-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NWiPMa6wNMuXRa12yrTIocCIX+9T2rWnucynDILOBjlRYR4yR+QVpdH/nvb40VS7 PTd+aQmynLyTQFYcvyK9ug== 0000950130-01-000886.txt : 20010223 0000950130-01-000886.hdr.sgml : 20010223 ACCESSION NUMBER: 0000950130-01-000886 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 24 FILED AS OF DATE: 20010214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRITEL PCS INC CENTRAL INDEX KEY: 0001088384 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 640896438 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-55606 FILM NUMBER: 1544824 BUSINESS ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 BUSINESS PHONE: 6039292606 MAIL ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRITEL INC CENTRAL INDEX KEY: 0001088383 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 640896417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-55606-01 FILM NUMBER: 1544825 BUSINESS ADDRESS: STREET 1: 111 E CAPITOL ST STREET 2: SUITE 500 CITY: JACKSON STATE: MS ZIP: 39201 BUSINESS PHONE: 6039292606 MAIL ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRITEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0001088385 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 640896042 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-55606-02 FILM NUMBER: 1544826 BUSINESS ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 BUSINESS PHONE: 6039292606 MAIL ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRITEL FINANCE INC CENTRAL INDEX KEY: 0001088386 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 640896439 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-55606-03 FILM NUMBER: 1544827 BUSINESS ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 BUSINESS PHONE: 6039292606 MAIL ADDRESS: STREET 1: 1080 RIVER OAKS DRIVE STREET 2: SUITE B 100 CITY: JACKSON STATE: MS ZIP: 39208 S-4 1 0001.txt FORM S-4 As filed with the Securities and Exchange Commission on February 14, 2001 Registration No. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 --------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- Tritel PCS, Inc. (Exact name of registrant as specified in its charter) Delaware 4812 64-0896438 (State or other jurisdiction of incorporation or (Primary Standard Industrial (I.R.S. Employer organization) Classification Code Number) Identification No.)
--------------- Tritel, Inc. (Exact name of registrant as specified in its charter) Delaware 4812 64-0896417 (State or other jurisdiction of incorporation or (Primary Standard Industrial (I.R.S. Employer organization) Classification Code Number) Identification No.)
--------------- Tritel Communications, Inc. (Exact name of registrant as specified in its charter) Delaware 4812 64-0896042 (State or other jurisdiction of incorporation or (Primary Standard Industrial (I.R.S. Employer organization) Classification Code Number Identification No.)
--------------- Tritel Finance, Inc. (Exact name of registrant as specified in its charter) Delaware 4812 64-0896439 (State or other jurisdiction of incorporation or (Primary Standard Industrial (I.R.S. Employer organization) Classification Code Number) Identification No.)
--------------- 1010 N. Glebe Road Suite 800 Arlington, VA 22201 (703) 236-1100 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) --------------- Thomas H. Sullivan President, Treasurer and Chief Financial Officer Tritel PCS, Inc. Tritel, Inc. Tritel Communications, Inc. Tritel Finance, Inc. 1010 N. Glebe Road, Suite 800 Arlington, VA 22201 (703) 236-1100 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------- Copies to: Brian Hoffmann, Esq. James H. Neeld, IV Cadwalader, Wickersham & Taft Tritel, Inc. 100 Maiden Lane 111 E. Capitol Street, Suite 500 New York, NY 10038 Jackson, MS 39201 (212) 504-6000 (601) 914-8000 Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [_] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) 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 this form is a post-effective amendment filed pursuant to Rule 462(d) 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. [_] --------------- CALCULATION OF REGISTRATION FEE - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum Offering Price Aggregate Amount of Title of Each Class Amount to be per Exchange Offering Price Registration of Securities to be Registered Registered Notes (1) (2) (3) Fee (1) (2) - ------------------------------------------------------------------------------------------------ 10 3/8% Senior Subordinated Notes due 2011..................... $450,000,000 100% $450,000,000 $112,500
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (1) The registration fee has been calculated pursuant to Rule 457(f)(2) and Rule 457(n) under the Securities Act of 1933. The Proposed Maximum Aggregate Offering Price is estimated solely for the purpose of calculating the registration fee. (2) The Proposed Maximum Aggregate Offering Price is based on the book value of the notes, as of February 14, 2001, in the absence of a market for them as required by Rule 457(f)(2) under the Securities Act of 1933. (3) Exclusive of accrued interest, if any. --------------- 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. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ---------------- FORWARD-LOOKING STATEMENTS This prospectus includes "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. All statements other than statements of historical facts included in this prospectus, including without limitation, statements under the captions "Summary", "Risk Factors", "Use of Proceeds", "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business", and located elsewhere herein regarding the prospects of our industry and our prospects, plans, financial position and business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "anticipate", "believe" or "continue" or the negatives thereof or variations thereon or similar terminology. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from our expectations are disclosed in this prospectus, including, without limitation, in conjunction with the forward-looking statements included in this prospectus and under "Risk Factors". All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements included in this document. These forward-looking statements speak only as of the date of this prospectus. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document might not occur. The information contained in this prospectus is current only as of the date on the cover page of this prospectus and may change after that date. The delivery of this prospectus does not, under any circumstances, mean that there has not been a change in our affairs since the date hereof. It also does not mean that the information in this prospectus is correct after this date. ---------------- iv ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ +The information in this prospectus is not complete and may be changed. We may + +not sell these securities until the registration statement filed with the + +Securities and Exchange Commission is effective. This prospectus is not an + +offer to sell these securities and it is not soliciting an offer to buy these + +securities in any state where the offer or sale is not permitted. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subject to Completion Dated February 14, 2001 PROSPECTUS Tritel PCS, Inc. OFFER TO EXCHANGE ALL OF OUR OUTSTANDING AND UNREGISTERED 10 3/8% SENIOR SUBORDINATED NOTES DUE 2011 FOR OUR REGISTERED 10 3/8% SENIOR SUBORDINATED NOTES DUE 2011 We are offering to exchange all of our outstanding 10 3/8% senior subordinated notes, which we refer to as the unregistered notes, for our registered 10 3/8% senior subordinated notes, which we refer to as the exchange notes. We refer to the unregistered notes and the exchange notes collectively as the notes. The terms of the exchange notes are identical to the terms of the unregistered notes, except that the exchange notes are registered under the Securities Act of 1933 and, therefore, are generally freely transferable. PLEASE CONSIDER THE FOLLOWING: -- Our offer to exchange unregistered notes for exchange notes will be open until 5:00 p.m., New York City time, on [ ], 2001, unless we extend the offer. -- You should carefully review the procedures for tendering the unregistered notes beginning on page 5 of this prospectus. -- If you fail to tender your unregistered notes, you will continue to hold unregistered securities. Your ability to transfer them will be limited. -- No public market currently exists for the notes. We do not intend to list the exchange notes on any securities exchange or any quotation system and, therefore, no active public market is anticipated. INFORMATION ABOUT THE NOTES: -- The notes will mature on January 15, 2011. -- The exchange notes are unconditionally guaranteed by Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc. -- We will pay interest on the notes semi-annually on January 15 and July 15 of each year beginning July 15, 2001 at the rate of 10 3/8% per annum. -- We may redeem some or all of the notes at any time on or after January 15, 2006 at the rates set forth on page 9 of this prospectus. -- We also have the option until January 15, 2004, to redeem up to 35% of the original aggregate principal amount of the notes with the net proceeds of certain types of qualified equity offerings. --Before January 15, 2006, we have the option to redeem the notes at par plus a premium. -- The notes are unsecured obligations and are structurally subordinated to our existing and future senior indebtedness, rank equally with all of our other senior subordinated debt and rank senior to all of our existing and future subordinated debt. -- If we undergo a change of control or sell some of our assets, we may be required to offer to purchase notes from you. -- If we fail to make payments on the notes, our guarantors must make them instead. -- The unregistered notes have been designated for trading in the PORTAL market. YOU SHOULD CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 13 OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. Each broker-dealer that receives exchange notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act of 1933. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for unregistered notes where such unregistered notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. Tritel PCS has agreed that, for a period of 180 days after the expiration of the exchange offer, it will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution". The date of this prospectus is [ ], 2001. ADDITIONAL INFORMATION This prospectus incorporates important business and financial information about Tritel PCS from other documents that are not included in or delivered with this prospectus. This information is available to you without charge upon your written or oral request. You can obtain the documents incorporated by reference in this prospectus without charge by requesting them in writing or by telephone from our principal executive offices at the following address or telephone number: Tritel PCS, Inc. Investor Relations 1010 North Glebe Road Suite 800 Arlington, Virginia 22201 (703) 236-1100 email: jmorrisey@telecorp1.com To timely deliver this information to you, we must receive your request no later than five business days before you must decide whether to exchange your notes, which is [ ], 2001 unless we extend the exchange offer. See "Available Information", that begins on page 142. ii ---------------- TABLE OF CONTENTS
Page ---- Summary.................................................................. 1 Risk Factors............................................................. 13 The Exchange Offer....................................................... 28 Use of Proceeds.......................................................... 38 Capitalization........................................................... 39 Selected Historical Financial Information................................ 40 Management's Discussion and Analysis of Financial Condition and Results of Operations........................................................... 41 The Wireless Communications Industry..................................... 52 Business................................................................. 54 Management............................................................... 73 Securities Ownership of Certain Beneficial Owners and Management......... 75
Page ---- Certain Relationships and Related Transactions............................. 78 Description of Certain Indebtedness........................................ 89 Description of the Notes................................................... 93 Certain U.S. Federal Tax Considerations.................................... 134 Book-Entry, Delivery and Form.............................................. 138 Plan of Distribution....................................................... 141 Legal Matters.............................................................. 141 Experts.................................................................... 142 Available Information...................................................... 142 Glossary of Selected Terms................................................. 143 Financial Statements Index................................................. F-1
---------------- iii SUMMARY This summary contains basic information about our offering. It may not contain all the information that is important to you. We encourage you to read this entire document for an understanding of the offering. In this prospectus, the words "company", "Tritel PCS", "we", "our" and "us" refer to Tritel PCS, Inc., its predecessors and consolidated subsidiaries. We will refer to Tritel, Inc., our parent company and a guarantor of the notes, and its predecessors as "Tritel". We will refer to TeleCorp PCS, Inc., Tritel's parent company and Tritel PCS's ultimate parent company, and its predecessors as "TeleCorp PCS". We will refer to TeleCorp Wireless, Inc., a wholly-owned subsidiary of TeleCorp PCS, and its predecessors and subsidiaries as "TeleCorp Wireless". We will refer to AT&T Wireless PCS, LLC as "AT&T Wireless", AT&T Wireless Services, Inc. as "AT&T Wireless Services" and AT&T Corp. as "AT&T". We define certain terms used in this prospectus in the Glossary of Selected Terms. Tritel PCS, Inc. We are an AT&T Wireless affiliate providing digital wireless personal communication services, or PCS, to licensed service areas covering 14.0 million people in the south-central United States. As of December 31, 2000, we had launched service in 38 markets, and had 205,675 customers. These markets include 13.7 million people, or 98% of the population in our licensed areas. Our licensed markets cover a contiguous geographic area, including eight of the 100 largest metropolitan areas in the United States. Our major markets include: Birmingham and Mobile, Alabama; Louisville and Lexington, Kentucky; Chattanooga, Nashville and Knoxville, Tennessee; and Jackson, Mississippi. We believe that these are attractive markets for providing wireless communications services because they contain major population and business centers, as well as traffic corridors, that generate significant wireless telephone usage. On November 13, 2000, Tritel, our direct parent, became a wholly-owned subsidiary of TeleCorp PCS, a public company that owns both Tritel and TeleCorp Wireless, a separate subsidiary. For additional information, see "--Recent Transactions" below. Immediately after the merger of TeleCorp Wireless and Tritel with subsidiaries of TeleCorp PCS, AT&T Wireless had an ownership interest of approximately 23% in TeleCorp PCS, our ultimate parent. Together with TeleCorp Wireless, we operate under a common regional brand name, SunCom(R)--a brand we share with Triton PCS, Inc., another AT&T Wireless affiliate. Strategic Alliance with AT&T Wireless Immediately after the merger of TeleCorp Wireless and Tritel with subsidiaries of TeleCorp PCS, AT&T Wireless had an ownership interest of approximately 23% in our ultimate parent, TeleCorp PCS, and is its largest stockholder. Our strategic alliance with AT&T Wireless provides us with many business, operational and marketing advantages, including: . Exclusivity. We are the exclusive provider for AT&T Wireless and its affiliates of wireless mobility services using equal emphasis co- branding with AT&T in our covered markets, except for licensed areas covering approximately 800,000 people in rural Kentucky, subject to the right of AT&T Wireless and its affiliates to resell services on our network. . Brand. We have the right to use the AT&T brand name and logo together with the SunCom(R) brand name and logo in our covered markets, giving equal emphasis to each. We also benefit from AT&T's and AT&T Wireless's nationwide advertising and marketing campaigns. . Roaming. We are AT&T Wireless's and its affiliates' preferred roaming partner for digital customers in our markets, except for licensed areas covering approximately 800,000 people in rural Kentucky. We believe that our AT&T Wireless affiliation will continue to provide us with a valuable base of roaming revenue. . Coast-to-Coast Coverage. Outside our markets, our customers are able to place and receive calls in AT&T Wireless Services' markets and the markets of AT&T Wireless Services' other roaming partners. 1 . Products and Services. We receive preferred terms on selected products and services, including handsets, infrastructure equipment and back office support from companies that provide these products and services to AT&T Wireless Services. . Marketing. We benefit from AT&T Wireless Services' and its affiliates' nationwide advertising and marketing campaigns. In addition, we work with AT&T Wireless Services' and its affiliates' national sales representatives to jointly market our wireless services to AT&T Wireless Services' and its affiliates' corporate customers located in our markets. Recent Transactions Merger of Tritel and TeleCorp Wireless On November 13, 2000, Tritel combined with TeleCorp Wireless through the mergers of each of Tritel and TeleCorp Wireless with two newly formed subsidiaries of a new holding company now known as TeleCorp PCS. In accordance with the terms of the merger agreement, all of the capital stock of TeleCorp Wireless and Tritel was converted into the right to receive capital stock in TeleCorp PCS. As a result of the merger, TeleCorp PCS is controlled by the former holders of the voting preference common stock of TeleCorp Wireless, Gerald T. Vento and Thomas H. Sullivan. Tritel and TeleCorp Wireless are wholly-owned subsidiaries of TeleCorp PCS. In connection with the merger, AT&T Wireless Services also agreed to make certain cash and other contributions to TeleCorp PCS in exchange for 9,272,740 shares of the class A voting common stock of TeleCorp PCS issued to AT&T Wireless, thereby increasing AT&T Wireless's ownership interest in TeleCorp PCS, our ultimate parent, from approximately 18% to 23%. This transaction was completed immediately after the merger. Acquisition of Licenses from ALLTEL On December 29, 2000, we completed the purchase from ALLTEL Communications, Inc. of two 10 MHz D-Block licenses covering approximately 1.5 million people in Birmingham and Tuscaloosa, Alabama, two markets in which we currently hold 15 MHz C-Block licenses. (Megahertz, or MHz, represents a measure of airwave capacity). We also acquired certain equipment and a customer list containing in excess of 2,500 PCS customers of ALLTEL in the Birmingham and Tuscaloosa markets, whom we intend to convert into our customers. These assets were purchased for an aggregate purchase price of $67.0 million which was principally funded through our senior credit facilities. In addition, we and AT&T Wireless Services have entered into a put and call agreement that gives us the right to sell the two licenses acquired from ALLTEL to AT&T Wireless Services at any time during the 18 months following the closing of this transaction for $50.0 million. This agreement also gives AT&T Wireless Services the right to purchase the two licenses during the same period for $50.0 million. However, generally, we can terminate AT&T Wireless Services' call right if we terminate our put right. In each case, the transfer of the licenses is conditioned upon receipt of the necessary regulatory approvals. For more information, see "Certain Relationships and Related Transactions--Agreements and Relationships with AT&T--Put and Call Agreement". Competitive Strengths Our goal is to provide our customers with simple-to-buy, easy-to-use wireless services, including coverage across the nation, superior call quality, competitive pricing and personalized customer care. In addition to our strategic alliance with AT&T Wireless, we believe we have several key competitive advantages, including our: . Attractive Markets. We believe our existing markets are attractive areas for providing wireless services and are strategically important to AT&T Wireless because they contain major population and business centers, as well as traffic corridors, that generate significant wireless service usage such as: Birmingham and Mobile, Alabama; Louisville and Lexington, Kentucky; Chattanooga, Nashville and Knoxville, Tennessee and Jackson, Mississippi. . Experienced Management. Our senior management team has substantial experience in the wireless industry. Messrs. Gerald T. Vento, our chief executive officer, and Thomas H. Sullivan, our chief 2 financial officer, founded TeleCorp Wireless. Additionally, the other members of our senior management team have extensive experience in the wireless industry. . Relationship with TeleCorp PCS. We believe that our relationship with TeleCorp PCS will provide us with significant competitive advantages. Our licensed areas, combined with those of TeleCorp Wireless, cover over 36 million people, and include 16 of the top 100 markets in the United States. We believe that the population coverage of our licensed areas, combined with those of TeleCorp Wireless, increases our strategic importance to AT&T Wireless, as we represent a significant portion of its nationwide service area. We believe that our merger with TeleCorp Wireless will enable us to better market our services to new and existing customers by offering more attractive calling plans with larger regional calling areas. We believe our increased size and scale will enable us to reduce operating costs and combine certain technical, network and corporate overhead functions with those of TeleCorp Wireless. We also expect to benefit from TeleCorp Wireless's experience in developing and launching mobile data services, such as instant messaging which TeleCorp Wireless began offering its customers in the fourth quarter of 2000. . Substantial Airwave Capacity. We have licenses with substantial airwave capacity in our markets. The airwave capacity of our licenses ranges between 10 MHz and 40 MHz in Alabama; 20 MHz and 45 MHz in Kentucky; 20 MHz and 35 MHz in Tennessee; 10 MHz and 45 MHz in Mississippi; and 20 MHz and 45 MHz in Georgia. We believe this airwave capacity will enable us to competitively deploy new and enhanced voice and data services. This airwave capacity will also permit us to provide service to the increasing number of wireless users and to service increased use by our customers. . Substantial Progress to Date. Since we initiated service in our first market in September 1999, we have achieved substantial progress in the completion of our networks and growth of our business. As of December 31, 2000, we had 205,675 customers, 1,482 integrated cell sites and six call connection sites in service and had launched service in markets encompassing 98% of the total population where we held our licenses. For the nine month period ended September 30, 2000, we had revenues of $76.0 million. Additionally, as of December 31, 2000, we had 80 SunCom(R) company owned stores, and hundreds of additional outlets where retailers including Circuit City, Office Depot and Best Buy offer our products and services. . Advanced Digital Technology. We are continuing to build our network using time division multiple access technology, or TDMA, which makes our network compatible with AT&T Wireless's TDMA network and other TDMA networks. This technology allows us to offer enhanced features and services relative to standard analog cellular service, including extended battery life, integrated voicemail, paging, fax and e-mail delivery, enhanced voice privacy and short-messaging capability. Our network will also serve as a platform for the development of mobile data services such as two-way data messaging and two-way data and internet applications. Our ultimate parent, TeleCorp PCS, has joined AT&T Wireless in selecting general packet radio services, or GPRS, a GSM- based technology, for the next step towards development of third generation services for high-speed transmission of data, such as internet service. . Strong Capital Base. We believe we have sufficient capital resources to fund our current business plan, including capital expenditures and operating losses for our existing markets. This estimate does not, however, include any funds to deploy GPRS technology as an overlay to our existing TDMA technology for the development of high-speed wireless data services. Along with TeleCorp Wireless, we are currently evaluating the implementation of GPRS technology for the next step toward the development of third generation services for high-speed transmission of data, such as internet service. However, our current business plan does not include, and we have not developed a budget for costs for, the development and implementation of our GPRS overlay network and delivery of GPRS. 3 Corporate Structure The following chart illustrates our corporate structure as of September 30, 2000 after giving effect to the offering of the unregistered notes. The unregistered notes were issued by Tritel PCS, Inc. and were not guaranteed by TeleCorp PCS, Inc. or TeleCorp Wireless, Inc. or TeleCorp Wireless's subsidiaries. [FLOW CHART] ------------------------------ TeleCorp PCS, Inc. ------------------------------ | -------------------------------- | | -------------------------- --------------------- Tritel, Inc. Guarantor of the TeleCorp Wireless, Unregistered and Exchange Inc. Notes, the 12 3/4% Notes and the Senior Credit Facilities -------------------------- --------------------- | - ---------------------------- ----------------- . Senior Credit Facilities $550 million committed . Unregistered and Exchange ____\ Tritel PCS, Inc. Notes $450 million / . 12 3/4% Notes $237.8 million accreted ----------------- value | - ---------------------------- | | ---------------------------------------------------------- | | | ------------------------- ------------------------- -------------------- - - Tritel Tritel Tritel A/B Holding Finance, Inc. Communications, Inc. Corp. and Tritel C/F Holding Corp. Guarantor of the Guarantor of the Unregistered and Exchange Unregistered and Exchange Guarantors of the Notes, the 12 3/4% Notes, the 12 3/4% Senior Credit Notes and the Senior Notes and the Senior Facilities Credit Facilities Credit Facilities ------------------------- ------------------------- -------------------- - - | -------------------- - - 12 License Subsidiaries Guarantors of the Senior Credit Facilities . FCC Licenses . Government license obligations of $41.9 million accreted value -------------------- - - 4 The Exchange Offer The Exchange Offer........ We are offering to exchange $1,000 principal amount of exchange notes for each $1,000 principal amount of unregistered notes. The terms of the exchange notes are identical to the terms of the unregistered notes, except that the exchange notes are registered under the Securities Act of 1933 and, therefore, are freely transferable. Expiration Date........... The exchange offer will expire at 5:00 p.m., New York City time, [ ], 2001 or a later date and time, if we extend it. Interest on the Exchange Cash interest on the notes is payable on January Notes and the 15 and July 15 of each year, beginning on July 15, Unregistered Notes....... 2001. We will pay no interest on the unregistered notes tendered and accepted for exchange. Conditions to the The exchange offer is subject to customary Exchange Offer........... conditions, some of which we may waive. Resale Without Further We believe the exchange notes may be offered for Registration............. resale and resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act so long as the following statements are true: . you acquire the exchange notes issued in the exchange offer in the ordinary course of your business; . you are not an affiliate of Tritel PCS, which is a person that controls or is controlled by, or is under common control with, Tritel PCS; and . you are not participating, and do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the exchange notes issued to you in the exchange offer. By tendering your unregistered notes as described below, you will be making representations to this effect. Transfer Restrictions on You may incur liability under the Securities Act the Exchange Notes....... if: (1) any of the representations listed above are not accurate; and (2) you transfer any exchange notes issued to you in the exchange offer without: . delivering a prospectus meeting the requirements of the Securities Act; or . qualifying for an exemption from the Securities Act's requirement to register your exchange notes. 5 We will not assume or indemnify you against such liability. Each broker-dealer that is issued exchange notes for its own account in exchange for unregistered notes that were acquired as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act of 1933 in connection with the resale of the exchange notes. A broker-dealer may use this prospectus for an offer to resell, a resale or other retransfer of the exchange notes issued to it in the exchange offer. Procedures for Tendering If you wish to exchange your unregistered notes Unregistered Notes....... in the exchange offer, you must: . complete, sign and date the accompanying letter of transmittal, or a facsimile of the letter; or . arrange for The Depository Trust Company to send required information to the exchange agent in connection with a book-entry transfer. You must mail or otherwise deliver this documentation on your unregistered notes to the exchange agent, at the address described in "The Exchange Offer--Exchange Agent." The exchange notes issued in the exchange offer will be delivered promptly following the expiration of the exchange offer. Withdrawal................ You may withdraw tendered unregistered notes at any time prior to the expiration of the exchange offer. We will return any unregistered notes that we do not exchange for any reason without expense to you promptly after the exchange offer expires or terminates. Special Procedures for Any beneficial owner whose unregistered notes are Beneficial Owners........ registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender the unregistered notes in the exchange offer should contact the registered holder promptly and instruct the registered holder to tender on its behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing a letter of transmittal and delivering its unregistered notes, either make appropriate arrangements to register ownership of the unregistered notes in its name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time and may not be able to be completed prior to the expiration of the exchange offer. Guaranteed Delivery You may comply with the procedures described in Procedures............... this prospectus under the heading "The Exchange Offer--Guaranteed Delivery Procedures" if you wish to tender your unregistered notes and: . time will not permit your required documents to reach the exchange agent by the expiration of the exchange offer; 6 . you cannot complete the procedure for book-entry transfer on time; or . your unregistered notes are not immediately available. Exchange Agent............ Firstar Bank, N.A. is serving as exchange agent in connection with the exchange offer. U.S. Federal Tax The exchange of the unregistered notes for the Considerations........... exchange notes in the exchange offer will not constitute a sale or an exchange for U.S. federal income tax purposes. For a more detailed discussion, see "Certain U.S. Federal Tax Considerations" in this prospectus. Effect of Not Tendering... If you do not tender your unregistered notes or you tender your unregistered notes but they are not accepted, following the completion of the exchange offer, such notes will continue to be subject to the existing restrictions upon transfer. Under some circumstances, we may register the unregistered notes under a shelf registration statement. Use of Proceeds........... We will not receive any cash from the exchange of the unregistered notes for exchange notes in the exchange offer. 7 The Notes Issuer.................... Tritel PCS, Inc. Notes Offered............. $450,000,000 in aggregate principal amount of 10 3/8% Senior Subordinated Notes due 2011. Guarantees................ All payments with respect to the notes including principal and interest will be fully and unconditionally guaranteed on an unsecured senior subordinated basis, jointly and severally, by our direct parent, Tritel, Inc. and our subsidiaries, Tritel Communications, Inc. and Tritel Finance, Inc., and by certain of our future subsidiaries that incur debt. Each of our guarantors also guarantees our senior credit facilities on a senior secured basis and guarantees our 12 3/4% senior subordinated discount notes on an unsecured senior subordinated basis and is jointly and severally liable on a senior secured basis or unsecured senior subordinated basis, respectively, with us for all obligations thereunder. Not all of our subsidiaries will be guaranteeing payments on the notes. All obligations under our senior credit facilities have been guaranteed by all of our subsidiaries and are secured by pledges of all the capital stock of all of our subsidiaries and security interests in, or liens on, substantially all of our other tangible and intangible assets and the tangible and intangible assets of our subsidiaries, excluding our PCS licenses. Repayment of the notes will not be guaranteed either by TeleCorp PCS or TeleCorp Wireless or any of TeleCorp Wireless's subsidiaries. Maturity Date............. January 15, 2011 Interest Payment Dates.... January 15 and July 15, commencing July 15, 2001 Ranking................... The notes and the guarantees will be unsecured and: . subordinate in right of payment to all of our and our guarantors' existing and future senior indebtedness (including our and our guarantors' obligations under our senior credit facilities); . equal in right of payment to our 12 3/4% notes and related guarantees, as well as any of our or our guarantors' future senior subordinated indebtedness; and . senior in right of payment to all of our and our guarantors' subordinated indebtedness. As of September 30, 2000: . our outstanding senior indebtedness was $300.0 million (excluding unused commitments under our senior credit facilities and $90.0 million drawn after September 30, 2000 which was subsequently repaid from the proceeds of the offering of unregistered notes); . our outstanding senior subordinated indebtedness had an accreted value of $237.8 million; and . we had no outstanding subordinated indebtedness. 8 In addition, as of September 30, 2000: . the outstanding senior indebtedness guaranteed by the guarantors and our remaining subsidiaries was approximately $300.0 million (excluding $90.0 million guaranteed after September 30, 2000 which was subsequently repaid from the proceeds of the offering of unregistered notes); . the outstanding senior subordinated indebtedness guaranteed by the guarantors was $237.8 million accreted value. Our subsidiaries that have not guaranteed the notes had approximately $41.9 million accreted value of senior indebtedness, consisting entirely of indebtedness owed to the United States government related to our licenses and guaranteed $300.0 million of our borrowings under our senior credit facilities (excluding $90.0 million guaranteed after September 30, 2000 which was subsequently repaid from the proceeds of the offering of unregistered notes). Our subsidiaries that have not guaranteed the notes had no outstanding senior subordinated or subordinated indebtedness; and . our guarantors had no outstanding subordinated indebtedness. Optional Redemption....... On or after January 15, 2006, we may redeem all or part of the notes, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest, if any, to the date of redemption (subject to the right of holders to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on January 15 of the years set forth below:
Redemption Year Price ---- ---------- 2006 105.188% 2007 103.458% 2008 101.729% 2009 and thereafter 100.000%
Before January 15, 2006, we may redeem all but not part of the notes at any time at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of redemption plus a make-whole premium based upon the present value of the remaining payments to be made on the notes. Before January 15, 2004, we may redeem up to 35% of the original aggregate principal amount of the notes with the net cash proceeds of one or more equity offerings by Tritel, Inc., our direct parent, TeleCorp PCS, Inc., our ultimate parent, or us at a redemption price equal to 110.375% of the principal amount, provided that at least 65% of the original aggregate principal amount of the notes remains outstanding after the redemption. Change of Control......... Upon specified change of control events, unless we have exercised our option to redeem all of the notes as described above, each holder of a 9 note will have the right to require us to repurchase all or a portion of its notes at a purchase price in cash equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. Covenants................. The indenture governing the notes will limit our ability and the ability of our restricted subsidiaries to, among other things: . incur additional indebtedness; . incur layered indebtedness; . incur liens securing pari passu or subordinated indebtedness without securing the notes; . pay dividends on or redeem capital stock; . make certain investments or redeem certain subordinated indebtedness; . make restricted payments; . make certain dispositions of assets; . engage in transactions with affiliates; . engage in certain business activities; and . engage in mergers, consolidations and certain sales of assets. The indenture governing the notes will also limit our ability to permit restrictions on the ability of certain of our subsidiaries to pay dividends or make certain other distributions. These covenants are subject to important exceptions and qualifications, as described under "Description of the Notes". Absence of Established Market for the Notes..... The unregistered notes and exchange notes are each a new issue of securities, and there is currently no market for them. We do not intend to apply for the unregistered notes (or exchange notes) to be listed on any securities exchange or to arrange for any quotation system to quote them. The exchange notes have been designated for trading in the PORTAL market. The initial purchasers of the unregistered notes have advised us that they intend to make a market for the unregistered notes (and exchange notes), but they are not obligated to do so. The initial purchasers of the unregistered notes may discontinue any market making in the unregistered notes or any exchange notes at any time in their sole discretion. Accordingly, we cannot assure you that a liquid market will develop for the unregistered notes or any exchange notes. Risk Factors You should consider carefully all of the information set forth in this prospectus and, in particular, you should evaluate the specific factors under "Risk Factors" beginning on page 13 before exchanging the unregistered notes. 10 Summary Historical Consolidated Financial and Other Data The following table sets forth Tritel's summary historical consolidated financial and other data for the years ended December 31, 1998 and 1999, for the nine months ended September 30, 1999 and 2000 and as of September 30, 2000. The statements of operations data for the years ended December 31, 1998 and 1999, are derived from Tritel's audited consolidated financial statements. The statements of operations data for the nine months ended September 30, 1999 and 2000 are derived from Tritel's unaudited consolidated financial statements. The results of operations for interim periods are not necessarily indicative of the results for a full year's operations. The balance sheet data at September 30, 2000 is derived from Tritel's unaudited consolidated financial statements included elsewhere in this prospectus. Management believes interim unaudited financial data includes all adjustments necessary for a fair presentation of Tritel's financial condition and results of operations at that date and for those periods presented. The other data is unaudited and derived from Tritel's operational records. The pro forma as adjusted balances reflect the offering of the unregistered notes, net of $12.5 million of estimated offering expenses, and the recapitalization of Tritel after the merger with TeleCorp Wireless. The merger resulted in the exchange of 100% of the outstanding common and preferred stock of Tritel for common and preferred stock of TeleCorp PCS. As a result, all amounts previously recorded as redeemable preferred stock, preferred stock, common stock, additional paid-in capital and deferred compensation are presented for pro forma purposes as common stock and additional paid-in capital of Tritel immediately after the merger. Accordingly, as a result of the merger, TeleCorp PCS, our ultimate parent, owns all of Tritel's outstanding common stock. No pro forma adjustment has been reflected in any balance for merger related expenses incurred by Tritel subsequent to September 30, 2000. All the data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Tritel's consolidated financial statements and the related notes included elsewhere in this prospectus.
For the year ended For the nine months December 31, ended September 30, ------------------- ----------------------- 1998 1999 1999 2000 -------- --------- --------- ---------- ($ in thousands, excluding per unit data) Statement of Operations Data: Revenues: Service..................... $ -- $ 1,186 $ 10 $ 43,366 Roaming..................... -- 3,421 88 24,120 Equipment................... -- 2,152 81 8,511 -------- --------- --------- ---------- Total ..................... -- 6,759 179 75,997 -------- --------- --------- ---------- Operating expenses: Costs of services and equipment.................. -- 6,966 189 51,961 Technical operations........ 1,939 18,459 8,931 38,103 General and administrative.. 4,947 22,915 17,414 45,288 Sales and marketing......... 452 20,404 6,621 47,339 Stock-based compensation.... -- 190,664 -- 79,092 Depreciation and amortization............... 348 12,839 5,601 45,069 -------- --------- --------- ---------- Total operating expenses... 7,686 272,247 38,756 306,852 -------- --------- --------- ---------- Operating loss.............. (7,686) (265,488) (38,577) (230,855) Interest income.............. 77 16,791 10,451 20,501 Interest expense and financing cost.............. (722) (27,200) (14,268) (47,260) -------- --------- --------- ---------- Loss before extraordinary item and income taxes...... (8,331) (275,897) (42,394) (257,614) Income tax benefit........... -- 28,443 13,638 1,857 -------- --------- --------- ---------- Loss before extraordinary item....................... (8,331) (247,454) (28,756) (255,757) Extraordinary item--loss on return of spectrum.......... (2,414) -- -- -- -------- --------- --------- ---------- Net loss.................... (10,745) (247,454) (28,756) (255,757) Series A preferred dividend requirement................. -- (8,918) (6,632) (6,800) -------- --------- --------- ---------- Net loss available to common shareholders................ $(10,745) $(256,372) $( 35,388) $ (262,557) ======== ========= ========= ========== Other Data: Deficiency of earnings to fixed charges(a)............ $ 18,876 $ 299,582 $ 56,986 $ 263,723 Customers (end of period).... -- 24,600 300 156,100 Covered population (end of period, in millions)........ -- 7.9 0.7 13.2 ARPU (post-pay)(b)........... -- $ 45(d) NM(e) $ 57 Churn(c)..................... -- 1.1%(d) NM(e) 1.7%
11
Pro forma as adjusted at Actual at September 30, September 30, 2000 2000(f) ------------------- ------------- ($ in thousands) Balance Sheet Data: Cash and cash equivalents................... $ 168,786 $ 606,286 Working capital............................. 131,587 569,087 Property and equipment, net................. 503,436 503,436 Federal Communications Commission licensing costs, net................................. 202,281 202,281 Intangible assets, net...................... 55,216 55,216 Total assets................................ 1,013,443 1,463,443 Total long-term debt (including current maturities)................................ 579,729 1,029,729 Redeemable preferred stock.................. 106,386 -- Total stockholders' equity.................. $ 205,044 $ 311,430
- -------- (a) The ratio of earnings to fixed charges is computed by dividing fixed charges into income before taxes plus fixed charges plus amortization of capitalized interest less interest capitalized. Fixed charges include interest expense, interest capitalized and rental expense or operating leases representing that portion of expense deemed attributable to interest. On this basis, earnings before fixed charges for the periods shown were not adequate to cover fixed charges therefore the amount of the deficiency is shown. These deficiencies should not be considered indicative of future results. (b) Average revenue per unit, or ARPU, is defined as post-pay service revenue, including airtime and incollect roaming revenue but excluding outcollect roaming revenue, for the periods indicated, divided by the average post-pay customers for those periods. (c) Churn is defined as the number of disconnected customers for the periods indicated, divided by the average number of customers for those periods. (d) Tritel commenced operations in late September 1999. Therefore, ARPU and churn are based only on data for the three months ended December 31, 1999. (e) Not meaningful. (f) Pro forma as adjusted at September 30, 2000, balances include proceeds of the offering of the unregistered notes net of estimated offering expenses of $12.5 million. These estimated offering expenses are a deferred financing cost reflected in total assets. These balances do not include the repayment from the proceeds of the offering of the unregistered notes of approximately $90.0 million of revolving credit borrowed subsequent to September 30, 2000 under the senior credit facilities. 12 RISK FACTORS An investment in the notes involves risk. In addition to the other information in this prospectus, you should consider carefully the following risks in deciding whether to exchange your unregistered notes. Risks Relating to Our Business, Operations and Strategy We continue to incur significant operating losses, and we may not be able to generate positive cash flow from our operations in the future. We have a limited operating history and a history of operating losses. We incurred cumulative operating losses through September 30, 2000, of approximately $508.9 million. We expect to continue to incur operating losses and to generate negative cash flow from operating activities during the next few years while we develop our business and expand our networks. Our business has required and will continue to require substantial capital expenditures. In addition, we have to dedicate a substantial portion of any cash flow from operations to make interest and principal payments on our debt, which will reduce funds available for capital expenditures and other purposes. If we do not achieve and maintain positive cash flow from operations on a timely basis, we may be unable to develop our network or to conduct our business in an effective or competitive manner. We may not be able to obtain sufficient financing to complete our network and to fund our operating losses. The actual expenditures necessary to complete our network and achieve our goals may differ significantly from our estimates. We cannot predict whether any additional financing we may need will be available, what the terms of any such additional financing would be or whether our existing debt agreements would allow additional financing. We may incur variable rate debt, which would make us more vulnerable to interest rate increases. If we cannot obtain additional financing when needed, we will have to delay, modify or abandon some of our plans to construct the remainder of our network. This could slow our growth and negatively impact our ability to compete in the wireless communications industry and to fund our operations. We would have to obtain additional financing, and the buildout of our network could be delayed if, among other things: . any of our sources of capital are unavailable or insufficient; . we significantly depart from our business plan; . we experience unexpected delays or cost overruns in the construction of our network; . we experience increases in operating costs; . changes in technology or governmental regulations create unanticipated costs; . we acquire additional licenses; or . revenue from customers is lower than anticipated. We may not be able to acquire the sites necessary to develop our network. We must lease or otherwise acquire rights to use sites for the location of network equipment and obtain zoning variances and other governmental approvals for the continued development of our network and to provide wireless communications services to customers in our licensed areas. If we encounter significant difficulties in leasing or otherwise acquiring rights to sites for the location of network equipment, we may need to alter the design of our network. In many cases, we will be required to obtain zoning variances and other governmental approvals or permits. In addition, because of concern over radio frequency emissions and tower appearance, some local governments have instituted moratoria on further construction of antenna sites until the respective health, safety and historic preservation aspects of this matter are studied further. Changes in our development plan could slow the construction of our network, which would make it harder to compete in the wireless communications industry or cause us not to meet development requirements. 13 We may have difficulty in obtaining infrastructure equipment. The demand for the equipment that we require to develop our network is considerable and manufacturers of this equipment could have substantial backlogs of orders. Accordingly, the lead-time for the delivery of this equipment may be long. Some of our competitors purchase large quantities of communications equipment and may have established relationships with the manufacturers of this equipment. Consequently, they may receive priority in the delivery of this equipment. Our agreements with vendors contain penalties if they do not deliver the equipment according to schedule. Nevertheless, the vendors may fail to deliver the equipment to us in a timely manner. If we do not receive the equipment in a timely manner, we may be unable to provide wireless communications services comparable to those of our competitors. Our failure to develop our network in a timely manner could limit our ability to compete effectively, or cause us to breach the agreements with AT&T and its affiliates, which, in turn, could materially adversely affect us. Potential acquisitions may require us to incur substantial additional debt and integrate new technologies, operations and services, which may be costly and time consuming. We intend to continually evaluate opportunities for the acquisition of licenses and properties that are intended to complement or extend our existing operations. If we acquire new licenses or facilities, we may encounter difficulties that may be costly and time-consuming, which may slow our growth. Examples of such difficulties are that we may have to: . incur substantial additional debt to finance the acquisitions; . assume United States government debt related to any licenses we acquire; . integrate new technologies with our technology; . integrate new operations with our operations; . integrate new services with our offering of services; or . divert the attention of our management from other business concerns. Changes in technology and the failure to implement new technologies could adversely affect us. We use TDMA technology in our network. Other digital technologies, such as CDMA, or code division multiple access, and GSM, or global system for mobile communications, may have significant advantages over TDMA. It is anticipated that CDMA-based and GSM-based PCS providers will own licenses covering virtually all of the United States population. Other PCS providers have deployed GSM technology in many of our markets. GSM is the prevalent standard in Europe. It is possible that a digital transmission technology other than TDMA may gain sufficient acceptance in the United States to adversely affect the resources currently devoted by vendors to improving TDMA digital cellular technology. If consumers perceive that another technology has marketplace advantages over TDMA, we could experience a competitive disadvantage or be forced to implement that technology at substantially increased cost. Our ultimate parent, TeleCorp PCS, has joined AT&T Wireless Services in selecting GPRS technology for the next step towards the development of third- generation services for high-speed transmission of data, such as internet service. GPRS is a new GSM-based technology that has not currently been implemented. There are currently no commercially available GPRS handset devices. In addition, there can be no assurance that handset devices will become available that will operate on both our existing TDMA networks and our planned GPRS networks, enabling customers to use a single handset to access voice and data communications. With any new technology, there is a risk that the new technology may not work or that we may be unable to integrate the new technology with our current systems and technology. In addition, GPRS may not deliver the anticipated benefits. Our current business plan does not include, and we have not developed a budget for, the development 14 and implementation of our GPRS overlay network and delivery of GPRS. As we refine our GPRS overlay network strategy and budget, we may determine that the costs to develop and implement our GPRS overlay network will require us to seek additional financing. We cannot predict whether any additional financing we need, if any, will be available, what the terms of such additional financing will be or whether our existing debt agreements will allow the additional financing. There is also a risk that customers may not appreciate the benefits or recognize the potential applications of GPRS. Furthermore, customers may choose a competing method or standard for high-speed data transmission services. Market acceptance of GPRS will depend, in part, on our ability to convince the customers of the advantages of the technology as compared to competitive products. Any one or more of these factors could cause us to delay, modify or abandon some or all of our plans to offer high-speed data transmission services and we may incur substantial additional costs as a result. This could slow our growth and advancement into the market for high- speed wireless data transmission, which may have a negative impact on our competitiveness. The stockholders' agreement includes conditions that may require us to upgrade our technology to match the technology of AT&T Wireless and its affiliates. We may not be able to successfully purchase and install the equipment necessary to allow us to convert to a new or different technology or to adopt a new or different technology at an acceptable cost, if at all. In addition, the technologies that we choose to invest in may not lead to successful implementation of our business plan. We may be unable to purchase tri-mode handsets in sufficient quantities to meet the demand of our customers. Our customers access wireless services in our markets and throughout the AT&T Wireless network by using tri-mode handsets. A limited number of companies worldwide, including Ericsson, Motorola and Nokia Corporation, currently manufacture and supply TDMA tri-mode handsets in commercial quantities. Without tri-mode handsets, our customers will not be able to roam on both analog cellular and digital cellular systems. If we are unable to obtain these handsets from our vendors in the quantities or at the prices we expect, our service, business and operating results could be adversely affected. The cost of tri-mode handsets could affect customer demand for our services. In order to roam in other markets where no PCS licensee utilizes the TDMA technology, our customers must utilize tri-mode handsets to use an analog or digital cellular system in such markets. Generally, tri-mode handsets are more expensive than single- or dual-mode handsets. The higher cost of these handsets may impede our ability to attract customers or achieve positive cash flow as planned. We may not be able to manage the construction of our network or the growth of our business successfully. We expect to experience rapid growth and development in a relatively short period of time. Our financial performance will depend on our ability to manage such growth and the successful construction of our network. Our management may not be able to direct our development effectively, including implementing adequate systems and controls in a timely manner or retaining qualified employees. This inability could slow our growth and adversely affect our ability to compete in the wireless communications service industry. We may experience a high rate of customer turnover that could negatively impact our business. Many providers in the PCS industry have experienced a high rate of customer turnover, or churn, as compared to cellular industry averages. Our strategy to address customer turnover may not be successful, or the rate of customer turnover may be unacceptable. Our average monthly churn rate for the twelve months ended December 31, 2000 was 1.9%. The overall churn rate that we may experience will likely be the result of several factors, including network coverage, reliability issues such as blocked and dropped calls, handset problems, 15 non-usage of phones, change of employment, affordability, the relative mix of our pre-pay and post-pay customers and customer care concerns. Price competition and other competitive factors could also increase our churn rate. Our use of the SunCom(R) brand name for marketing may link our reputation with another SunCom(R) company, which could result in a negative perception of our brand. We use the SunCom(R) brand name to market our products and services in conjunction with TeleCorp Wireless, our sister company, and Triton PCS, Inc., a separate AT&T Wireless affiliate, in order to broaden our marketing exposure and share the costs of advertising. If Triton or TeleCorp Wireless have problems developing and operating their network, it could harm consumer perception of the SunCom(R) brand and, in turn, harm our reputation and business. Our ability to succeed may be impeded by the common ownership of TeleCorp Wireless and Tritel. Our success will depend, in part, on the ability of TeleCorp PCS's management team to develop strategies and implement a business plan that will: . successfully retain and attract our key employees, including management; . maintain adequate focus on our existing business and operations, while working to develop synergies between us and TeleCorp Wireless; . not favor TeleCorp Wireless over us in allocating opportunities and resources; . effectively manage markets and networks of TeleCorp Wireless and us; and . effectively manage the marketing and sales of the services of TeleCorp Wireless and us. Certain of our debt instruments, and certain of those of TeleCorp Wireless, generally require that transactions with affiliates be carried out on arm's- length terms. These requirements for arm's-length dealing may limit our ability to achieve the operating synergies with TeleCorp Wireless that would be available in the absence of such limitations. Dependence on key personnel. We are managed by a small number of key management and operating personnel. The loss of any of these key individuals could have a material adverse effect on us. We believe that our ability to manage our growth successfully will depend in large part on our continuing ability to attract and retain highly skilled and qualified personnel. TeleCorp PCS and some of its stockholders have affirmative or negative control of us and they may have interests different than yours. TeleCorp PCS owns all of the capital stock of Tritel, our direct parent. Gerald T. Vento and Thomas H. Sullivan control a majority of TeleCorp PCS's voting power and, as a result, have effective control of us. Messrs. Vento and Sullivan, together with AT&T Wireless and certain other equity holders at TeleCorp PCS, control the election of TeleCorp PCS's board of directors. In addition, certain actions including, among other things, certain mergers, capital expenditures and incurrences of indebtedness require the approval of at least two-thirds of the TeleCorp PCS board of directors. Consequently, less than a majority of the TeleCorp PCS board of directors can prevent certain actions by TeleCorp PCS. Directors and officers of a company generally do not owe a fiduciary duty to holders of debt securities, such as the notes, and they may not act in the best interests of the holders of the notes. Additionally, these stockholders' interests could conflict with our interests, and we may not be able to resolve any such conflict in our favor. In addition, in allocating resources, opportunities and management, the board of directors of TeleCorp PCS may favor TeleCorp Wireless, our sister company, over us, because the board may determine that such actions are in the best interests of TeleCorp PCS's stockholders. Holders of notes will not have any recourse with respect to any of these decisions. 16 Risks Relating to our Relationship with AT&T and its Affiliates We depend on agreements with AT&T and its affiliates for our success, and would have difficulty operating without them. TeleCorp PCS, our ultimate parent, and Tritel, our direct parent, have entered into a number of agreements which benefit us, with AT&T and its affiliates, including: . a license agreement; . a stockholders' agreement; . an intercarrier roamer services agreement; . a roaming administration service agreement; and . a long distance agreement. Our business strategy depends on our strategic alliance with AT&T and its affiliates. We are dependent on co-branding, roaming and service relationships with AT&T Wireless and its affiliates under the joint venture agreements between AT&T Wireless and its affiliates and Tritel. These relationships are central to our business plan. If any of these relationships were terminated, our business strategy could be significantly affected and, as a result, our operations and future prospects could be adversely affected. The agreements with AT&T and its affiliates create an organizational and operational structure that defines the strategic alliance between AT&T and its affiliates and us. Because of our dependence on these relationships, it is important for you to understand that there are circumstances in which AT&T and its affiliates can terminate our right to use the AT&T brand name, as well as other important rights under the joint venture agreements, if the joint venture agreements are violated or if certain other events occur. If we fail to maintain certain quality standards, violate terms of our licenses or AT&T engages in certain combination transactions, AT&T and its affiliates could terminate their exclusive relationship with us and our rights to use the AT&T brand. If we fail to meet specified customer care, reception quality and network reliability standards set forth under the stockholders' agreement, AT&T Wireless may terminate AT&T Wireless's exclusivity obligations with us and AT&T may terminate our rights to use the AT&T brand. If AT&T Wireless terminates its exclusivity obligations, other providers could then enter into agreements with AT&T Wireless, exposing us to increased competition, and we could lose access to customers and roaming revenues. If we lose our rights to use the AT&T brand, we would lose the advantages associated with AT&T's and its affiliates' marketing efforts and customers may not recognize our brand readily. We may have to spend significantly more money on advertising to create brand recognition. AT&T can terminate our license to use the AT&T brand name, our designation as a member of the AT&T Wireless network, or our use of other AT&T service marks if we violate the terms of the license or otherwise breach one of the agreements with AT&T and its affiliates. The exercise by AT&T of any of these rights, or other rights described in the agreements with AT&T and its affiliates, could significantly and materially adversely affect our operations and revenues. In addition, if AT&T or any of its affiliates combines with specified entities with over $5 billion in annual revenues from telecommunications activities, that derive less than one-third of their aggregate revenues from the provision of wireless telecommunications and that have PCS or cellular licenses that cover at least 25% of the people covered by our licenses, then AT&T Wireless may terminate its exclusivity obligations with us in markets that overlap with markets of those entities. Other providers could then enter into agreements with AT&T Wireless and its affiliates in those markets, exposing us to increased competition, and we could lose access to customers. 17 We rely on AT&T Wireless Services for a significant portion of our roaming revenue and a decrease in this roaming revenue may have a negative impact on our business. Revenues generated through our roaming agreement with AT&T Wireless Services constitute a significant majority of our roaming revenues. If the number of customers of AT&T Wireless Services roaming on our network materially declines, it could have a material adverse effect on our ability to generate revenues. If we do not deploy our anticipated GPRS network at a sufficient pace relative to AT&T Wireless Services' and its affiliates' deployment of their GPRS systems, we may not be able to serve customers using GSM and GPRS handsets roaming in our service areas. We rely on the use of the AT&T brand name and logo to market our services, and a loss of use of this brand name and logo or a decrease in the market value of this brand name and logo would hinder our ability to market our products and may have an adverse effect on our business and results of operations. The AT&T brand and logo is highly recognizable and AT&T supports its brand and logo by its marketing. If we lose our rights to use the AT&T brand and logo under the license agreement, we would lose the advantages associated with AT&T's marketing efforts. If we lose the rights to use this brand and logo, customers may not recognize our brand readily and we may have to spend significantly more money on advertising to create brand recognition. In addition, our results of operations are highly dependent on our relationship with AT&T and AT&T Wireless and their affiliates, their success as wireless communications providers and the value of the AT&T brand and logo. If AT&T Wireless encounters problems in developing and operating its wireless network and its reputation as a wireless communications provider declines, it could adversely affect the value to us of the AT&T brand, the agreements with AT&T and its affiliates and our results of operations. In that event, we may need to invest heavily in obtaining other operating agreements and in marketing our brand to develop our business, and we may not have funds to do so. AT&T Wireless can at any time require us to enter into a resale agreement that would allow AT&T Wireless to sell access to, and usage of, our services in our licensed area on a nonexclusive basis using the AT&T brand. Under the terms of the stockholders' agreement, we are required to enter into a resale agreement at AT&T Wireless's request. The resale agreement will allow AT&T Wireless to sell access to, and usage of, our services in our licensed area on a nonexclusive basis and usage of the AT&T brand. We believe our results of operations could be adversely affected if AT&T Wireless were to take such action. AT&T Wireless may terminate its obligations under the stockholders' agreement, which could result in increased competition with us for customers who otherwise might use our services that are co-branded with AT&T. If AT&T or any of its affiliates engages in specified business combinations, the exercise of its termination rights under the stockholders' agreement could result in increased competition detrimental to our business. We cannot assure you that AT&T or any of its affiliates will not enter into such a business combination, and the termination of the non-compete and exclusivity provisions of the stockholders' agreement will not have a material adverse effect on our operations. We may not be able to engage in certain activities and make acquisitions outside of our license footprint and this may limit our future growth. Generally, under the agreements with AT&T and its affiliates, we cannot engage in any business other than providing mobile wireless telecommunications services using a specified technology or ancillary businesses, or 18 make acquisitions of licenses outside of our licensed footprint without the approval of AT&T Wireless. This limitation on our ability to engage in other businesses or acquire additional licenses outside of our footprint may inhibit our future growth. The interests of AT&T Wireless and its affiliates may conflict with those of Tritel PCS and the holders of notes. Our interests and those of AT&T Wireless and its affiliates may conflict, and there can be no assurance that any conflict will be resolved in our favor. Our ultimate parent, TeleCorp PCS, effectively has control of us. Under the stockholders' agreement, AT&T Wireless has the right to nominate two of the fourteen directors on TeleCorp PCS' board of directors and approve the selection of four other director nominees of TeleCorp PCS. AT&T Wireless and its affiliates owe no duty to us except to the extent expressly set forth in our agreements with AT&T Wireless and its affiliates. Officers and directors generally do not have fiduciary duties to holders of debt securities such as the notes. Risks Relating to Our Current Financing and the Notes We have substantial debt, which we may not be able to service. We have a substantial amount of debt. As of September 30, 2000, after giving effect to the offering of the unregistered notes, our outstanding debt would have consisted of (1) $300.0 million (not including the $90.0 million incurred after September 30, 2000, all of which was subsequently repaid from the proceeds of the offering of the unregistered notes) in debt under our senior credit facilities under which we could borrow up to a total of $550.0 million, (2) $450.0 million of the unregistered notes (to be exchanged for the exchange notes pursuant to this registration statement), (3) $237.8 million accreted value of 12 3/4% notes and (4) $41.9 million accreted value of government debt. We drew an additional $60.0 million under our senior credit facilities to pay for the acquisition of assets from ALLTEL on December 29, 2000 and an additional $30.0 million for working capital needs on January 10, 2001 all of which was subsequently repaid from the proceeds of the offering of the unregistered notes. We may incur additional debt in the future. We may not have sufficient cash flow in the future to service any additional debt we incur. The substantial amount of our debt will have a number of important consequences for our operations, including: . we may not have sufficient funds to pay interest on, and principal of, our debt (including the notes); . if payments on any debt owed to the United States government are not made when due, the Federal Communications Commission may: . impose substantial financial penalties; . reclaim and reauction the related licenses, and impose a significant financial penalty in respect of each license that is reclaimed and reauctioned; . deny renewal of any other licenses; and . pursue other enforcement measures; . we will have to dedicate a substantial portion of any cash flow from operations to the payment of interest on, and principal of, our debt, which will reduce funds available for other purposes; . we may not be able to obtain additional financing for capital requirements including capital expenditures, working capital requirements and other corporate purposes; . some of our debt, including borrowings under our senior credit facilities, will be at variable rates of interest, which could result in higher interest expense in the event of increases in interest rates; . pledges of the capital stock of our subsidiaries and liens on substantially all of our other assets and the assets of such subsidiaries secure the debt incurred under our senior credit facilities and this debt matures prior to the maturity of the notes; and 19 . our ability to adjust to changing market conditions and to withstand competitive pressures could be limited, and we may be vulnerable to additional risk in the event of a downturn in general economic conditions or our business. Our ability to make payments on our debt, including the notes, depends upon our future operating performance, which is subject to general economic and competitive conditions and to financial, business and other factors, many of which we cannot control. If our cash flow from our operating activities is insufficient, we may take certain actions, including delaying or reducing capital expenditures, attempting to restructure or refinance our debt, selling assets or operations or seeking additional equity capital. We may be unable to take any of these actions on satisfactory terms or in a timely manner. Further, any of these actions may not be sufficient to allow us to service our debt obligations. Our existing debt agreements limit our ability to take certain of these actions. The indenture governing the notes will contain similar restrictions. Our failure to earn enough to pay our debts or to successfully undertake any of these actions could, among other things, materially adversely affect the market value of the notes. All indebtedness under our senior credit facilities is secured, and therefore the notes and the guarantees will be effectively subordinated to all indebtedness under the senior credit facilities to the extent of the value of the assets securing that indebtedness. All indebtedness under our senior credit facilities is secured by substantially all of our assets, as well as the assets of our subsidiaries, exclusive of our PCS licenses. Since the notes and the guarantees are unsecured, the claims of noteholders will be effectively subordinated to the claims of the lenders under our senior credit facilities to the extent of the value of the assets securing the indebtedness under our senior credit facilities. Our debt instruments contain restrictive covenants that may limit our operating flexibility. The documents governing our indebtedness, including our senior credit facilities, 12 3/4% note indenture and the indenture for the notes, contain significant covenants that limit our ability to engage in various transactions. In addition, under each of these documents, the occurrence of specific events, in some cases after notice and grace periods, would constitute an event of default permitting acceleration of the respective indebtedness. The limitations imposed by the documents governing the outstanding indebtedness are substantial, and if we fail to comply with them, our debts could become immediately payable at a time when we are unable to pay them. The notes are subordinate to other indebtedness that encumbers our assets. The right to payment on the notes will be subordinate to all of our existing and future senior indebtedness. Similarly, each guarantee of the notes will be subordinate to all existing and future senior indebtedness of the applicable guarantor. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to us or any guarantor, our or such guarantor's assets will be available to pay obligations on the notes or the applicable guarantee only after all outstanding senior indebtedness of that party has been paid in full. There may not be sufficient assets remaining to make payments on amounts due on any or all of the notes then outstanding or any guarantee. In addition, under certain circumstances, an event of default in the payment of certain senior indebtedness will prohibit us and the guarantors of the notes from paying the notes or the guarantees of the notes. As of September 30, 2000: . our outstanding senior indebtedness was approximately $300 million (excluding unused commitments of $250.0 million under our senior credit facilities and excluding $90 million drawn after September 30, 2000 which was subsequently repaid from the proceeds of the offering of the unregistered notes); and . the outstanding senior indebtedness of our guarantors was approximately $300 million (consisting entirely of guarantees of borrowings under our senior credit facilities and excluding $90 million guaranteed after September 30, 2000 which was subsequently repaid from the proceeds of the offering of the unregistered notes). 20 In addition, certain of our subsidiaries will not guarantee the notes. However, all of our subsidiaries have guaranteed the indebtedness under our senior credit facilities. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to any of these subsidiaries, the assets of these subsidiaries will be available to pay obligations on the notes only after all outstanding liabilities of the subsidiaries have been paid in full. As of September 30, 2000, the total liabilities of these subsidiaries was approximately $72.7 million, consisting of debt owed to the U.S. government related to our licenses in the amount of $41.9 million accreted value, trade payables in the approximate amount of $600,000 and other accrued expenses in the approximate amount of $30.2 million. The notes and the guarantees of the notes will be unsecured. Thus, the notes and the guarantees of the notes will rank junior in right of payment to any of our secured indebtedness or the secured indebtedness of the guarantors of the notes to the extent of the value of the assets securing that debt. The secured indebtedness includes indebtedness incurred under our senior credit facilities, which is secured by liens on substantially all of our assets and those of our subsidiaries. If an event of default were to occur under our senior credit facilities, the lenders could foreclose on that collateral regardless of any default with respect to the notes. These assets would first be used to repay in full all amounts outstanding under our senior credit facilities. We are dependent on our subsidiaries for funds necessary to make payments on the notes. Almost all of our operations are conducted through our subsidiaries. As a result, we are dependent upon dividends from our subsidiaries for the funds necessary to make payments on the notes. Our senior credit facilities restrict the ability of these subsidiaries to pay dividends or make other distributions. There can be no assurance that any such dividends or distributions will be adequate to allow us to make payments on the notes. We may not be able to satisfy our obligations owed to the holders of 12 3/4% notes and the notes upon a change of control. Upon the occurrence of a "change of control" as defined in the indenture governing the 12 3/4% notes and the indenture governing the notes, each holder of the 12 3/4% notes and the notes will have the right to require us to repurchase that holder's notes at a price equal to 101% of the accreted value of the 12 3/4% notes or of the principal amount of the notes, together with accrued and unpaid interest to the date of repurchase. Certain events which would constitute a change of control under the indenture governing the 12 3/4% notes and the notes would result in a default under our senior credit facilities. In addition, our senior credit facilities effectively prevent repurchase of the 12 3/4% notes and the notes by us in the event of a change of control unless all amounts outstanding under our senior credit facilities are repaid in full. Our failure to repurchase the 12 3/4% notes and the notes would be a default under the indenture governing the 12 3/4% notes and the indenture governing the notes, which would be a default under our senior credit facilities. The inability to repay all indebtedness outstanding under our senior credit facilities upon acceleration thereof would also be a default under the indenture governing the 12 3/4% notes and the indenture governing the notes. Any default under our senior credit facilities or the indenture governing the notes would materially adversely affect our business, operations and financial results as well as the market price of the notes. In the event of a change of control, we may not have sufficient assets to satisfy all obligations under our senior credit facilities, the indenture governing the 12 3/4% notes and the indenture governing the notes. Any debt we incur in the future may also prohibit certain events or transactions that would constitute a change of control under the indenture governing the notes. We may enter into transactions, including acquisitions, refinancings or recapitalizations, or highly leveraged transactions, that do not constitute a change of control under the indenture governing the 12 3/4% notes and the indenture governing the notes. Any of these transactions may result in an increase in our debt or otherwise affect our capital structure, harm our credit ratings or have a material adverse affect on holders of the notes. There is no public market for the notes. The unregistered and exchange notes are each a new issue of securities, and there is no established market for them. We do not intend to apply for the unregistered notes (or exchange notes) to be listed on any securities exchange or to arrange for any quotation system to quote the notes. The initial purchasers of the unregistered 21 notes have told us that they intend to make a market in the unregistered notes (and exchange notes), but they are not obliged to do so. The initial purchasers may discontinue any market-making in the unregistered notes (or any exchange notes) at any time in their sole discretion. Accordingly, we cannot ensure that a liquid market will develop for the unregistered notes (or any exchange notes), that you will be able to sell your unregistered notes (or any exchange notes) at a particular time or that the prices that you receive when you sell will be favorable. Future trading prices of the unregistered notes (and any exchange notes) will depend on many factors, including our operating performance and financial condition, our ability to complete the offer to exchange the unregistered notes for exchange notes, prevailing interest rates and the market for similar securities. We relied upon an exemption from registration under the Securities Act and applicable state securities laws in offering the unregistered notes. The unregistered notes may be transferred or resold only in a transaction registered under, or exempt from, the Securities Act and applicable state securities laws. We, along with our subsidiaries that guarantee the unregistered notes, are filing this registration statement with the Securities and Exchange Commission and intend to use commercially reasonable efforts to cause this registration statement to become effective with respect to the exchange notes. The Securities and Exchange Commission, however, has broad discretion to declare any registration statement effective and may delay or deny the effectiveness of any registration statement for a variety of reasons. When issued under an effective registration statement, the exchange notes generally may be resold or otherwise transferred (subject to the restrictions described in "The Exchange Offer") by each holder of the exchange notes with no need for further registration. The exchange notes issued in exchange for the unregistered notes, however, will constitute a new issue of securities with no established trading market. The offer to exchange the unregistered notes will not depend upon the amount of the unregistered notes being tendered for exchange. We cannot ensure that there will be a liquid trading market for any exchange notes or, in the case of non-exchanging holders of the unregistered notes, the trading market for the unregistered notes following the offer to exchange the unregistered notes. The unregistered notes which you do not tender or we do not accept will, following the exchange offer, continue to be restricted securities. Therefore, you may only transfer or resell them in a transaction registered under or excepted from the Securities Act of 1933 and applicable state securities laws. Following the exchange offer, if you did not tender your unregistered notes, or we did not accept your tender, you generally will not have any further registration rights unless you qualify for the shelf registration rights. We do not currently anticipate that we will register the remaining unregistered notes under the Securities Act of 1933. General declines in the market for securities like the notes may materially adversely affect the trading market for the unregistered notes, or for any exchange notes, and their liquidity, regardless of our financial performance or prospects. If holders fail to exchange the unregistered notes for the exchange notes, it may weaken the market for the exchange notes. In addition, after the completion of this exchange offer, there may no longer be a market for the unregistered notes. The existence of a market for exchange notes could adversely affect the market for unregistered notes due to the limited amount of the unregistered notes that remain outstanding. Generally, a lower outstanding or trading amount of a security could result in less demand to purchase the security and could result in lower prices for the security. For the same reasons, the existence of a market for unregistered notes could adversely affect the trading market for the exchange notes. Our subsidiaries' guarantees of the notes may be void under certain circumstances, and if they are, our holding company structure limits the extent to which we can use the assets of our subsidiaries to satisfy our obligations under the notes. We are a holding company with no direct operations and no significant assets other than the stock of our subsidiaries. We will depend on funds from our subsidiaries to meet our obligations, including cash interest payments on the notes. If a court voids the subsidiary guarantees, your right as a holder of notes to participate in any distribution of the assets of any of our subsidiaries upon the liquidation, reorganization or insolvency of a subsidiary will be subject to the prior claims of that subsidiary's creditors. 22 Our operating subsidiary, Tritel Communications, Inc., and our finance subsidiary, Tritel Finance, Inc., will guarantee our obligations under the notes and certain of our future subsidiaries will be required to guarantee the notes. You may need to be able to enforce the subsidiary guarantees to recover your investment in the notes. The issuance of a subsidiary guarantee may be subject to review under federal or state fraudulent conveyance laws in the event of the bankruptcy or other financial difficulty of the subsidiary guarantor. Although laws differ among various jurisdictions, in general under fraudulent conveyance laws, a court could subordinate or avoid a guarantee if it found that: . the debt under the subsidiary guarantee was incurred with actual intent to hinder, delay or defraud creditors; or . the subsidiary guarantor did not receive fair consideration or reasonably equivalent value for its subsidiary guarantee and the subsidiary guarantor: . was insolvent or rendered insolvent because of its subsidiary guarantee; . was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or . intended to incur, or believed that it would incur, debts beyond its ability to pay upon maturity. A court is likely to find that a subsidiary guarantor did not receive fair consideration or reasonably equivalent value for its subsidiary guarantee to the extent that its liability under the subsidiary guarantee is greater than the direct benefit it received from the issuance of the notes. By its terms, each subsidiary guarantee will limit the liability of the subsidiary guarantor to the maximum amount that it could pay without the subsidiary guarantee being deemed a fraudulent transfer. A court may not give effect to this limitation on liability. In this event, a court may find that the issuance of the subsidiary guarantee rendered the subsidiary guarantor insolvent. If a court voided the guarantee or held it unenforceable, holders of notes would cease to have a claim against that subsidiary guarantor and would be solely creditors of our company and any remaining guarantors. If a court were to give effect to this limitation on liability, the amount that the subsidiary guarantor, whose liability was so limited, would be found to have guaranteed might be so low that there would not be sufficient funds to pay the notes in full. Because a significant portion of our assets are intangible, they may have little value upon a liquidation. Our assets consist primarily of intangible assets, principally Federal Communications Commission licenses, the value of which will depend significantly upon the success of our PCS network business and the growth of the PCS and wireless communications industries in general. If we default on our indebtedness, or if we are liquidated, the value of these assets may not be sufficient to satisfy our obligations to our creditors and debtholders, including the holders of the notes. Risks Related to Our Industry We face intense competition from other PCS and cellular providers and from other technologies. The viability of our PCS business will depend upon, among other things, our ability to compete, especially on price, reliability, quality of service, availability of voice and data features and customer care. In addition, our ability to maintain the pricing of our services may be limited by competition, including the entry of new service providers into our markets. We compete directly in each of our markets with at least two wireless communications service providers such as: . Verizon Wireless; . Cingular Wireless; 23 . Powertel (which has agreed to be acquired by VoiceStream; VoiceStream has agreed to be acquired by Deutsche Telekom); . US Cellular; . Nextel; . Sprint PCS; and . Leap Wireless. Some of these providers have significant infrastructure in place, often at low historical cost, and have been operational for many years, with substantial existing subscriber bases, and may have greater capital resources than we do. We also face competition from paging, dispatch and conventional mobile radio operations, specialized mobile radio, called SMR, and enhanced specialized mobile radio, called ESMR, including those ESMR networks operated by Nextel and its affiliates in our markets, and domestic and global mobile satellite service. We will also compete with resellers of wireless communications services in each of our markets. We have not obtained a significant share of the market in any of our areas of operation. We expect competition in the wireless telecommunications industry to be dynamic and intense as a result of the entrance of new competition, the development and deployment of new technologies, products and services, changes in consumer preferences and demographic trends. In the future, cellular and PCS providers will also compete more directly with traditional landline telephone service operators, and may compete with services offered by energy companies, utility companies and cable and wireless cable operators seeking to offer communications services by leveraging their existing infrastructure. They may attract customers away from us or prevent us from attracting customers. Additionally, continuing technological advances in telecommunications, the availability of more spectrum and Federal Communications Commission policies that encourage the development of new spectrum-based technologies make it impossible to accurately predict the extent of future competition. Concerns that the use of wireless handsets may pose health and safety risks may discourage the use of our PCS handsets. Media reports have suggested that, and studies are currently being undertaken to determine whether, radio frequency emissions from cellular and PCS wireless handsets may be linked with health risks, including cancer, and interference with various electronic medical devices, including hearing aids and pacemakers. Concerns over radio frequency emissions may discourage the use of wireless communications devices, such as PCS handsets, which could adversely affect our business. In addition, the Federal Communications Commission requires that certain transmitters, facilities, operations, and mobile and portable transmitting devices used in PCS handsets meet specific radio frequency emission standards. Compliance with any new restrictions could materially increase our costs. Concerns about radio frequency emissions may affect our ability to obtain licenses from government entities necessary to construct microwave sites in certain locations. Separately, governmental authorities may create new regulations concerning hand-held phones, and our handsets may not comply with rules adopted in the future. Noncompliance would decrease demand for our services. In addition, some state and local legislatures have passed or are considering restrictions on wireless phone use for drivers. The passage or proliferation of this or future legislation could decrease demand for our services. We cannot predict the effect of any governmental action concerning the usage of mobile phones. In addition, measures aimed at wireless services companies, as opposed to users, may be proposed or passed on the state or federal level in the future. Governmental actions could materially adversely affect us by requiring us to modify our operations or business plans in response to such restrictions. 24 Third-party fraud causes us to incur increased operating costs. As do most companies in the wireless industry, we incur costs associated with the unauthorized use of our network, including administrative and capital costs associated with detecting, monitoring and reducing the incidence of fraud. Fraud impacts interconnection costs, capacity costs, administrative costs, fraud prevention costs and payments to other carriers for unbillable fraudulent roaming. Risks Relating to Regulatory Matters The Federal Communications Commission has the ability to cancel or revoke our licenses, which would adversely affect our business and our ability to generate income. Our principal assets are PCS licenses issued by the Federal Communications Commission. The Federal Communications Commission has imposed certain requirements on its licensees, including PCS operators. For example, PCS licenses may be revoked by the Federal Communications Commission at any time for cause. The licenses may also be cancelled for a violation of Federal Communications Commission regulations, failure to continue to qualify for the licenses, malfeasance, other misconduct or failure to comply with the terms of the licenses. The loss of any license, or an action that threatens the loss of any license, could have a material adverse effect on our business and operating results. Because we face broad and evolving government regulation, we may have to modify our business plans or operations in the future and may incur increased costs to comply with new regulations. The licensing, construction, operation, sale and interconnection arrangements of wireless telecommunications systems are regulated to varying degrees by the Federal Communications Commission, Congress and state and local regulatory agencies. This regulation is continually evolving. There are a number of issues as to which regulation has been or in the future may be introduced, including those regarding interference between different types of wireless telecommunications systems and the effect of wireless telecommunications equipment on medical equipment and devices. As new regulations are promulgated on these or other subjects, we may be required to modify our business plans or operations to comply with them. It is possible that the Federal Communications Commission, Congress or any state or local regulatory agency having jurisdiction over our business will adopt or change regulations or take other actions that could adversely affect our business and operating results. The Telecommunications Act of 1996 mandated significant changes in existing regulation of the telecommunications industry to promote competitive development of new service offerings, to expand public availability of telecommunications services and to streamline regulation of the industry. Nevertheless, the implementation of these mandates by the Federal Communications Commission and state authorities will involve numerous changes in established rules and policies that could adversely affect our business. All of our PCS licenses are subject to the Federal Communications Commission's buildout requirements. We have developed a buildout plan that we believe meets all Federal Communications Commission requirements. In addition, the acquisition of new licenses in connection with the merger and separate exchange transaction will require new buildout plans. However, we may be unable to meet our buildout schedules. If there are delays in implementing our and our subsidiaries' network buildout, the Federal Communications Commission could reassess our authorized service area or, in extreme cases, it may revoke our licenses or impose fines. The current restrictions on foreign ownership could adversely affect our ability to attract additional equity financing from entities that are, or are owned by, foreign interests. If our foreign ownership were to exceed the then applicable limits in the future, the Federal Communications Commission could revoke or cancel our PCS licenses or order an ownership restructuring that could cause us to incur significant costs. 25 We could lose our C-Block and F-Block licenses if we fail to meet financial and other tests. To retain the C- and F-Block licenses and the favorable government financing granted to us, we must maintain our designated entity status as an entrepreneur and small business or very small business. To maintain all of the benefits of our designated entity status, our control group, including our qualifying investors, must retain certain minimum stock ownership and control of our voting stock, as well as legal and actual control of us for five years from the date of grant of our C- and F-Block PCS licenses, or until the first construction benchmark for licenses have been satisfied and the Federal Communications Commission has been notified of such construction subject to possible unjust enrichment obligations. The Federal Communications Commission has indicated that it will not rely solely on legal control in determining whether the control group and its qualifying investors are truly in control of an entity. Even if the control group and the qualifying investors hold the requisite percentages of equity control, the Federal Communications Commission may still inquire to determine whether actual and voting control exists. Government regulation, changes in our licenses or other governmental action could affect how we do business and hinder our ability to service our debt. Congress, the Federal Communications Commission, the Federal Aviation Administration, state and local regulatory authorities or the courts may adopt new regulations, amend existing regulations, alter the administration of existing regulations or take other actions that might cause us to incur significant costs in making changes to our network or providing additional services, and such costs might affect our cash flows. Additionally, the potential allocation by the Federal Communications Commission of additional PCS licenses or other wireless licenses in our markets may increase competition in those markets, which might adversely affect our operating results. As the Federal Communications Commission continues to implement changes to promote competition under the Communications Act of 1934, as amended by the Telecommunications Act of 1996, it may change how it regulates the way our network connects with other carriers' networks. The Federal Communications Commission may require us to provide lower cost services to other carriers, which may lessen our revenues. Our licenses to provide wireless communications services, which are our principal assets, have terms of ten years. The Federal Communications Commission may not renew our licenses upon the expiration of their terms. Further, the Federal Communications Commission could modify our licenses in a way that decreases their value or use to us or allocate unused airwaves for similar services. The nonrenewal or modification of any of our licenses or the allocation of additional spectrum could slow our growth and affect our ability to compete in the wireless communications industry. We could lose our PCS licenses or incur financial penalties if the Federal Communications Commission determines that we and certain of our subsidiaries are not small businesses, very small businesses or entrepreneurial enterprises or if we do not meet the Federal Communications Commission's minimum construction requirements. The Federal Communications Commission could impose penalties on us, related to our subsidiaries' very small business, small business and entrepreneurial status and its requirements regarding minimum construction of our network that could slow our growth and adversely affect our ability to compete in the wireless communications industry. Certain of our subsidiaries acquired PCS licenses as very small businesses, small businesses and entrepreneurial companies. These subsidiaries must remain very small businesses, small businesses or entrepreneurs, as the case may be, for at least five years following the original date of determination to comply with applicable rules of the Federal Communications Commission, including rules governing our capital and ownership structure and corporate governance. If the Federal Communications Commission determines that we 26 or our subsidiaries violated these rules or failed to meet its minimum construction requirements, it could impose substantial penalties upon us. Among other things, the Federal Communications Commission could: . fine us; . cancel our licenses; . revoke our licenses; . accelerate our installment payment obligations; . require a restructuring of our equity; or . cause us to lose bidding credits retroactively. 27 THE EXCHANGE OFFER Purpose and Effects The unregistered notes were originally issued on January 24, 2001 in the principal amount of $450.0 million in a transaction exempt from the registration requirements of the Securities Act. The unregistered notes may not be reoffered, resold or transferred except under a registration statement filed with the SEC or unless an exemption from the registration requirements of the Securities Act is available. The exchange offer is designed to provide to holders of unregistered notes an opportunity to acquire exchange notes which, unlike the unregistered notes, generally will be freely transferable at all times, provided the holder is not our affiliate and not a broker-dealer or participating in a distribution of the exchange notes. Based on no-action letters issued by the staff of the SEC to third parties in other transactions, we believe that a holder of unregistered notes, other than a holder who is our affiliate within the meaning of the Securities Act, who exchanges unregistered notes for exchange notes in the exchange offer, generally may offer the exchange notes for resale, sell the exchange notes and otherwise transfer the exchange notes without further registration under the Securities Act and without delivery of a prospectus that satisfies the disclosure requirements of the Securities Act if the holder acquires the exchange notes in the ordinary course of its business and is not participating, does not intend to participate and has no arrangement or understanding with any person to participate in a distribution of the exchange notes. Any holder who is our affiliate within the meaning of that term under the Securities Act may not rely on these no action letters. Any holder of unregistered notes using the exchange offer to participate in a distribution of exchange notes cannot rely on the no-action letters referred to above. This includes a broker-dealer that acquired the unregistered notes directly from us, but not as a result of market-making activities or other trading activities. Consequently, each holder who may not rely on these letters must comply with the registration and prospectus delivery requirements of the Securities Act in the absence of an exemption from such requirements. See "Plan of Distribution". Each broker-dealer that receives exchange notes for its own account in exchange for unregistered notes, where the unregistered notes were acquired by the broker-dealer as a result of market-making activities or other trading activities may be a statutory underwriter and must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act of 1933 in connection with the resale of the exchange notes received in exchange for the unregistered notes. The letter of transmittal which accompanies this prospectus states that by so acknowledging and by delivering a prospectus, a participating broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act. A participating broker-dealer may use this prospectus, as it may be amended and/or supplemented from time to time, in connection with the resales of the exchange notes it receives in exchange for the unregistered notes in the exchange offer. We will make this prospectus available to any participating broker-dealer in connection with any resale of this kind for a period of 180 days after the consummation of the exchange offer. See "Plan of Distribution". Each holder of unregistered notes who wishes to exchange unregistered notes for exchange notes in the exchange offer will be required to represent and acknowledge, for the holder and for each beneficial owner of such unregistered notes, whether or not the beneficial owner is the holder, in the letter of transmittal that: . the exchange notes to be acquired by the holder and each beneficial owner, if any, are being acquired in the ordinary course of business; . neither the holder nor any beneficial owner is our or any of our subsidiaries' affiliate; 28 . any person participating in the exchange offer with the intention or purpose of distributing exchange notes received in exchange for the unregistered notes, including a broker-dealer that acquired the unregistered notes directly from us, but not as a result of market- making activities or other trading activities, cannot rely on the no- action letters referenced above and must comply with the registration and prospectus delivery requirements of the Securities Act, in connection with a secondary resale of the exchange notes acquired by such person; . if the holder is not a broker-dealer, the holder and each beneficial owner, if any, are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in any distribution of the exchange notes received in exchange for unregistered notes; and . if the holder is a broker-dealer that will receive exchange notes for the holder's own account in exchange for the unregistered notes, the unregistered notes to be so exchanged were acquired by the holder as a result of market-making or other trading activities and the holder will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such exchange notes received in the exchange offer. However, by so representing and acknowledging and by delivering a prospectus, the holder will not be deemed to admit that it is an underwriter within the meaning of the Securities Act of 1933. Terms of the Exchange Offer We will offer exchange notes in exchange for the surrender of unregistered notes. We will keep the exchange offer open for at least 30 days, or longer if required by applicable law, after the date on which notice of the exchange offer is mailed to the holders of the unregistered notes. Upon the terms contained in this prospectus and in the letter of transmittal which accompanies this prospectus, we will accept any and all unregistered notes validly tendered and not withdrawn before 5:00 p.m., New York City time, on the expiration date of the exchange offer. We will issue an equal principal amount of exchange notes in exchange for the principal amount of the unregistered notes accepted in the exchange offer. Holders may tender some or all of their unregistered notes under the exchange offer. Unregistered notes may be tendered only in principal amounts at maturity of $1,000 and integral multiples of $1,000. The form and terms of the exchange notes will be the same as the form and terms of the unregistered notes except that: . the exchange notes will have been registered under the Securities Act and therefore will not bear legends restricting their transfer; and . the exchange notes will not contain specific terms providing for registration rights or liquidated damages under specific circumstances which are described in the exchange and registration rights agreement. The exchange notes will evidence the same debt as the unregistered notes and will be entitled to the benefits of the same indenture. Interest on each exchange note issued in the exchange offer will accrue from the last interest payment date on which interest was paid on the unregistered notes for which the exchange note was exchanged, or if no interest has been paid on the unregistered notes, from the issue date of the unregistered notes. In connection with the exchange offer, holders of the unregistered notes do not have any appraisal or dissenters' rights under law or the indenture. We intend to conduct the exchange offer in accordance with the applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations of the SEC related to these offers. We will be deemed to have accepted validly tendered unregistered notes when, as and if we have given oral or written notice of acceptance to Firstar Bank, N.A., our exchange agent for the exchange offer. The exchange agent will act as agent for the tendering holders for the purpose of receiving exchange notes from us. 29 If any tendered unregistered notes are not accepted for exchange because of an invalid tender, the occurrence of other events specified in this prospectus or if the unregistered notes are submitted for a greater principal amount than the holder desires to exchange, the certificates for the unaccepted unregistered notes will be returned without expense to the tendering holder. If unregistered notes were tendered by book-entry transfer in the exchange agent account at The Depository Trust Company in accordance with the book-entry transfer procedures described below, these non-exchanged unregistered notes will be credited to an account maintained with The Depository Trust Company as promptly as practicable after the expiration date of the exchange offer. Each of the following is a registration default: (1) neither the registration statement of which this prospectus is a part nor a shelf registration statement with respect to the unregistered notes is filed on or prior to April 24, 2001; (2) neither of the registration statements of which this prospectus is a part nor a shelf registration statement with respect to the unregistered notes is declared effective by the Securities & Exchange Commission on or prior to August 22, 2001, the effectiveness target date, or, if later, within 45 days after the publication of a change in applicable law or interpretation of law by the Securities & Exchange Commission's staff that would require us to file a shelf registration statement; (3) we fail to complete the exchange offer on or prior to September 21, 2001; or (4) a shelf registration statement that has been timely declared effective but thereafter ceases to be effective or usable in connection with resales of transfer restricted notes without being succeeded within 45 days by an additional registration statement filed and declared effective. In the event of a registration default, we must pay liquidated damages to each holder of transfer restricted notes during the period of one or more such registration defaults, in an amount equal to $0.192 per week per $1,000 of principal amount of the transfer restricted notes held by such holder until the cure of all registration defaults. Such interest will be payable on the next scheduled interest payment date. We may file a shelf registration to cover resales of transfer restricted notes if: . a change in law or the Securities & Exchange Commission's interpretations of the law precludes our exchange offer; . we do not exchange validly tendered unregistered notes for exchange notes by September 21, 2001; . any initial purchaser requests in connection with unregistered notes which were not eligible for exchange in the exchange offer and which that initial purchaser still holds; . any law or the Securities & Exchange Commission's interpretations preclude a holder from participating in the exchange offer; . a holder receives exchange notes which are not freely transferable; or . we so elect. For the purposes of the foregoing, "transfer restricted notes" mean each unregistered note until (i) the date on which such unregistered note has been exchanged for a freely transferable exchange note in the exchange offer, (ii) the date on which such unregistered note has been effectively registered under the Securities Act of 1933 and disposed of in accordance with the shelf registration statement or (iii) until the date on which such unregistered note is distributed to the public pursuant to Rule 144 under the Securities Act of 1933 or is saleable pursuant to Rule 144(k) under the Securities Act of 1933. Tendering holders of the unregistered notes will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal and certain exceptions listed in the indenture, transfer taxes with respect to the exchange of unregistered notes in the exchange offer. We will pay all charges and expenses, other than transfer taxes which may be imposed, in connection with the exchange offer. See "--Transfer Taxes" below. 30 Expiration Date; Extensions; Amendment The expiration date of the exchange offer is 5:00 p.m., New York City time, on [ ], 2001, unless we, in our reasonable discretion, extend the exchange offer, in which case the expiration date shall be the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we will notify the exchange agent of any extension by oral or written notice and will make a public announcement of the extension before 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We reserve the right, in our reasonable discretion: . to delay accepting any unregistered notes, to extend the exchange offer or to terminate the exchange offer if, in our reasonable judgment, any of the conditions described below under "--Conditions to the Exchange Offer" shall not have been satisfied, by giving oral or written notice of the delay, extension or termination to the exchange agent; or . to amend the terms of the exchange offer in any manner. If we amend the exchange offer in a manner that we consider material, we will: . disclose the amendment by means of a prospectus supplement; and . extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment and the manner of disclosure to the registered holders, if the exchange offer would otherwise expire during the five to ten business day period. We will give oral or written notice of any extension, amendment, non- acceptance or termination to the holders of unregistered notes as promptly as practicable. In the case of any extension, we will issue such notice as a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Procedures for Tendering To tender in the exchange offer, a holder must do the following: . complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal; . have the signatures guaranteed if required by the instructions to the letter of transmittal; and . except as discussed in "--Guaranteed Delivery Procedures," mail or otherwise deliver the letter of transmittal, or facsimile, together with the unregistered notes and any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. The exchange agent must receive the unregistered notes, a completed letter of transmittal and all other required documents at the address listed below under "--Exchange Agent" before 5:00 p.m., New York City time, on the expiration date for the tender to be effective. You may deliver your unregistered notes by using the book-entry transfer procedures described below, as long as the exchange agent receives confirmation of the book-entry transfer before the expiration date. The Depository Trust Company has authorized its participants that hold unregistered notes on behalf of beneficial owners of unregistered notes through The Depository Trust Company to tender their unregistered notes as if they were holders. To effect a tender of unregistered notes, The Depository Trust Company participants should either: . complete and sign the letter of transmittal, or a manually signed facsimile of the letter, have the signature guaranteed if required by the instructions to the letter of transmittal, and mail or deliver the letter of transmittal to the exchange agent according to the procedure described in "--Procedures for Tendering"; or 31 . transmit their acceptance to The Depository Trust Company through its automated tender offer program for which the transaction will be eligible and follow the procedure for book-entry transfer described in "--Book-Entry Transfer". By tendering, each holder will make the representations contained under the heading "--Terms of the Exchange Offer." Each participating broker-dealer must acknowledge that it will deliver a prospectus in connection with any resale of exchange notes. The tender of a holder and our acceptance of the tender will constitute a binding agreement between the holder and us described in this prospectus and in the letter of transmittal. The method of delivery of unregistered notes, the letter of transmittal and all other required documents to the exchange agent is at the election and sole risk of the holder of the unregistered notes. If such delivery is by mail, it is recommended that registered mail, properly insured, with return receipt requested, be used. In all cases, sufficient time should be allowed to assure delivery to the exchange agent prior to the expiration date. No letters of transmittal or unregistered notes should be sent to us. Any beneficial owner whose unregistered notes are registered in the name of a broker-dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the beneficial owner's behalf. If the beneficial owner wishes to tender on its own behalf, the owner must, prior to completing and executing the letter of transmittal and delivering unregistered notes, either: . make appropriate arrangements to register ownership of the unregistered notes in the owner's name; or . obtain a properly completed bond power from the registered holder. If a letter of transmittal is signed by a person other than the registered holder of any unregistered notes listed in the letter of transmittal, the unregistered notes must be endorsed or accompanied by a properly completed bond power and signed by the registered holder as the registered holder's name appears on the unregistered notes. The transfer of a registered ownership may take considerable time. The tender by a holder of unregistered notes will constitute an agreement between us and the holder in accordance with the terms and subject to the conditions set forth in this prospectus and in the applicable letter of transmittal. If a holder tenders less than all the unregistered notes held by this holder, this tendering holder should fill in the applicable box of the applicable letter of transmittal. The amount of unregistered notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated. Signatures on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible guarantor institution unless the unregistered notes are tendered as follows: . by a registered holder who has not completed the box entitled "--Special Issuance Instructions" or "--Special Delivery Instructions" on the letter of transmittal; or . for the account of an eligible guarantor institution. An eligible guarantor institution is a transfer agent, registered by the Securities and Exchange Commission to issue guarantees. If signatures on a letter of transmittal or a notice of withdrawal are required to be guaranteed, the guarantee must be by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, a commercial bank or trust company having an office or correspondent in the United States or an eligible guarantor institution. If a letter of transmittal or any unregistered notes or bond is signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing, and, unless waived by us, evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal. 32 Promptly after the date of this prospectus, the exchange agent will establish a new account or use an existing account with respect to the unregistered notes at the book-entry facility, The Depository Trust Company, to facilitate the exchange offer. Subject to establishing the accounts, any financial institution that is a participant in the book-entry transfer facility's system may make book-entry delivery of unregistered notes by causing the book-entry transfer facility to transfer the unregistered notes into the exchange agent's account in accordance with that facility's procedures. Although delivery of the unregistered notes may be effected through book-entry transfer into the exchange agent's account at the book-entry transfer facility, the exchange agent must receive: . an appropriate letter of transmittal properly completed and duly executed; or . an agent's message with any required signature guarantee; and . all other required documents before the expiration date of the exchange offer or within the time period provided under guaranteed delivery procedures. Delivery of documents to the book-entry transfer facility does not constitute delivery to the exchange agent. The term agent's message means a message transmitted by The Depository Trust Company to the exchange agent, which states that The Depository Trust Company has received an express acknowledgment from the participant in The Depository Trust Company tendering the unregistered notes stating: . the aggregate principal amount of unregistered notes which have been tendered by such participant; . that the participant has received and agrees to be bound by the term of the letter of transmittal; and . that we may enforce such agreement against the participant. We will determine in our reasonable discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered unregistered notes and withdrawal of tendered unregistered notes, which determination will be final and binding. We reserve the absolute right to reject any and all unregistered notes not properly tendered or any unregistered notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular unregistered notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of unregistered notes must be cured within a period of time that we shall determine. Neither us, the exchange agent nor any other person will incur any liability for failure to give notice of any defect or irregularity with respect to any tender of unregistered notes. Tenders of unregistered notes will not be deemed to have been made until such defects or irregularities mentioned above have been cured or waived. Any unregistered notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date of the exchange offer. Acceptance of Unregistered Notes for Exchange; Delivery of Exchange Notes We will deliver exchange notes in exchange for unregistered notes promptly following acceptance of the unregistered notes. For purposes of the exchange offer, we shall be deemed to have accepted validly tendered unregistered notes which have not been withdrawn when, as and if we have given oral or written notice to the exchange agent. The exchange agent will act as agent for the tendering holders of unregistered notes for the purposes of receiving exchange notes. Under no circumstances will we or the exchange agent pay interest because of any delay in making the payment or delivery. 33 If any tendered unregistered notes are not accepted for exchange because of an invalid tender, the occurrence of other events or otherwise, we will return any unaccepted unregistered notes, at our expense, to the tendering holders as promptly as practicable after the expiration or termination of the exchange offer. Guaranteed Delivery Procedures A holder who wishes to tender its unregistered notes and: . whose unregistered notes are not immediately available; . who cannot deliver unregistered notes, the letter of transmittal or any other required documents to the exchange agent prior to the expiration date; or . who cannot complete the procedures for book-entry transfer, before the expiration date; may effect a tender if: . the tender is made through an eligible guarantor institution; . before the expiration date, the exchange agent receives from the eligible guarantor institution a properly completed and duly executed notice of guaranteed delivery by facsimile transmission, mail or hand delivery including: . the name and address of the holder; . the certificate numbers of unregistered notes; . the principal amount of unregistered notes tendered; . a statement that the tender is being made; and . a guarantee that, within three New York Stock Exchange trading days after the expiration date, the letter of transmittal together with the certificate representing the unregistered notes, or a confirmation of book-entry transfer of the unregistered notes into the exchange agent's account at the book-entry transfer facility, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and . the exchange agent receives, within three New York Stock Exchange trading days after the expiration date, a properly completed and executed letter of transmittal or facsimile, as well as the certificate representing all tendered unregistered notes in proper form for transfer or a confirmation of book-entry transfer of such unregistered notes into the exchange agent's account at the book-entry transfer facility, and all other documents required by the letter of transmittal. Withdrawal of Tenders Tenders of unregistered notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date of the exchange offer. To withdraw a tender of unregistered notes in the exchange offer, a letter or facsimile transmission notice of withdrawal must be received by the exchange agent at its address described below prior to 5:00 p.m., New York City time, on the expiration date. Any notice of withdrawal must: . specify the name of the person having deposited the unregistered notes to be withdrawn; . identify the unregistered notes to be withdrawn including the certificate numbers and principal amount of those unregistered notes or, in the case of unregistered notes transferred by book-entry transfer, the name and number of the account at the book-entry transfer facility to be credited and otherwise comply with the procedures of the transfer agent; . be signed by the holder in the same manner as the original signature on the letter of transmittal by which the unregistered notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee under the indenture governing the unregistered notes register the transfer of the unregistered notes into the name of the person withdrawing the tender; and 34 . specify the name in which any such unregistered notes are to be registered, if different from that of the person who deposited the unregistered notes. If unregistered notes have been tendered under the procedures of book-entry transfer described above under "--Procedures for Tendering", any notice of withdrawal must specify the name and number of the account at DTC's book-entry transfer facility to be credited with the withdrawn unregistered notes and otherwise comply with the procedures of the facility. A holder may obtain a form of the notice of withdrawal from the exchange agent at its offices listed under "--Exchange Agent". If certificates for unregistered notes have been delivered or otherwise identified to the exchange agent, then, before the release of these certificates, the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible guarantor institution unless the holder is an eligible guarantor institution. We will determine all questions as to the validity, form and eligibility, including time of receipt, of such notices, in our reasonable discretion, and our determination shall be final and binding on all parties. Any unregistered notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer, and no exchange notes will be issued, unless the withdrawn unregistered notes are validly retendered. Any unregistered notes which have been tendered but which are not accepted for exchange will be returned to the holder of the notes without cost to the holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. In the case of the unregistered notes tendered by book-entry transfer into the exchange agent's account at DTC's book-entry transfer facility pursuant to the book-entry transfer procedures described above under "--Procedures for Tendering", the unregistered notes will be credited to an account maintained with the book-entry transfer facility for the unregistered notes as soon as practicable after withdrawal, rejection of tender or termination. Properly withdrawn unregistered notes may be retendered by following one of the procedures described above under "--Procedures for Tendering" at any time before the expiration date. Conditions to the Exchange Offer Despite any other provision of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any unregistered notes, and may terminate or amend the exchange offer, if, at any time before the expiration date, any of the following events shall occur: . the acceptance or issuance would violate applicable law or any applicable interpretation of the staff of the SEC; . any action or proceeding by or before any court or governmental agency with respect to the exchange offer shall be instituted or pending which, in our reasonable judgment, might impair our ability to proceed with the exchange offer; or . any law, statute, rule or regulation shall have been proposed, adopted or enacted which, in our reasonable judgment, might materially impair our ability to proceed with the exchange offer. The above conditions are for our sole benefit and we may assert them regardless of the circumstances giving rise to any condition or we may waive them in whole or in part at any time and from time to time in our reasonable discretion. Our failure at any time to exercise any of our rights shall not be deemed a waiver of any right and each right shall be deemed an ongoing right which we may assert at any time and from time to time. If we determine in our reasonable discretion that any of the conditions are not satisfied, we may: . refuse to accept any unregistered notes and return all tendered unregistered notes to the tendering holders; . extend the exchange offer and retain all unregistered notes tendered before the expiration of the exchange offer, subject to the rights of holders to withdraw these unregistered notes; or 35 . waive unsatisfied conditions and accept all properly tendered unregistered notes that the holders did not withdraw. If this waiver constitutes a material change to the exchange offer, we will promptly disclose the waiver by a prospectus supplement that we will distribute to the registered holders. We will also extend the exchange offer for five to ten business days, depending upon the significance of the waiver, if the exchange offer would otherwise have expired. In addition, we will not accept for exchange any unregistered notes tendered, and no exchange notes will be issued in exchange for any unregistered notes, if at the time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus is a part or the qualification of the indenture under the Trust Indenture Act of 1939. Exchange Agent Firstar Bank, N.A. has been appointed as the exchange agent for the exchange offer. All executed letters of transmittal should be directed to the exchange agent at the addresses described below. Questions and requests for assistance, requests for additional copies of the prospectus or the letter of transmittal and requests for notices of guaranteed delivery should be directed to the exchange agent, addressed as follows: FIRSTAR BANK, N.A. By Facsimile: (651) 229-6415 Attention: Corporate Trust Department By Hand, Mail or Courier: Firstar Bank, N.A. Attention: Corporate Trust Department 101 East Fifth Street St. Paul, Minnesota 55101 Telephone: (651) 229-2600 Delivery of this instrument to an address other than as described above or transmission of instructions via fax transmission other than as described above does not constitute a valid delivery. Fees and Expenses We will not make any payment to brokers, dealers, or others soliciting acceptances of the exchange offer. We will bear the expenses of soliciting tenders under the exchange offer. We will not make any payment to brokers, dealers or others soliciting acceptances of the exchange offer. We will pay other expenses to be incurred in connection with the exchange offer, including the fees and expenses of the exchange agent, accounting and the reasonable legal fees of the holders of unregistered notes as defined in the registration rights agreement. Holders who tender unregistered notes in connection with the exchange offer will not be required to pay brokerage commissions or fees. Transfer Taxes Holders who tender their unregistered notes for exchange will not be obligated to pay any transfer taxes. A tendering holder, however, will be required to pay any transfer taxes incurred, whether imposed on the registered holder or any person, if: . exchange notes are to be delivered to, or issued in the name of, any person other than the registered holder of the unregistered notes; or 36 . tendered unregistered notes are registered in the name of any person other than the person signing the applicable letter of transmittal; or . a transfer tax is imposed for any reason other than the exchange of unregistered notes in connection with the exchange offer. If satisfactory evidence of payment of these taxes or exemption from them is not submitted with the applicable letter of transmittal, the amount of these transfer taxes will be billed directly to the tendering holder. Consequences of Failure to Exchange The unregistered notes of holders who do not exchange their unregistered notes for exchange notes in the exchange offer will continue to have restrictions on transfer because we issued the unregistered notes under exemptions from, or in transactions not subject to, the registration requirements of the Securities Act of 1933 and applicable state securities laws. In general, unregistered notes may not be offered or sold, unless registered under the Securities Act of 1933, except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will register the unregistered notes under the Securities Act of 1933. To the extent that unregistered notes are tendered in connection with the exchange offer, any trading market for the unregistered notes not tendered in connection with the exchange offer could be adversely affected. The tender of unregistered notes in the exchange offer may have an adverse effect upon, and increase the volatility of, the market prices of the unregistered notes due to a reduction in liquidity. Accounting Treatment The exchange notes will be recorded at the same carrying value as the unregistered notes, as reflected in our accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized. The expenses of the exchange offer will be expensed over the term of the exchange notes. 37 USE OF PROCEEDS We will not receive any cash proceeds from the issuance of our exchange notes or the exchange of the unregistered notes in the exchange offer. The net proceeds from the offering of the unregistered notes (after deducting the initial purchasers' discounts and estimated fees and expenses payable by us) were approximately $437.5 million. We used some of the proceeds from the offering of the unregistered notes to repay approximately $90 million of revolving credit borrowed under our senior credit facilities to fund the acquisition of certain assets from ALLTEL and working capital needs. We intend to use the net proceeds from the offering of the unregistered notes to fund: . capital expenditures, including the construction of our network and adding additional cell sites to our existing markets; . a portion of the costs of developing and implementing our GPRS overlay network; . acquisitions of PCS licenses within our market areas; . operating losses and other working capital; and . general corporate purposes. The revolving credit that was repaid with the proceeds from the offering of the unregistered notes bore interest at a variable rate equal to the eurodollar rate (as defined in our senior credit facilities) plus a margin of 3.75% and had a maturity date of June 30, 2007. The interest rate would be reset every 30 days. The average interest rate for the revolving credit was approximately 10.26%. Under the terms of our senior credit facilities, the proceeds from the offering of the unregistered notes may only be used to finance the buildout of our system and working capital, pay transaction costs related to this offering and other general corporate purposes related to our build out. See "Business-- Network Development" and "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources". Pending these uses, we expect to invest the net proceeds of the offering of the unregistered notes in investment grade, interest bearing securities. 38 CAPITALIZATION The following table sets forth as of September 30, 2000: . Tritel's historical capitalization; and . Tritel's pro forma capitalization as adjusted to give effect to (1) the recapitalization of Tritel after the merger with TeleCorp Wireless and (2) the offering of the unregistered notes, as if both transactions had occurred on September 30, 2000. This table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Tritel's consolidated financial statements and the related notes included elsewhere in this prospectus.
Pro forma(d) Actual as adjusted As of as of September 30, September 30, 2000 2000 ------------- ------------- ($ in thousands) Cash and cash equivalents.......................... $ 168,786 $ 606,286 ========= ========== Long term debt: Government license obligations(a)................ $ 41,946 $ 41,946 Senior credit facilities(b)...................... 300,000 300,000 10 3/8% senior subordinated notes................ -- 450,000 12 3/4% senior subordinated discount notes....... 237,783 237,783 --------- ---------- Total long term debt (including current maturities)................................... 579,729 1,029,729 --------- ---------- Redeemable preferred stock......................... 106,386 -- --------- ---------- Stockholders' equity: Preferred stock.................................. 46,374 -- Common stock..................................... 1,071 -- Additional paid-in capital(c).................... 675,714 829,545 Accumulated deficit.............................. (518,115) (518,115) --------- ---------- Total stockholders' equity..................... 205,044 311,430 --------- ---------- Total capitalization......................... $ 891,159 $1,341,159 ========= ==========
- ---------- (a) Does not include the assumption of $11.5 million of Federal Communications Commission debt on October 27, 2000 in connection with certain licenses acquired. See "Certain Relationships and Related Transactions--Purchase of Licenses in Georgia and Florida; Ownership of the Remaining Affiliate Licenses". (b) Our senior credit facilities provide up to $550.0 million of term loan and revolving credit financing. As of September 30, 2000, we had drawn $300.0 million under our senior credit facilities (not including $90.0 million drawn after September 30, 2000 which was subsequently repaid from the proceeds of the offering of unregistered notes). See "Description of Certain Indebtedness--Senior Credit Facilities". (c) Additional paid-in capital as of September 30, 2000 is net of deferred compensation. (d) The pro forma as adjusted balances reflect this offering net of $12.5 million of estimated offering expenses and the recapitalization of Tritel after the merger with TeleCorp Wireless. The merger resulted in the exchange of 100% of the outstanding common and preferred stock of Tritel for common and preferred stock of TeleCorp PCS. As a result, all amounts previously recorded as redeemable preferred stock, preferred stock, common stock, additional paid-in capital and deferred compensation are presented for pro forma purposes as common stock and additional paid-in capital of Tritel immediately after the merger. Accordingly, as a result of the merger, TeleCorp PCS, our ultimate parent, owns all of Tritel's outstanding common stock. No pro forma adjustment has been reflected in any balance for merger related expenses incurred by Tritel subsequent to September 30, 2000. Pro forma as adjusted at September 30, 2000, balances include proceeds of the offering of unregistered notes net of estimated offering expenses of $12.5 million. These estimated offering expenses are a deferred financing cost reflected in total assets. These balances do not include the repayment from the proceeds of the offering of the unregistered notes of approximately $90.0 million of revolving credit borrowed subsequent to September 30, 2000 under the senior credit facilities. 39 SELECTED HISTORICAL FINANCIAL INFORMATION The selected historical balance sheet data of Tritel presented below as of December 31, 1998 and 1999 and the selected statements of operations data for each of the three years in the period ended December 31, 1999, have been derived from audited consolidated financial statements included elsewhere in this prospectus. The selected historical balance sheet data presented below as of December 31, 1995, 1996 and 1997 and the selected statements of operations data for the years ended December 31, 1995 and 1996 have been derived from audited consolidated financial statements not included elsewhere in this prospectus. The selected historical balance sheet data presented below as of September 30, 2000 and the selected statement of operations data for the nine months ended September 30, 1999 and 2000 have been derived from unaudited consolidated financial statements included elsewhere in this prospectus which management believes include all adjustments necessary for a fair presentation of Tritel's financial condition and results of operations at those dates and for those periods. The results of operations for interim periods are not necessarily indicative of the results for a full year's operations. The other data is unaudited and derived from Tritel's operational records. All the data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Tritel's consolidated financial statements and the related notes included elsewhere in this prospectus.
Nine months ended For the years ended December 31, September 30, -------------------------------------------- --------------------- 1995 1996 1997 1998 1999 1999 2000 ----- ------- ------- -------- --------- -------- --------- ($ in thousands except ARPU) Statements of Operations Data: Revenues: Service................ $ -- $ -- $ -- $ -- $ 1,186 $ 10 $ 43,366 Roaming................ -- -- -- -- 3,421 88 24,120 Equipment.............. -- -- -- -- 2,152 81 8,511 ----- ------- ------- -------- --------- -------- --------- Total revenues....... -- -- -- -- 6,759 179 75,997 ----- ------- ------- -------- --------- -------- --------- Operating expenses: Costs of services and equipment............. -- -- -- -- 6,966 189 51,961 Technical operations... -- 4 104 1,939 18,459 8,931 38,103 Sales and marketing, general and administrative........ 121 1,486 3,151 5,399 43,319 24,035 92,627 Stock-based compensation.......... -- -- -- -- 190,664 -- 79,092 Depreciation and amortization.......... -- 2 20 348 12,839 5,601 45,069 ----- ------- ------- -------- --------- -------- --------- Total operating expense.............. 121 1,492 3,275 7,686 272,247 38,756 306,852 ----- ------- ------- -------- --------- -------- --------- Operating loss......... (121) (1,492) (3,275) (7,686) (265,488) (38,577) (230,855) Interest income......... 1 31 121 77 16,791 10,451 20,501 Interest expense and financing cost......... -- -- -- (722) (27,200) (14,268) (47,260) ----- ------- ------- -------- --------- -------- --------- Loss before extraordinary item and income taxes.......... (120) (1,461) (3,154) (8,331) (275,897) (42,394) (257,614) Income tax benefit...... -- -- -- -- 28,443 13,638 1,857 ----- ------- ------- -------- --------- -------- --------- Loss before extraordinary item.... (120) (1,461) (3,154) (8,331) (247,454) (28,756) (255,757) Extraordinary item--loss on return of spectrum.. -- -- -- (2,414) -- -- -- ----- ------- ------- -------- --------- -------- --------- Net loss............... (120) (1,461) (3,154) (10,745) (247,454) (28,756) (255,757) Series A preferred stock dividend requirement... -- -- -- -- (8,918) (6,632) (6,800) ----- ------- ------- -------- --------- -------- --------- Net loss available to common shareholders.... $(120) $(1,461) $(3,154) $(10,745) $(256,372) $(35,388) $(262,557) ===== ======= ======= ======== ========= ======== ========= Other Data: Deficiency of earnings to fixed charges(a).... $ 140 $ 4,819 $10,368 $ 18,876 $ 299,582 $ 56,986 $ 263,723 Ending subscribers...... -- -- -- -- 24,600 300 156,100 ARPU (post-pay)(b)...... -- -- -- -- $ 45(d) NM(e) $ 57 Churn(c)................ -- -- -- -- 1.1%(d) NM(e) 1.7% Covered population (end of period, in millions).............. -- -- -- -- 7.9 0.7 13.2
As of December 31, ---------------------------------------------- September 30, 1995 1996 1997 1998 1999 2000 ------ ------- -------- -------- ---------- ------------- ($ in thousands) Balance Sheet Data: Cash and cash equivalents............ $ 400 $ 32 $ 1,763 $ 846 $ 609,269 $ 168,786 Working capital (deficit).............. 1,476 (3,521) (6,377) (31,105) 516,317 131,587 Property and equipment, net.................... -- 10 13 13,816 262,343 503,436 Federal Communications Commission licensing costs, net............. 40 62,503 99,425 71,466 201,946 202,281 Intangible assets, net.. -- -- -- -- 59,508 55,216 Total assets............ 4,944 67,731 102,513 89,021 1,196,362 1,013,443 Long-term debt (including current maturities)............ -- 53,504 77,200 51,599 558,639 579,729 Redeemable preferred stock.................. -- -- -- -- 99,586 106,386 Total stockholders' equity (deficit)....... $1,519 $ 5,674 $ 8,762 $ (1,983) $ 387,446 $ 205,044
- ------- (a) The ratio of earnings to fixed charges is computed by dividing fixed charges into income before taxes plus fixed charges plus amortization of capitalized interest less interest capitalized. Fixed charges include interest expense, interest capitalized and rental expense or operating leases representing that portion of expense deemed attributable to interest. On this basis, earnings before fixed charges for the periods shown were not adequate to cover fixed charges therefore the amount of the deficiency is shown. These deficiencies should not be considered indicative of future results. (b) Average revenue per unit, or ARPU, is defined as post-pay service revenue, including airtime and incollect roaming revenue but excluding outcollect roaming revenue, for the periods indicated, divided by the average post-pay customers for those periods. (c) Churn is defined as the number of disconnected customers for the periods indicated, divided by the average number of customers for those periods. (d) Tritel commenced operations in late September 1999. Therefore, ARPU and churn are based only on data for the three months ended December 31, 1999. (e) Not meaningful. 40 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion in conjunction with (1) Tritel's accompanying unaudited consolidated financial statements and notes thereto and (2) Tritel's audited consolidated financial statements, notes thereto and management's discussion and analysis of financial condition and results of operations as of and for the year ended December 31, 1999 included in our annual report on Form 10-K for such period. Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward- looking statements that are based on current expectations, estimates, and projections. These forward-looking statements reflect management's good-faith evaluation of information currently available. However, because these statements are based upon, and therefore can be influenced by, a number of external variables over which management has no, or incomplete, control, they are not, and should not be read as being guarantees of future performance or of actual future results; nor will they necessarily prove to be accurate indications of the times at or by which any performance or result will be achieved. Accordingly, actual outcomes and results may differ materially from those expressed in these forward-looking statements. The following discussion and analysis of Tritel's financial condition and results of operations should be read in conjunction with its consolidated financial statements and notes thereto, which are included in this prospectus. As used in this section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations", the terms "we", "our", and "us" refer to Tritel, Inc. and its consolidated subsidiaries, including Tritel PCS, Inc. General We are an AT&T Wireless affiliate with licenses to provide PCS services to approximately 14.0 million people in contiguous markets in the south-central United States. In January 1999, we entered into affiliation agreements with AT&T Wireless and its affiliates. We have also joined with TeleCorp Wireless and one other AT&T Wireless affiliate to operate under a common regional brand name, SunCom(R). We provide our PCS services as a member of the AT&T Wireless network, serving as the preferred roaming provider to AT&T Wireless's and AT&T Wireless Services' and its affiliates' digital customers in virtually all of our markets and co-branding our services with the AT&T and SunCom(R) brands and logos, giving equal emphasis to each. We have incurred significant expenditures in conjunction with our organization and financing, PCS license acquisitions, hiring of key personnel, and design and construction of our PCS network facilities. As of December 31, 2000, we had launched service in 38 markets. These markets include 13.7 million people, or 98% of the population in our licensed areas, and we serviced 205,675 customers. The timing of launch in individual markets is determined by various factors, principally the success of our site acquisition program, zoning and microwave relocation activities, equipment delivery schedules and local market and competitive considerations. We will evaluate further coverage expansion on a market-by-market basis. On November 13, 2000, TeleCorp Wireless completed its merger with Tritel. As a result of the merger, all of the capital stock of TeleCorp Wireless and Tritel was converted into the right to receive capital stock in TeleCorp PCS. After the merger, we and TeleCorp Wireless became wholly-owned subsidiaries of TeleCorp PCS. 41 We launched commercial service in our first markets in September 1999. As of December 31, 2000, we had successfully launched commercial service in the following markets throughout our coverage areas: Biloxi/Gulfport/ Pascagoula, MS Decatur, AL Knoxville, TN Brookhaven-McComb, MS Dothan-Enterprise, AL Nashville, TN Columbus-Starkville, MS Florence, AL Dalton, GA Greenville-Greenwood, MS Gadsden, AL LaGrange, GA Hattiesburg, MS Huntsville, AL Rome, GA Jackson, MS Mobile, AL Bowling Green, KY Laurel, MS Montgomery, AL Corbin, KY Meridian, MS Opelika-Auburn, AL Lexington, KY Natchez, MS Selma, AL Louisville, KY Tupelo, MS Tuscaloosa, AL Madisonville, KY Vicksburg, MS Chattanooga, TN Owensboro, KY Anniston, AL Cleveland, TN Clarksville, TN and Birmingham, AL Cookeville, TN Hopkinsville, KY
Revenues We generate substantially all of our revenues from the following sources: Service. We sell wireless personal communications services. The various types of service revenues associated with personal communications services for our customers include monthly recurring charges and monthly non-recurring airtime charges for local, long distance and roaming airtime used in excess of pre-subscribed usage. Our customers' charges are dependent on their rate plans, based on the number of minutes included in their plans. Service revenues also include monthly non-recurring airtime usage associated with our prepaid customers and non-recurring activation and deactivation service charges. Equipment. We sell wireless PCS handsets and accessories that are used by our customers in connection with our wireless services. Roaming. We charge monthly, non-recurring, per minute fees to other wireless companies whose customers use our network facilities to place and receive wireless services. A particular focus of our strategy is to reduce customer churn. Industry data suggests that wireless communications providers (including PCS providers) that have offered poor or spotty coverage, poor voice quality, unresponsive customer care or confusing billing suffer higher-than-average churn rates. Accordingly, we launch service in a new market only after we believe that comprehensive and reliable coverage and service can be maintained in that market. In addition, we have designed our billing system to provide simple and understandable options to our customers and to permit our customers to select a flexible billing cycle. We also focus resources on a proactive customer retention program, strict credit policies and alternative methods of payment for credit-challenged customers. However, future PCS churn rates may be higher than historical rates due to the increase in number of competitors and expanded market base. Cost of Services and Equipment Our cost of services and equipment consists of the following: Equipment. We purchase PCS handsets and accessories from third party vendors to resell to our customers for use in connection with our services. The cost of handsets has been, and is expected to remain, higher than the resale price to the customer. This cost is recorded as a cost of services and equipment. We do not manufacture any of this equipment. 42 Roaming Fees. We pay fees to other wireless communications companies based on airtime usage of our customers on other communications networks. It is expected that reciprocal roaming rates charged between us and other carriers will decrease. Variable Interconnect. We pay monthly charges associated with the connection of our network with other carriers' networks. These fees are based on minutes of use by our customers. This is known as interconnection. Variable Long Distance. We pay monthly usage charges to other communications companies for long distance service provided to our customers. These variable charges are based on our customers' usage, applied at pre-negotiated rates with the other carriers. Clearinghouse Fees. We pay fees to an independent clearinghouse for processing our call data records and performing monthly intercarrier financial settlements for all charges that we pay to other wireless companies when our customers use their network, and that other wireless companies pay to us when their customers use our network. These fees are based on the number of transactions processed in a month. Operating Expenses Our operating expenses consist of the following costs: Technical Operations. Our technical operations expense includes engineering operations and support, cell site lease expenses, field technicians, network implementation support, and engineering management. This expense also includes monthly recurring charges directly associated with the maintenance of network facilities and equipment. General and Administrative. Our general and administrative expense includes customer service, billing, information technology, finance, accounting, human resources and legal services. Sales and Marketing. Our sales and marketing expense includes salaries and benefits, commissions, advertising and promotions, retail distribution, sales training, and direct and indirect support. Stock Based Compensation. At September 30, 2000, we had issued a total of 12,343,388 shares of our class A voting and class C common stock to members of our management, primarily in connection with the strategic alliance with AT&T Wireless. These shares are subject to vesting and unvested shares are held in escrow. These shares were also subject to individual repurchase agreements with each employee, which collectively were considered a "variable stock plan" under generally accepted accounting principles. These individual repurchase agreements were modified to remove the provision that required the employees to surrender a portion of their vested shares. The effective date of this modification, which occurred in June 2000, became the measurement date upon which the value of the awards was fixed. As part of the merger of Tritel with TeleCorp Wireless, each of these shares was exchanged for shares of TeleCorp PCS. Depreciation and Amortization. Property and equipment are depreciated using the straight-line method, generally over three to seven years, based upon the estimated useful lives of the respective assets. Leasehold improvements are depreciated over the term of the lease. Network development costs are capitalized and are depreciated generally over seven years beginning as PCS service is commenced in each of our markets. PCS license costs are amortized over 40 years beginning as PCS service is commenced in each of our markets. The agreements with AT&T and its affiliates, including the network membership license agreement and the intercarrier roamer service agreement, are amortized over the lives of the agreements, 10 years and 20 years, respectively, beginning in January 1999. Interest Income (Expense). Interest income is earned primarily on our cash and cash equivalents and restricted cash. Interest expense consists of interest due on our senior credit facilities and debt owed to the United States government related to our licenses as well as discount accretion on the 12 3/4% notes. In the future, we will also pay cash interest on the notes. 43 Results of Operations Nine Month Periods Ended September 30, 1999 and September 30, 2000 Revenues Revenues for the nine months ended September 30, 1999 and September 30, 2000 were $179,000 and $76.0 million, respectively. We launched commercial service in our first markets, Jackson and Vicksburg, Mississippi, during September 1999. As of September 30, 2000, we had 35 markets in operation as compared to two markets at September 30, 1999. For the nine months ended September 30, 1999 and 2000, revenues consisted primarily of revenues derived from service to our customers of $10,000 and $43.4 million, respectively, roaming services provided to customers of other carriers of $88,000 and $24.1 million, respectively and the sale of handsets and accessories of $81,000 and $8.5 million, respectively. As of September 30, 2000, we had approximately 156,100 subscribers throughout our service area as compared to approximately 300 as of September 30, 1999. Our average monthly revenue per unit, or ARPU, for our post-pay customers, consisting of service revenue, including airtime and incollect roaming revenue, but excluding outcollect roaming revenue, was $57 for the nine months ended September 30, 2000 as compared to $45 for the fourth quarter of 1999. Operating Expenses Cost of services and equipment was $52.0 million for the nine months ended September 30, 2000. Cost of services and equipment includes primarily the cost of equipment sold to customers, costs paid to other carriers for roaming services and wireline access and long-distance costs from customer use on our system. We incurred $189,000 in cost of services and equipment for the nine months ended September 30, 1999. The increase in these costs, which are expected to continue to increase during the remainder of 2000 and in future periods, is the result of new customers added to the system and increased usage of our system. Technical operations expenses were $8.9 million and $38.1 million for the nine months ended September 30, 1999 and 2000, respectively. These expenses include primarily the cost of engineering and operating staff devoted to the oversight of the design, implementation and monitoring of our network, cell site lease expense, and charges incurred to connect our network to other carriers. These costs increased in 2000 as compared to 1999 as a result of our network expansion and increased usage of our system. We expect the majority of our future technical operations expenses will consist of costs relating to operating the network, including the cost of interconnection to wireline and other wireless networks, cell site lease costs, network personnel and repair and maintenance. We expect these costs to continue to increase in future periods as we expand our coverage areas and incur a full year of operational expenses. Our general and administrative expense includes customer service, billing, information technology, finance, accounting, human resources and legal services. General and administrative expenses increased from $17.4 million for the nine month period ended September 30, 1999, to $45.3 million for the nine month period ended September 30, 2000. The increase was due primarily to increased staffing in various departments, including information technology, billing, customer care, accounting, human resources and other administrative functions, incurred in connection with the expansion of our network and customer base, costs related to the modification of restricted stock agreements in the second quarter of 2000, and costs related to the merger with TeleCorp Wireless. We expect general and administrative expenses to continue to increase in future periods as we continue to launch additional markets and provide customer support functions to a larger customer base. Costs related to the merger with TeleCorp Wireless have been expensed as incurred. Our sales and marketing expense includes salaries and benefits, commissions, advertising and promotions, retail distribution, and sales training. Sales and marketing expenses increased from $6.6 million for the first nine months of 1999 to $47.3 million for the same period in 2000. The increase was primarily associated with 44 the salaries, benefits and commissions for sales and marketing personnel, market deployment, including planning and leasing of sales offices and retail store locations and advertising costs related to market launches. We expect sales costs to continue to increase in future periods primarily related to sales commissions, ongoing advertising and promotions. Stock-based compensation expense was $79.1 million for the nine months ended September 30, 2000. At September 30, 2000, we had issued a total of 12,343,388 shares of our class A voting and class C common stock to members of our management, primarily in connection with the strategic alliance with AT&T Wireless. These shares are subject to vesting and unvested shares are held in escrow. These shares are also subject to individual repurchase agreements with each employee, which collectively were considered a "variable stock plan" under generally accepted accounting principles. These individual repurchase agreements were modified to remove the provision that required the employees to surrender a portion of their vested shares. The effective date of this modification, which occurred in June 2000, became the measurement date upon which the value of the awards was fixed. Depreciation and amortization expenses were $5.6 million for the nine month period ended September 30, 1999, as compared to $45.1 million for the nine month period ended September 30, 2000. The increase relates primarily to the depreciation of network system equipment placed into service as our markets are launched and the amortization of the Federal Communications Commission licenses as well as depreciation of computer hardware, software, furniture, fixtures, and office equipment. Depreciation and amortization expenses are expected to increase in future periods as we complete the construction of our network as well as recognize a full year of depreciation expense on our network assets placed in service during 1999 and 2000. Non-Operating Income and Expense Interest income was $10.5 million for the first nine months of 1999 as compared to $20.5 million for the first nine months of 2000. The year to date increase in 2000 as compared to 1999 was primarily a result of interest earned on our investment of advances under our senior credit facilities of $300.0 million, proceeds from the sale of senior subordinated discount notes of approximately $200.2 million and proceeds from the sale of common stock in our initial public offering of approximately $242.5 million. Our short-term cash investments consist primarily of United States Government securities and highly rated commercial paper with a dollar-weighted average maturity of 90 days or less. Financing costs were $2.2 million for the nine months ended September 30, 1999. These costs were associated with the January 1999 conversion by Digital PCS, LLC of debt due to an investor in Airwave Communications, LLC to equity in Airwave Communications. Digital PCS and Airwave Communications are our predecessor companies. Interest expense was $12.0 million for the first three quarters of 1999 as compared to $47.3 million for the first three quarters of 2000. The increase in interest expense resulted from interest related to additional borrowings under our bank credit facility in September 1999, discount accretion on the senior subordinated discount notes issued in May 1999 and a reduction in the amount of interest capitalized. Interest expense is net of the amount capitalized for the purpose of completing the network buildout. The deferred income tax benefit recorded for the first nine months of 1999 and 2000 was $13.6 million and $1.9 million, respectively. The valuation allowance for the gross deferred tax asset at September 30, 2000 was $63.0 million. No valuation allowance was considered necessary for the remaining gross deferred tax asset of $39.2 million, principally due to the existence of a deferred tax liability which was recorded upon the closing of the transaction with AT&T Wireless and its affiliates on January 7, 1999. 45 Years Ended December 31, 1997, 1998 and 1999 Revenues Revenues for the year ended December 31, 1999 were $6.8 million. We launched commercial service in Jackson, Mississippi in September 1999 and launched commercial service in seven other major markets during the fourth quarter of 1999. We had not previously recognized any revenues. For the year ended December 31, 1999, revenues consisted primarily of revenues derived from service to our customers of $1.2 million, roaming services provided to customers of other carriers of $3.4 million, and the sale of handsets and accessories of $2.2 million. We ended 1999 with approximately 24,600 subscribers in eight major markets. Our ARPU, including service and feature revenue as well as airtime and incollect roaming charges, was $45 for the fourth quarter of 1999. We expect an increase in ARPU as we begin to target business customers, implement a national accounts program, focus on value added features and provide incentives to our sales force for selling higher priced rate plans. Operating Expenses Cost of services and equipment was $7.0 million for the year ended December 31, 1999. Cost of equipment includes primarily the cost of equipment sold to customers, costs paid to other carriers for roaming services and wireline access and long-distance costs from customer use on our system. These costs are expected to increase in future periods as subscribers are added to the system and usage of our system increases. Technical operations expenses were $104,000, $1.9 million and $18.5 million for the years ended December 31, 1997, 1998, and 1999, respectively. These expenses include primarily the cost of engineering and operating staff devoted to the oversight of the design, implementation and monitoring of our network, cell site lease expense, charges incurred to connect our network to other carriers and construction site office expenses. We expect that the majority of our future technical operations expenses will consist of costs relating to operating the network, including the cost of interconnection to wireline and other wireless networks, cell site lease costs, network personnel and repair and maintenance. We expect these costs to increase in future periods as we expand our coverage areas, add additional subscribers and incur a full year of operational expenses. Our general and administrative expense includes customer service, billing, information technology, finance, accounting, human resources and legal services. General and administrative expenses increased from $3.1 million in 1997, to $4.9 million in 1998 and $22.9 million in 1999. The increase was due primarily to increased staffing in various departments, including information technology, billing, customer care, accounting, human resources and other administrative functions incurred in preparation for commercial launch of our network in 1999, as well as costs related to our redefined employment agreement with Jerry M. Sullivan, Jr. totaling $5.8 million recorded in 1999. Jerry M. Sullivan, Jr. is not related to Thomas H. Sullivan. Effective September 1, 1999, we and Jerry M. Sullivan, Jr. entered into an agreement to redefine Mr. Sullivan's relationship with us. Mr. Sullivan resigned as one of our officers and directors. Mr. Sullivan will retain the title of Executive Vice President through December 15, 2001; however, under the agreement, he is not permitted to represent us nor will he perform any functions for us. As part of the agreement, Mr. Sullivan will also receive an annual salary of $225,000 and an annual bonus of $112,500 through December 31, 2002. Mr. Sullivan is fully vested in 1,800,000 shares of class A voting common stock and has returned to us all other shares held by him, including his voting preference common stock. Accordingly, we recorded $5.8 million in additional compensation expense for the year ended December 31, 1999. The $5.8 million was determined pursuant to the settlement of Mr. Sullivan's employment relationship with us and includes $4.5 million for the grant of additional stock rights, $225,000 annual salary and $112,500 annual bonus through December 31, 2002, and other related amounts. Our sales and marketing expense includes salaries and benefits, commissions, advertising and promotions, retail distribution, sales training, and direct and indirect support. Sales and marketing expenses increased from $28,000 in 1997 to $452,000 in 1998 and $20.4 million in 1999. The increase was associated with the salaries and benefits for sales and marketing personnel, market deployment, including planning and leasing of sales 46 offices and retail store locations and advertising costs related to 1999 market launches. We expect to incur significant selling and marketing costs during 2000 primarily related to sales commissions, ongoing advertising and promotions in our existing markets and promotional events and advertising incurred in connection with market launches. Depreciation and amortization expenses were $20,000 in 1997 compared to $348,000 in 1998 and $12.8 million in 1999. The 1999 expenses related primarily to the depreciation of network system equipment placed into service in 1999 and the amortization of Tritel's roaming and license agreements with AT&T Wireless, as well as depreciation of computer hardware, software, furniture, fixtures, and office equipment. Depreciation and amortization expenses are expected to increase during 2000 as we complete the construction of our network and recognize a full year of depreciation expense on our network assets placed in service during 1999. Non-Operating Income and Expense Interest income was $121,000 in 1997, $77,000 in 1998 and $16.8 million in 1999. This significant increase in 1999, as compared to 1998, was a result of our investment of the cash received from equity investors of $163.4 million, advances under our senior credit facilities of $300.0 million, proceeds from the sale of senior subordinated discount notes of approximately $200.2 million and proceeds from the sale of common stock in our initial public offering of approximately $242.5 million. Our short-term cash investments consisted primarily of United States government securities and highly rated commercial paper with a dollar-weighted average maturity of 90 days or less. Financing costs were $2.2 million for the year ended December 31, 1999. These costs were associated with the January 1999 conversion by Digital PCS of debt due to an investor in Airwave Communications to equity in Airwave Communications. Interest expense was $722,000 in 1998 and $25.0 million in 1999 and consisted of interest related to borrowing under our bank credit facility and the Federal Communications Commission debt and discount accretion on the senior subordinated discount notes issued in May 1999. Interest expense is net of the amount capitalized for the purpose of completing the network buildout. For the year ended December 31, 1999, we recorded a deferred income tax benefit of $28.4 million. The valuation allowance for the gross deferred tax asset at December 31, 1999 was $1.0 million. No valuation allowance was considered necessary for the remaining gross deferred tax asset, principally due to the existence of a deferred tax liability that was recorded upon the closing of the transaction with AT&T and its affiliates on January 7, 1999. Prior to this date, the predecessor companies were limited liability companies and were not subject to income taxes. During June 1998, we took advantage of a reconsideration order by the Federal Communications Commission allowing companies holding C-Block PCS licenses several options to restructure their license holdings and associated obligations. We elected the disaggregation option and returned one-half of the broadcast spectrum originally acquired for each of the C-Block license areas. As a result, we reduced the carrying amount of the related licenses by one- half, or $35.4 million, and reduced the discounted debt and accrued interest due to the Federal Communications Commission by $33.0 million. Because of the disaggregation election, we recognized an extraordinary loss in 1998 of approximately $2.4 million. Liquidity and Capital Resources Management estimates that capital expenditures required by our current business plan (which does not include the deployment of the GPRS technology) will total approximately $365 million from September 30, 2000 through the end of 2002. We anticipate that most of these capital expenditures will be used to enhance our existing infrastructure which will enable us to provide superior call quality. Costs associated with the network buildout include switches, base stations, towers and antennae, radio frequency engineering, cell site acquisition 47 and construction and microwave relocation. The actual funds required to build out our network may vary materially from these estimates, and additional funds could be required in the event of significant departures from the current business plan, unforeseen delays, cost overruns, unanticipated expenses, regulatory expenses, engineering design changes and other technological risks. Upon the completion of this offering, we expect to have sufficient capital resources to fund our current business plan, including capital expenditures and operating losses for our existing markets. This estimate does not, however, include any funds to deploy GPRS technology for the development of high-speed wireless data services. GPRS is a GSM-based technology. We, along with TeleCorp Wireless, are currently evaluating the implementation of this technology for the next step toward the development of third generation services for high- speed transmission of data, such as internet service. Our current business plan does not include, and we have not developed a budget for costs for, the development and implementation of our GPRS overlay network and delivery of GPRS. As we refine our GPRS overlay network strategy and budget, we may determine that the costs to develop and implement our GPRS overlay network will require us to seek additional financing. Cash and Cash Equivalents Cash and cash equivalents totaled approximately $168.8 million at September 30, 2000, as compared to approximately $609.3 million at December 31, 1999. This decrease was the result of $134.7 million of cash used in operating activities and $306.0 million of cash used in investing activities, offset by cash provided by financing activities of $177,000 during the nine months ended September 30, 2000. Cash used in operating activities resulted from a net loss of $255.8 million that was partially offset by non-cash charges of $145.8 million. Cash used in investing activities resulted primarily from cash outlays for capital expenditures, required for the development and construction of our network, of $304.2 million. Senior Credit Facilities We entered into a loan agreement dated as of March 31, 1999 that provides for senior credit facilities with a group of lenders for an aggregate amount of $550.0 million of senior secured credit. The senior credit facilities provide for: . a $250.0 million reducing revolving credit facility maturing on June 30, 2007, . a $100.0 million term credit facility maturing on June 30, 2007, and . a $200.0 million term credit facility maturing on December 31, 2007. Up to $10.0 million of the facility may be used for letters of credit. The terms of the senior credit facilities will permit us, subject to certain terms and conditions, including compliance with certain leverage ratios and satisfaction of buildout and subscriber milestones, to draw up to $550.0 million to finance working capital requirements, capital expenditures or other corporate purposes. As of September 30, 2000, we had $300.0 million outstanding under the senior credit facilities and could have borrowed up to a total of approximately $550.0 million pursuant to the terms of the senior credit facilities. After September 30, 2000, we borrowed an additional approximately $90.0 million which we subsequently repaid with the proceeds of the offering of unregistered notes. See "Description of Certain Indebtedness--Senior Credit Facilities". 12 3/4% Senior Subordinated Discount Notes On May 11, 1999, we issued 12 3/4% notes with a principal amount at maturity of $372.0 million. These notes were issued at a substantial discount from their principal amount at maturity for proceeds of $200.2 million. No interest will be paid on the notes prior to May 15, 2004. We will recognize interest expense for discount accretion during this period. Thereafter, the notes will bear interest at the stated rate of 12 3/4%. The 12 3/4% notes mature on May 15, 2009. See "Description of Certain Indebtedness--12 3/4% Senior Subordinated Discount Notes due 2009". 48 Government Debt Our predecessor companies received preferential financing from the United States government for the C- and F-Block licenses, which they contributed to us in exchange for series C preferred stock. As a result, the aggregate principal balance at September 30, 2000 to the United States government under the terms of this financing was $46.8 million (undiscounted). The debt relating to the C- Block licenses requires interest-only payments from 1996 to 2002 and then principal and interest payments from 2003 to 2006. The debt relating to the F- Block licenses required interest only payments for 1997 and 1998 and principal and interest payments from 1999 to 2007. See "Description of Certain Indebtedness--Government Debt". Acquisition of Licenses from ALLTEL On December 29, 2000, we completed the purchase from ALLTEL of two 10 MHz D- Block licenses covering approximately 1.5 million people in Birmingham and Tuscaloosa, Alabama, two markets in which we currently hold 15 MHz C-Block licenses. We also acquired certain equipment and a customer list containing in excess of 2,500 PCS customers of ALLTEL in the Birmingham and Tuscaloosa markets, whom we intend to convert into our customers. These assets were purchased for an aggregate purchase price of $67.0 million which was principally funded through our senior credit facilities. In addition, we and AT&T Wireless Services have entered into a put and call agreement that gives us the right to sell the two licenses acquired from ALLTEL to AT&T Wireless Services at any time during the 18 months following the closing of this transaction for $50.0 million. This agreement also gives AT&T Wireless Services the right to purchase the two licenses during the same period for $50.0 million. However, generally, we can terminate AT&T Wireless Services' call right if we terminate our put right. In each case, the transfer of the licenses is conditioned upon receipt of the necessary regulatory approvals. For more information, see "Certain Relationships and Related Transactions--Agreements and Relationships with AT&T--Put and Call Agreement". Recently Issued Accounting Standards In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities, referred to as FAS 133. FAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. FAS 133 will significantly change the accounting treatment of derivative instruments and, depending upon the underlying risk management strategy, these accounting changes could affect future earnings, assets, liabilities, and shareholders' equity. Tritel is closely monitoring the deliberations of the FASB's derivative implementation task force. With the issuance of Statement of Financial Accounting Standards No. 137, Accounting for Derivative Instruments and Hedging Activities--Deferral of the Effective Date of FASB Statement No. 133, which delayed the effective date of FAS 133, Tritel will be required to adopt FAS 133 on January 1, 2001. Presently, the Company has determined that the adoption will not have a material impact on Tritel's consolidated financial statements. In December 1999, the Securities and Exchange Commission released Staff Accounting Bulletin (SAB) Number 101, "Revenue Recognition in Financial Statements". This bulletin will become effective for Tritel no later than the quarter ending December 31, 2000. This bulletin establishes more clearly defined revenue recognition criteria than previously existing accounting pronouncements, and specifically addresses revenue recognition requirements for nonrefundable fees, such as activation fees, collected by a company upon entering into an arrangement with a customer, such as an arrangement to provide telecommunications services. The Company has determined that the adoption of this bulletin will not have a material impact on Tritel's consolidated financial statements. 49 Quarterly Results of Operations The following table sets forth certain unaudited quarterly operating information for each of the eleven quarters ended September 30, 2000. This data has been prepared on the same basis as the audited financial statements, and in management's opinion, includes all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the information for the periods presented. Results for any previous fiscal quarter are not necessarily indicative of results for the full year or for any future quarter. Quarterly Financial Data
December 31 March 31 June 30 September 30 ------------------ ------------------------- ------------------------ --------------------------- 1998 1999 1998 1999 2000 1998 1999 2000 1998 1999 2000 ------- --------- ----- ------- --------- ----- ------- -------- ------- -------- -------- ($ in thousands) Revenues........ $ -- $ 6,580 $ -- $ -- $ 14,883 $ -- $ -- $ 24,425 $ -- $ 179 $ 36,691 Operating loss.. (4,536) (226,911) (763) (7,471) (149,327) (997) (9,877) (4,478) (1,390) (21,229) (77,051) Net loss before extraordinary items.......... (5,200) (218,698) (743) (6,247) (154,512) (990) (6,655) (12,740) (1,398) (15,855) (88,504) Net loss........ (5,200) (218,698) (743) (6,247) (154,512) (990) (6,655) (12,740) (3,812) (15,855) (88,504)
Quantitative and Qualitative Disclosure About Market Risk We are exposed to market risk from changes in interest rates which could impact results of operations. We manage interest rate risk through a combination of fixed and variable rate debt. At September 30, 2000, we had $300.0 million of term A and term B loans under our senior credit facilities, which carried a rate of 10.87%; $372.0 million principal amount of the 12 3/4% notes, due 2009; $38.0 million of 7%, discounted to yield 10%, debt to the Federal Communications Commission, due in quarterly installments from 2003 to 2006; and $8.8 million of 6 1/8%, discounted to yield 10%, debt to the Federal Communications Commission, due in quarterly installments from 2000 to 2008. Our 12 3/4% notes and Federal Communications Commission debt are fixed interest rate obligations and as a result we are less sensitive to market rate fluctuations. However, our term A and term B loans outstanding and other amounts available to us under our senior credit facilities are variable interest rate obligations. Beginning in May 1999, we entered into interest rate swap agreements with notional amounts totaling $200.0 million to manage our interest rate risk under our senior credit facilities. The swap agreements establish a fixed effective rate of 9.05% on $200.0 million of the current balance outstanding under the senior credit facilities through the earlier of March 31, 2002 or the date on which we achieve operating cash flow breakeven. We use interest rate swaps to hedge the effects of fluctuations in interest rates on our senior credit facilities. These transactions meet the requirements for hedge accounting, including designation and correlation. These interest rate swaps are managed in accordance with our policies and procedures. We do not enter into these transactions for trading purposes. Gains or losses associated with interest rate swaps are computed as the difference between the interest expense per the amount hedged using the fixed rate compared to the floating rate over the term of the swap agreement. As of September 30, 2000, we had entered into interest rate swap agreements totaling $200.0 million to convert our variable rate debt to fixed rate debt. The interest rate swaps had no material impact on the consolidated financial statements as of and for the year ended December 31, 1999 or as of and for the nine months ended September 30, 2000. The following table provides information about our market risk exposure associated with changing interest rates on our fixed rate debt at maturity value of the debt (dollars in millions):
Expected Maturity ----------------------------------------- 2000 2001 2002 2003 2004 Thereafter Total ---- ---- ---- ---- ----- ---------- ------ Face value of long-term fixed rate debt................... $0.2 $1.0 $1.1 $9.7 $10.4 $396.4 $418.8 Average interest rate........ 6.1% 6.1% 6.1% 6.9% 6.9% 12.4% --
50 Collectively, at September 30, 2000, our fixed rate debt had a carrying value of $279.7 million and a fair value of $296.8 million. The fair value of our fixed rate debt has been estimated using an incremental borrowing rate of 10.7% based on the market value of our senior subordinated discount notes. We are also exposed to the impact of interest rate changes on our short-term cash investments, consisting primarily of United States government securities and highly rated commercial paper with a dollar weighted average maturity of 90 days or less. As with all investments, these short-term investments carry a degree of interest rate risk. We are not exposed to fluctuations in currency exchange rates since our operations are entirely within the United States. 51 THE WIRELESS COMMUNICATIONS INDUSTRY Wireless communications systems use a variety of radio airwaves to transmit voice and data. The wireless communications industry includes one-way radio applications, such as paging or beeper services, and two-way radio applications, such as personal communications services, or PCS, cellular telephone and other technologies. Each application is licensed and operates in a distinct radio airwave block. Since the introduction of commercial cellular service in 1983, the wireless communications industry has experienced dramatic growth. The number of wireless subscribers in the United States has increased from an estimated 340,000 at the end of 1985 to over 86 million as of December 31, 2000, according to the Cellular Telecommunications Industry Association, an international association for the wireless industry. Paul Kagan Associates Inc., an independent media and telecommunications association, estimates that the number of wireless users in the United States will increase from an estimated 107.4 million at the end of 2000 to approximately 201.9 million by the end of 2005. In addition, Paul Kagan Associates estimates that the percentage of total wireless users in the United States that are PCS users will increase from an estimated 24.6% at the end of 2000 to 42.5% by the end of 2005. The following chart illustrates the estimated annual growth in United States wireless communications customers, who use cellular, PCS or other two-way wireless services through December 31, 1999:
Year Ended December 31, -------------------------------------- 1995 1996 1997 1998 1999 ------ ------ ------ ------ ------ Wireless Industry Statistics(a) Total service revenues (in billions).. $ 16.5 $ 21.5 $ 25.6 $ 29.6 $ 37.2 Wireless subscribers at end of period (in millions)........................ 28.2 38.2 48.7 60.8 76.3 Subscriber growth..................... 46% 36% 28% 25% 25% Average local monthly wireless bill... $52.45 $48.84 $43.86 $39.88 $40.24
- -------- Source: Cellular Telecommunications Industry Association. (a) Reflects domestic commercially operational cellular, enhanced special mobile radio and PCS and enhanced specialized mobile radio technology providers. In the wireless communications industry, there are two principal services licensed by the Federal Communications Commission for transmitting voice and data signals: PCS and cellular. PCS is a term commonly used in the United States to refer to service carried over the 1850 MHz to 1990 MHz portion of the radio airwaves. Cellular is a term commonly used in the United States to refer to service carried over the 824 MHz to 893 MHz portion of the radio airwaves. Cellular service is the predominant form of wireless voice communications service available. Cellular systems were originally analog-based systems, although digital technology has been introduced in some markets. PCS systems use digital technology. Analog technology currently has several limitations, including lack of privacy and limited capacity. Digital systems convert voice or data signals into a stream of digits that is compressed before transmission, enabling a single radio channel to carry multiple simultaneous signal transmissions. This enhanced capacity, along with improvements in digital signaling, allows digital-based wireless technologies to offer new and enhanced services, such as greater call privacy and data transmission features, including mobile office applications like facsimile, e-mail and wireless connections to computer/data networks, including the Internet. See "Business-- Government Regulation" for a discussion of the Federal Communications Commission auction process and allocation of wireless licenses. Operation of Wireless Communications Systems Wireless communications system service areas, whether PCS, cellular or other technologies, are divided into multiple units. Each unit contains a transmitter, a receiver and signaling equipment to transmit wireless signals to individual phones. This equipment is connected by telephone lines or microwave signals to call connection equipment that uses computers to control the operation of the communications system for the entire service area. The call connection equipment controls the connection of calls and the connection of the wireless network to local telephone systems and long distance carriers. The system controls the transfer of calls from 52 equipment site to equipment site as a subscriber's handset travels, coordinates calls to and from handsets, allocates calls among the network equipment sites within the system and connects calls to the local telephone system or to a long distance telephone carrier. Wireless communications providers must establish agreements with local and long distance carriers that allow them to pass calls, or interconnect; thereby integrating their system with the existing communications system. Because the signal strength of a transmission between a handset and a network equipment site declines as the handset moves away from the network equipment site, the wireless network monitors the signal strength of calls in progress. When the signal strength of a call declines to a predetermined level, the call connection equipment may transfer the call to another network equipment site where the signal is stronger. If a handset leaves the services area of a PCS or cellular system, the call is disconnected unless there is a technical connection with the adjacent system. If there is a technical connection with the adjacent system, the customer may roam onto the adjacent system. Analog handsets that use the cellular portion of the airwaves are functionally compatible with cellular systems in all markets in the United States. As a result, these handsets may be used wherever a customer is located, as long as a cellular system is operational in the area and either the service provider's system covers such area or a roaming arrangement exists with a provider covering the area. Although PCS and cellular systems use similar technologies and hardware, they operate on different portions of the airwaves and use different technical and network standards. Use of advanced handsets makes it possible for users of one type of system to roam on a different type of system outside of their service area, and to transfer calls from one type of system to another if the appropriate agreements are in place and the networks are properly configured to transfer calls from one system to the next. Currently, PCS systems operate under one of three principal digital signal transmission technological standards: TDMA, CDMA or GSM. TDMA and GSM are both time division-based standards but are incompatible with each other and with CDMA. Accordingly, a subscriber of a system that uses TDMA technology is unable to use a TDMA handset when travelling in an area not served by TDMA- based PCS operators, unless the subscriber carries a special handset that permits the subscriber to use the analog or digital system on the cellular portion of the airwaves in that area and the appropriate agreements are in place. With an advanced handset, a user can place or receive calls using: . a PCS system using the technological standard with which the handset is compatible; . a digital system on the cellular portion of the airwaves using the corresponding technological standard; or . an analog system on the cellular portion of the airwaves. If a PCS system operated by the service provider or covered by a roaming agreement is operating in the area, the call will be placed via this system. If there is no PCS system providing coverage, the call will be placed through a digital system on the cellular portion of the airwaves operating in the area and providing coverage to the user, and if no digital system on the cellular portion of the airwaves is providing coverage, the call will be connected over an analog system that uses the cellular portion of the airwaves providing coverage. These handsets allow for a call in progress to be handed off to an adjacent system, whether the same mode or band or otherwise, without interruption if the appropriate agreements are in place. Prior generations of handsets would cut off the call when the handset left the coverage of one system and would require the customer to place the call again using the adjacent system. 53 BUSINESS Tritel PCS, Inc. We are an AT&T Wireless affiliate providing digital wireless PCS to licensed service areas covering 14.0 million people in the south-central United States. As of December 31, 2000, we had launched service in 38 markets, and had 205,675 customers. These markets include 13.7 million people, or 98% of the population in our licensed areas. Our licensed markets cover a contiguous geographic area, including eight of the 100 largest metropolitan areas in the United States. Our major markets include: Birmingham and Mobile, Alabama; Louisville and Lexington, Kentucky; Chattanooga, Nashville and Knoxville, Tennessee; and Jackson, Mississippi. We believe that these are attractive markets for providing wireless communications services because they contain major population and business centers, as well as traffic corridors, that generate significant wireless telephone usage. On November 13, 2000, Tritel, our direct parent, became a wholly-owned subsidiary of TeleCorp PCS, a public company that owns both Tritel and TeleCorp Wireless, a separate subsidiary. For additional information see "--Recent Transactions" below. Immediately after the merger of TeleCorp Wireless and Tritel with subsidiaries of TeleCorp PCS, AT&T Wireless had an ownership interest of approximately 23% in TeleCorp PCS, our ultimate parent. Together with TeleCorp Wireless, we operate under a common regional brand name, SunCom(R)--a brand we share with Triton, another AT&T Wireless affiliate. Strategic Alliance With AT&T Wireless Immediately after the merger of TeleCorp Wireless and Tritel with subsidiaries of TeleCorp PCS, AT&T Wireless had an ownership interest of approximately 23% in our ultimate parent, TeleCorp PCS, and is its largest stockholder. Our strategic alliance with AT&T Wireless provides us with many business, operational and marketing advantages, including: . Exclusivity. We are the exclusive provider for AT&T Wireless and its affiliates of wireless mobility services using equal emphasis co- branding with AT&T in our covered markets, except for licensed areas covering approximately 800,000 people in rural Kentucky, subject to the right of AT&T Wireless and its affiliates to resell services on our network. . Brand. We have the right to use the AT&T brand name and logo together with the SunCom(R) brand name and logo in our covered markets, giving equal emphasis to each. We also benefit from AT&T's and AT&T Wireless's nationwide advertising and marketing campaigns. . Roaming. We are AT&T Wireless's and its affiliates' preferred roaming partner for digital customers in our markets, except for licensed areas covering approximately 800,000 people in rural Kentucky. We believe that our AT&T Wireless affiliation will continue to provide us with a valuable base of roaming revenue. . Coast-to-Coast Coverage. Outside our markets, our customers are able to place and receive calls in AT&T Wireless Services' markets and the markets of AT&T Wireless Services' other roaming partners. . Products and Services. We receive preferred terms on selected products and services, including handsets, infrastructure equipment and back office support from companies that provide these products and services to AT&T Wireless Services. . Marketing. We benefit from AT&T Wireless Services' and its affiliates' nationwide advertising and marketing campaigns. In addition, we work with AT&T Wireless Services' and its affiliates' national sales representatives to jointly market our wireless services to AT&T Wireless Services' and its affiliates' corporate customers located in our markets. 54 Recent Transactions Merger of Tritel and TeleCorp Wireless On November 13, 2000, Tritel combined with TeleCorp Wireless through the mergers of each of Tritel and TeleCorp Wireless with two newly formed subsidiaries of a new holding company now known as TeleCorp PCS. In accordance with the terms of the merger agreement, all of the capital stock of TeleCorp Wireless and Tritel was converted into the right to receive capital stock in TeleCorp PCS. As a result of the merger, TeleCorp PCS is controlled by the former holders of the voting preference common stock of TeleCorp Wireless, Gerald T. Vento and Thomas H. Sullivan. Tritel and TeleCorp Wireless are wholly-owned subsidiaries of TeleCorp PCS. In connection with the merger, AT&T Wireless Services also agreed to make certain cash and other contributions to TeleCorp PCS in exchange for 9,272,740 shares of the class A voting common stock of TeleCorp PCS issued to AT&T Wireless, thereby increasing AT&T Wireless's ownership interest in TeleCorp PCS, our ultimate parent, from approximately 18% to 23%. This transaction was completed immediately after the merger. Acquisition of Licenses from ALLTEL On December 29, 2000, we completed the purchase from ALLTEL of two 10 MHz D- Block licenses covering approximately 1.5 million people in Birmingham and Tuscaloosa, Alabama, two markets in which we currently hold 15 MHz C-Block licenses. We also acquired certain equipment and a customer list containing in excess of 2,500 PCS customers of ALLTEL in the Birmingham and Tuscaloosa markets, who we intend to convert into our customers. These assets were purchased for an aggregate purchase price of $67.0 million which was principally funded through our senior credit facilities. In addition, we and AT&T Wireless Services have entered into a put and call agreement that gives us the right to sell the two licenses acquired from ALLTEL to AT&T Wireless Services at any time during the 18 months following the closing of this transaction for $50.0 million. This agreement also gives AT&T Wireless Services the right to purchase the two licenses during the same period for $50.0 million. However, generally, we can terminate AT&T Wireless Services' call right if we terminate our put right. In each case, the transfer of the licenses is conditioned upon receipt of the necessary regulatory approvals. For more information, see "Certain Relationships and Related Transactions--Agreements and Relationships with AT&T--Put and Call Agreement". Competitive Strengths Our goal is to provide our customers with simple-to-buy, easy-to-use wireless services, including coverage across the nation, superior call quality, competitive pricing and personalized customer care. In addition to our strategic alliance with AT&T Wireless, we believe we have several key competitive advantages, including our: . Attractive Markets. We believe our existing markets are attractive areas for providing wireless services and are strategically important to AT&T Wireless because they contain major population and business centers, as well as traffic corridors, that generate significant wireless service usage such as: Birmingham and Mobile, Alabama; Louisville and Lexington, Kentucky; Chattanooga, Nashville and Knoxville, Tennessee and Jackson, Mississippi. . Experienced Management. Our senior management team has substantial experience in the wireless industry. Messrs. Gerald T. Vento, our chief executive officer, and Thomas H. Sullivan, our chief financial officer, founded TeleCorp Wireless. Additionally, the other members of our senior management team have extensive experience in the wireless industry. . Relationship with TeleCorp PCS. We believe that our relationship with TeleCorp PCS will provide us with significant competitive advantages. Our licensed areas, combined with those of TeleCorp Wireless, cover over 36 million people, and include 16 of the top 100 markets in the United States. We believe that the population coverage of our licensed areas, combined with those of TeleCorp Wireless, increases our strategic importance to AT&T Wireless, as we represent a significant portion of its nationwide service area. We believe that our merger with TeleCorp Wireless will enable us to 55 better market our services to new and existing customers by offering more attractive calling plans with larger regional calling areas. We believe our increased size and scale will enable us to reduce operating costs and combine certain technical, network and corporate overhead functions with those of TeleCorp Wireless. We also expect to benefit from TeleCorp Wireless's experience in developing and launching mobile data services, such as instant messaging which TeleCorp Wireless began offering its customers in the fourth quarter of 2000. . Substantial Airwave Capacity. We have licenses with substantial airwave capacity in our markets. The airwave capacity of our licenses ranges between 10 MHz and 40 MHz in Alabama; 20 MHz and 45 MHz in Kentucky; 20 MHz and 35 MHz in Tennessee; 10 MHz and 45 MHz in Mississippi; and 20 MHz and 45 MHz in Georgia. We believe this airwave capacity will enable us to competitively deploy new and enhanced voice and data services. This airwave capacity will also permit us to provide service to the increasing number of wireless users and to service increased use by our customers. . Substantial Progress to Date. Since we initiated service in our first market in September 1999, we have achieved substantial progress in the completion of our networks and growth of our business. As of December 31, 2000, we had 205,675 customers, 1,482 integrated cell sites and six call connection sites in service and had launched service in markets encompassing 98% of the total population where we held our licenses. For the nine month period ended September 30, 2000, we had revenues of $76.0 million. Additionally, as of December 31, 2000, we had 80 SunCom(R) company owned stores, and hundreds of additional outlets where retailers including Circuit City, Office Depot and Best Buy offer our products and services. . Advanced Digital Technology. We are continuing to build our network using TDMA technology, which makes our network compatible with AT&T Wireless's TDMA network and other TDMA networks. This technology allows us to offer enhanced features and services relative to standard analog cellular service, including extended battery life, integrated voicemail, paging, fax and e-mail delivery, enhanced voice privacy and short- messaging capability. Our network will also serve as a platform for the development of mobile data services such as two-way data messaging and two-way data and internet applications. Our ultimate parent, TeleCorp PCS, has joined AT&T Wireless in selecting general packet radio services, or GPRS, a GSM-based technology, for the next step towards development of third generation services for high-speed transmission of data, such as internet service. . Strong Capital Base. Upon the completion of this offering, we expect to have sufficient capital resources to fund our current business plan, including capital expenditures and operating losses for our existing markets. This estimate does not, however, include any funds to deploy GPRS technology as an overlay to our existing TDMA technology for the development of high-speed wireless data services. Along with TeleCorp Wireless, we are currently evaluating the implementation of GPRS technology for the next step toward the development of third generation services for high-speed transmission of data, such as internet service. However, our current business plan does not include, and we have not developed a budget for costs for, the development and implementation of our GPRS overlay network and delivery of GPRS. Business Strategy Our goal is to become the leading provider of wireless personal communications services in each of our markets, by providing our customers with simple-to-buy and easy-to-use wireless services, including coverage across the nation, superior call quality, competitive pricing and personalized customer care. The elements of our strategy to achieve these objectives are: . Leverage Relationship with AT&T Wireless and its affiliates. We receive numerous benefits from AT&T Wireless and its affiliates, including market exclusivity, co-branding, preferred roaming status, roaming and coast-to-coast coverage, and preferred terms on selected products and services. Also, we 56 benefit from AT&T Wireless's and its affiliates' nationwide marketing and advertising campaigns. In addition, we are working with AT&T Wireless's and its affiliates' national sales representatives to jointly market our wireless services to AT&T Wireless and its affiliates corporate customers located in our markets. . Provide Coast-to-Coast Coverage. Our market research indicates that scope and quality of coverage are extremely important to customers in their choice of a wireless service provider. We have designed extensive local calling areas, and we offer coast-to-coast coverage through our arrangements with AT&T Wireless Services and its roaming partners. Our network covers those areas where people are most likely to take advantage of wireless coverage, such as suburbs, metropolitan areas and vacation locations. . Offer Superior Call Quality. We are committed to investing the capital required to develop a quality network in our existing and new markets. In an effort to promote customer satisfaction, we have invested $57 per covered person in our licensed areas as of September 30, 2000. We believe our capital investment enables us to provide a highly reliable network as measured by performance factors such as percentage of calls completed and number of dropped calls. We intend to improve our network coverage by adding cell sites in our existing markets, which we expect to: . increase roaming minutes on our network while decreasing the expenses we incur when our customers roam on other networks in our markets; and . increase the quality of our call coverage to our customers. . Achieve Management and Operating Synergies. As a result of our merger with TeleCorp Wireless, we have broadened our senior management team to include executives of both companies. We have begun to consolidate additional management functions, including sales and marketing, field operations, engineering, legal and human resource functions. Additionally, we expect to implement strategies that have proven successful for TeleCorp Wireless in the past, such as the creation of larger regional management areas and expanded sales and marketing campaigns. . Provide Enhanced Value at Low Cost. We offer our customers advanced services and features at competitive prices. Our pricing plans are designed to promote the use of wireless services by enhancing the value of our services to our customers. We include usage enhancing features such as call waiting, three-way conference calling, and short message service in our basic packages. We market our service with a simple, all- in-one focus: digital phone, pager and voice mail. We offer our customers affordable and simple calling plans, and we take advantage of the coast-to-coast reach of AT&T Wireless Services and its roaming partners. Our national SunCom America SM and SunRate SM plans are similar to AT&T Digital One RateSM plans in that minutes can generally be used throughout the United States without paying additional roaming fees or long distance charges. We believe we can offer competitive services because of the cost advantages provided by agreements between us and AT&T Wireless and certain of its affiliates, the cost-effective characteristics of TDMA and our centralized administrative functions and efficient distribution. . Deliver Quality Customer Care. Our customer service strategy is predicated upon building strong relationships with customers, from the time of the initial handset purchase through the life of the service contract. Customers who purchase handsets from company stores are able to activate service immediately. Customers purchasing their handsets from independent retailers are able to activate service by using the handset to call one of our customer service representatives. Either way, the customer is able to obtain immediate credit approval or establish a debit billing plan, select service features and a rate plan and set up a billing program. We also offer special billing services that cater to the needs of consumers, including simplified monthly billing statements and flexible billing cycles. We expect future enhancements to include on-line billing and account information. AT&T Wireless and the SunCom(R) affiliates, including ourselves, will exchange information and share best practices in order to provide our respective customers with better customer care. 57 . Develop Wireless Data Services. In the future, we intend to offer wireless data services including integrated e-mail, wireless internet and PDA functions. In addition, our ultimate parent, TeleCorp PCS, has joined AT&T Wireless in selecting GPRS technology, a GSM-based technology, for the next step towards the development of third- generation services for high-speed data transmission. Third generation wireless technologies are expected to greatly enhance transmission speeds for internet service and other data. Service and Features Wireless Calling Our primary service is digital wireless calling, which features advanced handsets, enhanced voice clarity, improved protection from eavesdropping and a broad feature set. Our basic wireless service offering includes caller identification, three-way conference calling, call waiting, voicemail, paging and short-messaging. Data and Internet Services Digital wireless communications systems will enable us to transmit wireless data services such as applications providing weather reports, sports summaries, stock quotes, monitoring of alarm systems and internet access. Improved Voice Quality We believe the version of TDMA we are using offers significantly improved voice quality, more powerful error correction, less susceptibility to call fading and enhanced interference rejection, which results in fewer dropped calls compared to earlier versions of TDMA. Voice Privacy and Call Security Digital technology is inherently more secure than analog technologies. This security provides increased voice privacy and enhanced fraud protection for our customers. Feature-Rich Handsets As part of our basic service offering, we provide easy-to-use, interactive menu-driven handsets that can be activated over the air. These handsets primarily feature word prompts and easy-to-use menus rather than numeric codes to operate handset functions. These handsets allow mobile access to e-mail and other internet services. Extended Battery Life Our advanced handsets offer significantly extended battery life over earlier technologies, providing up to 14 days of stand-by battery life. Handsets operating on a digital system are capable of "sleep-mode" while turned on but not in use, improving efficiency and extending battery life. We expect that this feature will increase usage, especially for incoming calls, as users will be able to leave the phone on for significantly longer periods. The use of these handsets further extends battery life by using a digital system for roaming when in areas covered by digital systems. 58 Market Overview The following table shows the basic trading areas, or BTAs, where we provide service as of December 31, 2000. . As of the date of this prospectus we have launched our service in portions of each BTA where at least one-half of the population of that BTA reside. We estimate that approximately 80% of the total population in our current BTAs resides within an area covered by our service. . The column entitled "Estimated 1998 population" shows the total population of each BTA, based on the most current available statistics in Paul Kagan Associates, Inc.'s 1999 Cellular/PCS Pop Book.
Amount of Estimated 1998 FCC License Airwave Existing BTA's Population Block Capacity(a) - -------------- -------------- ----------- ----------- (in thousands) (in MHz) Birmingham Area Birmingham, Alabama.................. 1,298 C, D 25 Huntsville, Alabama.................. 496 C 15 Montgomery, Alabama.................. 475 C, F 40 Tuscaloosa, Alabama.................. 253 C, D 25 Dothan-Enterprise, Alabama........... 218 C, F 25 Florence, Alabama.................... 184 C, F 25 Gadsden, Alabama..................... 184 C 15 Anniston, Alabama.................... 164 C 15 Decatur, Alabama..................... 143 C 15 Selma, Alabama....................... 74 F 10 ------ Total............................... 3,489 ------ Louisville Area Louisville, Kentucky................. 1,448 A, F 30 Lexington, Kentucky.................. 893 A 20 Bowling Green-Glasgow, Kentucky...... 244 A, F 20(b) Owensboro, Kentucky.................. 165 A, C 45(b)(c) Corbin, Kentucky..................... 142 A 20(b) Somerset, Kentucky................... 124 A 20(b) Madisonville, Kentucky............... 46 A, C 45(b) ------ Total............................... 3,062 ------ Nashville Area Nashville, Tennessee................. 1,676 B, C 35 Clarksville, Tennessee-Hopskinsville, Kentucky............................ 261 B, C 35 Cookeville, Tennessee................ 132 B, C 35 ------ Total............................... 2,069 ------ Memphis Area Jackson, Mississippi................. 658 B 20 Tupelo-Corinth, Mississippi.......... 313 B, C 45(b) Greenville-Greenwood Mississippi..... 211 B, C 35 Meridian, Mississippi................ 206 B, C 35 Columbus-Starkville, Mississippi..... 171 B, C 35 Natchez, Mississippi................. 72 B, C 45(b) Vicksburg, Mississippi............... 62 B 20 Montgomery county, Mississippi....... 12 B 20 ------ Total............................... 1,705 ------ New Orleans Area Mobile, Alabama...................... 654 F 10 Biloxi-Gulfport Pascagoula, Mississippi......................... 382 F 10 Hattiesburg, Mississippi............. 181 F 10 McComb-Brookhaven, Mississippi....... 110 C, F 40 Laurel, Mississippi.................. 81 E 10 ------ Total............................... 1,408 ------ Atlanta Area Chattanooga, Tennessee............... 548 A, C 35 Opelika-Auburn, Alabama.............. 137 A, C 35 Rome, Georgia........................ 122 A, C 45(b) Dalton, Georgia...................... 116 A, C 45(b) Atlanta counties (Carroll, Haralson), Georgia............................. 108 A 20 Cleveland, Tennessee................. 96 A 20 La Grange, Georgia................... 70 A, C 35 ------ Total............................... 1,197 ------ Knoxville Area Knoxville, Tennessee................. 1,074 A 20 ------ Total............................... 14,004 ======
- -------- (a) Includes licenses that are subject to a license purchase agreement with ABC Wireless the closing of which is conditioned on receipt of approval by the Federal Communications Commission. See "Certain Relationships and Related Transactions--Relationship with ABC Wireless". Does not include certain licenses which we have agreed to transfer. See "Certain Relationships and Related Transactions--Purchase of Licenses in Georgia and Florida; Ownership of the Remaining Affiliate Licenses". (b) There is additional airwave capacity that is also subject to the license purchase agreement with ABC Wireless. (c) Our license subsidiary has only 35 MHz in Daviess county. 59 Marketing Strategy We believe that our association with the AT&T brand name and the distinctive advantages of our TDMA network, combined with our simple-to-buy and easy-to-use philosophy, will allow us to expand our customer base. Additionally, we expect to attract new users to wireless. We developed our marketing strategy on the basis of extensive market research in each of our markets. This research indicates that limited coverage of existing wireless systems, relatively high costs, inconsistent performance and overall confusion about wireless services drive subscriber dissatisfaction and reduce the attractiveness of wireless services for potential new subscribers. We are focusing our marketing efforts on three primary market segments: . corporate accounts; . current wireless users; and . individuals with the intent to purchase a wireless product within six months. For each segment, we are creating a specific marketing program, including a service package, pricing plan and promotional strategy. We believe that targeted service offerings will increase customer loyalty and satisfaction, reducing customer turnover. The following are key components of our marketing strategy: Branding We market our wireless services as "SunCom, Member of the AT&T Wireless Network" and use the globally recognized AT&T brand name and logo in equal size and prominence with the SunCom(R) brand name and logo. We believe that consumers associate the AT&T brand with reliability and quality. We have entered into agreements with TeleCorp Wireless and Triton to adopt a common regional brand, SunCom(R). We, TeleCorp Wireless and Triton are endeavoring to establish the SunCom(R) brand as a strong local presence. Markets in which the SunCom(R) brand is used have a service area covering a population of approximately 50 million. We enjoy preferred pricing on equipment, handset packaging and distribution by virtue of our affiliation with AT&T and the other SunCom(R) companies. Advertising/Promotion We believe that the most successful marketing strategy is to establish a strong local presence in each of our markets. We are directing our media efforts at the community level by advertising in local publications and sponsoring local and regional events. We combine these local efforts with mass market media, including television, radio, newspaper, magazine, outdoors and internet advertisements. Outside advertising agencies support our brand campaigns, and also develop newspaper, radio and web page advertisements to promote specific product offerings and direct marketing programs for targeted audiences. All of our advertising materials use the SunCom(R) and AT&T names, giving equal emphasis to each, and the tagline, "SunCom, Member of the AT&T Wireless Network". Pricing Our pricing plans are designed to be competitive and straightforward, offering large buckets of minutes, large local calling areas and usage enhancing features. We offer pricing plans tailored for our market segments, including local, regional and national pricing plans. We also offer shared minute pools that are available for businesses and families who have multiple wireless users who want to share the bucket of minutes. The wireless industry is experiencing shifts in customers' calling patterns. A contributing factor in these shifts is the increase in availability of flat rate plans--where customers purchase a large bucket of minutes for use per month, including minutes that can be used locally, regionally or nationally. An example of one of these plans is the AT&T Digital One Rate Plan SM. We believe growth in this category will provide us with a valuable roaming revenue stream as AT&T Digital One Rate SM customers use their minutes while visiting our networks. 60 We are able to offer national SunCom AmericaSM and SunRateSM plans by virtue of our roaming relationship with AT&T Wireless Services. Competing flat rate plans often limit flat rate usage to the competitor's own networks. We are able to offer a differentiated national rate plan by virtue of our roaming arrangements with AT&T Wireless Services and its roaming partners. We believe our pricing policies differentiate us from our competition through flexibility and design. We offer 23 price plans per region, on average, and we design our plans to encourage customers to enter into long-term agreements. Handsets We sell our service exclusively with handsets that are compatible with wireless communications systems that operate using digital service on the PCS portion of the airwaves, as well as digital and analog service on the cellular portion of the airwaves. Through the use of technologically advanced Nokia, Ericsson and Motorola handsets, our customers can use their phones across a variety of wireless networks. Sales and Distribution Our sales and distribution strategy is to use a balanced mix of distribution channels to maximize penetration within our licensed service area while minimizing customer acquisition costs. Our channels include a network of company stores, nationally recognized retailers, a direct sales force for corporate and business customers, regional and local mass merchandisers, telesales, direct mail and online sales. We also work with AT&T's and its affiliates' sales channels to cooperatively exchange leads and develop new business. . Company Stores. Our stores range in size from 1,200 to 2,000 square feet in the principal retail district in each market. As of December 31, 2000, we had opened 80 stores for the distribution and sale of our handsets. We believe that company stores offer a considerable competitive advantage by providing a strong local presence. We also believe that company stores offer one of the lowest customer acquisition costs among our different distribution channels. Sales representatives in company stores receive in-depth training to allow them to explain wireless communications services simply and clearly. We believe this process distinguishes us from our competitors and will improve our ability to attract subscribers within our markets. . Retail Outlets. We have negotiated distribution agreements with national and regional mass merchandisers and consumer electronics retailers, including Circuit City, Office Depot, and Best Buy. We currently have over 2,000 retail outlet locations where customers can purchase our services. In some of these retail store locations, we are implementing a store-within-a-store concept, which uses visual merchandising to leverage the brand awareness created by both SunCom(R) and AT&T and its affiliates advertising. . Direct Sales and Marketing. Our direct corporate sales force focuses on high-revenue, high-margin corporate users. As of December 31, 2000, our direct corporate sales force consisted of approximately 109 sales professionals targeting the wireless decision maker within large corporations. We also benefit from AT&T Wireless's and its affiliates' national corporate accounts sales force. AT&T Wireless and its affiliates, in conjunction with us, support our marketing of their services to AT&T Wireless's and its affiliates' large national accounts located in our service areas. We use direct marketing to generate leads and stimulate prospects, allowing us to maintain low selling costs and to offer our customers additional features or customized services. . Online Sales. Our web page provides current information about us, our markets, our products and our services. All information that is required to make a purchasing decision is available through our website and online store. Customers are able to choose from our rate plans, features, handsets and accessories. The online store provides a secure environment for transactions, and customers purchasing through the online store experience a similar business process to that of customers purchasing service through other channels. 61 Customer Care We are committed to building strong customer relationships by providing customers with prompt and helpful service. As of December 31, 2000, our customer care center employed 162 customer care representatives. Our customer care center has sophisticated infrastructure and information systems, including automated call distributors and advanced diagnostic tools for one-call trouble resolution. We emphasize proactive and responsive customer service, including welcome calls. Network Development We launched commercial operations in September 1999 and have commenced our services in each of our major markets. We launched our services in markets which have attractive characteristics for a high volume of wireless communications usage, including metropolitan areas, the surrounding suburbs, commuting and travel corridors, and popular leisure and vacation destinations. Immediately upon launch, customers had access to coast-to-coast coverage through roaming arrangements with AT&T Wireless Services and its roaming partners, both inside and outside its licensed areas. Within each market, geographic coverage will be based upon changes in wireless communications usage patterns, demographic changes within our licensed areas and our experiences in those markets. We define coverage to include an entire basic trading area if we have a significantly developed system in that basic trading area. As of December 31, 2000, we launched commercial service in the following 38 markets: Biloxi/Gulfport/Pascagoula, MS Decatur, AL Knoxville, TN Brookhaven-McComb, MS Dothan-Enterprise, AL Nashville, TN Columbus-Starkville, MS Florence, AL Dalton, GA Greenville-Greenwood, MS Gadsden, AL LaGrange, GA Hattiesburg, MS Huntsville, AL Rome, GA Jackson, MS Mobile, AL Bowling Green, KY Laurel, MS Montgomery, AL Corbin, KY Meridian, MS Opelika-Auburn, AL Lexington, KY Natches, MS Selma, AL Louisville, KY Tupelo, MS Tuscaloosa, AL Madisonville, KY Vicksburg, MS Chattanooga, TN Owensboro, KY Anniston, AL Cleveland, TN Clarksville, TN and Birmingham, AL Cookeville, TN Hopkinsville, KY
These 38 markets include 13.7 million people, or approximately 98% of the population in our licensed areas. As of December 31, 2000, our network included 1,482 network equipment sites and six call connection sites and we had 205,675 customers. By the end of 2001, we expect to have approximately 1,875 cell sites, providing service in over 40 cities. Initial Radio Frequency Design. Two radio frequency engineering firms, Galaxy Personal Communications Services, Inc., a wholly-owned subsidiary of World Access, Inc., for the Mississippi, Alabama, Georgia and eastern Tennessee sites, and Wireless Facilities, Inc., for the Nashville, Tennessee and the Louisville and Lexington, Kentucky sites, performed the initial radio frequency design for our network. Based upon their engineering designs, Galaxy and Wireless Facilities determined the required number of cell sites to operate the network and identified the general geographic areas in which they propose to locate each of the required cell sites. Our network is designed to provide 90% in-building service reliability in urban areas, 88% in-building service reliability in suburban areas and 90% in-car service reliability in rural areas. Site Identification, Acquisition and Construction. We have arrangements with several firms to identify and acquire the sites on which we will locate the towers, antennae and other equipment necessary for the operation of our PCS system. After the site acquisition companies identify the general geographic area in which to locate cell sites, the site acquisition companies survey potential sites to identify two potential tower sites 62 within each geographic location. The site acquisition companies evaluate the alternative sites within each of the identified geographic areas, giving consideration to various engineering criteria as well as the desirability of the site from an economic point of view. The contracts with these site acquisition companies are based upon specified hourly fees or fixed fee arrangements. We can obtain a cell site in three ways: (1) co-location; (2) construction of a tower by an independent build-to-suit company; or (3) our own construction of a tower. First preference in site acquisition is being given to sites on which we can co-locate with another wireless company or companies by leasing space on an existing tower or building. The advantages of co-location are that there are lower construction costs to us associated with the building of a tower and any zoning difficulties have likely been resolved. Second preference is being given to sites where we would be able to arrange for the construction of a tower on a build-to-suit basis by an independent tower construction company who would acquire the site, build the tower and lease it back to us. The principal advantage of this method is that it reduces our capital expenditures, although operating expenses will reflect the required lease payments. Third preference is being given to those greenfield sites that we would acquire and then arrange for the construction of a tower that we would own. Call Connection Sites In order to cover markets with approximately 13.7 million people in our licensed areas, we utilize six call connection sites located in Louisville, Nashville, Knoxville, Jackson and two in Birmingham. Each call connection site serves several purposes, including routing calls, managing call hand-off, managing access to landline carrier networks and providing access to voice mail. Network Operations Network Communications Equipment In December 1998, we entered into an exclusive equipment supply agreement with Ericsson under which we agreed to purchase radio base stations, switches and other related PCS transmission equipment, software and services necessary to establish our PCS network. Ericsson has assigned a dedicated project management team to assist us in the installation and testing of the equipment that will comprise our transmission system. We have agreed that, during the five year term of the agreement, Ericsson will be our exclusive provider for certain PCS transmission equipment, materials and services within our markets. Connection Agreements Our digital PCS network connects to the landline telephone system through local exchange carriers. We have entered into connection agreements with BellSouth, Verizon and smaller local exchange carriers within our markets. Long Distance Connection We have executed a wholesale long distance agreement with AT&T providing for preferred rates for long distance services. Roaming Arrangements Through our arrangements with AT&T Wireless Services and its affiliates and via the use of advanced handsets, our customers have roaming capabilities on AT&T Wireless Services' and its affiliates' wireless 63 network and AT&T Wireless Services' and its affiliates' customers have roaming capability on our wireless network. Further, we have the benefit of AT&T Wireless Services' and its affiliates' roaming agreements with third party carriers at AT&T Wireless Services' and its affiliates' preferred pricing. These agreements, together with AT&T Wireless Services' wireless network, enable us to offer roaming services in licensed areas representing more than 95% of the United States population. Network Operations Center We are utilizing Wireless Facilities' network operations center located in Richardson, Texas during the buildout and deployment of our network. The network operations center's function is to monitor the network on a real-time basis for, among other things, alarm monitoring, power outages, tower lighting problems and traffic patterns. We are transitioning to the exclusive use of TeleCorp Wireless's network operations center in Memphis, Tennessee by the end of the first quarter of 2001. Financial Operation Systems We operate management information systems to handle customer care, billing, roaming, fraud, network management and financial and administrative services. The systems focus on three primary areas: . network management, including traffic and usage monitoring, trouble management and operational support systems; . financial operations, including billing systems, service activation, pre-pay systems and customer service and support systems; and . business systems, including accounting, financial, purchasing, human resources, inventory and other administrative systems. We have incorporated sophisticated network management and operations support systems to facilitate network fault detection, correction and management, performance and usage monitoring and security. System capabilities have been developed to allow over-the-air activation of handsets and implement fraud protection measures. We maintain stringent controls for both voluntary and involuntary deactivations. We attempt to minimize customer disconnects initiated by us through credit review and preactivation screening, identify prior fraudulent or bad debt activity and call pattern profiling and identify where activation and termination policy adjustments are needed. Technology TDMA Digital Technology We have chosen digital TDMA technology for our network. TDMA technology allows for: . the use of advanced handsets which allow for roaming across the PCS and cellular portion of the airwaves, including both analog and digital technologies; . enhanced services and features, such as short-messaging, extended battery life, added call security and improved voice quality; and . network equipment sites that are small and that improve network coverage with low incremental investment. TDMA technology is the digital technology choice of two of the largest wireless communications companies in the United States, AT&T Wireless Services and Cingular Wireless. This technology served an estimated 35 million subscribers worldwide and 19 million subscribers in North America as of December 31, 1999, according to the Universal Wireless Communications Consortium, an association of TDMA providers and manufacturers. We believe that the increased usage of TDMA has increased the probability that this technology will remain an industry standard. TDMA equipment is available from leading telecommunication vendors such as Lucent, Ericsson and Nortel. 64 Future Technology Development Our ultimate parent, TeleCorp PCS, has joined AT&T Wireless in selecting GPRS technology for the next step toward the development of third-generation services for high-speed data transmission, such as internet service. GPRS operates on GSM technology. Third generation wireless technologies are expected to greatly enhance transmission speeds for internet service and other data. We believe that it will be possible to deploy GPRS as an overlay to our existing TDMA network. To do this, we would, in most instances, place GPRS transmitters at our existing cell sites and connect those transmitters to our existing antenna systems. In some situations, we would build new GPRS sites. As a result, we may be able to offer roaming services to GSM-based PCS providers. However, our current business plan does not include, and we have not developed a budget for costs for, the development and implementation of our GPRS overlay network and delivery of GPRS. We do, however, anticipate deploying our GPRS network strategically, initially targeting more heavily populated areas where we believe deploying the GPRS network will likely attract additional roaming revenues. We do not anticipate making any expenditures until the latter part of 2001. Any expenditures in 2001 that we make for GPRS are not expected to be material. Competition We believe that customers choose a wireless communications service provider principally based upon network coverage, pricing, quality of service and customer care. We compete directly with at least two cellular providers and PCS providers in each of our markets and against enhanced special mobile radio operations in some of our markets. We compete with at least one analog, one CDMA and one GSM operator in each of our markets. Some of these providers have significant infrastructure in place, often at low historical cost, have been operational for many years, and may have greater capital resources than we do. The cellular operators we compete with may upgrade their networks to provide services comparable to those we offer. We compete in: . Alabama, primarily against Verizon Wireless and Cingular Wireless for cellular services, and Sprint PCS, Powertel (which has agreed to be acquired by VoiceStream and VoiceStream has agreed to be acquired by Deutsche Telekom), PrimeCo, Mobile Tri-States, Nextel and ALLTEL for PCS; . Mississippi, primarily against Cingular Wireless and Centurytel for cellular services, and Powertel, Sprint PCS, Nextel and Cellular South for PCS; . Tennessee, primarily against Verizon Wireless, Cingular Wireless and US Cellular for cellular services, and Cingular Wireless, Powertel, Leap Wireless, Nextel and Sprint PCS for PCS; and . Kentucky, primarily against Verizon Wireless and Cingular Wireless for cellular services, and Verizon, Sprint PCS, Nextel and Powertel for PCS. We also compete with resellers of wireless communications services in each of our markets. Resellers purchase large volumes of services on a wireless operator's network, usually at a discount, and resell the services to end users under the reseller's own brand name. While the network operator receives some revenue from the sale of services to the reseller, the operator is competing with its own customer for sales to the end users. We have agreed to resell services to AT&T Wireless and its affiliates in each of our markets should AT&T Wireless desire to do so. We have not yet entered into any such arrangements with AT&T Wireless or any other party. We have not obtained a significant share of the market in any of our areas of operation. We face significant competition from operators who have already established strong market positions and have signed up many customers. Most of the existing cellular operators have developed systems that have larger local and regional coverage than we currently have. We seek to compete by offering a competitive product with attractive pricing plans and through our extensive access to roaming, including in-region roaming, which gives us an effective coverage area competitive with that of our principal competitors. We have developed our pricing plans to be competitive and to emphasize the advantages of our offerings. 65 We anticipate that market prices for wireless communications services generally will decline in the future based upon increased competition. Our ability to compete successfully will depend, in part, on our ability to anticipate and respond to various competitive factors affecting the industry, including new services that may be introduced, changes in consumer preferences, demographic trends, economic conditions and competitors' discount pricing strategies, all of which could adversely affect our operating margins. We plan to use our digital feature offerings, national network through our AT&T Wireless affiliations, contiguous footprint providing an extended home calling area, and local presence in secondary markets to combat potential competition. We believe that our extensive digital network, once deployed, will provide a cost-effective means to react appropriately to any price competition. Formation of Tritel PCS, Inc. and Tritel, Inc. Prior to January 7, 1999, Tritel's operations were conducted through Airwave Communications, formerly Mercury PCS, LLC, and Digital PCS, formerly Mercury PCS II, LLC. Airwave Communications was formed in July 1995 by William M. Mounger, II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr. and various other investors as a "small business", as defined by the Federal Communications Commission, to participate in the Federal Communications Commissions C-Block PCS spectrum auction. Airwave Communications acquired six 30 MHz C-Block licenses covering 2.5 million people in northern Alabama. Digital PCS was similarly formed in July 1996 as a "very small business", as defined by the Federal Communications Commission, to participate in the Federal Communications Commission's D-, E- and F-Block PCS spectrum auctions. Digital PCS acquired 32 10 MHz licenses in the D-, E- and F-Blocks covering approximately 9.1 million people in Alabama, Florida, Kentucky, Louisiana, Mississippi, New Mexico and Texas. Tritel was formed as a Delaware corporation in 1998. On May 20, 1998, Tritel, Airwave Communications and Digital PCS entered into a securities purchase agreement with AT&T Wireless and other parties, which provided for the joint venture arrangement with AT&T Wireless. On January 7, 1999, the parties created the joint venture. Under the AT&T Wireless joint venture, AT&T Wireless contributed to Tritel PCS A- and B-Block licenses covering 9.1 million people, and Airwave Communications and Digital PCS contributed to Tritel PCS their C- Block licenses and certain of their E- and F-Block licenses covering 6.6 million people. In addition, Central Alabama Partnership, an unrelated party, contributed C-Block licenses covering 475,000 people in Montgomery, Alabama to us. The licenses contributed by Airwave Communications and Digital PCS included licenses covering 1.7 million people that overlapped with those contributed by AT&T Wireless. All of the Central Alabama licenses also overlapped with those held by Tritel PCS. As a result, we now hold PCS licenses covering 14.0 million people. Government Regulation We are subject to substantial regulation by the Federal Communications Commission, state public utility commissions and, in some cases, local authorities. Our principal operations are classified as commercial mobile radio service by the Federal Communications Commission, subject to regulation under Title II of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, as a common carrier and subject to regulation under Title III of the Communications Act as a radio licensee. The states are preempted from regulating our entry into and rates for commercial mobile radio service offerings, but remain free to regulate other terms and conditions of our commercial mobile radio services and to regulate other intrastate offerings by us. Congress and the states regularly enact legislation, and the Federal Communications Commission, state commissions and local authorities regularly conduct rulemaking and adjudicatory proceedings that could have a material adverse effect on us. In addition, government regulation may adversely affect our ability to engage in, or rapidly complete, transactions and may require us to expend additional resources in due diligence and filings related to the Federal Communications Commission and other requirements, as compared to unregulated entities. Federal Communications Commission Common Carrier Regulation Under Title II Under Title II of the Communications Act, among other things, we are: . required to offer service upon reasonable request; 66 . prohibited from imposing unjust or unreasonable rates, terms or conditions of service; . proscribed from unjustly or unreasonably discriminating among customers; . required to reserve communications capacity for law enforcement surveillance operations and to make technical network changes to facilitate this surveillance; . required to make our services and products accessible to, and usable by, persons with disabilities, if readily achievable; and . required to comply with limitations on our use of customer proprietary network information. Under the Telecommunications Act, we are entitled to benefits when negotiating interconnection arrangements with other communications carriers, such as resale rights, their customers being able to keep their old numbers when switching to us and compensation equal to that of other carriers, but we are subject to many of those same requirements when other carriers seek to interconnect with our networks. The Federal Communications Commission is still in the process of implementing some of these benefits. While the rates of common carriers are subject to the Federal Communications Commission's jurisdiction, the Federal Communications Commission forbears from requiring commercial mobile radio service carriers to file tariffs for their services. Common carriers, including commercial mobile radio service providers, are also prohibited under the Communications Act from unreasonably restricting the resale of their services and are required to offer unrestricted resale. Federal Communications Commission Radio License Regulation Under Title III Among other things, Title III of the Communications Act: . does not permit licenses to be granted or held by entities that have been subject to the denial of federal benefits; . requires us to seek prior approval from the Federal Communications Commission to transfer control of us or to assign our radio authorizations, including subdividing our radio airwaves or partitioning geographic license areas, except in very limited circumstances; and . limits foreign ownership in radio licensees, including PCS providers. Federal Communications Commission Commercial Mobile Radio Service Regulation The Federal Communications Commission rules and policies impose substantial regulations on commercial mobile radio service providers. Among other regulations, commercial mobile radio service providers such as the company: . incur costs as a result of required contributions to federal programs; . are prohibited from acquiring or holding an attributable interest in PCS, cellular or special mobile radio licenses with more than 45 MHz of airwaves in the same metropolitan area, and more than 55 MHz in rural markets, although these rules are currently subject to requests for modification; . are required to provide at least manual roaming service to enable a customer of one provider to obtain service while roaming in another carrier's service area; . are required to route emergency calls to public safety centers and provide the public safety centers under certain circumstances with information regarding the originating number and the general location of the caller; . are required to comply with federal rules governing radio frequency transmissions in order to limit exposure, by both the general public and maintenance personnel, to potentially harmful radiation; and . will eventually be required to allow customers to retain their telephone numbers when changing service providers in some circumstances. 67 Federal Communications Commission Personal Communications Services Regulation We are subject to service-specific regulations under the Federal Communications Commission's rules. Among other things, these regulations provide that PCS licensees, such as us, be granted licenses for a 10-year term, subject to renewal. Under these policies, we will be granted a renewal expectancy that would preclude the Federal Communications Commission from considering competing applications if we have: . provided "substantial" performance that is "sound, favorable and substantially above a level of mediocre service just minimally justifying renewal"; and . substantially complied with the Federal Communications Commission rules and policies and the Communications Act. These regulations also govern the transmission characteristics of PCS handsets and network equipment sites and other technical requirements. PCS licensees are required to comply with limits intended to ensure that these operations do not interfere with radio services in other markets or in other portions of the airwaves and to ensure emissions from mobile transmitters do not cause adverse health effects. We are also subject to minimum construction requirements that will require us to deploy facilities with service coverage of a particular amount of the population of our licensed areas within specified time periods. Relocation of Fixed Microwave Licensees Because PCS carriers use airwaves occupied by existing microwave licensees, the Federal Communications Commission has adopted special regulations governing the relocation of incumbent systems and cost-sharing among licensees that pay to relocate microwave incumbents. Relocation usually requires a PCS operator to compensate an incumbent for the costs of system modifications and new equipment required to move the incumbent to new portions of the airwaves, including possible premium costs for early relocation to alternate portions of the airwaves. The transition plan allows most microwave users to operate in the PCS portion of the airwaves for a one-year voluntary negotiation period and an additional one-year mandatory negotiation period following the issuance of the PCS license. These periods are longer for public safety entities. We have entered into all necessary agreements for microwave relocation. Under certain circumstances relocated licensees may exercise their rights to move back to their original sites in the event the new sites are inadequate. Federal Communications Commission and Federal Aviation Administration Facilities Regulation Because we acquire and operate antenna sites for use in our networks, we are subject to Federal Communications Commission and Federal Aviation Administration regulations governing registration of towers, the marking and lighting of structures and regulations governing compliance with the National Environmental Policy Act of 1969, which requires carriers to assess the impact of their operations on the environment, including the health effects of radio airwave radiation on humans. Federal Communications Commission Designated Entity Regulation Federal Communications Commission licenses are held by certain of our subsidiaries under the Federal Communications Commission's designated entity policies. Under such policies, for a period of five years from initial license grant, some of our licenses can only be held by a company that meets the Federal Communications Commission's criteria for "entrepreneurial" status. In addition, some of our licenses were awarded subject to bidding credits because the original bidder met the criteria for "small business" or "very small business" status. With respect to our designated entity licenses, we: . believe we met the relevant eligibility and benefits criteria at the time such licenses were granted; . believe our subsidiaries continue to hold such licenses in compliance with the Federal Communications Commission's eligibility and benefits criteria; and . intend to diligently maintain our subsidiaries' eligibility and benefits in compliance with applicable Federal Communications Commission rules. 68 We rely on representations of our investors to determine their compliance with the Federal Communications Commission's rules applicable to PCS licenses. Entrepreneurial Eligibility. Under the Federal Communications Commission's designated entity rules for PCS, the C- and F-Blocks of PCS spectrum were set aside by the Federal Communications Commission for entrepreneurs. Only entrepreneurs were eligible to bid for these licenses and, for a period of five years from the original grant, only entrepreneurs may hold these licenses. Airwave Communications, and Digital PCS initially qualified to hold PCS licenses as entrepreneurs. We believe that we have met the entrepreneurs requirements. To qualify as an entrepreneur, our designated entity subsidiaries, their attributable investors, the affiliates of our designated entity subsidiaries and the affiliates of the attributable investors in our designated entity subsidiaries must have had less than $500.0 million in net assets at the time they acquired their initial licenses and gross revenues of less than $125.0 million for each of the two years prior to filing their applications for these licenses. To the extent an entrepreneur grows beyond these limits as a result of normal business growth, it will retain its eligibility to hold its licenses and even may continue to acquire additional entrepreneurial licenses from other entrepreneurs. Small Business and Very Small Business Status. Under the Federal Communications Commission's designated entity policies, Airwave Communications and Digital PCS received their licenses subject to bidding credits, and in some cases, government financing, awarded because of their status as very small businesses. In order to qualify for bidding credits or government financing, or to acquire licenses originally awarded with bidding credits or government financing without being subject to penalty payments, the Federal Communications Commission considers the aggregate average gross revenues of the applicant, its attributable investors, the applicant's affiliates, and the affiliates of the applicant's attributable investors for the prior three years. If these average annual revenues are $40.0 million or less, the entity will be considered a small business. If these average annual revenues are $15.0 million or less, the entity will be considered a very small business. To the extent a small business or very small business grows beyond these limits as a result of normal business growth, it will not lose its bidding credits or governmental financing, but its status as a small or very small business is not grandfathered for other licenses it subsequently acquires. Control Group or Controlling Interest Holder Requirements. For our designated entity subsidiaries to avoid attribution of the revenues and assets of some of their investors, our designated entity subsidiaries are required to maintain a conforming control group or controlling interest holders as well as limit the amount of equity held by other entities on a fully-diluted basis. These requirements mandate that the control group, among other things, have and maintain both actual and legal control of the licensee. Under these control group requirements: . an established group of investors meeting the financial qualifications must own at least three-fifths of the control group's equity, or 15% of the licensee's overall equity, on a fully-diluted basis and at least 50.1% of the voting power in the licensee entity; and . additional members of the control group may hold up to two-fifths of the control group's equity, or up to 10% equity interest on a fully-diluted basis in the licensee entity. Additional members may be non-controlling institutional investors, including most venture capital firms. A licensee must have met the requirements at the time it filed its application to acquire these licenses and must continue to meet the requirements for five years following the date that a license is granted, although normal business growth is permitted. Beginning the fourth year of the license term, the Federal Communications Commission rules: . eliminate the requirement that the 10% equity interest be held by certain limited classes of investors; and . allow the qualifying investors to reduce the minimum required equity interest from 15% to 10%. 69 In August of 2000, the Federal Communications Commission revised the rules for newly designated entities whereby a designated entity may show compliance with the financial limitations using a new controlling interest standard. This standard does not mandate specific equity criteria, but continues to require de jure and de facto control by the controlling interest holders. Pre-existing designated entities, such as some of our subsidiaries, are not required to conform to the new rules. Federal Communications Commission Transfer Restrictions During the first five years of their license terms, with one exception, designated entity PCS licensees may only transfer or assign their license, in whole or in part, to other qualified entrepreneurs. The Federal Communications Commission has amended its rules to permit transfer or assignment of designated entity licenses to non-entrepreneurs if the first construction benchmarks for the licenses have been satisfied and the Federal Communications Commission has been notified of such construction. The acquiring entities would take over the license, or any portion of the license, subject to separately established installment payment obligations. After five years, licenses are transferable to entrepreneurs and non-entrepreneurs alike, subject to unjust enrichment penalties. If transfer occurs during years six through ten of the initial license term to a company that does not qualify for the same level of auction preferences as the transferor, the sale would be subject to immediate payment of the outstanding balance of the government installment payment debt and payment of any unjust enrichment assessments as a condition of transfer. The Federal Communications Commission has also initiated transfer disclosure regulations that require licensees who transfer control of or assign a PCS license within the first three years to file associated contracts for sale, option agreements, management agreements or other documents disclosing the total consideration that the applicant would receive in return for the transfer or assignment of its license. State and Local Regulation The Federal Communications Commission permits the states to: . regulate terms and conditions of our commercial mobile radio service services other than rates and entry and may regulate all aspects of our intrastate toll services; . regulate the intrastate portion of services offered by local telephone carriers, and therefore the rates we must pay to acquire critical facilities from other common carriers; . administer numbering resources, subject to federal oversight; and . have other responsibilities that impact the nature and profitability of our operations, including the ability to specify cost-recovery mechanisms for network modifications to support emergency public safety services. States and localities also regulate construction of new antenna site facilities and are responsible for zoning and developmental regulations that can materially impact our timely acquisition of sites critical to our radio network. Emission and Hands-Free Regulation Media reports have suggested that some radio airwave emissions from wireless handsets may be linked to health concerns, including the incidence of cancer. Data gathered in studies performed by manufacturers of wireless communications equipment dispute these media reports. The Federal Communications Commission has adopted rules specifying the methods to be used in evaluating radio airwave emissions from radio equipment, including wireless handsets. The hand-held digital telephones that we offer to our customers comply with the standards adopted under the new rules, although these handsets may not comply with any rules adopted by the Federal Communications Commission in the future. Recent studies have shown that hand-held digital telephones interfere with medical devices, including hearing aids and pacemakers, and additional studies are underway. 70 Various state legislatures have proposed or considered measures that would require hands free use of cellular phones while operating motor vehicles, ban cellular phone use or limit the length of calls while driving and require drivers to pull to the side of the road to use cellular phones. In addition, some gas stations have banned the use of mobile phones on their premises. Intellectual Property The AT&T globe design logo is a service mark registered with the United States Patent and Trademark Office. AT&T owns the service mark. We use the AT&T globe design logo, on a royalty free basis, with equal emphasis on the SunCom(R) brand and logo, solely within our licensed area in connection with marketing, offering and providing licensed services to end-users and resellers of our services. Our license agreement with AT&T grants us the right and license to use licensed marks on permitted mobile phones. This license agreement contains numerous restrictions with respect to the use and modification of licensed marks. Along with TeleCorp Wireless and Triton, we have adopted a common brand, SunCom(R). Each of the SunCom(R) companies owns one-third of Affiliate License Co., which owns the SunCom(R) name and has no other operations. We, along with the other SunCom(R) companies license the SunCom(R) name from Affiliate License Co. The SunCom(R) name is a service mark registered with the United States Patent and Trademark Office. We use the brand to market, offer and provide services to end-users and resellers of our PCS. Employees As of December 31, 2000, we employed 1,181 people. None of our employees is currently represented by a union, and we believe that our relations with our employees are good. Properties We currently own no real property. We have entered into leases for an aggregate of 75,543 square feet of office space in Jackson, Mississippi, for use as our regional headquarters. The leases have varying initial terms ranging from five years to ten years. However, the leases all expire on December 31, 2003, with options to renew for an additional five years. We have also leased 20,000 square feet of office space for use as our regional project and sales office and 48,500 square feet of office space for use as our new customer operations center, both located in Ridgeland, Mississippi and having initial terms expiring June 30, 2004, with an option to renew for an additional five years. We currently have 18,874 square feet of office space located in Flowood, Mississippi that was used for our former customer care center, which is on the market for sublease. The initial term of that lease is five years and expires on March 31, 2004. Management expects that our current regional headquarters and customer operations office facilities will be sufficient through at least 2001. Legal Proceedings Welsh. On August 28, 2000, Edwin Welsh commenced an action to reopen a final judgment dismissing with prejudice certain litigation he had brought against Tritel's predecessor companies and certain of Tritel's initial investors in the Chancery Court of the First Judicial District of Hinds County, Mississippi. The final judgment arose out of a settlement of the underlying litigation. Mr. Welsh claims that he was fraudulently induced to enter into that settlement agreement because, among other things, he was misled as to the plans of Tritel to make a public offering of its stock. In addition, on August 28, 2000, Mr. Welsh commenced an action against Tritel, its predecessor companies and certain of Tritel's initial investors in the same court. Mr. Welsh seeks actual damages of $30 million and punitive damages of $300 million. Tritel intends to vigorously defend these actions and believes that it has meritorious defenses to these claims. High Plains. Nineteen of our Federal Communications Commission licenses (each of which covers 10 MHz), including eight that we are contractually obligated to sell to a third party (the eleven remaining licenses cover approximately 4 million people), were originally awarded to Mercury PCS II, LLC as a result of 71 the Federal Communications Commission's D-, E-, and F-Block PCS auction. Mercury's original application for these authorizations was contested by High Plains Wireless, L.P., a competing bidder in that auction, which alleged that Mercury violated the Federal Communications Commission's rules by engaging in reflexive bidding. Although the Federal Communications Commission originally proposed to fine Mercury $650,000 for this violation, the Federal Communications Commission ultimately rescinded its proposed fine based upon its determination that Mercury lacked notice that reflexive bidding was prohibited conduct. The Department of Justice also terminated a related inquiry with a consent decree prohibiting Mercury from engaging in such activities in the future and requiring Mercury to institute an antitrust compliance program. During the course of the Federal Communications Commission proceedings regarding Mercury's bidding activities, High Plains also asserted that Mercury violated the Federal Communications Commission's ex parte regulations and demonstrated a lack of candor in responding to the Federal Communications Commission's inquiries. On June 30, 2000, High Plains sought judicial review by the Court of Appeals for the District of Columbia Circuit of the decisions by the Federal Communications Commission: (i) granting certain licenses to Mercury and eliminating conditions on other previously granted licenses and (ii) finding in favor of Mercury on the ex parte and candor issues. Tritel has intervened in the appeal and filed a motion arguing for dismissal of High Plains appeal on jurisdictional and procedural grounds. Because the relief sought by High Plains includes a potential determination that Mercury was unfit to be a licensee, the appeal could materially and adversely impact licenses held by Tritel that were assigned from Mercury if High Plains prevails. However, we believe that High Plains is extremely unlikely to prevail on substantive, jurisdictional and procedural grounds and that, if High Plains were to succeed, it is even more unlikely that the Federal Communications Commission would take any action beyond reinstating the original fine against Mercury. In addition, we are a party to routine filings and customary regulatory proceedings with the Federal Communications Commission relating to our operations. 72 MANAGEMENT Board of Directors of Tritel, Tritel PCS, Tritel Communication, Inc. and Tritel Finance, Inc. The boards of directors of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc. are made up of Gerald T. Vento and Thomas H. Sullivan. The table below sets forth certain information regarding the directors and officers of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc.:
Term Name Age Title Expires ---- --- ------------------------------ ------- Gerald T. Vento............... 53 Chief Executive Officer of 2001 Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc., Director of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc. Thomas H. Sullivan............ 38 Chief Financial Officer, 2001 President and Treasurer of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc., Director of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc.
Gerald T. Vento. Mr. Vento has been the Chief Executive Officer and a director of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc. since November 13, 2000. Mr. Vento is the co-founder of TeleCorp Wireless and has been TeleCorp Wireless's Chief Executive Officer and a director since its inception in July 1997. He has been Chairman of TeleCorp Wireless's board of directors since June 1999. From December 1993 to March 1995, Mr. Vento was Vice Chairman and Chief Executive Officer of Sprint Spectrum/American PCS, L.P. From April 1995 to March 1998, Mr. Vento was Chairman of Entel Technologies, Inc., a wireless site acquisition and construction management company. From April 1996 to October 1996, Mr. Vento also served as the Chief Executive Officer of National Fiber Networks, Inc. Mr. Vento also served as managing partner in a joint venture with the Washington Post Company to build and operate that company's systems in the United Kingdom prior to its sale in 1993 to TCI/US West Communications. Mr. Vento has spent over twenty years in cable, telephone and wireless businesses. Mr. Vento was the founder and Managing General Partner of several cable television companies, throughout the United States and Puerto Rico. Mr. Vento has been a director and Chief Executive Officer of TeleCorp PCS since its formation in April 2000. Thomas H. Sullivan. Mr. Sullivan has been the President of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc. since February 2, 2001 and the Chief Financial Officer, Treasurer and a director since November 13, 2000. Mr. Sullivan is the co-founder of TeleCorp Wireless and has been TeleCorp Wireless's Executive Vice President and one of TeleCorp Wireless's directors since its inception in July 1997, and Chief Financial Officer since March 1999. Mr. Sullivan served as President of TeleCorp Wireless from 1997 to 1998 and has served as a senior executive and founder of several wireless and wireline companies for the past six years. From 1992 to 1999, Mr. Sullivan was a partner of, and counsel to, McDermott, Will & Emery, where he served as co- head of its telecommunications practice and co-chairman of its Boston corporate department. Mr. Sullivan has been a director and Chief Financial Officer of TeleCorp PCS since its formation in April 2000. Compensation of Directors Currently, members of the board of directors do not receive compensation in their capacity as directors. Committees of the Board of Directors Our bylaws provide that our board may establish committees to exercise powers delegated by the company. 73 Tritel 1999 Stock Option Plan The 1999 Stock Option Plan of Tritel authorizes the grant of certain tax- advantaged stock options that are intended as "incentive stock options" under Section 422 of the Internal Revenue Code of 1986, as amended, nonqualified stock options, restricted shares, deferred shares and stock appreciation rights for the purchase of an aggregate of up to 10,426,400 shares of Tritel's common stock. The Stock Option Plan provides for the grant of these shares of Tritel's common stock to qualified officers, employee directors and other key employees of, and consultants to, Tritel and Tritel's subsidiaries, provided, however that incentive stock options may only be granted to employees. As of September 30, 2000, 69,935 shares of Tritel's common stock have been issued under the Stock Option Plan. As of September 30, 2000, 4,557,896 shares have been issued and are outstanding pursuant to restricted stock grants. The maximum term of any stock option to be granted under the Stock Option Plan is ten years, except that with respect to incentive stock options granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of Tritel, the term of those stock options shall be for no more than five years. The precise number and terms and all questions of interpretation with respect to the Stock Option Plan, including the administration of, and amendments to, the Stock Option Plan, are determined by the Board of Directors or a compensation committee designated by the Board. TeleCorp PCS assumed the 1999 Stock Option Plan after the merger of TeleCorp Wireless and Tritel into two of our wholly-owned subsidiaries. As a result, all existing awards became awards to receive TeleCorp PCS stock and any future awards will be awards for TeleCorp PCS stock. Tritel 1999 Stock Option Plan for Non-employee Directors The 1999 Stock Option Plan for Non-employee Directors of Tritel authorized the grant of certain nonqualified stock options for the purchase of an aggregate of up to 100,000 shares of Tritel's common stock to non-employee directors of Tritel. As of September 30, 2000, 45,000 options have been issued under the non-employee directors' plan. The maximum term of any stock option to be granted under the non-employee directors' plan is ten years. Grants of options under the non-employee directors' plan and all questions of interpretations with respect to the non-employee directors' plan, including the administration of, and amendments to, the non-employee directors' plan, are determined by Tritel's Board of Directors. TeleCorp PCS assumed the 1999 Stock Option Plan for Non-employee Directors after the merger of TeleCorp Wireless and Tritel into two of our wholly-owned subsidiaries. As a result, all existing awards became awards to receive TeleCorp PCS stock and any future awards will be awards for TeleCorp PCS stock. 74 SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following tables set forth information concerning the beneficial ownership of the common stock of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc. as of January 31, 2001, for each person known to us to beneficially own more than 5% of the outstanding shares of the common stock of each of Tritel, Tritel PCS, Tritel Communications, Inc. and Tritel Finance, Inc. Tritel
Name of Amount of Percent Title of beneficial beneficial of class owner ownership class -------- ------------ ---------- ------- common stock TeleCorp PCS 1000 100.0
Tritel PCS
Name of Amount of Percent Title of beneficial beneficial of class owner ownership class -------- ---------- ---------- ------- common stock Tritel 1 100.0
Tritel Communications, Inc.
Name of Amount of Percent Title of beneficial beneficial of class owner ownership class -------- ---------- ---------- ------- common stock Tritel PCS 1 100.0
Tritel Finance, Inc.
Name of Amount of Percent Title of beneficial beneficial of class owner ownership class -------- ---------- ---------- ------- common stock Tritel PCS 1 100.0
75 Executive Compensation Summary Compensation Table The following table contains information about the cash and other compensation that we paid in 1998, 1999 and 2000 to Mr. Mounger and Mr. Vento, our Chief Executive Officers during those years, and the five other most highly paid executive officers. The bonuses in the table are shown in the year in which they were earned. In general, bonuses were paid in the year after they were earned.
Long-Term Compensation Annual Compensation Awards ------------------------------------ ----------------------------------- All Other Other Annual Restricted Stock Compen- Name and Principal Salary Bonus Compensation Stock Options sation Position Year ($) ($)(1) ($) Awards ($) (#) ($) - ------------------ ---- ------- ------- ------------ ---------- ------- --------- William M. Mounger, II (2)................. 2000 229,327 -- 6,465,480(3) 7,686,920(4) -- -- Chief Executive Officer--Tritel, Inc. 1999 225,000 172,575(5) -- 30,748(6) -- -- 1998 225,000 112,500 -- -- -- -- Gerald T. Vento (7)..... 2000 -- -- -- -- -- -- Chief Executive Officer--Tritel, Inc. Karlen Turbeville....... 2000 198,020 -- 912,774(3) 1,085,212(4) 13,050(8) -- Senior Vice President-- Finance 1999 175,000 109,970(5) -- 10,852(9) -- -- 1998 175,000 87,500 -- -- -- -- Timothy Burnette (10)... 2000 191,979 -- 273,832(3) 325,564(4) 45,000(8) -- Senior Vice President-- 1999 118,017 109,970(5) 44,213(11) 3,256(12) -- -- Technical Operations James H. Neeld, IV (13)................... 2000 191,978 -- 228,194(3) 271,304(4) 45,000(8) -- Senior Vice President-- 1999 131,255 82,854(5) 2,713(14) -- General Counsel E.B. Martin, Jr. (15)... 2000 223,558 -- 6,465,480(3) 7,686,920(4) -- -- 1999 225,000 172,575(5) -- 30,748(16) -- -- 1998 225,000 112,500 -- -- -- -- Willliam S. Arnett 2000 (17)................... 229,764 -- 3,422,896(3) 4,069,540(4) -- 562,500(18) President and Chief 1999 225,000 172,575(5) 84,300(19) 16,278(20) 172,184(8) Operating 1998 -- -- -- -- -- -- Officer--Tritel
- -------- (1) Bonus amounts for services rendered during the year ended December 31, 2000 are expected to be paid in the first quarter of 2001. (2) Mr. Mounger served as Chief Executive Officer and Chairman of the board of directors of Tritel until November 13, 2000. (3) This amount reflects tax deposits made by Tritel on behalf of the recipient in connection with the amendment of restricted stock agreements during 2000. (4) This amount reflects the increase in value of the recipient's 1999 restricted stock award as a result of an amendment to that agreement during 2000. (5) In March 2000, the Compensation Committee awarded discretionary bonuses to the employees including the executive officers listed in the Summary Compensation Table, for services rendered during the year ended December 31, 1999. (6) This amount reflects 2,384,544 shares of Tritel's class A voting common stock and 690,224 shares of Tritel's class C common stock, valued at 1/400th of $.01 on January 7, 1999, the date of grant, awarded to Mr. Mounger upon the closing of the joint venture. As a result of the merger of Tritel and TeleCorp Wireless with two wholly-owned subsidiaries of TeleCorp PCS, all of the capital stock of Tritel and TeleCorp Wireless was converted into the right to receive capital stock in TeleCorp PCS. 76 (7) Mr. Vento has served as Chief Executive Officer of Tritel, Tritel PCS, Tritel Finance, Inc. and Tritel Communications, Inc. since November 13, 2000. Mr. Vento also serves as Chief Executive Officer of our ultimate parent, TeleCorp PCS. Mr. Vento is compensated by TeleCorp PCS pursuant to the terms of a management agreement between TeleCorp PCS and TeleCorp Management Corp., a corporation controlled by Mr. Vento and Thomas H. Sullivan. Mr. Vento is not directly compensated by Tritel. TeleCorp PCS may allocate some of the costs for Mr. Vento's compensation under the management agreement to Tritel based on the duties that Mr. Vento performs for Tritel. (8) These figures represent options for shares of Tritel class A voting common stock prior to the merger of Tritel and TeleCorp Wireless with two wholly- owned subsidiaries of TeleCorp PCS. In accordance with the terms of the merger agreement, these options now represent options to acquire shares of TeleCorp PCS class A voting common stock. (9) This amount reflects the value of 1,085,212 shares of Tritel class A voting common stock, valued at 1/400th of $.01 on January 7, 1999, the date of grant, awarded to Ms. Turbeville in connection with his employment. As a result of the merger of Tritel and TeleCorp Wireless with two wholly-owned subsidiaries of TeleCorp PCS, all of the capital stock of Tritel and TeleCorp Wireless was converted into the right to receive capital stock in TeleCorp PCS. (10) Mr. Burnette became an employee of Tritel during the year in 1999. (11) This amount consists of approximately $44,213 paid in connection with the relocation of Mr. Burnette's residence to Jackson, Mississippi. (12) This amount reflects the value of 325,564 shares of Tritel class A voting common stock, valued at 1/400th of $.01 on January 7, 1999, the date of grant, awarded to Mr. Burnette in connection with his employment. As a result of the merger of Tritel and TeleCorp Wireless with two wholly-owned subsidiaries of TeleCorp PCS, all of the capital stock of Tritel and TeleCorp Wireless was converted into the right to receive capital stock in TeleCorp PCS. (13) Mr. Neeld became an employee of Tritel during the year in 1999. (14) This amount reflects the value of 271,304 shares of Tritel class A voting common stock, valued at 1/400th of $.01 on January 7, 1999, the date of grant, awarded to Mr. Neeld in connection with his employment. As a result of the merger of Tritel and TeleCorp Wireless with two wholly-owned subsidiaries of TeleCorp PCS, all of the capital stock of Tritel and TeleCorp Wireless was converted into the right to receive capital stock in TeleCorp PCS. (15) Mr. Martin served as the Chief Financial Officer of Tritel until November 13, 2000. From November 2000 until February 2001, Mr. Martin served as the Chief Information Officer of Tritel. (16) This amount reflects the value of 2,384,544 shares of Tritel's class A voting common stock and 690,224 shares of Tritel's class C common stock, valued at 1/400th of $.01 on January 7, 1999, the date of grant, awarded to Mr. Martin upon the closing of the joint venture. As a result of the merger of Tritel and TeleCorp Wireless with two wholly-owned subsidiaries of TeleCorp PCS, all of the capital stock of Tritel and TeleCorp Wireless was converted into the right to receive capital stock in TeleCorp PCS. (17) Mr. Arnett resigned as President and Chief Operating Officer of Tritel effective December 15, 2000. (18) This amounts consists of amounts Tritel is required to pay Mr. Arnett pursuant to his separation agreement as follows: $450,000 in equal installments over two years and $112,500 in bonus payments during the first quarter of 2001. (19) This amount consists of approximately $66,655 paid in connection with the relocation of Mr. Arnett's residence to Jackson, Mississippi; approximately $2,482 of imputed interest with respect to an unsecured, interest-free loan made by Tritel in connection with the relocation of Mr. Arnett's residence, and approximately $15,163 in legal fees incurred in connection with the negotiation of Mr. Arnett's employment agreement with Tritel. (20) This amount reflects the value of 1,627,816 shares of Tritel class A voting common stock, valued at 1/400th of $.01 on January 7, 1999, the date of grant, awarded to Mr. Arnett in connection with his employment as President. As a result of the merger of Tritel and TeleCorp Wireless with two wholly-owned subsidiaries of TeleCorp PCS, all of the capital stock of Tritel and TeleCorp Wireless was converted into the right to receive capital stock in TeleCorp PCS. 77 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Agreements and Relationships with AT&T On May 20, 1998, Tritel agreed to the formation of a venture under which Tritel and its subsidiaries would finance, construct and operate a wireless communications network using the AT&T and SunCom(R) brand names and logos together, giving equal emphasis to both. Under the securities purchase agreement dated as of May 20, 1998, creating the venture between Tritel and AT&T Wireless and certain initial investors other than AT&T Wireless, AT&T Wireless contributed licenses to Tritel in exchange for an equity interest in it. Each of the agreements governing the venture with AT&T Wireless and its affiliates is unique and was heavily negotiated by the parties. We believe that the terms of these agreements were no more favorable to any of the parties than could have been obtained from third parties negotiated at arm's length. AT&T Wireless, as a result of these agreements and the merger of TeleCorp Wireless and Tritel, owns shares of the capital stock of TeleCorp PCS. The terms of the ventures and the alliances are described in a number of agreements, summaries of which are set forth below. Securities Purchase Agreement Under a securities purchase agreement, dated as of May 20, 1998, as amended, among Tritel, its initial investors and William M. Mounger, II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr.: (1) AT&T Wireless and TWR Cellular, Inc. assigned the AT&T licensed areas to Tritel in exchange for shares of Tritel's series A preferred stock and series D preferred stock; (2) Airwave Communications and Digital PCS assigned to Tritel their contributed licensed areas and certain other assets in exchange for shares of series C preferred and the assumption of certain liabilities of Airwave Communications and Digital PCS, including the indebtedness owed to the United States Department of the Treasury for the Airwave Communications and Digital PCS contributed licensed areas; and (3) Tritel's initial investors other than AT&T Wireless purchased shares of the series C preferred stock. The licenses contributed by AT&T Wireless provide for the right to use 20 MHz of airwave capacity in geographic areas that cover approximately 9.1 million people, which AT&T Wireless has partitioned and disaggregated from certain of its 30 MHz A- and B-Block PCS licenses. AT&T Wireless has reserved the right to use, market and sell to others any services on the 10 MHz of airwave capacity that it retained, subject to the exclusivity provisions of the stockholders' agreement and the network membership license agreement. Except as specified in the securities purchase agreement and the related agreements, none of AT&T Wireless nor any of its affiliates has any further obligation or commitment to acquire Tritel's debt or equity securities, provide or arrange for debt or equity financing for Tritel or provide services to or otherwise assist Tritel in connection with the conduct of Tritel's business. The securities purchase agreement does not contain any restrictions on AT&T Wireless, or any of its affiliates, from competing, directly or indirectly, with Tritel. Network Membership License Agreement Tritel entered into a network membership license agreement dated as of January 7, 1999, with AT&T. In the network membership license agreement AT&T granted to us a royalty-free, non-transferable, non-sublicensable, non- exclusive, limited right and license to use some of AT&T's licensed marks in our markets, including: . the logo containing the AT&T name and globe design and the general image or appearance of the marketing or services performed under the licensed logo, including AT&T colors, graphics and overall configurations; and . the expression, "Member, AT&T Wireless Services Network". 78 The licensed marks may be used by us only in connection with licensed activities. These licensed activities include: . providing to Tritel's customers and resellers of their wireless services, solely within the areas covered by its licenses, mobile wireless communications services; and . marketing and offering the licensed services within the areas covered by Tritel's licenses with limited advertising outside these licensed areas to the extent necessary to reach end-users and potential end-users in the areas covered by our licenses. The network membership license agreement also grants us the right to use licensed marks on specified mobile phones distributed to our customers. Except in specified instances, AT&T has agreed not to grant to any other person a right to provide or resell, or act as agent for any person offering, mobile wireless communications services under the licensed marks in our licensed markets. AT&T retains all rights of ownership in the licensed marks, subject to its exclusivity obligations to us, in the areas covered by our licenses and all other areas. The network membership license agreement restricts our use and modification of any of the licensed marks. Although we may develop our own marks, we may not use them together with the licensed marks without the prior approval of AT&T. Our PCS systems must be of comparable quality to the systems that AT&T operates. We may take into account the relative stage of development of similar AT&T services and systems in the licensed areas to determine what is comparable service. In order to provide maximum enhancement and protect licensed marks, we must also provide sufficiently high quality services, such as attaining specified levels of network quality, audio quality, system performance and meeting customer care standards. The network membership license agreement also defines specific testing procedures to determine compliance with these standards and affords us with a grace period to cure any instances of noncompliance. Following the cure period, we must stop using the licensed marks until we comply with the standards, or we may be deemed to be in breach of the network membership license agreement and may lose our rights to the licensed marks. Tritel may not assign, sublicense or transfer, by change of control or otherwise, any of its rights under the network membership license agreement, except that the network membership license agreement may be, and has been, assigned to our lenders under our senior credit facilities. After the expiration of any applicable grace and cure periods under these senior credit facilities, the lenders may then enforce our rights under the network membership license agreement and assign the network membership license agreement to any person with AT&T's consent. The initial term of the network membership license agreement runs until July 17, 2005 and will be automatically renewed for an additional five-year period if each party gives written notice to the other party of the election to renew the license agreement and neither party gives notice of non-renewal. The network membership license agreement may be terminated by AT&T at any time in the event of a significant breach by Tritel and the exhaustion of any applicable cure periods, which include: . the misuse of any licensed marks; . bankruptcy of Tritel; . licensing or assigning by Tritel of any of their rights under the applicable network membership license agreement, except as permitted by the terms of the network membership license agreement; . the loss of its Federal Communications Commission licenses; . the failure to maintain AT&T Wireless's quality standards in any material respect; or . a change of control with respect to Tritel. 79 A "change of control" means a transaction, other than a transfer by AT&T, that results in any person other than Tritel's initial stockholders or Tritel's senior lenders acquiring beneficial ownership of more than 50% of Tritel's voting stock, or more than 33.3% of Tritel's voting stock if the person acquiring Tritel stock acquires more than Tritel's initial stockholders hold at that time. Also included is a transaction that results in any of the three largest interexchange carriers, excluding AT&T or any regional bell operating company, Microsoft or Verizon Wireless, or any of their respective affiliates acquiring more than 15% of Tritel's voting stock, excluding acquisitions through open market transactions or a majority of Tritel's directors are removed in a proxy contest. In addition, AT&T may generally terminate the network license membership agreement upon the later of the consummation of a disqualifying transaction or the second anniversary of the date on which AT&T notifies Tritel that it has entered into a binding agreement to engage in a disqualifying transaction. Disqualifying transaction is defined in the Stockholders' Agreement. See "-- Stockholders' Agreement--Disqualifying Transactions". Tritel's rights under the network membership license agreement are also subject to the minimum construction plan set forth in the stockholders' agreement. For more information concerning the minimum construction plan, see the discussion under "--Stockholders' Agreement". Intercarrier Roamer Service Agreement Tritel and several of its affiliates entered into an intercarrier roamer service agreement dated January 7, 1999, with AT&T Wireless Services and several of its affiliates. The intercarrier roamer service agreement provides that each party, in its capacity as a serving provider, will provide services to each others' customers where it has a license or permit to operate a wireless communications system. Each home carrier whose customers receive service from a serving provider will pay to the serving provider all of the serving provider's charges for wireless service and all of the applicable charges. Each service provider's service charges per minute or partial minute for use for the first three years will be fixed. In years four to twenty, service charges will be the lower of a fixed rate or the AT&T Wireless Services' average home rate. The intercarrier roamer service agreement has a term of 20 years, which is automatically renewed on a month-to-month basis unless terminated by either party upon 90-days prior written notice. The intercarrier roamer service agreement may be terminated immediately by either party upon written notice to the other of a default of the other party. A party will be in default under the intercarrier roamer service agreement upon any of the following: . a material breach of any material term of the intercarrier roamer service agreement by a party that continues unremedied for 30 days after receipt of written notice of the breach from the non-breaching party; . voluntary liquidation or dissolution or the approval by the management or owners of a party of any plan or arrangement for the voluntary liquidation or dissolution of the party; . a final order by the Federal Communications Commission revoking or denying a material PCS license or permit granted to either party; or . bankruptcy or insolvency of a party. The intercarrier roamer service agreement may also be suspended by either party immediately upon written notice to the other party of the existence of a breach of the agreement, whether or not the breach constitutes a default, if the breach materially affects the service being provided to the customers of the non-breaching party. While the suspension is in effect, either in whole or in part, the parties will work together to resolve as quickly as possible the difficulty that caused the suspension. When the party who originally gave notice of suspension concludes that the problem causing the suspension has been resolved, that party will give to the other written notice to this effect, and the agreement will resume in full effect within five business days 80 after the parties have mutually agreed that the problem has been resolved. No party to the intercarrier roamer service agreement may assign or transfer its rights and obligations under the intercarrier roamer service agreement without the written consent of the other party, except to an affiliate. In addition, if either party sells, assigns or transfers control of all or part of its PCS systems to any other party, the transferee is required to assume the obligations under the intercarrier roamer service agreement as it relates to the transferred systems. Roaming Administrative Service Agreement Under a roaming administrative service agreement dated as of January 7, 1999, between AT&T Wireless Services and Tritel, AT&T Wireless Services has agreed to make available to us the benefits of the intercarrier roaming services agreements it has entered into with other wireless carriers, subject to the consent of the other wireless carriers and to our remaining a member in good standing of the North American Cellular Network. The roaming administrative service agreement has an initial term of two years, which is automatically renewed on a year-to-year basis unless terminated by either party upon 90 days prior written notice. Either party may terminate the roaming administrative service agreement for any reason at any time upon 180 days prior written notice. Either party may also terminate the roaming administrative service agreement: . upon a material breach of the other party that is not cured or for which cure is not reasonably begun within 30 days after written notice of the claimed breach; or . immediately by either party, after reasonable prior notice, if the other party's operations materially and unreasonably interfere with its operations and the interference is not eliminated within 10 days. AT&T Wireless Services can terminate the roaming administrative service agreement if: . Tritel is no longer a member in good standing of the North American Cellular Network; or . an agreement under which AT&T Wireless Services receives roaming administration services from a third party is terminated or expires. No party to the roaming administration service agreement may assign or transfer its rights and obligations under the agreement without the written consent of the other party, except that AT&T Wireless Services may assign and transfer its rights to an affiliate without such consent. AT&T Wireless Services may subcontract any or all of its duties under the agreement to a third party. Resale Agreements The stockholders' agreement provides that, from time to time, at AT&T Wireless's request, we are required to enter into a resale agreement with AT&T Wireless or other of its affiliates. The resale agreement would grant to AT&T Wireless or the person designated by it (subject to certain limitations) the right to purchase from us its wireless services on a non-exclusive basis within a designated area and resell access to, and use of, our services. The reseller must pay charges for any services that are resold, including usage, roaming, directory assistance and long distance charges, and taxes and tariffs. We are required to provide these services at rates and upon terms, taken as a whole, at least as favorable as those that we provide to any other person. Any resale agreement would have an initial, term of ten years that would be automatically renewed on a year-to-year basis unless terminated by either party upon 90-days prior written notice. In addition, AT&T Wireless would be able to terminate any resale agreement for any reason at any time upon 180 days prior written notice. Long Distance Agreements AT&T has entered into a long distance agreement with us dated as of January 7, 1999, as amended. The long distance agreement allows us to purchase interstate and intrastate long distance services from AT&T at preferred rates. We then resell these long distance services to our customers. We can only obtain these preferred rates if we continue our affiliation with AT&T Wireless Services. The long distance agreement has a term of up to three years. 81 The long distance agreement requires that we meet a minimum traffic volume during the term of the agreement. The minimum traffic volume commitments may be adjusted more frequently upon mutual agreement of the parties to the long distance agreement. If we fail to meet the volume commitments, we must pay to AT&T the difference between the expected fee based on the volume commitment and the fees based on actual volume. The long distance services purchased from AT&T may only be used in connection with: . our commercial mobile radio services; . calls that originate on our commercial mobile radio services system; and . those commercial mobile radio services that share our call connection switches. Stockholders' Agreement General. As of November 13, 2000, TeleCorp PCS and certain of its shareholders entered into a stockholders' agreement by and among TeleCorp PCS, TeleCorp Wireless's initial investors, certain of Tritel's initial investors, William M. Mounger, II, E.B. Martin, Jr., Gerald T. Vento and Thomas H. Sullivan. Board of Directors. The stockholders' agreement requires that any action of the board of directors of TeleCorp PCS be approved by the affirmative vote of a majority of the entire board of directors of TeleCorp PCS, except in circumstances where voting by particular classes of directors is required. The stockholders' agreement also provides that the board of directors of TeleCorp PCS will consist of 13 directors. The parties to the stockholders' agreement have agreed to vote all of their shares of TeleCorp PCS class A voting common stock and voting preference stock to cause the election of the following 13 individuals to the board of directors of TeleCorp PCS: . Gerald T. Vento and Thomas H. Sullivan, so long as each remains an officer of TeleCorp PCS and the management agreement with TeleCorp Management Corp. remains in effect; . subject to the provisions described below which limit such selection rights, two individuals selected by holders of a majority in interest of the class A voting common stock of TeleCorp PCS beneficially owned by TeleCorp Wireless's initial investors other than AT&T Wireless; . subject to the provisions described below which limit such selection rights, two individuals selected by holders of a majority in interest of the class A voting common stock of TeleCorp PCS beneficially owned by Tritel's initial investors other than AT&T Wireless; . two individuals designated by AT&T Wireless in its capacity as a holder of series A convertible preferred stock and series B convertible preferred stock of TeleCorp PCS so long as AT&T has the right to elect each such director in accordance with the TeleCorp PCS certificate of incorporation; . five individuals designated by the holders of the voting preference stock of TeleCorp PCS, which include: . one individual who must be acceptable to AT&T Wireless; . one individual who will be William M. Mounger, II so long as he remains an officer and employee of TeleCorp PCS, or one individual who must be reasonably acceptable to William M. Mounger, II; and . three individuals who must be reasonably acceptable to holders of a majority in interest of the class A voting common stock of TeleCorp PCS beneficially owned by AT&T Wireless on the one hand, and TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T 82 Wireless, on the other hand, so long as TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless remain entitled to designate at least two directors, or, if they are not entitled, then by the remaining directors on the board of directors. In the event that William M. Mounger, II ceases to be an officer or employee of TeleCorp PCS and either the number of shares of common stock of TeleCorp PCS beneficially owned by William M. Mounger, II and E.B. Martin, Jr., in the aggregate, falls below seventy percent of the number of shares of common stock of TeleCorp PCS beneficially owned by them on the effective date of the merger of TeleCorp Wireless and Tritel, or two years have elapsed from the effective date of the merger of TeleCorp Wireless and Tritel, Mr. Mounger will resign or be removed from the board of directors of TeleCorp PCS. Following the resignation or removal of Mr. Mounger, the board of directors of TeleCorp PCS will be reduced by one, and all remaining board of directors seats will have one vote on all matters requiring a vote of the board of directors of TeleCorp PCS. In the event that Mr. Mounger is no longer a member of the board of directors of TeleCorp PCS, the number of directors designated by the holders of the voting preference common stock who require approval by William M. Mounger, II will be reduced to zero, and the number of directors designated by the holders of the voting preference stock and acceptable to holders of a majority in interest of the class A voting common stock of TeleCorp PCS beneficially owned by AT&T Wireless on one hand and TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless on the other hand will be increased to four. In the event that either Gerald T. Vento or Thomas H. Sullivan ceases to be an officer of TeleCorp PCS, or the management agreement between TeleCorp PCS and TeleCorp Management Corp. ceases to be in full force and effect, Mr. Vento or Mr. Sullivan, as applicable, will resign or be removed from the board of directors of TeleCorp PCS and the holders of the voting preference stock of TeleCorp PCS will select a replacement or replacements who must be acceptable to a majority in interest of TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless, in its sole discretion. In the event that AT&T Wireless ceases to be entitled to designate directors, the director or directors elected by AT&T Wireless will resign or be removed from the board of directors of TeleCorp PCS and the remaining directors will take action so that the number of directors constituting the entire board of directors of TeleCorp PCS will be reduced accordingly. The number of directors TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless will be permitted to designate will be reduced when the number of shares of common stock of TeleCorp PCS beneficially owned by TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless on a fully-diluted basis falls below: . 85% of the number of shares of common stock of TeleCorp PCS beneficially owned by them on the effective date of the merger of TeleCorp Wireless and Tritel; . 70% of the number of shares of common stock of TeleCorp PCS beneficially owned by them on the effective date of the merger of TeleCorp Wireless and Tritel; . 60% of the number of shares of common stock of TeleCorp PCS beneficially owned by them on the effective date of the merger of TeleCorp Wireless and Tritel; and . 50% of the number of shares of common stock of TeleCorp PCS beneficially owned by them on the effective date of the merger of TeleCorp Wireless and Tritel; so that TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless will be permitted to designate three, two, one or zero directors respectively; provided, however, that the reductions in the board of directors may not take place or may be delayed if certain of TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless hold or maintain a specified percentage of common stock as set forth in the stockholders' agreement. 83 In each instance in which the number of directors TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless are entitled to designate is reduced, the director designated by TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless beneficially owning the smallest percentage of shares of common stock then owned by any of TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless whose designees then remain as directors designated will resign or be removed from the board of directors and the size of the board of directors of TeleCorp PCS will be reduced accordingly. In the event that either: . the number of directors TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless are entitled to designate falls below two; or . both TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless entitled to designate the last two directors that TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless may designate cease to beneficially own at least 75% of the number of shares of common stock beneficially owned by them on the effective date of the merger of TeleCorp Wireless and Tritel, TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless will no longer be entitled to approve any designation of the TeleCorp PCS directors nor approve any director that replaces Gerald T. Vento or Thomas H. Sullivan on the board of directors. Exclusivity. The parties to the stockholders' agreement have agreed that, during the term of the stockholders' agreement, neither they nor any of their respective affiliates will provide or resell, or act as the agent for any person offering, within the areas covered by the licenses of TeleCorp PCS and its subsidiaries, wireless communications services initiated or terminated using TDMA and portions of the airwaves licensed by the Federal Communications Commission, except that AT&T Wireless and its affiliates will be able to: . resell or act as agent for TeleCorp PCS in connection with mobile wireless communications services; . provide or resell wireless communications services only to or from specific locations, provided that any equipment sold in connection with the service must be capable of providing wireless communications services of TeleCorp PCS and its subsidiaries; and . resell mobile wireless communications services from a person other than TeleCorp PCS in any area where TeleCorp PCS has not placed a system into commercial service. Additionally, with respect to some markets identified in the intercarrier roamer services agreements between AT&T Wireless and each of TeleCorp Wireless and Tritel, each of TeleCorp PCS and AT&T Wireless has agreed to cause its respective affiliates in their home carrier capacities to: . program and direct the programming of customer equipment so that the other party, in its capacity as the serving carrier, is the preferred provider in these markets; and . refrain from inducing any of its customers to change such programming. AT&T Wireless has retained some PCS licenses within the areas covered by the licenses of TeleCorp PCS and its subsidiaries for which we have a right of negotiation in the event of a proposed transfer. If TeleCorp PCS materially breaches any of its obligations, AT&T Wireless may terminate its exclusivity obligations under the stockholders' agreement and may terminate our rights to the AT&T brand and logo under the network membership license agreement if a default continues after the applicable cure periods lapse. These material breaches include, if: . we fail to meet the minimum buildout requirements for our system, as set forth in the stockholders' agreement; . AT&T Wireless and its affiliates decide to adopt a new technology standard other than TDMA in a majority of its markets, and TeleCorp PCS declines to adopt the new technology; 84 . each portion of the TeleCorp PCS network including our network does not, within one year after being placed into service, meet or exceed technical standards that AT&T Wireless has developed regarding voice quality and performance of network and call completion equipment. Each portion of the network being developed by TeleCorp PCS, including our network, must, within one year after being placed into service, perform on a level, measured by these standards manuals, that meets or exceeds the levels achieved by the average of all comparable wireless communications networks owned and operated by AT&T Wireless; . TeleCorp PCS fails to satisfy specific percentages that its entire network, measured as a single system, must meet, including percentage of calls completed, percentage of established calls dropped, percentages of calls not successfully transferred from one network equipment site to another as a handset moves, as well as technical standards regarding the functioning of network and call connection equipment; or . TeleCorp PCS fails to meet specified customer care, reception quality and network reliability standards. The exclusivity provisions in the stockholders' agreement also does not apply to AT&T Wireless or its affiliates with respect to certain rural portions of Kentucky in which AT&T Wireless and its affiliates had an existing roaming agreement in place with another wireless provider. Construction. The stockholders' agreement requires TeleCorp PCS to construct a PCS system in the areas covered by its licenses according to a minimum build- out plan prepared by the company and approved by AT&T Wireless, which upon projected completion at sometime before July 17, 2003, will cover over 75% of the people in the areas covered by its licenses in accordance with Federal Communications Commission build-out requirements. Disqualifying Transactions. If AT&T (or any of its affiliates) and an entity that: . derives annual revenues from communications businesses in excess of $5 billion; . derives less than one-third of its aggregate revenues from wireless communications; and . owns Federal Communications Commission licenses to offer, and does offer, mobile wireless communications services serving more than 25% of the residents, as determined by Paul Kagan Associates, Inc. within the areas covered by licenses held by TeleCorp PCS and its subsidiaries merge, consolidate, acquire or dispose of assets to each other, or otherwise combine, then AT&T, upon written notice to TeleCorp PCS, may terminate its exclusivity obligations where the territory covered by its licenses overlaps with commercial mobile radio service licenses of the business combination partner. Upon such termination, TeleCorp PCS will have the right to cause AT&T or any transferee that acquired any shares of the series A convertible preferred stock, series B convertible preferred stock, series D preferred stock, series F preferred stock or series G preferred stock of TeleCorp PCS then owned by AT&T Wireless, and any shares of TeleCorp PCS common stock into which any of these shares are converted, to exchange all, or a proportionate share based on overlapping service areas after such disqualifying transaction, of their shares into shares of series H and I preferred stock of TeleCorp PCS. In case of any such exchange, AT&T will be able to terminate its exclusivity obligations in all of our markets. Once so converted, TeleCorp PCS will be able to redeem the shares of its series H and I preferred stock at any time in accordance with our restated certificate of incorporation. Acquisition of Licenses. The stockholders' agreement provides that TeleCorp PCS may acquire any cellular license that TeleCorp PCS's board of directors has determined is a demonstrably superior alternative to constructing a PCS system within the corresponding areas covered by its licenses, if: . a majority of the population covered by the license is within the areas covered by its licenses; 85 . AT&T Wireless and its affiliates do not own commercial mobile radio service licenses in the area covered by the license; and . its ownership of the license will not cause AT&T Wireless or any affiliate to be in breach of any law or contract. Vendor Discounts; Roaming Agreements. AT&T Wireless has agreed in the stockholders' agreement that, if TeleCorp PCS requests, and if such request shall not result in any adverse impact to AT&T Wireless, it will use all commercially reasonable efforts: . to assist TeleCorp PCS in obtaining discounts from any AT&T Wireless vendor with whom TeleCorp PCS is negotiating for the purchase of any infrastructure equipment or billing services; and . to enable TeleCorp PCS to become a party to the roaming agreements between AT&T Wireless and its affiliates and operators of other cellular and PCS systems. Subsidiaries. The stockholders' agreement provides that all of its subsidiaries must be direct or indirect wholly-owned subsidiaries. The stockholders' agreement also provides that with respect to such subsidiaries, TeleCorp PCS may not sell or dispose of a substantial portion of the assets or any of the capital stock of any such subsidiaries except in connection with a pledge to secure indebtedness. Amendments. In addition to the approval of the senior lenders of TeleCorp PCS, the terms of the stockholders' agreement may only be amended if agreed to in writing by TeleCorp PCS and the beneficial holders of a majority of the class A voting common stock party to the stockholders' agreement, including AT&T Wireless, 66 2/3% of the class A voting common stock beneficially owned by TeleCorp Wireless's initial investors and Tritel's initial investors other than AT&T Wireless, and 66 2/3% of the class A voting common stock beneficially owned by Gerald T. Vento and Thomas H. Sullivan. Termination. The stockholders' agreement will terminate upon the earliest to occur of: . the receipt of the written consent of each party; . July 17, 2009; and . the date on which a single stockholder beneficially owns all of the outstanding shares of class A voting common stock of TeleCorp PCS. AT&T Right of First Refusal to Purchase Certain Shares of TeleCorp PCS Capital Stock On November 13, 2000, each of Gerald T. Vento and Thomas H. Sullivan granted AT&T Wireless or its designee a right of first refusal to purchase shares of their respective TeleCorp PCS voting preference stock, class C common stock or class D common stock. These agreements were amended as of December 22, 2000. Currently, the holders of TeleCorp PCS's voting preference stock would control a majority of TeleCorp PCS's voting power. In the event that either Mr. Vento or Mr. Sullivan receives a bona fide offer that he intends to accept from a third party to purchase all shares of TeleCorp PCS's voting preference stock, class C common stock or class D common stock owned by him, AT&T Wireless or its designee has the option, but not the obligation, to purchase all such shares on the same terms as the third party offer. The purchase price per share payable by AT&T Wireless or its designee for any of the subject shares shall be equal to the lesser of (i) the same price set forth in the third party offer, and (ii) the average closing price per share for the TeleCorp PCS class A common stock for the five trading days ending two days prior to the date of execution of the third party offer. Put and Call Agreement In connection with our acquisition of certain PCS licenses and equipment from ALLTEL, we entered into a put and call agreement with AT&T Wireless Services on October 20, 2000. Under the put and call agreement, we have the right to sell the two licenses acquired from ALLTEL to AT&T Wireless Services at any time during the 18 months following the closing of the ALLTEL acquisition for $50.0 million. Similarly, unless within 10 days of notice from AT&T Wireless Services of its intention to exercise its call right, we renounce 86 our put right, upon which the put and call agreement will terminate, AT&T Wireless Services has the right to purchase the two licenses from us during the same 18 months period for $50.0 million. In the event of the acquisition of all the voting preference stock of TeleCorp PCS, by an AT&T Wireless Services competitor and not approved by AT&T Wireless Services, our right to renounce our put right and negate the exercise of AT&T Wireless Services's call right will terminate. In addition, during the period between the signing of definitive documents to complete such an acquisition and the closing of such an acquisition, our right to negate the exercise of AT&T Wireless Services' call right and AT&T Wireless Services' call right will both be suspended. If such a change of control is not completed, all rights under the put and call agreement will be reinstated. Relationships with Triton TeleCorp Wireless and Tritel Communications, Inc., a Tritel subsidiary, have formed Affiliate License Co. with Triton to adopt a common brand, SunCom(R), that is co-branded with AT&T on an equal emphasis basis. Under the agreement, TeleCorp Wireless, Tritel Communications and Triton each own one third of Affiliate License Co., the owner of the SunCom(R) name. TeleCorp Wireless, Tritel Communications and Triton license the SunCom(R) name from Affiliate License Co. The terms of this agreement were no more favorable to the parties than they could have obtained from third parties negotiated at arm's length. Tritel has common stockholders with Triton and may be deemed to be an affiliate by virtue of this common ownership. Transfer of Licenses to Tritel As part of the joint venture transactions, Tritel acquired C-Block PCS licenses from Airwave Communications and E- and F- Block PCS licenses from Digital PCS. The members of Digital PCS are Airwave Communications, William M. Mounger, II, Jerry M. Sullivan, Jr. and E.B. Martin, Jr. Airwave Communications owns 85% of the membership in Digital PCS while the remaining three members own 5% each. Airwave Communications transferred its C-Block PCS licenses, comprising approximately 2.5 million people in Alabama, and $31.9 million of government financing, to Tritel in exchange for $14.4 million of series C preferred stock. Digital PCS transferred certain of its E- and F-Block licenses, comprising areas containing 4.1 million people in Alabama and Mississippi, and $9.5 million of government financing, to Tritel, in exchange for $3.8 million of series C preferred stock. Of the 4.1 million people in the area transferred by Digital PCS, 1.7 million overlap with those contributed by AT&T Wireless Services. Purchase of Licenses in Georgia and Florida; Ownership of the Remaining Affiliate Licenses Digital PCS, held licenses covering 2.0 million people in Florida and southern Georgia. These markets include the cities of Pensacola, Tallahassee, and Panama City, Florida and will not be part of the territory where we are allowed to operate absent AT&T Wireless's consent. As part of Tritel's formation, Tritel acquired the option to purchase the Florida and Georgia licenses in exchange for certain shares of Tritel's stock and the assumption of certain Federal Communications Commission debt. As consideration for the option, Tritel agreed to pay Digital PCS an amount equal to (a) the interest that had accrued from May 20, 1998, until the closing of the exercise of the option under any Federal Communications Commission debt incurred to finance the Florida and Georgia licenses and (b) the interest that had accrued from May 20, 1998, until the closing of the exercise of the option on advances made by Tritel to Digital PCS to fund interest on Federal Communications Commission debt. In May 1999, Tritel exercised this option and was required to obtain consent from parties to the TeleCorp PCS stockholders' agreement to consummate such transaction. As a condition to obtaining such consent, Tritel was required to transfer the licenses being acquired to a third party. At the time of the exercise, the Tritel shares to be exchanged for the license were valued in the aggregate at approximately $3.7 million. Tritel completed the acquisition of the licenses on October 27, 2000, in exchange for 1,480,697 shares of Tritel common stock and Tritel's assumption of approximately $11.5 million of Federal Communications Commission debt. In accordance with the terms of the consent, Tritel simultaneously entered into an agreement 87 to transfer the licenses to Panther Wireless, L.L.C. in exchange for Panther Wireless's assumption of all outstanding of Federal Communications Commission debt on these licenses and cash in an amount equal to 110% of the sum of (a) the amount paid to the Federal Communications Commission in respect of these licenses minus the Federal Communications Commission debt assumed, plus (b) the aggregate amount of interest paid by Tritel and Digital PCS on the Federal Communications Commission debt. At the time the agreement was executed, the consideration for the licenses would have equaled approximately $6.3 million plus the assumption of $11.5 million of Federal Communications Commission debt. Panther Wireless has subsequently assigned its rights and obligations under that agreement to an unrelated third party, solely in exchange for that party's assumption of Panther Wireless's obligations under the agreement. Gerald T. Vento, Thomas H. Sullivan and Scott I. Anderson indirectly own a minority economic interest in, and voting control of, Panther Wireless. Mr. Vento and Mr. Sullivan are both officers and directors of Tritel, TeleCorp PCS and TeleCorp Wireless and Mr. Anderson is a director of TeleCorp PCS. Loans to Predecessors On January 7, 1999, Tritel entered into a secured promissory note loan agreement under which it agreed to lend up to $2.5 million to Airwave Communications and Digital PCS to be used primarily to fund interest payments due to the Federal Communications Commission on licenses held by Digital PCS, including the Florida and Georgia licenses and certain expenses relating to winding up the affairs of Airwave Communications and Digital PCS. Interest on advances under the loan agreement is 10% per year. The interest compounds annually and interest and principal are due at maturity of the note. The note is secured by Airwave Communications' and Digital PCS's ownership interest in Tritel and certain equity securities of TeleCorp Wireless. Any proceeds from the sale of licenses by Airwave Communications or Digital PCS are required to be applied to the note balance. If the note has not been repaid within five years, it will be repaid through a reduction of Airwave Communications' and Digital PCS's ownership interest in Tritel based on a valuation of Tritel's stock at that time. Tritel provided funding to Airwave Communications and Digital PCS in excess of its $2.5 million commitment to finance interest payments due on the Federal Communications Commission debt. As of September 30, 2000, $4.3 million in principal amount was outstanding. At the time of the purchase of the Florida and Georgia licenses from Digital PCS in October 2000, Tritel agreed to reduce the loan balance by $2.3 million as payment of the consideration for the option to purchase the licenses from Digital PCS. After the completion of this transaction, there was $2.5 million principal amount outstanding under the note. Services from Wireless Facilities, Inc. We are utilizing Wireless Facilities' network operations center located in Richardson, Texas during the buildout and deployment of our network. The network operations center's function is to monitor the network on a real-time basis for, among other things, alarm monitoring, power outages, tower lighting problems and traffic patterns. We are transitioning to the exclusive use of TeleCorp Wireless's network operations center in Memphis, Tennessee by the end of the first quarter of 2001. Also, on July 1, 1999, Wireless Facilities agreed to provide radio frequency engineering services and microwave relocation services to Tritel Communications. Scott I. Anderson, who is a director of TeleCorp PCS, is also a director of Wireless Facilities. Relationship with ABC Wireless Tritel entered into a financing agreement with ABC Wireless, whereby Tritel loaned $7.5 million to ABC Wireless for the purpose of bidding on licenses in the Federal Communications Commission's auction of C-Block PCS licenses. Tritel later agreed to advance to ABC Wireless an additional $288,686 to further finance the acquisition of the licenses. In exchange for cancellation of the $7.5 million note and the additional $288,686 advance, ABC Wireless has agreed to assign a number of licenses it acquired in that auction to AirCom PCS, Inc., a subsidiary of Tritel. The licenses being assigned to AirCom PCS cover 5.7 million people, including licenses for the Nashville and Chattanooga markets, all in Tritel's existing licensed area. Scott I. Anderson, a director of TeleCorp PCS, and Gerald T. Vento and Thomas H. Sullivan, directors and executive officers of Tritel, TeleCorp PCS and TeleCorp Wireless own minority economic interests in, and voting control of, ABC Wireless. 88 DESCRIPTION OF CERTAIN INDEBTEDNESS Senior Credit Facilities We, as borrower, entered into an amended and restated loan agreement, dated as of March 31, 1999 with Tritel, as parent, Toronto Dominion (Texas), Inc., as administrative agent for the lenders and financial institutions signatory thereto, as lenders. Our senior credit facilities are governed by the amended and restated loan agreement and the other related documents entered into in connection with the senior credit facilities. The amended and restated loan agreement was further amended on April 21, 1999, October 31, 2000, and January 9, 2001. The debt under the senior credit facilities is guaranteed by all of our subsidiaries. The senior credit facilities provide for up to $550.0 million of senior secured credit facilities including up to (1) a $250.0 million reducing revolving credit facility, which is referred to as the "Revolver", which matures in June 2007, (2) a $100.0 million term credit facility, which is referred to as the "Term Loan A", which matures in June 2007 and (3) a $200.0 million term credit facility, which is referred to as the "Term Loan B", which matures in December 2007. At September 30, 2000, we had borrowed $300.0 million under the senior credit facilities. After September 30, 2000, we drew an additional $90.0 million to fund the acquisition of certain licenses and related assets of ALLTEL and working capital needs which we subsequently repaid out of the proceeds of the offering of the unregistered notes. Our ability to draw funds under the senior credit facilities is subject to customary conditions including, among others, (1) the total debt outstanding may not exceed 70% of the total capital through June 30, 2001, and 75% of total capital after June 30, 2001 and (2) the senior debt may not exceed 50% of the total capital or, under certain circumstances, 55% of the total capital. As of September 30, 2000, we could have borrowed up to a total of $550.0 million under the terms of the senior credit facilities. The senior credit facilities also provide us with letters of credit of up to $10.0 million under the Revolver. At our option, the Revolver and the Term Loan A bear interest at either the base rate, which is the greater of the prime rate of the Toronto-Dominion Bank, New York Branch, or the federal funds rate, plus 0.5%, plus an applicable margin ranging from a minimum of 0.75% to a maximum of 2.75%, or eurodollar rate, plus an applicable margin ranging from a minimum of 1.75% to a maximum of 3.75%, in each case, depending on the occurrence of the third anniversary of the amended and restated loan offering, the generation of positive operating cash flow by Tritel and its total leverage ratio. At our option, the Term Loan B bears interest at either the base rate, plus an applicable margin of either 2.75% or 3.50%, or eurodollar rate, plus an applicable margin of either 3.75% or 4.50%, in each case depending on whether or not we have achieved positive cash flow and the third anniversary of the senior credit facilities has occurred. We must pay a per annum commitment fee payable quarterly equal to the product of either 0.5%, 1% or 1.75%, depending on the ratio of available Revolver and Term Loan A commitments to total Revolver and Term Loan A commitments, and the sum of the available Revolver and Term Loan A commitments. We also must pay a letter of credit fee equal to the applicable margin for eurodollar advances plus 0.125% per annum on the undrawn face amount of any outstanding letters of credit from the date of issuance through the expiration date of those letters of credit. Outstanding loans drawn from the Revolver or the Term Loan A bearing interest at the base rate plus the applicable margin may be prepaid without penalty. Prepayments of the Term Loan B made on or before December 31, 2001 will require a prepayment fee ranging from 0% to 3% of the prepayment amount, depending on the date of prepayment. Prepayments of any loans under the senior credit facilities bearing interest at eurodollar plus the applicable margin will require payment of an additional amount sufficient to compensate the lenders for all losses and out-of-pocket expenses other than lost margins on the loans incurred in connection with these prepayments. 89 The senior credit facilities are secured by liens on substantially all of our assets, including our Federal Communications Commission licenses if legally permitted. The senior credit facilities contain various covenants that restrict, among other things: . the incurrence of additional indebtedness; . the granting of liens; . the creation of guarantees, mergers, acquisitions, certain investments, consolidations, liquidations, dissolutions, certain transactions with affiliates and asset sales; . the distribution of dividends and other restricted payments; . the ownership of real estate; and . the restriction of upstream dividends by our subsidiaries to us. The senior credit facilities contain a number of financial and operating covenants including, among other things: . a maximum senior debt to total capitalization ratio; . a maximum total debt to total capitalization ratio; . a minimum percentage of people covered by our licenses; . a minimum number of subscribers; . a minimum amount of service revenues; . a maximum amount of capital expenditures; . a maximum total leverage ratio; . a maximum senior leverage ratio; . a minimum fixed charge coverage ratio; and . a minimum interest coverage ratio. The senior credit facilities contain customary events of default, including our loss of the right to use any AT&T trademark under the network license agreement within five years after March 31, 1999 and, thereafter, Tritel's loss of such right under more limited circumstances. The lenders under the senior credit facilities received fees reflecting then-existing market conditions, as well as reimbursement of their expenses. 12 3/4% Senior Subordinated Discount Notes due 2009 We have outstanding $372.0 million aggregate principal amount at maturity of our 12 3/4% notes. The 12 3/4% notes were issued at a discount to their principal amount. The 12 3/4% notes are guaranteed by Tritel, Tritel Communications, Inc. and Tritel Finance, Inc. The aggregate accreted value of the 12 3/4% notes at September 30, 2000 was $237.8 million. The 12 3/4% notes are senior subordinated unsecured obligations ranking subordinate in right of payment to all of our and our guarantors' existing and future senior debt (including their obligations under the senior credit facilities). The 12 3/4% notes were issued under an indenture dated as of May 11, 1999 among Tritel PCS, Tritel, as guarantor, Tritel Communications, Inc., as guarantor, Tritel Finance, Inc., as guarantor, and The Bank of New York, as Trustee. The 12 3/4% notes will mature on May 15, 2009. The 12 3/4% notes will accrete in value until May 15, 2004, compounded semi-annually. At that time, interest on the 12 3/4% notes will become payable semi-annually 90 on May 15 and November 15 of each year, commencing November 15, 2004. The 12 3/4% notes may be redeemed at our option, in whole or in part, at any time on or after May 15, 2004 at the following redemption prices, plus, in each case, accrued and unpaid interest to the date of redemption:
Redemption price as a percentage of Period the face value of the 12 3/4% notes ------ ----------------------------------- May 15, 2004 to May 14, 2005............. 106.375% May 15, 2005 to May 14, 2006............. 104.250% May 15, 2006 to May 14, 2007............. 102.125% after May 15, 2007....................... 100.000%
In addition, prior to May 15, 2002, we may redeem up to 35% of the original aggregate principal amount of the 12 3/4% notes at a redemption price of 112.75% of the accreted value of the 12 3/4% notes, with the net cash proceeds of certain public equity offerings, provided that at least 65% of the aggregate principal amount of the 12 3/4% notes at maturity remains outstanding immediately after such redemption. Upon the occurrence of certain change of control events (as defined in the 12 3/4% notes indenture), we will be required to make an offer to purchase all of the 12 3/4% notes at a purchase price equal to 101% of the accreted value of the 12 3/4% notes to the date of repurchase (if prior to May 15, 2004) or the principal amount at maturity, plus accrued and unpaid interest, if any, to the date of repurchase (if on or after May 15, 2004). The merger of TeleCorp Wireless and Tritel, in which the capital stock of Tritel was converted into the right to receive the capital stock of TeleCorp PCS, did not constitute a change of control under the 12 3/4% notes because the acquisition of control of Tritel by TeleCorp PCS and its affiliates is excluded from the definition of change of control. The 12 3/4% notes indenture contains certain financial covenants with which we must comply relating to, among other things, the following matters: . a limitation on our and our subsidiaries' payment of cash dividends, repurchase of capital stock, payment of principal on subordinated indebtedness and making of certain investments, until after December 31, 2002 and, thereafter, unless after giving effect to each such payment, repurchase or investment, certain financial tests are met, excluding certain permitted payments and investments; . a limitation on our and our subsidiaries' incurrence of additional indebtedness, unless at the time of such incurrence, our ratio of debt to annualized operating cash flow would be less than or equal to 7.0 to 1.0 (if incurred prior to May 15, 2004) or less than or equal to 6.0 to 1.0 (if incurred on or after May 15, 2004), or if debt was incurred prior to May 15, 2004, the total consolidated debt would be equal to or less than 75% of the total invested capital, in either case subject to certain permitted incurrences of debt; . a limitation on our and our guaranteeing subsidiaries' incurrence of certain liens; . a limitation on the ability of us or any of our subsidiaries to layer indebtedness; . a limitation on certain mergers, consolidations and sales of assets by us or our subsidiaries; . a limitation on certain transactions with affiliates of us and our subsidiaries; . a limitation on the ability of any of our subsidiaries to guarantee or otherwise become liable with respect to any of our other indebtedness unless such subsidiary provides for a guarantee of the 12 3/4% notes on a senior subordinated basis; and . a limitation on our or our subsidiaries' ability to engage in any business not substantially related to a telecommunications business. The events of default under the 12 3/4% notes indenture include various events of default customary for such type of agreement, including, among others, the failure to pay principal and interest when due on the 12 3/4% notes, cross-defaults on other indebtedness for borrowed monies in excess of $15.0 million, certain judgments or orders for payment of money in excess of $15.0 million, and certain events of bankruptcy, insolvency and reorganization. 91 Government Debt Because we qualify as a small business for the purpose of C-Block licenses and a very small business for the purposes of F-Block licenses, we are entitled to receive preferential financing for these licenses from the United States. The total license fee payable to the United States in respect of the C-Block licenses for which Airwave Communications was named the winning bidder is approximately $35.5 million. Under the preferential financing terms for the C- Block Licenses, Airwave Communications has paid a deposit of 10% of the license fee, which is approximately $3.5 million. Under the preferential financing terms for the C-Block licenses, we will pay interest only for the first six years of the license term at a fixed interest rate equal to 7.0% per annum with principal amortized during the seventh through tenth years of the license. With respect to the F-Block licenses, the total license fee payable to the United States Government is approximately $12.0 million. Under the preferential financing terms for the F-Block licenses, we will be required to make quarterly payments of interest only, at a fixed interest rate of 6.125% per annum for the first two years after the license grant date, and quarterly payments of interest at the same rate and principal over the remaining eight years of the license term. C- and F-Block licensees may incur substantial financial penalties, license revocation and other enforcement measures at the Federal Communications Commission's discretion, in the event that they fail to make timely quarterly installment payments. Where a C- and F-Block licensee anticipates defaulting on any required payment, it may request a three to six-month grace period before the Federal Communications Commission cancels its license. In the event of default by a C- and F-Block licensee, the Federal Communications Commission could reclaim the licenses, re-auction them, and subject the defaulting party to a penalty comprised of the difference between the price at which it acquired its license and the amount of the winning bid at re-auction, plus an additional penalty of three percent of the subsequent winning bid. 92 DESCRIPTION OF THE NOTES General As used in this section entitled "Description of the Notes", the term "Company" means Tritel PCS, Inc., a Delaware corporation, but does not include any of the Company's subsidiaries. Capitalized terms used in this section entitled "Description of the Notes" and not otherwise defined have the meanings set forth under""--Certain Definitions". The unregistered 10 3/8% senior subordinated notes due 2011 were, and any new notes issued in exchange for the unregistered notes (collectively, the "Notes") will be, issued under an Indenture, dated as of January 24, 2001 (the "Indenture"), among the Company, Tritel, Inc., as Parent Guarantor, Tritel Communications, Inc. and Tritel Finance, Inc., as Subsidiary Guarantors, and Firstar Bank, N.A., as Trustee (the "Trustee"), a copy of the form of which is available upon request to the Company. The following summary of certain provisions of the Indenture and the Notes does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the TIA. Principal of, premium, if any, and interest on the Notes will be payable, and the Notes may be exchanged or transferred, at the office or agency of the Company, which office or agency shall be maintained in the Borough of Manhattan, The City of New York (which initially shall be the corporate trust office of the Trustee, presently located at the office of the Trustee in the Borough of Manhattan, The City of New York) except that, at the option of the Company, payment of interest may be made by check mailed to the registered holders of the Notes at their registered addresses. The Notes will be issued only in fully registered form, without coupons, in denominations of $1,000 and any integral multiple of $1,000. No service charge will be made for any registration of transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith. Terms of the Notes The Notes will be unsecured senior subordinated obligations of the Company, limited to $450.0 million aggregate principal amount, and will mature on January 15, 2011. Each Note that was issued in connection with the offering of the unregistered notes and that we issue in exchange for the unregistered notes will bear interest at a rate of 10 3/8% per annum from January 24, 2001, or from the most recent date to which interest has been paid or provided for, payable semiannually to holders of record at the close of business on the January 1 or July 1 immediately preceding the interest payment date on January 15 and July 15 of each year, commencing July 15, 2001. The Company will pay interest on overdue principal at 1% per annum in excess of such rate, and it will pay interest on overdue installments of interest at such higher rate to the extent lawful. Optional Redemption Except as set forth in the following paragraph, the Notes will not be redeemable at the option of the Company prior to January 15, 2006. Thereafter, the Notes will be redeemable at the option of the Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest, if any, due on the 93 relevant interest payment date), if redeemed during the 12-month period commencing on January 15 of the years set forth below:
Redemption Year Price ---- ---------- 2006.......................................................... 105.188% 2007.......................................................... 103.458% 2008.......................................................... 101.729% 2009 and thereafter........................................... 100.000%
In addition, at any time and from time to time prior to January 15, 2004, the Company may redeem up to a maximum of 35% of the original aggregate principal amount of the Notes with the proceeds of one or more Equity Offerings (1) by the Company (2) Tritel, Inc., or (3) by Holdings to the extent that the proceeds thereof are contributed to the Company, at a redemption price equal to 110.375% of the principal amount on the redemption date; provided, however, that, after giving effect to any such redemption at least 65% of the original aggregate principal amount of the Notes remains outstanding. In addition, any such redemption shall be made within 180 days of such Equity Offering upon not less than 30 nor more than 60 days' notice mailed to each holder of Notes being redeemed and otherwise in accordance with the procedures set forth in the Indenture. At any time on or prior to January 15, 2006, the Notes may be redeemed as a whole but not in part at the option of the Company, upon not less than 30 or more than 60 days' prior notice mailed by first-class mail to each Holder's registered address, at a redemption price equal to 100% of the principal amount thereof plus the Make Whole Premium as of, and accrued but unpaid interest, if any, to, the redemption date, subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date. "Make Whole Premium" means with respect to a Note at any redemption date, the greater of (i) 1.0% of the principal amount of such Note or (ii) the excess of (A) the present value of (1) the redemption price of such Note at January 15, 2006 (such redemption price being set forth in the table above) plus (2) all required interest payments due on such Note through January 15, 2006, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the then-outstanding principal amount of such Note. "Treasury Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15(519) which has become publicly available at least two Business Days prior to the redemption date or, if such Statistical Release is no longer published, any publicly available source or similar market data) most nearly equal to the period from the redemption date to January 15, 2006; provided, however, that if the period from the redemption date to January 15, 2006 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to January 15, 2006 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. Selection In the 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 Notes in denominations of $1,000 or less will not 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 thereof to be redeemed. A new Note equal to the unredeemed portion thereof will be issued in the name of the holder thereof upon cancellation of the original Note. 94 Ranking The Indebtedness evidenced by the Notes: . will be unsecured Senior Subordinated Indebtedness of the Company; . will be subordinated in right of payment, as set forth in the Indenture, to all existing and future Senior Indebtedness of the Company; . will rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of the Company, including the Discount Notes; . will be senior in right of payment to all existing and future Subordinated Indebtedness of the Company; . will be effectively subordinated to any Secured Indebtedness of the Company and its Subsidiaries to the extent of the value of the assets securing such Indebtedness; and . will be unconditionally guaranteed by the Guarantors. The Notes will be guaranteed by Tritel, Inc., the parent of the Company, and by Tritel Communications, Inc., and Tritel Finance, Inc., two of the Subsidiaries of the Company, and, in the future, by certain other Subsidiaries of the Company that Incur Indebtedness. The Indebtedness evidenced by the Guarantees: . will be unsecured Senior Subordinated Indebtedness of each Guarantor; . will be subordinated in right of payment, as set forth in the Indenture, to all existing and future Senior Indebtedness of each Guarantor; . will rank pari passu in right of payment with all existing and future Senior Subordinated Indebtedness of each Guarantor, including the guarantees of the Discount Notes; . will be senior in right of payment to all existing and future Subordinated Indebtedness of each Guarantor; and . will be effectively subordinated to any Secured Indebtedness of each Guarantor and its Subsidiaries to the extent of the value of the assets securing such Indebtedness. Payment from the money or the proceeds of U.S. Government Obligations held in any defeasance trust described under "--Defeasance", however, is not subordinated to any Senior Indebtedness or subject to the restrictions described herein. Substantially all of the operations of the Company are conducted through its Subsidiaries. Claims of creditors of such Subsidiaries, including trade creditors, and claims of preferred stockholders, if any, of such Subsidiaries generally will have priority with respect to the assets and earnings of such Subsidiaries over the claims of creditors of the Company, including holders of the Notes. The Notes, therefore, will be effectively subordinated to creditors, including trade creditors, and preferred stockholders, if any, of Subsidiaries of the Company. Although the Indenture will contain limitations on the Incurrence of Indebtedness by, and the issuance of preferred stock of, certain of the Company's Subsidiaries, such limitations are subject to a number of significant qualifications. As of September 30, 2000: . with respect to the Company, . the outstanding Senior Indebtedness of the Company was $300.0 million (exclusive of unused commitments under the Credit Agreement and $90.0 million drawn after September 30, 2000 which was subsequently repaid from the proceeds of the offering of the unregistered notes), all of which was Secured Indebtedness; . the Company had $372.0 million principal amount ($237.8 million accreted value) of outstanding Senior Subordinated Indebtedness; and 95 . the Company had no outstanding Indebtedness that was subordinate or junior in right of payment to the Notes; . with respect to the Parent Guarantor, . the outstanding senior Indebtedness guaranteed by the Parent Guarantor was $300.0 million, consisting entirely of a guarantee of Indebtedness under the Credit Agreement (exclusive of $90.0 million guaranteed after September 30, 2000 which was subsequently repaid from the proceeds of the offering of the unregistered notes); . the Parent Guarantor had $237.8 million accreted value Senior Subordinated Indebtedness (consisting entirely of a guarantee of the Discount Notes); and . the Parent Guarantor had no outstanding Indebtedness that was subordinate or junior in right of payment to the Parent Guarantee; . with respect to the Subsidiary Guarantors, . the outstanding Senior Indebtedness guaranteed by the Subsidiary Guarantors was $300.0 million, consisting entirely of guarantees of Indebtedness under the Credit Agreement (exclusive of $90.0 million guaranteed after September 30, 2000 which was subsequently repaid from the proceeds of the offering of the unregistered notes); . the Subsidiary Guarantors had $237.8 million accreted value of Senior Subordinated Indebtedness, consisting entirely of a guarantee of the Discount Notes; and . the Subsidiary Guarantors had no outstanding Indebtedness that was subordinate or junior in right of payment to the Subsidiary Guarantees; . with respect to the Subsidiaries of the Company that will not guarantee the Notes, . the Subsidiaries that will not guarantee the Notes had $41.9 million accreted value of Senior Indebtedness, consisting entirely of FCC Debt, and guaranteed $300.0 million of Senior Indebtedness under the Credit Agreement (exclusive of $90.0 million guaranteed after September 30, 2000 which was subsequently repaid from the proceeds of the offering of the unregistered notes). As of September 30, 2000, after giving effect to the offering of the unregistered notes, the Company and its Restricted Subsidiaries would have been liable for $1,029.7 million of Indebtedness, including $41.9 million accreted value of FCC Debt owed by Subsidiaries of the Company that will not guarantee the Notes. Although the Indenture will contain limitations on the amount of additional Indebtedness which the Company may Incur, under certain circumstances the amount of such Indebtedness could be substantial and, in any case, such Indebtedness may be Senior Indebtedness. See "--Certain Covenants--Limitation on Incurrence of Indebtedness". "Senior Indebtedness" of the Company means the principal of, premium (if any) and accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization of the Company, regardless of whether or not a claim for post-filing interest is allowed in such proceedings) on, and fees and other amounts owing in respect of Bank Indebtedness and all other Indebtedness of the Company, including FCC Debt, whether outstanding on the date of the Indenture or thereafter Incurred, unless in the instrument creating or evidencing the same or pursuant to which the same is outstanding it is provided that such obligations are not superior in right of payment to the Notes; provided, however, that Senior Indebtedness shall not include: (1) any obligation of the Company to any Subsidiary of the Company; (2) any liability for federal, state, local or other taxes owed or owing by the Company; (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities); 96 (4) any indebtedness or obligation of the Company, and any accrued and unpaid interest in respect thereof, that by its terms is subordinate or junior in any respect to any other Indebtedness or obligation of the Company, including any Senior Subordinated Indebtedness of the Company and any Subordinated Indebtedness of the Company; (5) any obligations with respect to any Capital Stock; or (6) any Indebtedness Incurred in violation of the Indenture. "Senior Indebtedness" of any Guarantor has a correlative meaning. Subordination The payment of principal, interest and premium and liquidated damages, if any, on the Notes will be subordinated to the prior payment in full of all Senior Indebtedness of the Company, including Senior Indebtedness incurred after the date of the Indenture. The holders of Senior Indebtedness will be entitled to receive payment in full of all obligations due in respect of Senior Indebtedness, including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Indebtedness, before the Holders of Notes will be entitled to receive any payment with respect to the Notes, except that Holders of Notes may receive and retain Permitted Junior Securities and payments made from the trust described under "--Defeasance", in the event of any distribution to creditors of the Company: (1) in a liquidation or dissolution of the Company; (2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property; (3) in an assignment for the benefit of creditors; or (4) in any marshaling of the Company's assets and liabilities. The Company also may not make any payment in respect of the Notes, except, in Permitted Junior Securities or from the trust described under "-- Defeasance", if: (1) a payment default on Designated Senior Indebtedness occurs and is continuing beyond any applicable grace period; or (2) any other default occurs and is continuing on any series of Designated Senior Indebtedness that permits holders of that series of Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a notice of such default (a "Payment Blockage Notice") from the Company or the holders of any Designated Senior Indebtedness. Payments on the Notes may and will be resumed: (1) in the case of a payment default, upon the date on which such default is cured or waived; and (2) in case of a nonpayment default, the earlier of the date on which such nonpayment default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Indebtedness has been accelerated. No new Payment Blockage Notice may be delivered unless and until: (1) 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice; and (2) all scheduled payments of principal, interest and premium and liquidated damages, if any, on the Notes that have come due have been paid in full in cash. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee will be, or be made, the basis for a subsequent Payment Blockage Notice unless such default will have been cured or waived for a period of not less than 90 days. 97 If the Trustee or any Holder of the notes receives a payment in respect of the Notes, except in Permitted Junior Securities or from the trust described under "--Defeasance", when: (1) the payment is prohibited by these subordination provisions; and (2) the Trustee or the Holder has actual knowledge that the payment is prohibited; the Trustee or the Holder, as the case may be, will hold the payment in trust for the benefit of the holders of Senior Indebtedness. Upon the proper written request of the holders of Senior Indebtedness, the Trustee or the Holder, as the case may be, will deliver the amounts in trust to the holders of Senior Indebtedness or their proper representatives. The Company must promptly notify holders of Senior Indebtedness if payment of the Notes is accelerated because of an Event of Default. As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of the Company, Holders of Notes may recover less ratably than creditors of the Company who are holders of Senior Indebtedness. Guarantees Subject to the release provisions in the Indenture and as set forth herein, the Guarantors, and certain future subsidiaries of the Company (as described below), as primary obligors and not merely as sureties, will jointly and severally irrevocably and unconditionally guarantee on an unsecured senior subordinated basis the performance and full and punctual payment when due, whether at Stated Maturity, by acceleration or otherwise, of all obligations of the Company under the Indenture and the Notes, whether for payment of principal of, or interest on, or liquidated damages in respect of, the Notes, expenses, indemnification or otherwise (all such obligations guaranteed by the Guarantors being herein called the "Guaranteed Obligations") by executing a Guarantee. The Guarantors will agree to pay, in addition to the amount stated above, any and all costs and expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the holders of Notes in enforcing any rights under the Guarantees. Each Guarantee will be limited in amount to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering the Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Following the date of the Indenture, the Company will cause (1) each Domestic Restricted Subsidiary that Incurs Indebtedness and (2) each Foreign Restricted Subsidiary that Incurs Material Indebtedness to become a Guarantor; provided that the Company shall not cause any Special Purpose Subsidiary to become a Guarantor unless such Special Purpose Subsidiary Incurs Indebtedness other than Indebtedness under the Credit Agreement (or any Refinancing Indebtedness Incurred to Refinance any such Indebtedness) or FCC Debt; provided further that in the event that a Guarantor no longer has outstanding, other than the Guarantee, any Indebtedness (in the case of a Domestic Restricted Subsidiary) or Material Indebtedness (in the case of a Foreign Restricted Subsidiary), the Guarantee of that Guarantor shall terminate. See "--Certain Covenants--Future Subsidiary Guarantors". The obligations of each Guarantor under its Guarantee will be senior subordinated obligations. As such, the rights of Noteholders to receive payment from a Guarantor pursuant to its Guarantee will be subordinated in right of payment to the rights of holders of Senior Indebtedness of such Guarantor. The terms of the subordination provisions described under "--Ranking" with respect to the Company's obligations under the Notes apply equally to each Guarantor and the obligations of such Guarantor under its Guarantee. Each Guarantee will be a continuing guarantee and shall: (1) remain in full force and effect until payment in full of all the Guaranteed Obligations unless prior terminated; (2) be binding upon each Guarantor and its successors; and (3) inure to the benefit of and be enforceable by the Trustee, the holders of the Notes and their successors, transferees and assigns. 98 The Indenture will provide that upon the merger or consolidation of a Guarantor with or into any Person, other than the Company, a Subsidiary of the Company or an Affiliate of the Company, in a transaction in which such Guarantor is not the surviving entity of such merger or consolidation, such Guarantor shall be released and discharged from its obligations under its Guarantee. The Indenture will also provide that if a majority of the Capital Stock of a Guarantor is sold (including by issuance or otherwise) by the Company or any Subsidiary of the Company, other than to the Company, or a Subsidiary of the Company or an Affiliate of the Company, in a transaction constituting an Asset Disposition (or which, but for the provisions of clause (C) of such term, would constitute an Asset Disposition) and: (1) the Net Available Proceeds from such Asset Disposition are used in accordance with the covenant described under "--Certain Covenants-- Limitation on Certain Asset Dispositions"; or (2) the Company delivers to the Trustee an Officers' Certificate to the effect that the Net Available Proceeds from such Asset Disposition will be used in accordance with the covenant described under "--Certain Covenants-- Limitation on Certain Asset Dispositions" within the time limits specified by such covenant, then such Guarantor shall be released and discharged from its obligations under its Guarantee upon such use, in the case of clause (1), or upon such delivery, in the case of clause (2). In addition, any Guarantor that becomes a Guarantor as a consequence of its guarantee of certain Indebtedness permitted under the Indenture and that is released and discharged from such guarantee will be released and discharged from its Guarantee upon delivery of an Officers' Certificate certifying such release and discharge from such guarantee to the Trustee. Change of Control Upon the occurrence of any of the following events (each a "Change of Control"), each holder of Notes will have the right to require the Company to repurchase all or any part of such holder's Notes at a purchase price in cash equal to 101% of the principal amount on the Purchase Date, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date): (1) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder or Permitted Holders or a person or group controlled by a Permitted Holder or Permitted Holders, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d- 5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all such securities that such person has the right to acquire within one year, upon the happening of an event or otherwise) directly or indirectly (including, through ownership of Holdings), of securities of the Company representing 50% or more of the combined voting power of the Company's then outstanding Voting Stock; (2) the following individuals cease for any reason to constitute more than a majority of the number of directors then serving on the board of directors of the Company: individuals who, on the date of the Indenture, constitute the board of directors of the Company and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation relating to the election of directors of the Company) whose appointment or election by the board of directors of the Company or nomination for election by the Company' stockholders was approved by the vote of at least two-thirds of the directors then still in office or whose appointment, election or nomination was previously so approved or recommended or made in accordance with the terms of the Stockholders' Agreement; or (3) the stockholders of the Company shall approve any Plan of Liquidation (whether or not otherwise in compliance with the provisions of the Indenture). Within 30 days following any Change of Control, the Company will be required to mail a notice to each holder of Notes, with a copy to the Trustee (the "Change of Control Offer"), stating that the Company is commencing an Offer to Purchase all outstanding Notes at a purchase price in cash equal to 101% of the 99 principal amount on the Purchase Date, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). The Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Company. The Company's obligation to make a Change of Control Offer will be reinstated unless such third party purchases all Notes validly tendered and not withdrawn under such Change of Control Offer in accordance with its terms. The Company will be required to comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will be required to comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. In the event that, at the time of a Change of Control, the terms of the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to this covenant, then, prior to the mailing of the notice to holders of Notes as provided in the immediately following paragraph, but in any event within 30 days following any Change of Control, the Company will be required to: (1) repay in full all Bank Indebtedness; or (2) obtain the requisite consent under the agreements governing such Bank Indebtedness to permit the repurchase of the Notes as required by this covenant. The Change of Control purchase feature is a result of negotiations between the Company and the Initial Purchasers. Management of the Company has no present intention to engage in a transaction involving a Change of Control, although it is possible that management of the Company may decide to do so in the future. Subject to the limitations described under "--Certain Covenants", the Company could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect the Company's capital structure or credit ratings. Restrictions on the ability of the Company to Incur additional Indebtedness are contained in the covenant described under "Certain Covenants--Limitation on Incurrence of Indebtedness". Such restrictions may only be waived with the consent of the holders of a majority in aggregate principal amount of the Notes then outstanding. Except for the limitations contained in such covenants, however, the Indenture will not contain any covenants or provisions that may afford holders of the Notes protection in the event of a highly leveraged transaction. The occurrence of certain of the events that would constitute a Change of Control would constitute a default under the Credit Agreement. Future Senior Indebtedness of the Company may also contain prohibitions of certain events which would constitute a Change of Control or require such Senior Indebtedness to be repurchased upon a Change of Control. Moreover, the exercise by holders of Notes of their right to require the Company to repurchase the Notes could cause a default under such Senior Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Company. Finally, the Company's ability to pay cash to holders of Notes upon a repurchase may be limited by the Company's then existing financial resources. There can be no assurance that sufficient funds will be available when necessary to make any required repurchases. The provisions of the Indenture related to the Company's obligation to make a Change of Control Offer as a result of a Change of Control may be waived or modified with the written consent of the holders of a majority in aggregate principal amount of the Notes. 100 Certain Covenants The Indenture will contain certain covenants including, among others, the following: Limitation on Incurrence of Indebtedness. The Indenture will provide that the Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness), except: (1) Indebtedness of the Company or any Subsidiary Guarantor if, immediately after giving effect to the Incurrence of such Indebtedness and the receipt and application of the net proceeds therefrom (including, without limitation, the application or use of the net proceeds therefrom to repay Indebtedness, consummate an Asset Acquisition or make any Restricted Payment): (a) the ratio of (x) Total Consolidated Indebtedness to (y) Annualized Pro Forma Consolidated Operating Cash Flow would be less than 7.0 to 1.0; or (b) in the case of any Incurrence of Indebtedness prior to May 15, 2004 only, Total Consolidated Indebtedness would be equal to or less than 75% of Total Invested Capital; (2) Bank Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount not to exceed $1.0 billion at any time outstanding; (3) Purchase Money Indebtedness; (4) Indebtedness owed by the Company to any Restricted Subsidiary or Indebtedness owed by a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided, however, that, upon either (a) the transfer or other disposition by such Restricted Subsidiary or the Company of any Indebtedness so permitted under this clause (4) to a Person other than the Company or another Restricted Subsidiary or (b) the issuance (other than of directors' qualifying shares), sale, transfer or other disposition of shares of Capital Stock or other ownership interests (including by consolidation or merger) of such Restricted Subsidiary to a Person other than the Company or another such Restricted Subsidiary, the exception provided by this clause (4) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed to have been Incurred at the time of any such issuance, sale, transfer or other disposition, as the case may be; (5) Indebtedness of the Company or any Restricted Subsidiary under any Hedging Agreement to the extent entered into to protect the Company or such Restricted Subsidiary from fluctuations in interest rates on any other Indebtedness permitted under the Indenture (including the Notes), currency exchange rates or commodity prices and not for speculative purposes; (6) Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred under the prior clause (1) or (3) above or (12) below, the Discount Notes, guarantees of the Discount Notes, the Notes, the Subsidiary Guarantees, Indebtedness existing on the date of the Indenture, or any Refinancing Indebtedness in respect of Refinancing Indebtedness Incurred pursuant to this clause (6); (7) Indebtedness of the Company under the Notes and Indebtedness of the Subsidiary Guarantors under the Subsidiary Guarantees, in each case Incurred in accordance with the Indenture; (8) Capital Lease Obligations of the Company or any Restricted Subsidiary in an aggregate principal amount not in excess of the greater of $50.0 million or 5.0% of Total Assets at any time outstanding; (9) FCC Debt assumed in connection with any acquisition after the date of the Indenture; (10) Indebtedness of the Company or any Restricted Subsidiary consisting of a guarantee of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant; (11) Indebtedness of the Company or any Restricted Subsidiary in respect of statutory obligations, performance, surety or appeal bonds or other obligations of a like nature Incurred in the ordinary course of business; 101 (12) Indebtedness of a Restricted Subsidiary existing at the time such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred in connection with, or in contemplation of, the transaction or series of related transactions pursuant to which such Restricted Subsidiary was acquired by the Company); provided, however, that on the date such Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to clause (1) above after giving effect to the Incurrence of such Indebtedness pursuant to this clause (12) and the acquisition of such Restricted Subsidiary; and (13) Indebtedness of the Company not otherwise permitted to be Incurred pursuant to clauses (1) through (12) above which, together with any other outstanding Indebtedness Incurred pursuant to this clause (13), has an aggregate principal amount not in excess of $75.0 million at any time outstanding. Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary or which is secured by a Lien on an asset acquired by the Company or a Restricted Subsidiary (whether or not such Indebtedness is assumed by the acquiring person) shall be deemed Incurred at the time the Person becomes a Restricted Subsidiary or at the time of the asset acquisition, as the case may be. For purposes of determining compliance with this covenant: (1) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness permitted pursuant to clauses (1) through (13) above, the Company shall, in its sole discretion, be permitted to classify such item of Indebtedness in any manner that complies with this covenant and may from time to time reclassify such items of Indebtedness in any manner that would comply with this covenant at the time of such reclassification; (2) Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this covenant permitting such Indebtedness; (3) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this covenant, the Company, in its sole discretion, shall classify such Indebtedness and only be required to include the amount of such Indebtedness in one of such clauses; and (4) accrual of interest (including interest paid-in-kind) and the accretion of accreted value will not be deemed to be an Incurrence of Indebtedness for purposes of this covenant. Notwithstanding any other provision of this covenant: (1) the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may Incur pursuant to this covenant shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies; and (2) Indebtedness Incurred pursuant to the Credit Agreement prior to or on the date of the Indenture shall be treated as Incurred pursuant to clause (2) of the first paragraph of this covenant. Limitation on Layered Indebtedness. The Indenture will provide that the Company will not: (1) directly or indirectly Incur any Indebtedness that by its terms would expressly rank senior in right of payment to the Notes and rank subordinate in right of payment to any other Indebtedness of the Company; or (2) cause or permit any Guarantor to, and no Guarantor will, directly or indirectly, Incur any Indebtedness that by its terms would expressly rank senior in right of payment to the Guarantee of such Guarantor and rank subordinate in right of payment to any other Indebtedness of such Guarantor; provided that no Indebtedness shall be deemed to be subordinated solely by virtue of being unsecured. 102 Limitation on Liens. The Indenture will provide that the Company shall not, and shall not permit any Subsidiary Guarantor to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing Indebtedness that is pari passu with the Notes or the applicable Guarantee, as the case may be, or is Subordinated Indebtedness, upon any of their property or assets, now owned or hereafter acquired (other than Permitted Liens), unless all payments due under the Indenture and the Notes are secured equally and ratably with (or prior to, in the case of Subordinated Indebtedness) the obligations so secured until such time as such obligations are no longer secured by such Lien; provided that this restriction shall not apply to any Lien securing Acquired Indebtedness created prior to the incurrence of such Indebtedness by the Company or any Subsidiary Guarantor (and to successive extensions or refinancings thereof), where such Lien only extends to the assets that were subject to such Lien prior to the related acquisition by the Company or the Subsidiary Guarantor. Limitation on Restricted Payments. The Indenture will provide that the Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, on or prior to December 31, 2002: (1) declare or pay any dividend, or make any distribution of any kind or character (whether in cash, property or securities), in respect of any class of Capital Stock of the Company, excluding any dividends or distributions payable solely in shares of Qualified Stock of the Company or in options, warrants or other rights to acquire Qualified Stock of the Company; (2) purchase, redeem or otherwise acquire or retire for value any shares of Capital Stock of the Company, any options, warrants or rights to purchase or acquire such shares or any securities convertible or exchangeable into such shares (other than any such shares of Capital Stock, options, warrants, rights or securities that are owned by the Company or a Restricted Subsidiary); (3) make any Investment (other than a Permitted Investment) in any Person other than the Company or a Restricted Subsidiary; or (4) redeem, defease, repurchase, retire or otherwise acquire or retire for value, prior to its scheduled maturity, repayment or any sinking fund payment, Subordinated Indebtedness, each of the transactions described in clauses (1) through (4) (other than any exception to any such clause) being a "Restricted Payment"; and at any time after December 31, 2002, the Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, make a Restricted Payment if, at the time thereof: (A) a Default or an Event of Default shall have occurred and be continuing at the time of or after giving effect to such Restricted Payment; (B) immediately after giving effect to such Restricted Payment, the Company could not Incur at least $1.00 of additional Indebtedness pursuant to clause (1) of the covenant described under "--Limitation on Incurrence of Indebtedness"; and (C) immediately upon giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after the date of the Indenture (including any Designation Amount) exceeds the sum (without duplication) of: (1) the amount of (x) the Consolidated Cash Flow of the Company after December 31, 2002, through the end of the latest full fiscal quarter for which consolidated financial statements of the Company are available preceding the date of such Restricted Payment (treated as a single accounting period), less (y) 150% of the cumulative Consolidated Interest Expense of the Company after December 31, 2002, through the end of the latest full fiscal quarter for which consolidated financial statements of the Company are available preceding the date of such Restricted Payment (treated as a single accounting period); plus (2) the aggregate net cash proceeds received by the Company as a capital contribution in respect of Qualified Stock or from the proceeds of a sale of Qualified Stock made after the date of the Indenture (excluding in each case (x) the proceeds from a sale of Qualified Stock to a Restricted Subsidiary and (y) the proceeds from a sale of Qualified Stock to an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries); plus 103 (3) the aggregate net cash proceeds received by the Company or any Restricted Subsidiary from the sale, disposition or repayment (other than to the Company or a Restricted Subsidiary) of any Investment made after the date of the Indenture and constituting a Restricted Payment in an amount equal to the lesser of (x) the return of capital with respect to such Investment and (y) the initial amount of such Investment, in either case, less the cost of disposition of such Investment; plus (4) an amount equal to the consolidated Net Investment on the date of Revocation made by the Company and/or any Restricted Subsidiary in any Subsidiary of the Company that has been designated as an Unrestricted Subsidiary after the date of the Indenture upon its redesignation as a Restricted Subsidiary in accordance with the covenant described under "--Limitation on Designations of Unrestricted Subsidiaries". For purposes of: (1) the preceding clause (C)(2), the value of the aggregate net cash proceeds received by the Company from, or as a capital contribution in connection with, the issuance of Qualified Stock either upon the conversion of convertible Indebtedness of the Company or any of its Restricted Subsidiaries or in exchange for outstanding Indebtedness of the Company or any of its Restricted Subsidiaries or upon the exercise of options, warrants or rights will be the net cash proceeds received by the Company or any Restricted Subsidiary upon the issuance of such Indebtedness, options, warrants or rights plus the incremental amount received by the Company or any Restricted Subsidiary upon the conversion, exchange or exercise thereof; (2) the preceding clause (C)(4), the value of the consolidated Net Investment on the date of Revocation shall be equal to the Fair Market Value of the aggregate amount of the Company's and/or any Restricted Subsidiary's Investments in such Subsidiary of the Company on the applicable date of Designation; and (3) determining the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its Fair Market Value on the date such Restricted Payment is made by the Company or a Restricted Subsidiary, as the case may be. The provisions of this covenant shall not prohibit: (1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at such date of declaration such payment would comply with the provisions of the Indenture; (2) so long as no Default or Event of Default shall have occurred and be continuing, the purchase, redemption, retirement or other acquisition of any Capital Stock of the Company out of the net cash proceeds of the substantially concurrent capital contribution to the Company in connection with Qualified Stock or out of the net cash proceeds received by the Company from the substantially concurrent issue or sale (other than to a Restricted Subsidiary or to an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries) of Qualified Stock; provided that (a) any such net cash proceeds shall be excluded from clause (C)(2) of the second preceding paragraph; (3) so long as no Default or Event of Default shall have occurred and be continuing, the purchase, redemption, retirement, defeasance or other acquisition of Subordinated Indebtedness of the Company made by exchange for or conversion into, or out of the net cash proceeds received by the Company, or out of a capital contribution to the Company in connection with a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of, (a) Qualified Stock (provided that (x) any such net cash proceeds are excluded from clause (C)(2) of the second preceding paragraph and (y) such proceeds, if from a sale other than a Public Sale, are not applied to optionally redeem Notes on or prior to December 31, 2002) or (b) other Subordinated Indebtedness of the Company that has an Average Life equal to or greater than the Average Life of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired and that is subordinated in right of payment to the Notes at least to the same extent as the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired; 104 (4) so long as no Default or Event of Default shall have occurred and be continuing, the making of a direct or indirect Investment constituting a Restricted Payment in an amount not to exceed the amount of the net cash proceeds of capital contributions in respect of Qualified Stock or from the issue or sale (other than to a Restricted Subsidiary) of Qualified Stock of the Company, in each case made no more than one year prior to the date of such investment; provided that (a) any such net cash proceeds are excluded from clause (C)(2) of the second preceding paragraph and (b) such proceeds, if from a sale other than a Public Sale, are not applied to optionally redeem Notes on or prior to December 31, 2002; (5) so long as no Default or Event of Default has occurred and is continuing, the repurchase, redemption, acquisition or retirement for value of any Capital Stock of Holdings held by any member of management of the Company or any of its Subsidiaries pursuant to any management equity subscription agreement, stock option agreement, restricted stock agreement or other similar agreement; provided that (a) the aggregate amount of such dividends or distributions shall not exceed $10.0 million in any twelve- month period, (b) any unused amount in any twelve-month period may be carried forward to one or more future twelve-month periods and (c) the aggregate of all unused amounts that may be carried forward to any future twelve-month period shall not exceed $20.0 million; (6) payments to Tritel, Inc. to reimburse Tritel, Inc. for its out-of- pocket operating and administrative expenses attributable to the Company, provided this reimbursement shall not exceed $10.0 million in any fiscal year; (7) payments to Holdings pursuant to a tax sharing agreement so long as such payments in the aggregate do not exceed the lesser of (A) the aggregate amount of taxes that would be payable by the Company and its Subsidiaries if they were filing on a separate return basis as a consolidated entity and (B) the aggregate amount of taxes paid by Holdings and its consolidated subsidiaries; (8) payments or distributions to dissenting stockholders pursuant to applicable law in connection with a consolidation, merger or transfer of assets that complies with the provisions of the Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company; (9) the repurchase, redemption or other acquisition or retirement for value of the Company's Capital Stock to the extent necessary in the good faith judgment of the board of directors of the Company evidenced by a board resolution delivered to the Trustee to prevent the loss or secure the renewal or reinstatement of any material license or franchise held by the Company or any Restricted Subsidiary from any government agency; provided that no Capital Stock shall be repurchased, redeemed or otherwise acquired from any Permitted Holder pursuant to this clause (9); or (10) the repurchase of Indebtedness subordinated to the Notes at a purchase price not greater than 101% of the principal amount thereof (plus accrued and unpaid interest) pursuant to a mandatory offer to repurchase made upon the occurrence of a Change of Control; provided that the Company first make an Offer to Purchase the Notes (and repurchase all tendered notes) under the Indenture pursuant to the provisions of the Indenture described under "--Change of Control". Restricted Payments made pursuant to clauses (1), (5), (6), (8) and (10) of the immediately preceding paragraph shall be included in making the determination of available amounts under clause (C) of the third preceding paragraph, and Restricted Payments made pursuant to clauses (2), (3), (4), (7) and (9) of the immediately preceding paragraph shall not be included in making the determination of available amounts under clause (C) of the third preceding paragraph. Limitation on Restrictions Affecting Restricted Subsidiaries. The Indenture will provide that the Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist any consensual encumbrances or restrictions of any kind on the ability of any Restricted Subsidiary to: (1) pay, directly or indirectly, dividends, in cash or otherwise, or make any other distributions in respect of its Capital Stock or pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary; 105 (2) make any Investment in the Company or any other Restricted Subsidiary; or (3) transfer any of its property or assets to the Company or any other Restricted Subsidiary, except for such encumbrances or restrictions existing under or by reason of: (A) any agreement in effect on the date of the Indenture as any such agreement is in effect on such date; (B) any agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company and outstanding on such date and not Incurred in anticipation or contemplation of becoming a Restricted Subsidiary; provided, however, that such encumbrance or restriction shall not apply to any property or assets of the Company or any Restricted Subsidiary other than such Restricted Subsidiary; (C) customary provisions contained in an agreement which has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of a Restricted Subsidiary; provided, however, that such encumbrance or restriction is applicable only to such Restricted Subsidiary or its property and assets; (D) any agreement effecting a Refinancing or amendment of Indebtedness Incurred pursuant to any agreement referred to in clause (A) or (B) above; provided, however, that the provisions contained in such Refinancing or amendment agreement relating to such encumbrance or restriction are no more restrictive in any material respect than the provisions contained in the agreement that is the subject thereof in the reasonable judgment of the board of directors of the Company; (E) the Indenture; (F) applicable law or any applicable rule, regulation or order; (G) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of any Restricted Subsidiary; (H) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the type referred to in clause (3) of this covenant; and (I) restrictions of the type referred to in clause (3) of this covenant contained in security agreements securing Indebtedness of a Restricted Subsidiary to the extent that such Liens restrict the transfer of property subject to such agreements. Limitation on Certain Asset Dispositions. The Indenture will provide that the Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, make any Asset Disposition unless: (1) the Company or such Restricted Subsidiary, as the case may be, receives consideration for such Asset Disposition at least equal to the Fair Market Value of the assets sold or disposed of as determined by the board of directors of the Company in good faith and evidenced by a resolution of such board of directors filed with the Trustee; (2) other than in the case of a Permitted Asset Swap, not less than 75% of the consideration received by the Company or such Restricted Subsidiary from the disposition consists of: (A) cash or Cash Equivalents; (B) the assumption of Indebtedness (other than non-recourse Indebtedness or any Subordinated Indebtedness) of the Company or such Restricted Subsidiary or other obligations relating to such assets (accompanied by an irrevocable and unconditional release of the Company or such Restricted Subsidiary from all liability on the Indebtedness or other obligations assumed); or (C) notes, other obligations or common stock received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into 106 cash or Cash Equivalents concurrently with the receipt of such notes or other obligations (to the extent of the cash actually received by the Company); and (3) all Net Available Proceeds, less any amounts invested within 365 days of such Asset Disposition to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, an entity primarily engaged in a Permitted Business, to make a capital expenditure or to acquire other long-term assets that are used or useful in a Permitted Business, are applied, on or prior to the 365th day after such Asset Disposition, unless and to the extent that the Company shall determine to make an Offer to Purchase, to the permanent reduction and prepayment of any senior Indebtedness of the Company then outstanding (including a permanent reduction of the commitments in respect thereof). Any Net Available Proceeds from any Asset Disposition which is subject to the immediately preceding sentence that are not applied as provided in the immediately preceding sentence shall be used promptly after the expiration of the 365th day after such Asset Disposition (or earlier if the Company so elects) to make an Offer to Purchase outstanding Notes at a purchase price in cash equal to 100% of the principal amount on the Purchase Date, plus accrued and unpaid interest to the Purchase Date; provided, however, that if the Company elects (or is required by the terms of any other Senior Subordinated Indebtedness), an offer may be made ratably to purchase the Notes and such other Senior Subordinated Indebtedness. Notwithstanding the foregoing, the Company may defer making any Offer to Purchase outstanding Notes (and any offer to purchase other Senior Subordinated Indebtedness ratably) until there are aggregate unutilized Net Available Proceeds from Asset Dispositions otherwise subject to the two immediately preceding sentences equal to or in excess of $15.0 million (at which time the entire unutilized Net Available Proceeds from Asset Dispositions otherwise subject to the two immediately preceding sentences, and not just the amount in excess of $15.0 million, shall be applied as required pursuant to this paragraph). Any remaining Net Available Proceeds following the completion of the required Offer to Purchase (and any offer to purchase other Senior Subordinated Indebtedness ratably) may be used by the Company for any other purpose (subject to the other provisions of the Indenture), and the amount of Net Available Proceeds then required to be otherwise applied in accordance with this covenant shall be reset to zero. These provisions will not apply to a transaction consummated in compliance with the provisions of the Indenture described under "--Merger, Consolidation and Certain Sales of Assets". Pending application as set forth above, the Net Available Proceeds of any Asset Disposition may be invested in cash or Cash Equivalents or used to reduce temporarily Indebtedness outstanding under any revolving credit agreement to which the Company is a party and pursuant to which it has Incurred Indebtedness. The Company will be required to comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Company will be required to comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this covenant by virtue thereof. Limitation on Transactions with Affiliates. The Indenture will provide that the Company will not, and will not cause or permit any Restricted Subsidiary to, directly or indirectly, conduct any business or enter into, renew or extend any transaction with any of their respective Affiliates, including, without limitation, the purchase, sale, lease or exchange of property, the rendering of any service or the making of any guarantee, loan, advance or Investment, either directly or indirectly, unless the terms of such transaction are at least as favorable as the terms that could be obtained at such time by the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on an arms'-length basis with a Person that is not such an Affiliate; provided, however, that: (1) in any transaction involving aggregate consideration in excess of $10.0 million, the Company shall deliver an Officers' Certificate to the Trustee stating that a majority of the disinterested directors of the board of directors of the Company or such Restricted Subsidiary, as the case may be, have determined, in their good faith judgment, that the terms of such transaction are at least as favorable as the terms that 107 could be obtained by the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on an arms'-length basis between unaffiliated parties; and (2) if the aggregate consideration is in excess of $25.0 million, the Company shall also deliver to the Trustee, prior to the consummation of the transaction, the favorable written opinion of a nationally recognized accounting, appraisal or investment banking firm as to the fairness of the transaction to the holders of the Notes, from a financial point of view; provided, however, that the requirements set forth in this clause (2) shall not apply in the case of exchanges of licenses and related assets between the Company or any of its Subsidiaries and AT&T Corp., AT&T Wireless and any of their respective Subsidiaries so long as the Fair Market Value of licenses and related assets exchanged by the Company or any of its Subsidiaries shall not exceed $50.0 million. Notwithstanding the foregoing, the restrictions set forth in this covenant shall not apply to: (1) transactions between or among the Company and/or any Restricted Subsidiaries; (2) any Restricted Payment or Permitted Investment permitted by the covenant described under "--Limitation on Restricted Payments"; (3) directors' fees, indemnification and similar arrangements, officers' indemnification, employment agreements, employee stock option or employee benefit plans and employee salaries and bonuses paid or created in the ordinary course of business; (4) any transactions pursuant to agreements existing on the date of the Indenture and described in the offering memorandum relating to the offering of the unregistered notes on terms substantially consistent with those set forth in that offering memorandum; (5) transactions with AT&T or any of its Affiliates relating to the marketing or provision of telecommunication services or related hardware, software or equipment on terms that are no less favorable (when taken as a whole) to the Company or such Restricted Subsidiary, as applicable, than those available from unaffiliated third parties; (6) transactions involving the leasing or sharing or other use by the Company or any Restricted Subsidiary of communications network facilities (including, without limitation, cable or fiber lines, equipment or transmission capacity) of any Affiliate of the Company (such Affiliate being a "Related Party") on terms that are no less favorable (when taken as a whole) to the Company or such Restricted Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (7) transactions involving the provision of telecommunication services by a Related Party in the ordinary course of its business to the Company or any Restricted Subsidiary, or by the Company or any Restricted Subsidiary to a Related Party, on terms that are no less favorable (when taken as a whole) to the Company or such Restricted Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (8) any sales agency agreements pursuant to which an Affiliate has the right to market any or all of the products or services of the Company or any of the Restricted Subsidiaries; (9) transactions involving the sale, transfer or other disposition of any shares of Capital Stock of any Marketing Affiliate; provided that such Marketing Affiliate is not engaged in any activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof; and (10) customary commercial banking, investment banking, underwriting, placement agent or financial advisory fees paid in connection with services rendered to the Company and its subsidiaries in the ordinary course. Limitation on Activities of the Company and the Restricted Subsidiaries. The Indenture will provide that the Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business, except to such extent as is not material to the Company and its Restricted Subsidiaries, taken as a whole. 108 Provision of Financial Information. The Indenture will provide that, whether or not required by the rules and regulations of the Commission, so long as any Notes are outstanding, the Company will furnish to the holders of Notes: (1) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such forms, including a section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries and, with respect to annual information only, a report thereon by the Company's certified independent accountants; and (2) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports, in each case within the time period specified in the Commission's rules and regulations. In addition, following the consummation of the Exchange Offer contemplated by the Exchange and Registration Rights Agreement, whether or not required by the rules and regulations of the Commission, the Company will file a copy of all such information and reports specified in clauses (1) and (2) above with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to prospective investors upon request. In addition, the Company will, for so long as any Notes remain outstanding, furnish to the holders of Notes, upon request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company will also comply with Section 314(a) of the TIA. Limitation on Designations of Unrestricted Subsidiaries. The Indenture will provide that the Company may designate any Subsidiary of the Company (other than an Ineligible Subsidiary) as an "Unrestricted Subsidiary" under the Indenture (a "Designation") only if: (1) no Default or Event of Default shall have occurred and be continuing at the time of or after giving effect to such Designation; (2) the Company would be permitted under the Indenture to make an Investment at the time of Designation (assuming the effectiveness of such Designation) in an amount (the "Designation Amount") equal to the Fair Market Value of the aggregate amount of its Investments in such Subsidiary on such date; and (3) except in the case of a Subsidiary of the Company in which an Investment is being made pursuant to, and as permitted by, the penultimate paragraph of the covenant described under "--Limitation on Restricted Payments", the Company would be permitted to Incur $1.00 of additional Indebtedness pursuant to clause (1) of the covenant described under "-- Limitation on Incurrence of Indebtedness" at the time of Designation (assuming the effectiveness of such Designation). In the event of any such Designation, the Company shall be deemed to have made an Investment constituting a Restricted Payment pursuant to the covenant described under "--Limitation on Restricted Payments" for all purposes of the Indenture in the Designation Amount. The Indenture will further provide that the Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then constitute a Restricted Subsidiary, if no Default shall have occurred and be continuing at the time of and after giving effect to such Revocation. In the event of any such Revocation, the Company shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary constituting a Restricted Payment pursuant to the covenant described under "--Limitation on Restricted Payments" for all purposes under the Indenture in an amount (if positive) equal to: (1) the Fair Market Value of the aggregate amount of the Company's Investments in such Subsidiary at the time of such Revocation; less 109 (2) the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such Revocation. All Designations and Revocations must be evidenced by a resolution of the board of directors of the Company delivered to the Trustee certifying compliance with the foregoing provisions. Future Subsidiary Guarantors. The Company will cause (1) each Domestic Restricted Subsidiary that Incurs Indebtedness and (2) each Foreign Restricted Subsidiary that Incurs Material Indebtedness to become a Subsidiary Guarantor, and, if applicable, execute and deliver to the Trustee a supplemental indenture in the form set forth in the Indenture pursuant to which such Restricted Subsidiary will guarantee payment of the Notes; provided that the Company shall not cause any Special Purpose Subsidiary to become a Subsidiary Guarantor unless such Special Purpose Subsidiary Incurs Indebtedness other than Indebtedness in respect of the Credit Agreement (or any Refinancing Indebtedness Incurred to Refinance such Indebtedness) or FCC Debt; provided further that in the event that a Subsidiary Guarantor no longer has outstanding, other than the Subsidiary Guarantee, any Indebtedness (in the case of a Domestic Restricted Subsidiary) or Material Indebtedness (in the case of a Foreign Restricted Subsidiary), the Subsidiary Guarantee of that Subsidiary Guarantor shall terminate. Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Subsidiary Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. Merger, Consolidation and Certain Sales of Assets The Company will not consolidate or merge with or into any Person, or sell, assign, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary to consolidate or merge with or into any Person, or to sell, assign, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Restricted Subsidiaries), whether as an entirety or substantially an entirety in one transaction or a series of related transactions, including by way of liquidation or dissolution, to any Person unless, in each such case: (1) the entity formed by or surviving any such consolidation or merger (if other than the Company or such Restricted Subsidiary, as the case may be), or to which such sale, assignment, lease, conveyance or other disposition shall have been made (the "Surviving Entity"), is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) the Surviving Entity assumes by supplemental indenture all of the obligations of the Company on the Notes and under the Indenture; (3) immediately after giving effect to such transaction and the use of any net proceeds therefrom on a pro forma basis, the Company or the Surviving Entity, as the case may be, could Incur at least $1.00 of Indebtedness pursuant to clause (1) of the covenant described under "-- Certain Covenants--Limitation on Incurrence of Indebtedness;" provided, however that this clause (3) shall not apply in the case of a merger between TeleCorp Wireless, Inc. (or any successor entity) and the Company; (4) immediately after giving effect to such transaction and treating any Indebtedness which becomes an obligation of the Company or any of its Restricted Subsidiaries as a result of such transactions as having been Incurred by the Company or such Restricted Subsidiary, as the case may be, at the time of the transaction, no Default or Event of Default shall have occurred and be continuing; and (5) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such merger, consolidation or sale of assets and such supplemental indenture, if any, comply with the Indenture. The Indenture will provide that the Company will not permit any Guarantor to consolidate or merge with or into any Person, or sell, assign, lease, convey or otherwise dispose of all or substantially all of such 110 Guarantor's assets, whether as an entirety or substantially an entirety in one transaction or a series of related transactions, including by way of liquidation or dissolution, to any Person unless, in each such case: (1) the entity formed by or surviving any such consolidation or merger (if other than such Guarantor), or to which such sale, assignment, lease, conveyance or other disposition shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) such corporation assumes by supplemental indenture all of the obligations of the Guarantor, if any, under its Guarantee; (3) in the case of a Subsidiary Guarantor only, immediately after giving effect to such transaction and treating any Indebtedness which becomes an obligation of such Guarantor as a result of such transactions as having been Incurred by such Guarantor at the time of the transaction, no Default or Event of Default shall have occurred and be continuing; and (4) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such merger, consolidation or sale of assets and such supplemental indenture, if any, comply with the Indenture. The provisions of the foregoing two paragraphs shall not apply to any merger of a Restricted Subsidiary with or into the Company or a Wholly Owned Subsidiary, the release of any Guarantor in accordance with the terms of its Guarantee and the Indenture in connection with any transaction complying with the provisions of covenant described under "--Certain Covenants--Limitation on Certain Asset Dispositions". Defaults Each of the following events will be an Event of Default under the Indenture: (1) a default in any payment of interest on any Note when due and payable, whether or not prohibited by the provisions described under "-- Ranking", continued for 30 days; (2) a default in the payment of the principal of any Note when due and payable at its Stated Maturity, upon required redemption or repurchase, upon declaration or otherwise, whether or not such payment is prohibited by the provisions described under "--Ranking"; (3) the failure by the Company to comply with its obligations under the covenant described under "--Merger, Consolidation and Certain Sales of Assets"; (4) the failure by the Company to comply for 30 days after notice with any of its obligations under the covenants described under "--Change of Control" or "--Certain Covenants" (in each case, other than a failure to purchase Notes); (5) the failure by the Company to comply for 60 days after notice with its other agreements contained in the Indenture or the Notes; (6) the failure by the Company or any Significant Subsidiary to pay any Indebtedness within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $15.0 million or its foreign currency equivalent (the "cross acceleration provision") and such failure continues for 10 days after receipt of the notice specified in the Indenture; (7) certain events of bankruptcy, insolvency or reorganization of the Company or a Significant Subsidiary (the "bankruptcy provisions"); (8) the rendering of any final judgment or decree (not subject to appeal) for the payment of money in excess of $15.0 million or its foreign currency equivalent at the time it is entered against the Company or a Significant Subsidiary and is not discharged, waived or stayed if: (A) an enforcement proceeding thereon is commenced by any creditor; or 111 (B) such judgment or decree remains outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed (the "judgment default provision"); or (9) any Guarantee ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor or Person acting by or on behalf of such Guarantor denies or disaffirms such Guarantor's obligations under the Indenture or any Guarantee and such Default continues for 10 days after receipt of the notice specified in the Indenture. The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. However, a default under clauses (4), (5) or (6) will not constitute an Event of Default until the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Notes notify the Company of the default and the Company does not cure such default within the time specified in clauses (4), (5) or (6) after receipt of such notice. If an Event of Default (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) occurs and is continuing, the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Notes by notice to the Company may accelerate the maturity of all the Notes. Upon such an acceleration, the outstanding Notes will become immediately due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or the holders of the Notes. Under certain circumstances, the holders of a majority in aggregate principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders of the Notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder of Notes may pursue any remedy with respect to the Indenture or the Notes unless: (1) such holder has previously given the Trustee notice that an Event of Default is continuing; (2) holders of at least 25% in aggregate principal amount of the outstanding Notes have requested the Trustee in writing to pursue the remedy; (3) such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense; (4) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and (5) the holders of a majority in aggregate principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in aggregate principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder of Notes or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 112 The Indenture will provide that, if a Default occurs and is continuing and is known to the Trustee, the Trustee must mail to each holder of Notes notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note (including payments pursuant to the redemption provisions of such Note), the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the Noteholders. In addition, the Company will be required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Company will also be required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Events of Default, the status of any such event and the action the Company is taking or proposes to take in respect thereof. Amendments and Waivers Subject to certain exceptions, the Indenture or the Notes may be amended with the written consent of the holders of a majority in aggregate principal amount of the Notes then outstanding, and any past default or compliance with any provisions may be waived with the consent of the holders of a majority in aggregate principal amount of the Notes then outstanding. However, (a) without the consent of each holder of an outstanding Note affected, no amendment may, among other things: (1) reduce the amount of Notes whose holders must consent to an amendment; (2) reduce the rate of, or extend the time for payment of, interest or any liquidated damages on any Note; (3) reduce the principal of, or extend the Stated Maturity of, any Note; (4) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under "--Optional Redemption"; (5) make any Note payable in money other than that stated in the Note; (6) impair the right of any holder of Notes to receive payment of principal of and interest or any liquidated damages on such holder's Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such holder's Notes; or (7) make any change in the amendment provisions which require the consent of each holder of Notes or in the waiver provisions; and (b) without the consent of the holders of 66 2/3% in aggregate principal amount of the Notes then outstanding, no amendment may: (1) make any change to the subordination provisions of the Indenture that adversely affects the rights of any holder of Notes; or (2) modify a Guarantee in any manner adverse to the holders of Notes. Without the consent of any holder of Notes, the Company and the Trustee may amend the Indenture to: (1) cure any ambiguity, omission, defect or inconsistency; (2) provide for the assumption by a successor corporation of the obligations of the Company under the Indenture; (3) provide for uncertificated Notes in addition to, or in place of, certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code); 113 (4) make any change in the subordination provisions of the Indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company (or any representative thereof) under such subordination provisions; (5) add additional guarantees with respect to the Notes; (6) secure the Notes; (7) add to the covenants of the Company for the benefit of the Noteholders; (8) surrender any right or power conferred upon the Company; (9) make any change that does not adversely affect the rights of any holder of Notes; (10) provide for the issuance of the Exchange Notes or Private Exchange Notes, subject to the provisions of the Indenture; or (11) comply with any requirement of the Commission in connection with the qualification of the Indenture under the TIA. No amendment may be made to the subordination provisions of the Indenture, however, that adversely affects the rights of any holder of Senior Indebtedness of the Company then outstanding unless the holders of such Senior Indebtedness (or any group or representative authorized to give a consent) consent to such change. The consent of the Noteholders will not be necessary under the Indenture to approve the particular form of any proposed amendment. It will be sufficient if such consent approves the substance of the proposed amendment. After an amendment under the Indenture becomes effective, the Company will be required to mail to Noteholders a notice briefly describing such amendment. However, the failure to give such notice to all Noteholders, or any defect therein, will not impair or affect the validity of the amendment. Transfer and Exchange A Noteholder may transfer or exchange Notes in accordance with the Indenture. Upon any transfer or exchange, the registrar and the Trustee may require a Noteholder, among other things, to furnish appropriate endorsements and transfer documents, and the Company may require a Noteholder to pay any taxes required by law or permitted by the Indenture. The Company will not be required to transfer or exchange any Note selected for redemption or to transfer or exchange any Note for a period of 15 days prior to a selection of Notes to be redeemed. The Notes will be issued in registered form, and the registered holder of a Note will be treated as the owner of such Note for all purposes. Defeasance The Company at any time may terminate all its obligations under the Indenture and the Notes ("legal defeasance"), except for certain obligations, including obligations: . relating to the defeasance trust; . to register the transfer or exchange of the Notes; . to replace mutilated, destroyed, lost or stolen Notes; and . to maintain a registrar and paying agent in respect of the Notes. The Company at any time may terminate its obligations under: . the covenants described under "--Certain Covenants"; 114 . the operation of the cross acceleration provision, the bankruptcy provisions with respect to Significant Subsidiaries and the judgment default provision"; or . clauses (3), (4) and (5) set forth in the first paragraph under "-- Merger, Consolidation and Certain Sales of Assets" ("covenant defeasance"). In the event that the Company exercises its legal defeasance option or its covenant defeasance option, each Guarantor will be released from all of its obligations with respect to its Guarantee. The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Company exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in clause (4), (6), (7) (with respect only to Significant Subsidiaries), (8) (with respect only to Significant Subsidiaries) or because of the failure of the Company to comply with clause (3), (4) and (5) set forth in the first paragraph under "--Merger, Consolidation and Certain Sales of Assets". In order to exercise either defeasance option, the Company must irrevocably deposit in trust (the "defeasance trust") with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the Notes will not recognize income, gain or loss for federal income tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the Internal Revenue Service or other change in applicable federal income tax law). Satisfaction and Discharge The Indenture will be discharged and will cease to be of further effect, except as to surviving rights of registration of transfer or exchange of the Notes as expressly provided for in the Indenture, as to all outstanding Notes under the Indenture when (a) either . all Notes authenticated and delivered, except lost, stolen or destroyed Notes which have been replaced or paid, have been delivered to the Trustee for cancellation, or . all Notes not delivered to the Trustee for cancellation (x) have become due and payable, (y) will become due and payable at their Stated Maturity within one year, or (z) are to be called for redemption within one year under arrangements satisfactory to the Trustee, acting reasonably, for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company; and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount in United States dollars or direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing prior to the date the Notes have become due and payable, the Stated Maturity of the Notes or the relevant redemption date for the Notes, as the case may be, sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, including principal of, any premium and accrued interest at maturity, Stated Maturity or redemption date, (b) the Company or any Guarantor has paid or caused to be paid all other sums payable under the Indenture by the Company and any Guarantor, and 115 (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that . all conditions precedent under the Indenture relating to the satisfaction and discharge of such Indenture have been complied with; and . such satisfaction and discharge will not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which the Company, any Guarantor or any Subsidiary is a party or by which the Company, any Guarantor or any Subsidiary is bound. Concerning the Trustee Firstar Bank, N.A. will be the Trustee under the Indenture, and Firstar Bank, N.A. has been appointed by the Company as Registrar and Paying Agent with regard to the Notes. Governing Law The Indenture provides that it and the Notes will be governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. Certain Definitions Set forth below is a summary of certain of the defined terms used in the Indenture, a copy of the form of which is available upon request to the Company. "Acquired Indebtedness" means, with respect to any Person, Indebtedness of such Person: (1) existing at the time such Person becomes a Restricted Subsidiary; or (2) assumed in connection with the acquisition of assets from another Person, including Indebtedness Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or such acquisition, as the case may be. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, any specified Person. For purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Annualized Pro Forma Consolidated Operating Cash Flow" means Consolidated Cash Flow for the latest two full fiscal quarters for which consolidated financial statements of the Company are available multiplied by two. For purposes of calculating "Consolidated Cash Flow" for any period for purposes of this definition only: (1) any Subsidiary of the Company that is a Restricted Subsidiary on the date of the transaction giving rise to the need to calculate "Annualized Pro Forma Consolidated Operating Cash Flow" (the "Transaction Date") shall be deemed to have been a Restricted Subsidiary at all times during such period; and (2) any Subsidiary of the Company that is not a Restricted Subsidiary on the Transaction Date shall be deemed not to have been a Restricted Subsidiary at any time during such period. In addition to and without limitation of the foregoing, for purposes of this definition only, "Consolidated Cash Flow" shall be calculated after giving effect on a pro forma basis for the applicable period to, without duplication, any Asset Dispositions or Asset Acquisitions (including, without limitation, any Asset Acquisition 116 giving rise to the need to make such calculation as a result of the Company or one of the Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) Incurring, assuming or otherwise being liable for Acquired Indebtedness) occurring during the period commencing on the first day of such two-fiscal-quarter period to and including the Transaction Date (the "Reference Period"), as if such Asset Sale or Asset Acquisition occurred on the first day of the Reference Period. "Asset Acquisition" means: (1) any purchase or other acquisition (by means of transfer of cash, Indebtedness or other property to others or payment for property or services for the account or use of others or otherwise) of Capital Stock of any Person by the Company or any Restricted Subsidiary, in either case, pursuant to which such Person shall become a Restricted Subsidiary or shall be merged with or into the Company or any Restricted Subsidiary; or (2) any acquisition by the Company or any Restricted Subsidiary of the property or assets of any Person which constitute all or substantially all of an operating unit or line of business of such Person. "Asset Disposition" means any sale, transfer or other disposition (including, without limitation, by merger, consolidation or Sale/Leaseback Transaction) of: (1) shares of Capital Stock of a Subsidiary of the Company (other than directors' qualifying shares); (2) any License for the provision of wireless telecommunications services held by the Company or any Restricted Subsidiary (whether by sale of Capital Stock or otherwise); or (3) any other property or assets of the Company or any Subsidiary of the Company other than in the ordinary course of business; provided, however, that an Asset Disposition shall not include: (A) any sale, transfer or other disposition of shares of Capital Stock, property or assets by a Restricted Subsidiary to the Company or to any other Restricted Subsidiary or by the Company to any Restricted Subsidiary; (B) any sale, transfer or other disposition of defaulted receivables for collection; (C) the sale, lease, conveyance or disposition or other transfer of all or substantially all of the assets of the Company as permitted under "-- Merger, Consolidation and Certain Sales of Assets"; (D) any disposition that constitutes a Change of Control; (E) any sale, transfer or other disposition of shares of Capital Stock of any Marketing Affiliate; provided that such Marketing Affiliate is not engaged in any activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof; or (F) any sale, transfer or other disposition that does not (together with all related sales, transfers or dispositions) involve aggregate consideration in excess of $15.0 million. "AT&T Wireless" means AT&T Wireless PCS Inc., a Delaware corporation. "Average Life" means, as of the date of determination, with respect to any Indebtedness for borrowed money or Preferred Stock, the quotient obtained by dividing: (1) the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal or liquidation value payments of such Indebtedness or Preferred Stock, respectively, and the amount of such principal or liquidation value payments by (2) the sum of all such principal or liquidation value payments. 117 "Bank Indebtedness" means any and all amounts payable under or in respect of the Credit Agreement and any Refinancing Indebtedness with respect thereto, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof. "board of directors" of any Person means the board of directors, management committee or other governing body of such Person. "Business Day" means any date which is not a Legal Holiday. "Capital Lease Obligations" of any Person means the obligations to pay rent or other amounts under a lease of (or other Indebtedness arrangements conveying the right to use) real or personal property of such Person which are required to be classified and accounted for as a capital lease or liability on the face of a balance sheet of such Person in accordance with GAAP. The amount of such obligations shall be the capitalized amount thereof in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants options, participations or other equivalents of or interests in (however designated) of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person. "Cash Equity Investors" means: CB Capital Investors, L.P.; Equity-Linked Investors-II; Private Equity Investors III, L.P.; Hoak Communications Partners, L.P.; HCP Capital Fund, L.P.; Whitney Equity Partners, L.P.; J.H. Whitney III, L.P.; Whitney Strategic Partners III, L.P.; Media/Communications Partners III Limited Partnership; Media/Communications Investors Limited Partnership; One Liberty Fund III, L.P.; One Liberty Fund IV, L.P.; One Liberty Advisors Fund, IV, L.P.; Gilde International B.V.; Toronto Dominion Investments, Inc.; Northwood Ventures LLC; Northwood Capital Partners LLC; TeleCorp Investment Corp., L.L.C.; TeleCorp Investment Corp. II, L.L.C.; Gerald T. Vento; Thomas H. Sullivan; Wireless 2000, Inc.; CIHC, Incorporated; Trillium PCS, LLC; Dresdner Kleinwort Benson Private Equity Partners LP; Triune PCS, LLC; JG Funding, LLC; Saunders Capital Group, LLC; Mon-Cre Wireless, Inc.; Ragland Wireless, Inc.; Cablevision Services, Inc.; Hayneville Wireless, Inc.; Moundville Communications, Inc.; James E. Campbell; William M. Mounger, II; and E.B. Martin, Jr. "Cash Equivalents" means: (1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (2) investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poor's Corporation or from Moody's Investors Service; (3) investments in certificates of deposit, banker's acceptance and time deposits maturing within 365 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500 million; 118 (4) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (1) above and entered into with a financial institution satisfying the criteria described in clause (3) above; and (5) money market funds substantially all of whose assets comprise securities of the type described in clauses (1) through (3) above. "Code" means the Internal Revenue Code of 1986, as amended. "Common Stock" of any Person means Capital Stock of such Person that does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "Commission" means the Securities and Exchange Commission. "Communications Act" means the Communications Act of 1934, and any similar or successor Federal statute, and the rules and regulations and published policies of the FCC thereunder, all as amended and as the same may be in effect from time to time. "Consolidated Cash Flow" of any Person means, for any period, the Consolidated Net Income of such Person for such period: (1) increased (to the extent Consolidated Net Income for such period has been reduced thereby) by the sum of (without duplication): (A) Consolidated Interest Expense of such Person for such period; plus (B) Consolidated Income Tax Expense of such Person for such period; plus (C) the consolidated depreciation and amortization expense of such Person and its Restricted Subsidiaries for such period; plus (D) any other non-cash charges of such Person and its Restricted Subsidiaries for such period except for any non-cash charges that represent accruals of, or reserves for, cash disbursements to be made in any future accounting period; and (2) decreased (to the extent Consolidated Net Income for such period has been increased thereby) by any non-cash gains from Asset Dispositions. "Consolidated Income Tax Expense" of any Person means, for any period, the consolidated provision for income taxes of such Person and its Restricted Subsidiaries for such period calculated on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" for any Person means, for any period, without duplication: (1) the consolidated interest expense included in a consolidated income statement (without deduction of interest or finance charge income) of such Person and its Restricted Subsidiaries for such period calculated on a consolidated basis in accordance with GAAP (including, without limitation, (a) any amortization of debt discount, (b) the net costs under Hedging Agreements, (c) all capitalized interest, (d) the interest portion of any deferred payment obligation and (e) all amortization of any premiums, fees and expenses payable in connection with the Incurrence of any Indebtedness); plus (2) the interest component of Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued, by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP. 119 "Consolidated Net Income" of any Person means for any period the consolidated net income (or loss) of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided, however, that there shall be excluded therefrom: (1) the net income (or loss) of any Person acquired by such Person or a Restricted Subsidiary of such Person in a pooling-of-interests transaction for any period prior to the date of such transaction; (2) the net income (but not loss) of any Restricted Subsidiary of such Person which is subject to restrictions which prevent or limit the payment of dividends or the making of distributions to such Person to the extent of such restrictions (regardless of any waiver thereof); (3) the net income of any Person that is not a Restricted Subsidiary of such Person, except to the extent of the amount of dividends or other distributions representing such Person's proportionate share of such other Person's net income for such period actually paid in cash to such Person by such other Person during such period; (4) gains or losses (other than for purposes of calculating Consolidated Net Income under clause (C) of the first paragraph under "--Certain Covenants--Limitation on Restricted Payments") on Asset Dispositions by such Person or its Restricted Subsidiaries; (5) all extraordinary gains (but not, other than for purposes of calculating Consolidated Net Income under clause (C) of the first paragraph under "--Certain Covenants--Limitation on Restricted Payments", losses) determined in accordance with GAAP; and (6) in the case of a successor to such Person by consolidation or merger or as a transferee of such Person's assets, any earnings (or losses) of the successor corporation prior to such consolidation, merger or transfer of assets. "Credit Agreement" means the amended and restated loan agreement dated as of March 31, 1999, as amended, waived or otherwise modified from time to time, among the Company, Tritel, Inc., the financial institutions named therein as lenders, Toronto Dominion (Texas), Inc., as administrative agent for itself and on behalf of the lenders and the issuing bank (except to the extent that any such amendment, waiver or other modification thereto would be prohibited by the terms of the Indenture, unless otherwise agreed to by the holders of at least a majority in aggregate principal amount of the Notes at the time outstanding). "Default" means any event that is, or after notice or lapse of time or both would become, an Event of Default. "Designated Senior Indebtedness" of the Company means: (1) so long as outstanding, Bank Indebtedness; and (2) so long as outstanding, any other Senior Indebtedness which has at the time of initial issuance an aggregate outstanding principal amount in excess of $25.0 million and which has been so designated as Designated Senior Indebtedness by the board of directors of the Company at the time of its initial issuance in a resolution delivered to the Trustee. "Designated Senior Indebtedness" of a Guarantor has a correlative meaning. "Designation" has the meaning set forth under "--Certain Covenants-- Limitation on Designations of Unrestricted Subsidiaries". "Designation Amount" has the meaning set forth under "--Certain Covenants-- Limitation on Designations of Unrestricted Subsidiaries". "Discount Notes" means the 12 3/4% Senior Subordinated Discount Notes due 2009 of the Company. "Disqualified Stock" of any Person means any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any 120 event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the first anniversary of the Stated Maturity of the Notes; provided, however, that any Capital Stock that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the first anniversary of the Stated Maturity of the Notes shall not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions of the covenant described under "--Change of Control". "Domestic Restricted Subsidiary" means any Restricted Subsidiary of the Company other than a Foreign Restricted Subsidiary. "Equity Offering" means any public or private sale of Qualified Stock made on a primary basis by the Company after the date of the Indenture, including through the issuance or sale of Qualified Stock to one or more Strategic Equity Investors; provided, however, that a sale to Holdings will constitute an Equity Offering only if funded by a substantially concurrent Equity Offering by Holdings. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock but excluding any debt security that is convertible into or exchangeable for, Capital Stock. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder. "Exchange and Registration Rights Agreement" means the Exchange and Registration Rights Agreement, to be dated the date of the Indenture, among the Company, the Parent Guarantor, the Subsidiary Guarantors and the Initial Purchasers. "Exchange Notes" means, collectively, debt securities of the Company that are identical in all material respects to the unregistered notes, except for transfer restrictions relating to the unregistered notes, issued in a like aggregate principal amount of the Notes originally issued pursuant to the Exchange and Registration Rights Agreement. "Exchange Offer" means a registered exchange offer for the Notes undertaken by the Company pursuant to the Exchange and Registration Rights Agreement. "Fair Market Value" means, with respect to any asset or property, the price that could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. Unless otherwise specified in the Indenture, Fair Market Value shall be determined by the board of directors of the Company acting in good faith. "FCC" means the Federal Communications Commission, or any other similar or successor agency of the Federal government administering the Communications Act. "FCC Debt" means Indebtedness owed to the United States Treasury Department or the FCC that is incurred in connection with the acquisition of a License. "Foreign Restricted Subsidiary" means any Restricted Subsidiary of the Company that is not organized under the laws of the United States of America or any State thereof or the District of Columbia. "GAAP" means generally accepted accounting principles, consistently applied, as in effect from time to time in the United States of America, as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as is approved by a significant segment of the accounting profession in the United States. 121 "Guarantees" means the guarantees of the Notes by the Parent Guarantor and the Subsidiary Guarantors in accordance with the provisions of the Indenture. "Guarantors" means the Parent Guarantor and the Subsidiary Guarantors. "Hedging Agreement" means any interest rate, currency or commodity swap agreement, interest rate, currency or commodity future agreement, interest rate cap or collar agreement, interest rate, currency or commodity hedge agreement and any put, call or other agreement designed to protect against fluctuations in interest rates, currency exchange rates or commodity prices. "Holder" or "Noteholder" means the Person in whose name a Note is registered on the registrar's books. "Holdings" means TeleCorp PCS, Inc., a Delaware corporation, the indirect parent of the Company and the direct parent of the Parent Guarantor, until a successor replaces it and thereafter, means the successor. "Incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (including by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "Incurrence", "Incurred" and "Incurring" shall have meanings correlative to the foregoing). Indebtedness of any Person or any of its Restricted Subsidiaries existing at the time such Person becomes a Restricted Subsidiary (or is merged into, or consolidates with, the Company or any Restricted Subsidiary), whether or not such Indebtedness was Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary (or being merged into, or consolidated with, the Company or any Restricted Subsidiary), shall be deemed Incurred at the time any such Person becomes a Restricted Subsidiary or merges into, or consolidates with, the Company or any Restricted Subsidiary. "Indebtedness" means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent: (1) every obligation of such Person for money borrowed; (2) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations Incurred in connection with the acquisition of property, assets or businesses; (3) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (4) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith); (5) every Capital Lease Obligation of such Person; (6) every net obligation under Hedging Agreements or similar agreements of such Person; and (7) every obligation of the type referred to in clauses (1) through (6) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor, guarantor or otherwise. Indebtedness shall: (1) include the liquidation preference and any mandatory redemption payment obligations in respect of any Disqualified Stock of the Company and any Restricted Subsidiary and any Preferred Stock of a Subsidiary of the Company; (2) never be calculated taking into account any cash and Cash Equivalents held by such Persons; 122 (3) not include obligations arising from agreements of the Company or a Restricted Subsidiary to provide for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, Incurred or assumed in connection with the disposition of any business or assets of a Restricted Subsidiary. The amount of any Indebtedness outstanding as of any date shall be: (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; (2) the principal amount thereof, in the case of any Indebtedness other than Indebtedness issued with original issue discount; and (3) the greater of the maximum repurchase or redemption price or liquidation preference thereof, in the case of any Disqualified Stock or Preferred Stock. "Ineligible Subsidiary" means: (1) any Special Purpose Subsidiary; (2) any Guarantor; (3) any Subsidiary of the Company that, directly or indirectly, owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; and (4) any Subsidiary of the Company that, directly or indirectly, owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, any other Subsidiary of the Company that is not eligible to be designated as an Unrestricted Subsidiary. "Initial Purchasers" means Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (USA) Inc. "Investment" in any Person means any direct or indirect loan, advance, guarantee or other extension of credit or capital contribution to (by means of transfers of cash or other property to others or payments for property or services for the account or use of others or otherwise), or purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities or evidence of Indebtedness issued by, any other Person. "Legal Holiday" means a Saturday, Sunday or other day on which banking institutions in the State of New York are authorized or required by law to close. "License" means any broadband Personal Communications Services license issued by the FCC in connection with the operation of a System. "License Subsidiary" means Tritel A/B Holding Corp., Tritel C/F Holding Corp., and any other Wholly Owned Subsidiary of the Company designated as a License Sub under the Credit Agreement. "Lien" means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, security interest, lien, charge, easement (other than any easement not materially impairing usefulness or marketability), encumbrance, preference, priority or other security agreement with respect to such property or assets (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). "Management Stockholders" means Gerald Vento and Thomas Sullivan. "Marketing Affiliate" means any Person which engages in no activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof. 123 "Material Indebtedness" means Indebtedness having an aggregate principal amount (or accreted value) of $50 million or more at the time outstanding. "Net Available Proceeds" from any Asset Disposition by any Person means cash or readily marketable Cash Equivalents received (including by way of sale or discounting of a note, installment receivable or other receivable, but excluding any other consideration received in the form of assumption by the acquiror of Indebtedness or other obligations relating to such properties or assets or received in any other non-cash form) therefrom by such Person, including any cash received by way of deferred payment or upon the monetization or other disposition of any non-cash consideration (including notes or other securities) received in connection with such Asset Disposition, net of (1) all legal, title and recording tax expenses, commissions and other fees and expenses incurred and all federal, state, foreign and local taxes accrued as a liability as a consequence of such Asset Disposition; (2) all payments made by such Person or any of its Restricted Subsidiaries on any Indebtedness which is secured by such assets in accordance with the terms of any Lien upon or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such Asset Disposition or by applicable law, be repaid out of the proceeds from such Asset Disposition; (3) all payments made with respect to liabilities associated with the assets which are the subject of the Asset Disposition, including, without limitation, trade payables and other accrued liabilities; (4) appropriate amounts to be provided by such Person or any Restricted Subsidiary thereof, as the case may be, as a reserve in accordance with GAAP against any liabilities associated with such assets and retained by such Person or any Restricted Subsidiary thereof, as the case may be, after such Asset Disposition, including, without limitation, liabilities under any indemnification obligations and severance and other employee termination costs associated with such Asset Disposition, until such time as such amounts are no longer reserved or such reserve is no longer necessary (at which time any remaining amounts will become Net Available Proceeds to be allocated in accordance with the provisions of clause (3) of the covenant described under "--Certain Covenants--Limitation on Certain Asset Dispositions"); and (5) all distributions and other payments made to minority interest holders in Restricted Subsidiaries of such Person or joint ventures as a result of such Asset Disposition. "Net Investment" means the excess of: (1) the aggregate amount of all Investments made in any Unrestricted Subsidiary or joint venture by the Company or any Restricted Subsidiary on or after the date of the Indenture (in the case of an Investment made other than in cash, the amount shall be the Fair Market Value of such Investment as determined in good faith by the Board of the Company or such Restricted Subsidiary); over (2) the aggregate amount returned in cash on or with respect to such Investments whether through interest payments, principal payments, dividends or other distributions or payments; provided, however, that such payments or distributions shall not be (and have not been) included in clause (C) of the first paragraph described under "--Certain Covenants-- Limitation on Restricted Payments"; provided further that, with respect to all Investments made in any Unrestricted Subsidiary or joint venture, the amounts referred to in clause (1) above with respect to such Investments shall not exceed the aggregate amount of all such Investments made in such Unrestricted Subsidiary or joint venture. "Note" or "Notes" means any Note or Notes issued under the Indenture, including any Exchange Note or Exchange Notes, or any Private Exchange Note or Private Exchange Notes, issued in exchange therefor in connection with an Exchange Offer undertaken pursuant to the Exchange and Registration Rights Agreement. "Noteholder" or "Holder" means the Person in whose name a Note is registered on the registrar's books. 124 "Offer to Purchase" means a written offer (the "Offer") sent by the Company by first class mail, postage prepaid, to each holder of Notes at such holder's address appearing in the register for the Notes on the date of the Offer offering to purchase up to the principal amount of the Notes specified in such Offer at the purchase price specified in such Offer (as determined pursuant to the Indenture). Unless otherwise required by applicable law, the Offer shall specify an expiration date (the "Expiration Date") of the Offer to Purchase which shall be not less than 30 days nor more than 60 days after the date of such Offer and a settlement date (the "Purchase Date") for purchase of Notes within five Business Days after the Expiration Date. The Company shall notify the Trustee at least 15 Business Days (or such shorter period as is acceptable to the Trustee) prior to the mailing of the Offer of the Company's obligation to make an Offer to Purchase, and the Offer shall be mailed by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. The Offer shall contain all the information required by applicable law to be included therein. The Offer shall contain all instructions and materials necessary to enable holders of Notes to tender their Notes pursuant to the Offer to Purchase. The Offer shall also state: (1) the provision of the Indenture pursuant to which the Offer to Purchase is being made; (2) the Expiration Date and the Purchase Date; (3) the aggregate principal amount of the outstanding Notes offered to be purchased by the Company pursuant to the Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to a specified provision of the Indenture requiring the Offer to Purchase) (the "Purchase Amount"); (4) the purchase price to be paid by the Company for each $1,000 aggregate principal amount of Notes accepted for payment (as specified pursuant to the Indenture) (the "Purchase Price"); (5) that such holder may tender all or any portion of the Notes registered in the name of such holder and that any portion of a Note tendered must be tendered in an integral multiple of $1,000 principal amount; (6) the place or places where Notes are to be surrendered for tender pursuant to the Offer to Purchase; (7) that interest on any Note not tendered or tendered but not purchased by the Company pursuant to the Offer to Purchase will continue to accrue; (8) that on the Purchase Date the Purchase Price will become due and payable upon each Note being accepted for payment pursuant to the Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date; (9) that each holder electing to tender all or any portion of a Note pursuant to the Offer to Purchase will be required to surrender such Note at the place or places specified in the Offer prior to the close of business on the Expiration Date (such Note being, if the Company or the Trustee so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the holder thereof or such holder's attorney duly authorized in writing); (10) that holders will be entitled to withdraw all or any portion of Notes tendered if the Company (or its paying agent) receives, not later than the close of business on the fifth Business Day next preceding the Expiration Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Note the holder tendered, the certificate number of the Note the holder tendered and a statement that such holder is withdrawing all or a portion of such holder's tender; (11) that (a) if Notes in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase all such Notes and (b) if Notes in an aggregate principal amount in excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase Notes having an 125 aggregate principal amount equal to the Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so that only Notes in denominations of $1,000 or integral multiples thereof shall be purchased); and (12) that in the case of any holder whose Note is purchased only in part, the Company shall execute and the Trustee shall authenticate and deliver to the holder of such Note without service charge, a new Note or Notes, of any authorized denomination as requested by such holder, in an aggregate principal amount equal to and in exchange for the unpurchased portion of the Note so tendered. An Offer to Purchase shall be governed by and effected in accordance with the provisions above pertaining to any Offer. "Officer" means the Chief Executive Officer, the Executive Vice President, the Chief Financial Officer, the Chief Operating Officer, the President, any Vice President, the Treasurer or any Secretary of the Company or a Subsidiary of the Company, as the case may be. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "Parent Guarantee" means a guarantee of the Notes by the Parent Guarantor in accordance with the provisions of the Indenture. "Parent Guarantor" means Tritel, Inc. and any successors or assigns permitted under the Indenture. "Permitted Asset Swap" means any exchange of assets by the Company or a Restricted Subsidiary where the Company and/or its Restricted Subsidiaries receive consideration at least 75% of which consists of (1) cash, (2) assets that are used or useful in a Permitted Business or (3) any combination thereof. "Permitted Business" means: (1) the delivery or distribution of telecommunications, voice, data or video services; or (2) any business or activity reasonably related or ancillary thereto, including, without limitation, any business conducted by the Company or any Restricted Subsidiary on the date of the Indenture and the acquisition, holding or exploitation of any license relating to the delivery of the services described in clause (1) above. "Permitted Holder" means: (1) each of AT&T Wireless, TWR Cellular, the Cash Equity Investors, the Management Stockholders, Digital PCS, L.L.C., Wireless 2000, Inc. and any of their respective Affiliates and the respective successors (by merger, consolidation, transfer or otherwise) to all or substantially all of the respective businesses and assets of any of the foregoing; provided that Triton PCS, Inc. shall be deemed an Affiliate of AT&T Wireless so long as AT&T Wireless owns at least 10% of the equity interests of Triton PCS, Inc.; and (2) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) controlled by one or more persons identified in clause (1) above. "Permitted Investments" means: (1) Investments in Cash Equivalents; (2) Investments representing Capital Stock or obligations issued to the Company or any Restricted Subsidiary in the course of the good faith settlement of claims against any other Person or by reason of a composition or readjustment of debt or a reorganization of any debtor of the Company or any Restricted Subsidiary; 126 (3) deposits including interest-bearing deposits, maintained in the ordinary course of business in banks; (4) any Investment in any Person; provided, however, that, after giving effect to such Investment, such Person is or becomes a Restricted Subsidiary or such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary; (5) trade receivables and prepaid expenses, in each case arising in the ordinary course of business; provided, however, that such receivables and prepaid expenses would be recorded as assets of such Person in accordance with GAAP; (6) endorsements for collection or deposit in the ordinary course of business by such Person of bank drafts and similar negotiable instruments of such other Person received as payment for ordinary course of business trade receivables; (7) any interest rate agreements with an unaffiliated Person otherwise permitted by clause (5) or (6) under "--Certain Covenants--Limitation on Incurrence of Indebtedness"; (8) Investments received as consideration for an Asset Disposition in compliance with the provisions of the Indenture described under "--Certain Covenants--Limitation on Certain Asset Dispositions"; (9) loans or advances to employees of the Company or any Restricted Subsidiary in the ordinary course of business in an aggregate amount not to exceed $5.0 million in the aggregate at any one time outstanding; (10) any Investment acquired by the Company or any of its Restricted Subsidiaries as a result of a foreclosure by the Company or any of its Restricted Subsidiaries or in connection with the settlement of any outstanding Indebtedness or trade payable; (11) loans and advances to officers, directors and employees for business-related travel expense, moving expense and other similar expenses, each incurred in the ordinary course of business; (12) any Investment for which the sole consideration is Qualified Stock; and (13) other Investments (with each such Investment being valued as of the date made and without giving effect to subsequent changes in value) in an aggregate amount not to exceed $15.0 million at any one time outstanding. "Permitted Junior Securities" means (1) Equity Interests in the Company or any Guarantor; or (2) debt securities that are subordinated to all Senior Indebtedness and to any debt securities issued in exchange for Senior Indebtedness, to substantially the same extent as, or to a greater extent than, the Notes and the Guarantees are subordinated to Senior Indebtedness under the Indenture. "Permitted Liens" means: (a) Liens to secure Indebtedness permitted to be Incurred under clause (2) of the covenant described under "--Certain Covenants--Limitation on Incurrence of Indebtedness"; (b) Liens to secure Indebtedness permitted to be Incurred under clause (3) of the covenant described under "--Certain Covenants--Limitation on Incurrence of Indebtedness"; provided that any such Lien may not extend to any property of the Company or any Restricted Subsidiary, other than the property acquired, constructed or leased with the proceeds of such Indebtedness and any improvements or accessions to such property; (c) Liens to secure FCC Debt permitted to be Incurred under clause (9) of the covenant described under "--Certain Covenants--Limitation on Incurrence of Indebtedness" and any interest or title of a lessor in the property subject to a Capitalized Lease Obligation permitted to be incurred under clause (8) of the covenant described under "--Certain Covenants-- Limitation on Incurrence of Indebtedness"; 127 (d) Liens consisting of the interests of other Persons under operating leases entered into in the ordinary course of business by the Company or a Restricted Subsidiary; (e) Liens granted by a Restricted Subsidiary to secure Indebtedness owing to the Company or another Restricted Subsidiary; (f) Liens securing Hedging Agreements so long as such Hedging Agreements relate to Indebtedness that is, and is permitted to be incurred under the "Limitation on Incurrence of Indebtedness" covenant, secured by a Lien on the same property covered by such Hedging Agreements; (g) Liens arising from the rendering of a final judgment or order that does not at the time constitute an Event of Default; (h) Liens for taxes, assessments or governmental charges or levies on the property of the Company or any Restricted Subsidiary if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision that shall be required in conformity with GAAP shall have been made therefor; (i) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens and other similar Liens, on the property of the Company or any Restricted Subsidiary arising in the ordinary course of business and securing payment of obligations that are not more than 60 days past due or are being contested in good faith and by appropriate proceedings; (j) Liens on the property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or arising from partial or progress payments by a customer or other obligations of a like nature and Incurred in a manner consistent with industry practice, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate impair in any material respect the use of property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole; (k) Liens on property at the time the Company or any Restricted Subsidiary acquired such property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that any such Lien may not extend to any other property of the Company or any Restricted Subsidiary; provided further, however, that such Liens shall not have been Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such property was acquired by the Company or any Restricted Subsidiary; (l) Liens on the property or Capital Stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that any such Lien may not extend to any other property of the Company or any other Restricted Subsidiary that is not a direct Subsidiary of such Person; provided further, however, that any such Lien was not Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such Person became a Restricted Subsidiary; (m) pledges or deposits by the Company or any Restricted Subsidiary under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which the Company or any Restricted Subsidiary is a party, or deposits to secure public or statutory obligations of the Company or any Restricted Subsidiary, or deposits for the payment of rent, in each case Incurred in the ordinary course of business; (n) utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character; (o) Liens existing on the date of issue of the Notes not otherwise described in clauses (a) through (n) above; 128 (p) Liens not otherwise described in clauses (a) through (o) above on the property of any Restricted Subsidiary that is not a Subsidiary Guarantor to secure any Indebtedness permitted to be Incurred by such Restricted Subsidiary pursuant to the covenant described under "--Certain Covenants--Limitation on Incurrence of Indebtedness"; and (q) Liens on the property of the Company or any Restricted Subsidiary to secure any Refinancing, in whole or in part, of any Indebtedness secured by Liens referred to in clause (b), (c), (k), (l), (o) or (p) above; provided, however, that any such Lien shall be limited to all or part of the same property that secured the original Lien (together with improvements and accessions to such property) and the aggregate principal amount of Indebtedness that is secured by such Lien shall not be increased to an amount greater than the sum of: (1) the outstanding principal amount, or, if greater, the committed amount, of the Indebtedness secured by Liens described under clause (b), (c), (k), (l), (o) or (p) above, as the case may be, at the time the original Lien became a Permitted Lien under the Indenture, and (2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, incurred by the Company or such Restricted Subsidiary in connection with such Refinancing. "Person" means any individual, corporation, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Plan of Liquidation" means, with respect to any Person, a plan (including by operation of law) that provides for, contemplates, or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and all or substantially all of the remaining assets of such Person to holders of Capital Stock of such Person. "Preferred Stock", as applied to the Capital Stock of any Person, means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "principal" of a Note means the principal of the Note plus the premium, if any, payable on the Note which is due or overdue or is to become due at the relevant time. "Private Exchange Notes" means, collectively, debt securities of the Company that are identical in all material respects to the Exchange Notes, except for transfer restrictions relating to such Private Exchange Notes, issued by the Company (under the same indenture as the Exchange Notes) simultaneously with the delivery of the Exchange Notes in the Exchange Offer to any Noteholder that holds any Notes acquired by it that have, or that are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, or to any Noteholder that is not entitled to participate in the Exchange Offer, upon the request of any such holder, in exchange for a like aggregate principal amount of Notes held by such holder. "Public Sale" means any underwritten public offering, made on a primary basis pursuant to a registration statement filed with, and declared effective by, the Commission in accordance with the Securities Act. 129 "Purchase Money Indebtedness" means any Indebtedness (including, without limitation, Capital Lease Obligations); provided that the net proceeds of such Indebtedness are utilized solely for the purpose of financing the cost (including, without limitation, the cost of design, development, site acquisition, construction, integration, handset manufacture or acquisition or microwave relocation) of assets used or usable in a Permitted Business (including, without limitation, through the acquisition of Capital Stock of an entity engaged in a Permitted Business). "Qualified License" means, as of the date of determination, any License covering or adjacent to any geographical area in respect of which the Company or any Restricted Subsidiary owns, as of the Business Day immediately prior to such date of determination, at least one other License covering a substantial portion of such area. "Qualified Stock" means any Capital Stock of the Company other than Disqualified Stock. "Refinance" means refinance, renew, extend, replace or refund; and "Refinancing" and "Refinanced" have correlative meanings. "Refinancing Indebtedness" means Indebtedness that is Incurred to refund, refinance, replace, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Company or any Restricted Subsidiary existing on the date of the Indenture or Incurred in compliance with the Indenture (including Indebtedness of the Company that Refinances Refinancing Indebtedness); provided, however, that: (1) the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced; (2) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being refinanced; (3) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced plus the amount of any premium required to be paid in connection with such Refinancing pursuant to the terms of the Indebtedness being Refinanced or the amount of any premium reasonably determined by the issuer of such Indebtedness as necessary to accomplish such Refinancing by means of a tender offer, exchange offer or privately negotiated repurchase, plus the expenses of such issuer reasonably incurred in connection therewith; and (4) if the Indebtedness being Refinanced is pari passu with the Notes, such Refinancing Indebtedness is made pari passu with, or subordinate in right of payment to, the Notes, and, if the Indebtedness being Refinanced is subordinate in right of payment to the Notes, such Refinancing Indebtedness is subordinate in right of payment to the Notes on terms no less favorable to the holders of Notes than those contained in the Indebtedness being Refinanced; provided further, however, that Refinancing Indebtedness shall not include (A) Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the Company; or (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary. "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "Revocation" has the meaning set forth under "--Certain Covenants-- Limitation on Designations of Unrestricted Subsidiaries". "Sale/Leaseback Transaction" means an arrangement relating to property owned on the date of the Indenture or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a 130 Restricted Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases it from such Person, other than leases between the Company and a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries. "Securities Act" means the Securities Act of 1933, as amended. "Senior Subordinated Indebtedness" of the Company means the Notes, the Discount Notes and any other Indebtedness of the Company that specifically provides that such Indebtedness is to rank pari passu with the Notes in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of the Company which is not Senior Indebtedness. "Senior Subordinated Indebtedness" of a Guarantor has a correlative meaning. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission. "Special Purpose Subsidiary" means any License Subsidiary. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). "Stockholders' Agreement" means the Stockholders' Agreement dated as of November 13, 2000, among AT&T Wireless, the Cash Equity Investors, the Management Stockholders, E.B. Martin,Jr., William M. Mounger, II and TeleCorp PCS, Inc., as such agreement may be amended from time to time in accordance with the provisions of such agreement, so long as the terms of any such amendment are no less favorable to the Noteholders than the terms of the Stockholders' Agreement in effect on the date of the Indenture. "Strategic Equity Investor" means any of the Cash Equity Investors, any Affiliate thereof, any other Person engaged in a Permitted Business whose Total Equity Market Capitalization exceeds $500 million or any other Person who has at least $100 million total funds under management and who has issued an irrevocable, unconditional commitment to purchase Qualified Stock of the Company for an aggregate purchase price that does not exceed 20% of the value of the funds under management by such Person. "Subordinated Indebtedness" means any Indebtedness of the Company or any Guarantor (whether outstanding on the date of the Indenture or thereafter Incurred) which is by its terms expressly subordinate or junior in right of payment to the Notes or the Guarantee of such Guarantor, as the case may be. "Subsidiary" of any Person means: (1) a corporation more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries thereof; or (2) any other Person (other than a corporation) in which such Person, or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, has at least a majority ownership and voting power relating to the policies, management and affairs thereof. "Subsidiary Guarantee" means each guarantee of the obligations with respect to the Notes issued by a Subsidiary of the Company pursuant to the terms of the Indenture. "Subsidiary Guarantor" means any Subsidiary of the Company that has issued a Subsidiary Guarantee. 131 "System" means, as to any Person, assets constituting a radio communications system authorized under the rules for wireless communications services (including any license and the network, marketing, distribution, sales, customer interface and operations and functions relating thereof) owned and operated by such Person. "Total Assets" means the total assets of the Company, as shown on the most recent quarterly balance sheet of the Company. "Total Consolidated Indebtedness" means, at any date of determination, an amount equal to: (1) the accreted value of all Indebtedness, in the case of any Indebtedness issued with original issue discount; plus (2) the principal amount of all Indebtedness, in the case of any other Indebtedness, of the Company and its Restricted Subsidiaries outstanding as of the date of determination. "Total Equity Market Capitalization" of any Person means, as of any day of determination, the sum of (a) the product of (1) the aggregate number of outstanding primary shares of common stock of such Person on such day (which shall not include any options or warrants on, or securities convertible or exchangeable into, shares of common stock of such Person) multiplied by (2) the average closing price of such common stock listed on a national securities exchange or the Nasdaq National Market System over the 20 consecutive Business Days immediately preceding such day plus (b) the liquidation value of any outstanding shares of preferred stock of such Person on such day. "Total Invested Capital" means, as of any date of determination, the sum of, without duplication: (1) the total amount of equity contributed to the Company as of September 30, 2000, as set forth on the September 30, 2000, consolidated balance sheet of the Company; plus (2) irrevocable, unconditional commitments from any Strategic Equity Investor to purchase Capital Stock of the Company (other than Disqualified Stock) within 36 months of the date of issuance of such commitment, but in any event not later than the Stated Maturity of the Notes; provided, however, that such commitments shall exclude commitments related to any Investment in any Person incorporated, formed or created for the purpose of acquiring one or more Qualified Licenses unless such Person shall become a Restricted Subsidiary; plus (3) the aggregate net cash proceeds received by the Company from capital contributions or the issuance or sale of Capital Stock of the Company (other than Disqualified Stock, but including Qualified Stock issued upon the conversion of convertible Indebtedness or upon the exercise of options, warrants or rights to purchase Qualified Stock) subsequent to the date of the Indenture, other than issuances or sales of Capital Stock to a Restricted Subsidiary and other than capital contributions from, or issuances or sales of Capital Stock to, any Strategic Equity Investor in connection with (a) any Investment in any Person incorporated, formed or created for the purpose of acquiring one or more Qualified Licenses and (b) any Investment in any Person engaged in a Permitted Business, unless, in either case, such Person shall become a Restricted Subsidiary; provided, however, such aggregate net cash proceeds shall exclude any amounts included as commitments to purchase Capital Stock in the preceding clause (2); plus (4) the Fair Market Value of assets that are used or useful in a Permitted Business or of the Capital Stock of a Person engaged in a Permitted Business received by the Company as a capital contribution or in exchange for Capital Stock of the Company (other than Disqualified Stock) subsequent to September 30, 2000, other than (x) capital contributions from a Restricted Subsidiary or issuance or sales of Capital Stock of the Company to a Restricted Subsidiary or (y) the proceeds from the sale of Qualified Stock to an employee stock ownership plan or other trust established by the Company or any of its subsidiaries; plus (5) the aggregate net cash proceeds received by the Company or any Restricted Subsidiary from the sale, disposition or repayment of any Investment made after the date of the Indenture and constituting a 132 Restricted Payment in an amount equal to the lesser of (a) the return of capital with respect to such Investment and (b) the initial amount of such Investment, in either case, less the cost of the disposition of such Investment; plus (6) an amount equal to the consolidated Net Investment of the Company and/or any of its Restricted Subsidiaries in any Subsidiary that has been designated as an Unrestricted Subsidiary after the date of the Indenture upon its redesignation as a Restricted Subsidiary in accordance with the covenant described under "--Certain Covenants--Limitation on Designations of Unrestricted Subsidiaries"; plus (7) Total Consolidated Indebtedness; minus (8) the aggregate amount of all Restricted Payments (including any Designation Amount, but other than a Restricted Payment of the type referred to in clause (3)(b) of the third paragraph of the covenant described under "--Certain Covenants--Limitations on Restricted Payments") declared or made on or after the date of the Indenture. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)77aaa-77bbbb) as in effect on the date of the Indenture. "Trustee" means the party named as such in the Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means the Chairman of the Board of Directors, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Unrestricted Subsidiary" means (1) any Subsidiary of the Company (other than an Ineligible Subsidiary) designated after the date of the Indenture as such pursuant to, and in compliance with, the covenant described under "-- Certain Covenants--Limitation on Designations of Unrestricted Subsidiaries" and (2) any Marketing Affiliate. Any such designation of any Subsidiary of the Company may be revoked by a resolution of the board of directors of the Company delivered to the Trustee certifying compliance with the such covenant, subject to the provisions of such covenant. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option. "Voting Stock" of any Person means the Capital Stock of such Person which ordinarily has voting power for the election of directors (or Persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency. "Wholly Owned Subsidiary" means a Restricted Subsidiary, all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by the Company and/or by one or more Wholly Owned Subsidiaries. 133 CERTAIN U.S. FEDERAL TAX CONSIDERATIONS The following is a summary of the principal U.S. federal income tax consequences resulting from the beneficial ownership of the exchange notes by certain persons and from the exchange of the unregistered notes for exchange notes. This summary does not purport to consider all the possible U.S. federal tax consequences of the purchase, ownership or disposition of the unregistered notes and exchange notes and is not intended to reflect the particular tax position of any beneficial owner. It addresses only initial purchasers who hold the unregistered notes and exchange notes as capital assets and does not address beneficial owners that may be subject to special tax rules, such as banks, insurance companies, dealers in securities or currencies, purchasers that hold notes or new notes as a hedge against currency risks or as part of a straddle with other investments or as part of a "synthetic security" or other integrated investment (including a "conversion transaction") comprised of an unregistered note or exchange note and one or more investments, or purchasers that have a "functional currency" other than the U.S. dollar. Except to the extent discussed below under "Non-U.S. Holders" and "Information Reporting and Backup Withholding", this summary only pertains to a holder that is (i) a citizen or resident of the U.S. for U.S. federal income tax purposes, (ii) an estate subject to U.S. federal income taxation without regard to the source of its income, (iii) a corporation or other entity taxable as a corporation for federal tax purposes created or organized in or under the laws of the U.S. or any political subdivision thereof or (iv) a trust which is subject to the supervision of a court within the U.S. and the control of a U.S. fiduciary (each, a "U.S. Holder"). If a partnership holds notes, the tax treatment of a partner generally will depend upon the status of the partner and upon the activities of the partnership. Partners of partnerships holding notes should consult their tax advisors. This summary is based upon the U.S. federal tax laws and regulations as now in effect and as currently interpreted and does not take into account possible changes in such tax laws or such interpretations, any of which may be applied retroactively. It does not include any description of the tax laws of any state, local or foreign government that may be applicable to the unregistered notes and/or exchange notes or holders thereof. PERSONS CONSIDERING EXCHANGING THEIR UNREGISTERED NOTES FOR EXCHANGE NOTES SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE APPLICATION OF THE U.S. FEDERAL TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY CONSEQUENCES TO THEM UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION. Characterization of the Notes We will treat the unregistered notes and the exchange notes as indebtedness for U.S. federal income tax purposes, and the following discussion assumes that such treatment will be respected. Accordingly, a holder also will generally be required to treat the unregistered notes and the exchange notes as indebtedness. A holder taking an inconsistent position must expressly disclose such fact in the holder's return. U.S. Holders Payments of Interest In general, interest on an unregistered note or an exchange note will be taxable to a holder as ordinary income at the time it is received or accrued, depending on the holder's method of accounting for tax purposes. Sale, Exchange or Other Disposition Except as provided below under "Exchange Offer", if a note is sold or otherwise disposed of, a U.S. Holder generally will recognize gain or loss equal to the difference between the amount realized on the disposition (except to the extent attributable to accrued but unpaid interest, which will be taxable as ordinary income) and such holder's tax basis in the note. A U.S. Holder's tax basis in a note generally will be the price paid for the note, subject to certain adjustments. Such gain or loss will be capital gain or loss and will be long-term if the holder has held the note for more than one year at the time of the disposition. 134 Exchange Offer An exchange of the unregistered notes for the exchange notes, described under "The Exchange Offer", will not be treated as an "exchange" for U.S. federal income tax purposes. As a result of exchanging the unregistered notes for the exchange notes, a U.S. Holder will not recognize taxable gain or loss upon the exchange and such holder will have the same tax basis and holding period in the exchange note as the holder did for the unregistered note so exchanged. We are obligated to pay additional interest to the holders of the notes under certain circumstances. Such additional interest generally will be taxable to a holder as ordinary income in accordance with the holder's method of tax accounting. It is possible, however, that the Internal Revenue Service (the "IRS") may take a different position, in which case a holder might be required to include such additional interest in income as it accrues or becomes fixed (regardless of such holder's regular method of accounting). Non-U.S. Holders Payments of Interest Subject to the discussion of information reporting and backup withholding below, payments of interest on the unregistered notes or exchange notes by us or our agent to or on behalf of any beneficial owner who is not a U.S. Holder (a "Non-U.S. Holder") and who is not engaged in a trade or business within the U.S. with respect to which interest on the unregistered notes or exchange notes is effectively connected will not be subject to U.S. federal income or withholding tax, provided that (i) such beneficial owner does not actually or constructively own ten percent or more of the total combined voting power of all of our classes of stock entitled to vote, (ii) such beneficial owner is not a controlled foreign corporation for U.S. federal income tax purposes (generally, a foreign corporation controlled by U.S. shareholders) that is related to us actually or constructively through stock ownership, and (iii) the Non-U.S. Holder provides an appropriate statement on IRS Form W-8BEN or the substitute Form provided by the beneficial owner ("Substitute Form W-8BEN"), together with all appropriate attachments, signed under penalties of perjury, identifying the Non-U.S. Holder and stating, among other things, that the Non- U.S. Holder is not a U.S. person for U.S. federal income tax purposes. If an unregistered note or exchange note is held through a securities clearing organization or certain other financial institutions, the organization or institution may provide a signed statement to eliminate withholding tax. However, in such case, the signed statement must be accompanied by a copy of the IRS Form W-8BEN or Substitute Form W-8BEN provided by the beneficial owner to the organization or institution. For interest paid with respect to an unregistered note or exchange note a Non-U.S. Holder that is treated as a partnership for U.S. federal income tax purposes generally will be required to provide an IRS Form W-8IMY and to attach an appropriate certification by each beneficial owner of the Non-U.S. Holder (including in certain cases, such beneficial owner's beneficial owners). To the extent these conditions are not met, a 30% withholding tax will apply to interest income on the unregistered note or exchange note, unless an income tax treaty reduces or eliminates such tax or unless the interest is effectively connected with the conduct of a trade or business within the U.S. by such Non- U.S. Holder and the Non-U.S. Holder provides an appropriate statement to that effect (generally on IRS Form W-8BEN, or IRS Form W-8ECI, as applicable). In the latter case, such Non-U.S. Holder generally will be subject to U.S. federal income tax with respect to all income from the unregistered note or exchange note at regular rates applicable to U.S. taxpayers. Additionally, in such event, Non-U.S. Holders that are corporations could be subject to a branch profits tax on such income. Sale, Exchange or Other Disposition In general, a Non-U.S. Holder will not be subject to U.S. federal income tax on any capital gain realized upon a sale, exchange or retirement of an unregistered note or exchange note unless (i) such gain is effectively connected with a U.S. trade or business of the holder, (ii) the Non-U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law applicable to certain U.S. expatriates or (iii) in the case of an individual, such 135 beneficial owner is present in the U.S. for 183 days or more during the taxable year of the sale, exchange or retirement and certain other requirements are met. In the latter event, Non-U.S. Holders generally will be subject to U.S. federal income tax with respect to such gain at regular rates applicable to U.S. taxpayers. Additionally, in such event, Non-U.S. Holders that are corporations could be subject to a branch profits tax on such gain. Treatment of Notes for U.S. Federal Estate Tax Purposes An individual Non-U.S. Holder (who is not domiciled in the U.S. for U.S. federal estate tax purposes at the time of death) will not be subject to U.S. federal estate tax in respect of an unregistered note or exchange note, provided the Non-U.S. Holder does not at the time of such Non-U.S. Holder's death actually or constructively own 10% or more of the combined voting power of all of our classes of stock entitled to vote, and payments of interest on such unregistered note or exchange note would not have been considered U.S. trade or business income at the time of such Non-U.S. Holder's death. Information Reporting and Backup Withholding For each calendar year in which the unregistered notes or exchange notes are outstanding, we, our agents or paying agents or a broker may be required to provide the IRS with certain information, including the holder's name, address and taxpayer identification number, the aggregate amount of principal and interest (and premium, if any) paid to that holder during the calendar year and the amount of tax withheld, if any. This obligation, however, does not apply with respect to certain holders including corporations, tax-exempt organizations, qualified pension and profit sharing trusts and individual retirement accounts. In the event that a U.S. Holder subject to the reporting requirements described above fails to supply its correct taxpayer identification number in the manner required by applicable law or underreports its tax liability, we, our agents or paying agents or a broker may be required to "backup" withhold a tax equal to 31% of each payment of interest and principal (and premium, if any) on the unregistered notes or exchange notes. A Non-U.S. Holder that provides an IRS Form W8-BEN or Substitute Form W- 8BEN, together with all appropriate attachments, signed under penalties of perjury, identifying the Non-U.S. Holder and stating that the Non-U.S. Holder is not a U.S. person will not be subject to IRS reporting requirements and U.S. backup withholding provided we do not have actual knowledge that such holder is a U.S. person. In addition, IRS Forms W-8BEN or Substitute Forms W-8BEN will be required from the beneficial owners of interests in a Non-U.S. Holder that is treated as a partnership for U.S. federal income tax purposes. The payment of the proceeds on the disposition of an unregistered note or exchange note to or through the U.S. office of a broker generally will be subject to information reporting and backup withholding at a rate of 31% unless the Non-U.S. Holder either certifies its status as a Non-U.S. Holder under penalties of perjury on IRS Form W-8BEN or Substitute Form W-8BEN (as described above) or otherwise establishes an exemption. If any payments of principal or interest (and premium, if any) are made to the beneficial owner of an unregistered note or exchange note by or through the foreign office of a foreign custodian, foreign nominee or other foreign agent of such beneficial owner, or if the foreign office of a foreign broker (as defined in applicable Treasury regulations) pays the proceeds of the sale of an unregistered note or exchange note to the seller thereof, backup withholding and information reporting will not apply. Information reporting requirements (but not backup withholding) will apply, however, to a payment by (i) a foreign office of (a) a custodian, nominee, other agent or broker that is a U.S. person for U.S. federal income tax purposes, (b) a foreign custodian, nominee, other agent or broker that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the U.S., (c) a foreign custodian, nominee, other agent or broker that is a controlled foreign corporation for U.S. federal income tax purposes, or (ii) a foreign partnership if at any time during its tax year one or more of its partners are U.S. persons who, in the aggregate, hold more than 50% of the income or capital interest of the partnership or if, at any time during its taxable year, the partnership is engaged in a U.S. trade or business, unless the custodian, nominee, other agent, broker or foreign partnership has documentary evidence in its records that the holder is not a U.S. person and certain other conditions are met or the holder otherwise establishes an exemption. 136 Backup withholding is not an additional tax; any amounts so withheld may be credited against the U.S. federal income tax liability of the holder or refunded if the amounts withheld exceed such liability, provided that the required information is furnished to the IRS. The information reporting requirements may apply regardless of whether withholding is required. Copies of the information returns reporting such interest and withholding also may be made available to the tax authorities in the country in which a Non-U.S. Holder is a resident under the provisions of an applicable income tax treaty or agreement. THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND TAX SITUATION. EACH HOLDER SHOULD CONSULT SUCH HOLDER'S TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE OWNERSHIP AND DISPOSITION OF THE NOTES AND NEW NOTES, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN, AND OTHER TAX LAWS OR SUBSEQUENT VERSIONS THEREOF. 137 BOOK-ENTRY, DELIVERY AND FORM The exchange notes are represented by a permanent global certificate in definitive, fully registered form. The global note is registered in the name of a nominee of The Depository Trust Company. Book-Entry Procedures for the Global Notes The descriptions of the operations and procedures of The Depository Trust Company, Euroclear Bank SA/N.V., as operator of the Euroclear System and Clearstream Banking, societe anonyme described below are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems, and are subject to change by them from time to time. Neither we nor any of the initial purchasers of the unregistered notes takes any responsibility for these operations or procedures, and investors are urged to contact the relevant system or its participants directly to discuss these matters. The Depository Trust Company has advised us that it is: . a limited purpose trust company organized under the laws of the State of New York; . a banking organization within the meaning of the New York Banking Law; . a member of the Federal Reserve System; . a clearing corporation within the meaning of the Uniform Commercial Code; and . a clearing agency registered under the Exchange Act. The Depository Trust Company was created to hold securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants, eliminating the need for physical transfer and delivery of certificates. The notes will be issued as fully-registered securities registered in the name of Cede & Co., The Depository Trust Company's nominee. The Depository Trust Company's participants include securities brokers and dealers, including the initial purchasers, banks and trust companies, clearing corporations and other organizations. Indirect access to The Depository Trust Company's system is also available to indirect participants such as banks, brokers, dealers and trust companies that clear through, or maintain a custodial relationship with a participant, either directly or indirectly. Investors who are not participants may beneficially own securities held by, or on behalf of The Depository Trust Company only through participants or indirect participants. We expect that under procedures established by The Depository Trust Company: (1) upon deposit of each global note, The Depository Trust Company will credit the accounts of participants designated by the initial purchasers of the unregistered notes with an interest in the global note; and (2) ownership of the notes will be shown on, and the transfer of ownership of the notes will be effected only through, records maintained by The Depository Trust Company, with respect to the interests of participants and the records of participants and the indirect participants, with respect to the interests of persons other than participants. The laws of some jurisdictions may require that purchasers of securities take physical delivery of the securities in definitive form. Accordingly, the ability to transfer interests in the notes represented by a global note to these persons may be limited. In addition, because The Depository Trust Company can act only on behalf of its participants, who in turn act on behalf of persons who hold interests through participants, the ability of a person having an interest in the notes represented by a global note to pledge or transfer the interest to persons or entities that do not participate in The Depository Trust Company's system, or to otherwise take actions in respect of the interest, may be affected by the lack of a physical definitive security in respect of the interest. 138 So long as The Depository Trust Company or its nominee is the registered owner of a global note, The Depository Trust Company or the nominee, will be considered the sole owner or holder of the notes represented by the global note for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global note will not be entitled to have the notes represented by the global note registered in their names, will not receive or be entitled to receive physical delivery of certificated notes and will not be considered the owners or holders under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee. Accordingly, each holder owning a beneficial interest in a global note must rely on the procedures of The Depository Trust Company and, if the holder is not a participant or an indirect participant, on the procedures of the participant through which the holder owns its interest, to exercise any rights of a holder of the notes under the indenture or the global note. We understand that, under existing industry practice, if we request any action of holders of the notes, or a holder that is an owner of a beneficial interest in a global note desires to take any action that The Depository Trust Company, as the holder of the global note, is entitled to take, The Depository Trust Company would authorize the participants to take the action and the participants would authorize holders owning through the participants to take the action or would otherwise act upon the instruction of the holders. Neither we nor the trustee will have any responsibility or liability for any aspect of the records relating to, or payments made on account of, the notes by The Depository Trust Company, or for maintaining, supervising or reviewing any records of The Depository Trust Company relating to these notes. Payments with respect to the principal and interest, and premium, if any, and liquidated damages, if any, on any notes represented by a global note registered in the name of The Depository Trust Company or its nominee on the applicable record date will be payable by the trustee to, or at the direction of, The Depository Trust Company or its nominee in its capacity as the registered holder of the global note representing the notes under the indenture. Under the terms of the indenture, we and the trustee will be permitted to treat the persons in whose names the notes, including the global notes, are registered as the owners of the notes for the purpose of receiving payment and for any and all other purposes whatsoever. Accordingly, neither we nor the trustee have or will have any responsibility or liability for the payment of the amounts to owners of beneficial interests in a global note, including principal, premium, if any, liquidated damages, if any, and interest. Payments by the participants and the indirect participants to the owners of beneficial interests in a global note will be governed by standing instructions and customary industry practice, and will be the responsibility of the participants or the indirect participants and The Depository Trust Company. Transfers between participants in The Depository Trust Company will be effected in accordance with the Depository Trust Company's procedures and will be settled in same-day funds. Transfers between participants in Euroclear or Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the notes, cross-market transfers between the participants in The Depository Trust Company, on the one hand, and Euroclear or Clearstream participants on the other hand, will be effected through The Depository Trust Company in accordance with The Depository Trust Company's rules on behalf of Euroclear or Clearstream, as the case may be. These cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in the system in accordance with the rules and procedures, and within the established Brussels time deadlines, of the system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its depositary to take action to effect final settlement on its behalf, by delivering or receiving interests in the relevant global notes in The Depository Trust Company and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to The Depository Trust Company. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream. Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a global note from a participant in the Depository Trust Company will be credited, and any crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities 139 settlement processing day, which must be a business day for Euroclear or Clearstream, as the case may be, immediately following the settlement date of The Depository Trust Company. Cash received by Euroclear or Clearstream as a result of sales of interests in a global note by or through a Euroclear or Clearstream participant to a participant in The Depository Trust Company will be received with value on the settlement date of The Depository Trust Company, but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream, as the case may be, following The Depository Trust Company's settlement date. Although The Depository Trust Company, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the global notes among participants in The Depository Trust Company, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform these procedures, and these procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by The Depository Trust Company, Euroclear or Clearstream, or their respective participants or indirect participants, of their respective obligations under the rules and procedures governing their operations. Certificated Notes If: . we notify the trustee in writing that The Depository Trust Company is no longer willing or able to act as a depositary, or The Depository Trust Company ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days of the notice or cessation; . we, at our option, notify the trustee in writing that we elect to cause the issuance of the notes in definitive form under the indenture; or . upon the occurrence of other events as provided in the indenture, then, upon surrender by The Depository Trust Company of the global notes, certificated notes will be issued to each person that The Depository Trust Company identifies as the beneficial owner of the notes represented by the global notes. Upon any the issuance, the trustee is required to register the certificated notes in the name of the person or persons, or the nominee of any the person, and cause the same to be delivered to the person. Neither we nor the trustee shall be liable for any delay by The Depository Trust Company or any participant or indirect participant in identifying the beneficial owners of the related notes, and each person may conclusively rely on, and shall be protected in relying on, instructions from The Depository Trust Company for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the notes to be issued. 140 PLAN OF DISTRIBUTION Each broker-dealer that receives exchange notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of exchange notes. A broker-dealer may use this prospectus, as it may be amended or supplemented from time to time, in connection with resales of exchange notes received in exchange for unregistered notes where the broker- dealer acquired the unregistered notes as a result of market-making activities or other trading activities. For a period of 180 days after the expiration date of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer that requests these documents in the letter of transmittal, for use in connection with any resale. Each holder of unregistered notes participating in the exchange offer will, by execution of a letter of transmittal, represent to us that it is not engaged in nor does it intend to engage in a distribution of exchange notes. We will not receive any proceeds from any sale of exchange notes by broker- dealers. Exchange notes received by broker-dealers for their own account in the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on exchange notes or a combination of these methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or at negotiated prices. Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account in the exchange offer and any broker or dealer that participates in a distribution of exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any resale of exchange notes and any commission or concessions received by any persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker- dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration date of the exchange offer we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests these documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer, including the expenses of one counsel for the holders of the notes, other than commissions or concessions of any brokers or dealers. We will indemnify the holders of the notes, including any broker- dealers, against liabilities, including liabilities under the Securities Act. The exchange notes are new securities with no established trading market. We do not intend to list the exchange notes on any securities exchange, but the unregistered notes have been designated for trading in the PORTAL market. The initial purchasers have advised us that they intend to make a market in the exchange notes, but they have no obligation to do so. The initial purchasers may discontinue market-making at any time. A liquid market may not develop for the exchange notes, you may not be able to sell your exchange notes at a particular time and the prices that you receive when you sell may not be favorable. Future trading prices of the exchange notes will depend on many factors, including our operating performance and financial condition, prevailing interest rates and the market for similar securities. LEGAL MATTERS Certain legal matters with regard to the validity of the notes will be passed upon for us by Cadwalader, Wickersham & Taft, New York, New York. 141 EXPERTS The consolidated balance sheets of Tritel, Inc. and subsidiaries as of December 31, 1998 and 1999, and the consolidated statements of operations, members' and stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1999, included in this prospectus have been audited by KPMG LLP, independent certified public accountants, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing. AVAILABLE INFORMATION We are filing with the Securities and Exchange Commission a registration statement on Form S-4 under the Securities Act of 1933 with respect to the exchange notes to be issued in exchange for the unregistered notes. As permitted by the rules and regulations of the Securities and Exchange Commission, this prospectus omits some information, exhibits and undertakings contained in the registration statement. For further information with respect to us and the notes, you should review the registration statement, including the exhibits and the financial statements to the registration statement and the notes and schedules filed as a part of the registration statement. The registration statement of which this prospectus is a part incorporates important business and financial information about the Company that is not included or delivered with this prospectus. The registration statement and the exhibits and schedules to the registration statement, as well as the periodic reports, proxy statements and other information filed with the Securities and Exchange Commission by us, as well as Tritel, Tritel Communications, Inc. and Tritel Finance, Inc. may be inspected and copied at the Public Reference Section of the Securities and Exchange Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, DC 20549 and at the regional offices of the Securities and Exchange Commission located at 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of these materials may be obtained from the Public Reference Section of the Securities and Exchange Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, DC 20549, and its public reference facilities in New York, New York at the prescribed rates. You may obtain information as to the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities and Exchange Commission maintains a website at http://www.sec.gov that contains periodic reports, proxy and information statements and other information regarding registrants that file documents electronically with the Securities and Exchange Commission. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance reference is made to the copy of contract or document filed as an exhibit to the registration statement, each statement being qualified in all respects by reference. Under the indenture, we have agreed to file with the Securities and Exchange Commission and provide to the holders of the notes annual reports and the information, documents and other reports which are specified in the disclosure and reporting provisions of the Exchange Act. 142 GLOSSARY OF SELECTED TERMS ANALOG....................... A method of transmission where the wave form of the output signal is analogous to the wave form of the input signal. ARPU......................... Average revenue per unit. Post-pay service revenue, including airtime and incollect roaming revenue but excluding outcollect roaming revenue, for the period indicated, divided by the average post-pay customers for that period. BANDWIDTH.................... The number of bits of information which can move through a communications medium in a given amount of time; the capacity of a telecommunications network to carry voice, data and video information. BASE STATION................. A fixed site with network equipment that is used for radio frequency communications with mobile stations, and is part of a cell, or sector within a cell. BLOCK........................ The distinct radio frequency block in which one-way radio applications, such as paging or beeper services, and two-way radio applications such as wireless communications, cellular telephone and ESMR networks, are licensed and operate. Blocks are categorized as A-, B-, C-, D-, E- or F- Blocks. A- and B- Blocks are each PCS 30 MHz licenses covering an MTA. C-Block is a PCS 30 MHz license covering a BTA. D-, E- and F- Block are each PCS 10 MHz licenses covering a BTA. BTA.......................... One of the 493 basic trading areas, which are smaller than MTAs, into which the licensing for broadband PCS has been divided based on the geographic divisions in the 1992 Rand McNally Commercial Atlas & Marketing Guide, as modified by the Federal Communications Commission. CDMA......................... Code division multiple access. A digital spread-spectrum wireless technology which allows a large number of users to access a single frequency band that assigns a code to all speech bits, sends a scrambled transmission of the encoded speech over the air, and reassembles the speech to its original format. CELL SITE.................... The location of a transmitting/receiving station serving a given geographic area in a cellular communications system. CELLULAR..................... Domestic public cellular radio communications service authorized by the Federal Communications Commission in the 824-893 MHz band, in which each of two licensees per market employs 25 MHz of spectrum to provide wireless services. CHURN........................ The number of disconnected customers for the period indicated, divided by the average number of customers for that period. CMRS......................... Commercial mobile radio service. 143 DIGITAL...................... A method of storing, processing and transmitting information through the use of distinct electronic or optical pulses that represent the binary digits 0 and 1. Digital transmission and switching technologies employ a sequence of discrete, distinct pulses to represent information, as opposed to the continuously variable analog signal. Digital wireless networks use digital transmission. DUAL-MODE.................... A wireless phone which is capable of operating on both digital and analog technologies. ESMR......................... Enhanced specialized mobile radio. A radio communications system that employs digital technology with multi-site configuration that permits frequency reuse, offering enhanced dispatch services to traditional analog SMR users. FREQUENCY.................... The number of cycles per second, measured in hertz, of a periodic oscillation or wave in radio propagation. GSM.......................... Global system for mobile communications. The standard digital cellular telephone service in Europe and Japan, guided by a set of standards specifying the infrastructure for digital cellular service, including the radio interface (900 MHz), switching, signaling and intelligent network. HAND-OFF..................... The act of transferring communication with a mobile unit from one base station to another. A hand-off transfers a call from the current base station to the new base station. A "soft" hand- off establishes communications with a new cell before terminating communications with the old cell, which prevents call cut-off. INTERCONNECTION.............. Any variety of arrangements that permit the connection of communications equipment to a common carrier network such as a public switched telephone network, and which defines the terms of revenue-sharing. Terms of interconnection are either negotiated between the network operators or imposed by regulatory authorities. MHZ.......................... Megahertz. A measure of airwave capacity. MICROWAVE RELOCATION......... The transferal of the business and public safety agencies which currently utilize radio spectrum within or adjacent to the spectrum allocated to PCS licensees by the Federal Communications Commission. RESELLER..................... A provider of PCS services that does not hold a Federal Communications Commission PCS license or own PCS facilities. The reseller purchases blocks of PCS numbers and capacity from a licensed carrier and resells service through its own distribution network to the public. Consequently, a reseller is both a customer of PCS licensee's services and a competitor of that licensee. ROAMING...................... A service offered by mobile communications network operators which allows a subscriber to use his or her handset while in the service area of another carrier. Roaming requires an agreement between operators of different individual markets to permit customers of either operator to access the other's system. 144 SMR.......................... Specialized mobile radio. A two-way analog mobile radio telephone system typically used for dispatch services such as truck and taxi fleets. TDMA......................... Time division multiple access. A digital spread-spectrum technology which allocates a discrete amount of frequency bandwidth to each user to permit more than one simultaneous conversation on a single radio frequency channel. TRI-MODE..................... A wireless phone which is capable of operating on either different digital protocols or both digital and analog technologies. 145 FINANCIAL STATEMENTS INDEX TRITEL, INC. Independent Auditors' Report................................................ F-2 Consolidated Balance Sheets................................................. F-3 Consolidated Statements of Operations....................................... F-4 Consolidated Statements of Members' and Stockholders' Equity................ F-5 Consolidated Statements of Cash Flows....................................... F-6 Notes to Consolidated Financial Statements.................................. F-7
TRITEL, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS Descriptions of Unaudited Pro Forma Condensed Consolidated Financial Statements.............................................................. F-41 Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2000................................................................ F-42 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2000................................ F-43 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1999........................................ F-44 Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.............................................................. F-45
F-1 INDEPENDENT AUDITORS' REPORT The Board of Directors Tritel, Inc.: We have audited the accompanying consolidated balance sheets of Tritel, Inc. and subsidiaries (the "Company") as of December 31, 1998 and 1999, and the related consolidated statements of operations, members' and stockholders' equity, and cash flows for each of the years in the three year period ended December 31, 1999. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Tritel, Inc. and subsidiaries as of December 31, 1998 and 1999, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 1999 in conformity with generally accepted accounting principles. KPMG LLP Jackson, Mississippi February 18, 2000 F-2 TRITEL, INC. CONSOLIDATED BALANCE SHEETS ($ in thousands)
December 31, ------------------- September 30, 1998 1999 2000 ------- ---------- ------------- (unaudited) ASSETS Current assets: Cash and cash equivalents.................. $ 846 $ 609,269 $ 168,786 Due from affiliates........................ 241 2,565 4,411 Accounts receivable, net................... -- 5,040 11,726 Inventory.................................. -- 8,957 19,500 Prepaid expenses and other current assets.. 719 4,733 10,266 ------- ---------- ---------- Total current assets...................... 1,806 630,564 214,689 ------- ---------- ---------- Restricted cash............................. -- 6,594 4,849 Property and equipment, net................. 13,816 262,343 503,436 Federal Communications Commission licensing costs, net................................. 71,466 201,946 202,281 Intangible assets, net...................... -- 59,508 55,216 Other assets................................ 1,933 35,407 32,972 ------- ---------- ---------- Total assets.............................. $89,021 $1,196,362 $1,013,443 ======= ========== ========== LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable.............................. $22,405 $ -- $ -- Current maturities of long-term debt....... -- 923 989 Accounts payable........................... 8,221 103,677 44,678 Accrued liabilities........................ 2,285 9,647 37,435 ------- ---------- ---------- Total current liabilities................. 32,911 114,247 83,102 ------- ---------- ---------- Non-current liabilities: Long-term debt............................. 51,599 557,716 578,740 Note payable to related party.............. 6,270 -- -- Deferred income taxes and other liabilities............................... 224 37,367 40,171 ------- ---------- ---------- Total non-current liabilities............. 58,093 595,083 618,911 ------- ---------- ---------- Total liabilities......................... 91,004 709,330 702,013 ------- ---------- ---------- Series A 10% redeemable convertible preferred stock............................ -- 99,586 106,386 Stockholders' equity: Preferred stock, 3,100,000 shares authorized: Series D, 46,374 shares outstanding at December 31, 1999 and September 30, 2000.. -- 46,374 46,374 Common stock, 30 shares issued and outstanding at December 31, 1998.......... -- -- -- Common stock issued and outstanding: Class A Voting--97,796,906 shares at December 31, 1999 and 97,847,848 shares at September 30, 2000; Class B Nonvoting-- 2,927,120 shares; Class G--1,380,448 shares; Class D--4,962,804 shares; Voting Preference--6 shares at December 31, 1999 and September 30, 2000.................... -- 1,071 1,071 Contributed capital--Predecessor Companies................................. 13,497 -- -- Additional paid-in capital................. -- 602,359 732,611 Deferred compensation...................... -- -- (56,897) Accumulated deficit........................ (15,480) (262,358) (518,115) ------- ---------- ---------- Total stockholders' equity (deficit)...... (1,983) 387,446 205,044 ------- ---------- ---------- Total liabilities, redeemable preferred stock and stockholders' equity........... $89,021 $1,196,362 $1,013,443 ======= ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. F-3 TRITEL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS ($ in thousands)
For the year ended For the nine months December 31, ended September 30, ---------------------------- ----------------------- 1997 1998 1999 1999 2000 ------- -------- --------- ----------- ----------- (unaudited) (unaudited) Revenues Service................ $ -- $ -- $ 1,186 $ 10 $ 43,366 Roaming................ -- -- 3,421 88 24,120 Equipment.............. -- -- 2,152 81 8,511 ------- -------- --------- -------- --------- Total revenues....... -- -- 6,759 179 75,997 ------- -------- --------- -------- --------- Operating expenses: Costs of services and equipment............. -- -- 6,966 189 51,961 Technical operations... 104 1,939 18,459 8,931 38,103 General and administrative........ 3,123 4,947 22,915 17,414 45,288 Sales and marketing.... 28 452 20,404 6,621 47,339 Stock-based compensation.......... -- -- 190,664 -- 79,092 Depreciation and amortization.......... 20 348 12,839 5,601 45,069 ------- -------- --------- -------- --------- Total operating expenses............ 3,275 7,686 272,247 38,756 306,852 ------- -------- --------- -------- --------- Operating loss......... (3,275) (7,686) (265,488) (38,577) (230,855) Interest income.......... 121 77 16,791 10,451 20,501 Financing cost........... -- -- (2,230) (2,230) -- Interest expense......... -- (722) (24,970) (12,038) (47,260) ------- -------- --------- -------- --------- Loss before extraordinary item and income taxes.......... (3,154) (8,331) (275,897) (42,394) (257,614) Income tax benefit....... -- -- 28,443 13,638 1,857 ------- -------- --------- -------- --------- Loss before extraordinary items... (3,154) (8,331) (247,454) (28,756) (255,757) Extraordinary item-- Loss on return of spectrum.............. -- (2,414) -- -- -- ------- -------- --------- -------- --------- Net loss............... (3,154) (10,745) (247,454) (28,756) (255,757) Series A preferred dividend requirement.... -- -- (8,918) (6,632) (6,800) ------- -------- --------- -------- --------- Net loss available to common stockholders..... $(3,154) $(10,745) $(256,372) $(35,388) $(262,557) ======= ======== ========= ======== =========
The accompanying notes are an integral part of these consolidated financial statements. F-4 TRITEL, INC. CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY ($ in thousands)
Members' Additional and Preferred Common Contributed Paid in Deferred Accumulated Stockholders' Stock Stock Capital Capital Compensation Deficit Equity --------- ------ ----------- ---------- ------------ ----------- ------------- Balance at December 31, 1996................... $ -- $ -- $ 7,255 $ -- $ -- $ (1,581) $ 5,674 Contributed capital, net of expenses of $148.... -- -- 5,437 -- -- -- 5,437 Conversion of debt to members' equity........ -- -- 805 -- -- -- 805 Net loss................ -- -- -- -- -- (3,154) (3,154) --------- ------ -------- -------- -------- --------- --------- Balance at December 31, 1997................... -- -- 13,497 -- -- (4,735) 8,762 Net loss................ -- -- -- -- -- (10,745) (10,745) --------- ------ -------- -------- -------- --------- --------- Balance at December 31, 1998................... -- -- 13,497 -- -- (15,480) (1,983) Conversion of debt to members' equity in Predecessor Company.... -- -- 8,976 -- -- -- 8,976 Series C Preferred Stock issued to Predecessor Company, including distribution of assets and liabilities........ 17,193 -- (22,473) -- -- 576 (4,704) Series C Preferred Stock issued in exchange for cash................... 163,370 -- -- -- -- -- 163,370 Payment of preferred stock issuance costs... (8,507) -- -- -- -- -- (8,507) Series C Preferred Stock issued to Central Alabama in exchange for net assets............. 2,602 -- -- -- -- -- 2,602 Series D Preferred Stock issued to AT&T Wireless in exchange for licenses and other agreements............. 46,374 -- -- -- -- -- 46,374 Grant of unrestricted rights in common stock to officer............. -- -- -- 4,500 -- -- 4,500 Conversion of preferred stock into common stock.................. (174,658) 783 -- 173,875 -- -- -- Sale of common stock, net of issuance costs of $15,338............. -- 288 -- 242,238 -- -- 242,526 Compensation expense related to restricted stock awards........... -- -- -- 190,664 -- -- 190,664 Accrual of dividends on Series A redeemable preferred stock........ -- -- -- (8,918) -- -- (8,918) Net loss................ -- -- -- -- -- (247,454) (247,454) --------- ------ -------- -------- -------- --------- --------- Balance at December 31, 1999................... 46,374 1,071 -- 602,359 -- (262,358) 387,446 Unaudited: Stock issuance costs.... -- -- -- (195) -- -- (195) Exercise of stock options................ -- -- -- 1,258 -- -- 1,258 Deferred compensation expense related to restricted stock awards................. -- -- -- 79,398 (79,398) -- -- Compensation expense related to restricted stock awards........... -- -- -- 56,591 22,501 -- 79,092 Accrual of dividends on Series A redeemable preferred stock........ -- -- -- (6,800) -- -- (6,800) Net loss................ -- -- -- -- -- (255,757) (255,757) --------- ------ -------- -------- -------- --------- --------- Balance, September 30, 2000 (unaudited)....... $ 46,374 $1,071 $ -- $732,611 $(56,897) $(518,115) $ 205,044 ========= ====== ======== ======== ======== ========= =========
The accompanying notes are an integral part of these consolidated financial statements. F-5 TRITEL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in thousands)
For the years ended For the nine months December 31, ended September 30, ---------------------------- ----------------------- 1997 1998 1999 1999 2000 ------- -------- --------- ----------- ----------- (unaudited) (unaudited) Cash flows from operating activities: Net loss............... $(3,154) $(10,745) $(247,454) $(28,756) $(255,757) Adjustments to reconcile net loss to net cash used in operating activities: Loss on return of spectrum.............. -- 2,414 -- -- -- Financing costs........ -- -- 2,230 2,230 -- Depreciation and amortization.......... 20 348 12,839 5,601 45,069 Stock-based compensation and grant of unrestricted rights in common stock to officer............... -- -- 195,164 4,500 79,092 Accretion of discount on debt and amortization of debt issue costs........... -- -- 10,608 3,672 21,627 Provisions for bad debts................. -- -- -- -- 1,893 Deferred income tax benefit............... -- -- (28,443) (13,368) (1,857) Changes in operating assets and liabilities: Accounts receivable... -- -- (5,040) -- (8,579) Inventory............. -- -- (8,957) (3,526) (10,352) Accounts payable and accrued expenses..... 45 (180) 24,659 5,762 1,286 Other current assets and liabilities...... (814) (333) (6,681) (4,813) (7,089) ------- -------- --------- -------- --------- Net cash used in operating activities.......... (3,903) (8,496) (51,075) (28,698) (134,667) ------- -------- --------- -------- --------- Cash flows from investing activities: Capital expenditures... (6) (5,970) (172,448) (80,189) (304,241) Payment for Federal Communications Commission licenses... (3,935) -- -- -- -- Refund of Federal Communications Commission deposit.... 1,376 -- -- -- -- Advance under notes receivable............ -- -- (7,550) (7,550) -- Capitalized interest on network construction and Federal Communications Commission licensing costs................. (415) (2,905) (13,623) (9,993) (3,313) (Increase) decrease in restricted cash....... -- -- (6,594) (7,387) 1,745 Other.................. (72) -- (614) (325) (184) ------- -------- --------- -------- --------- Net cash used in investing activities.......... (3,052) (8,875) (200,829) (105,444) (305,993) ------- -------- --------- -------- --------- Cash flows from financing activities: Proceeds from notes payable to related parties............... 5,700 -- -- -- -- Proceeds from notes payable............... 5,000 38,705 -- -- -- Proceeds from (repayment of) long- term debt............. -- -- 300,000 300,000 (687) Proceeds from senior subordinated discount notes................. -- -- 200,240 200,240 -- Repayments of notes payable............... (6,200) (21,300) (22,100) (22,100) -- Payment of stock issuance costs........ -- -- (8,507) (8,507) (195) Payment of debt issuance costs and other deferred charges............... (1,251) (951) (30,202) (28,054) (198) Proceeds from vendor discount.............. -- -- 15,000 15,000 -- Issuance of preferred stock................. -- -- 163,370 162,703 -- Issuance of common stock, net of issuance costs................. -- -- 242,526 -- -- Proceeds from exercise of stock options...... -- -- -- -- 1,257 Capital contributions, net of related expenses.............. 5,437 -- -- -- -- Other.................. -- -- -- (302) -- ------- -------- --------- -------- --------- Net cash provided by financing activities.......... 8,686 16,454 860,327 618,980 177 ------- -------- --------- -------- --------- Net increase (decrease) in cash and cash equivalents............ 1,731 (917) 608,423 484,838 (440,483) Cash and cash equivalents at beginning of period.... 32 1,763 846 846 609,269 ------- -------- --------- -------- --------- Cash and cash equivalents at end of period................. $ 1,763 $ 846 $ 609,269 $485,684 $ 168,786 ======= ======== ========= ======== =========
The accompanying notes are an integral part of these consolidated financial statements. F-6 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Principles of Consolidation Tritel, Inc. ("Tritel") was formed on April 23, 1998 by the controlling members of Airwave Communications, LLC and Digital PCS, LLC (collectively hereafter referred to as "Predecessor Company") to develop PCS markets in the south-central United States. Tritel's 1998 activities consisted of $1,542 in capital expenditures and $32 in net loss. On January 7, 1999, our Predecessor Company transferred substantially all of their assets and liabilities at historical cost to Tritel in exchange for stock in Tritel. Tritel continued the activities of our Predecessor Company and, for accounting purposes, this transaction was accounted for as a reorganization of the Predecessor Company into a C corporation and a name change to Tritel. Tritel and the Predecessor Company, together with Tritel's subsidiaries, are referred to collectively as the "Company." Tritel began commercial operations during the fourth quarter of 1999. Prior to that time, Tritel and the Predecessor Company were considered to be in the development stage. The consolidated accounts of the Company include its subsidiaries, Tritel PCS, Inc. ("Tritel PCS"); Tritel A/B Holding Corp.; Tritel C/F Holding Corp.; Tritel Communications, Inc.; Tritel Finance, Inc.; and others. All significant intercompany accounts or balances have been eliminated in consolidation. Cash and Cash Equivalents For purposes of financial statement classification, the Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Accounts Receivable Accounts receivable balances are presented net of allowances for losses. The Company's allowance for losses was $42 and $596 as of December 31, 1999 and September 30, 2000, respectively. Inventory Inventory consisting primarily of wireless telephones and telephone accessories is stated at cost. Restricted Cash On March 31, 1999, the Company entered into a deposit agreement with Toronto Dominion (Texas), Inc., as administrative agent, on behalf of the depository bank and the banks and other financial institutions who are a party to the bank facility described in Note 8. Under the terms of the agreement, the Company has placed on deposit $6,594 and $4,849 at December 31, 1999 and September 30, 2000, respectively, with the depository bank, which will be used for the payment of interest and/or commitment fees due under the bank facility. Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. When assets are placed in service, depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally seven years for wireless network assets and three years for information systems assets. Leasehold improvements F-7 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) are amortized over the lesser of the life of the underlying leased asset or lease term. The Company capitalizes interest on certain of its wireless network construction activities. Routine expenditures for repairs and maintenance are charged to expense as incurred. Federal Communications Commission Licensing Costs Licensing costs are accounted for in accordance with industry standards and include the value of license fees at date of acquisition and the direct costs incurred to obtain the licenses. Licensing costs also include capitalized interest during the period of time necessary to build out the wireless network. The Federal Communications Commission grants licenses for terms of up to ten years, and generally grants renewals if the licensee has complied with its license obligations. The Company believes it will be able to secure renewal of its PCS licenses. Amortization of such license costs, which begins for each geographic service area upon commencement of service, is over a period of 40 years. Accumulated amortization on Federal Communications Commission licensing costs at December 31, 1999 and September 30, 2000 was $597 and $3,678, respectively. The Company evaluates the propriety of the carrying amounts of its Federal Communications Commission licensing costs whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. There have been no impairments through December 31, 1999 and September 30, 2000. Derivative Financial Instruments Derivative financial instruments in the form of interest rate swap agreements are entered into by the Company to manage interest rate exposure. These are contractual agreements between counterparties to exchange interest streams based on notional principal amounts over a set period of time. Interest rate swap agreements normally involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. The notional or principal amount does not represent the amount at risk, but is used only as a basis for determining the actual interest cash flows to be exchanged related to the interest rate contracts. Market risk, due to potential fluctuations in interest rates, is inherent in swap agreements. Amounts paid or received under these agreements are included in interest expense during the period accrued or earned. Interest Capitalization In accordance with Statement of Financial Accounting Standards ("SFAS") No. 34, Tritel capitalizes interest expense related to the construction or purchase of certain assets including its Federal Communications Commission licenses which constitute activities preliminary to the commencement of the planned principal operations. Interest capitalized in the years ended December 31, 1997, 1998, and 1999 was $7,214, $10,519 and $23,685, respectively. Interest capitalized in the nine months ended September 30, 1999 and 2000 was $14,592 and $6,109 respectively. Income Taxes Because the Predecessor Company was a nontaxable entity, operating results prior to January 7, 1999 were included in the income tax returns of its members. Therefore, the accompanying consolidated financial statements do not include any provision for income tax benefit for the years ended December 31, 1997 and 1998 or any deferred income taxes on any temporary differences in asset bases as of December 31, 1998. As of January 7, 1999, the Company accounts for income taxes in accordance with SFAS No. 109, which requires the use of the asset and liability method in accounting for deferred taxes. F-8 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Revenue Recognition The Company earns revenue by providing wireless services to both its subscribers and subscribers of other wireless carriers traveling in the Company's service area, as well as sale of equipment and accessories. Generally, access fees, airtime and long distance are billed monthly and are recognized as service is provided. Revenue from the sale of equipment is recognized when sold to the customer. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs totaled $6,238 for the year ended December 31, 1999 and $1,016 and $11,188 for the nine months ended September 30, 1999, and 2000, respectively. No advertising costs were incurred prior to 1999. Stock-Based Compensation SFAS No. 123, "Accounting for Stock-Based Compensation" encourages, but does not require, companies to record compensation cost for stock-based compensation plans at fair value. The Company has chosen to continue to account for stock- based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees." See Note 12. Use of Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A significant estimate impacting the preparation of the consolidated financial statements is the estimated useful life of Federal Communications Commission licensing costs. Actual results could differ from those estimates. Comprehensive Income Comprehensive income is the total of net income (loss) and all other non- owner changes in stockholders' equity in a given period. The Company had no other comprehensive income components for the periods ended December 31, 1997, 1998, and 1999 and September 30, 1999 and 2000; therefore, comprehensive loss is the same as net loss for all periods. Segment Reporting The Company presently operates in a single business segment as a provider of wireless services in its licensed regions in the south-central United States. Stock Split On November 19, 1999, the board of directors approved a 400-for-1 stock split for class A, class B, class C and class D common stock effective immediately prior to the initial public offering. All common stock share data have been retroactively adjusted to reflect this change. F-9 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Reclassifications For the year ended December 31, 1999 and the nine months ended September 30, 2000, the accrual of dividends on the series A redeemable preferred stock has been reclassified from the amounts previously reported from a charge to accumulated deficit to a reduction in additional paid in capital. Revenues, previously reported in aggregate, have been reclassified to indicate revenues separately by source (service, roaming and equipment). (2) LIQUIDITY As reflected in the accompanying consolidated financial statements, the Company began commercial operations in certain of its markets late in 1999 and, therefore, has limited revenues to fund expenditures. The Company expects to grow rapidly while it develops and constructs its PCS network and builds its customer base. The Company expects this growth to strain its financial resources and result in significant operating losses and negative cash flows. The planned high level of indebtedness could have a material adverse effect on the Company, including the effect of such indebtedness on: (i) the Company's ability to fund internally, or obtain additional debt or equity financing in the future for capital expenditures, working capital, debt service requirements, operating losses, acquisitions and other purposes; (ii) the Company's ability to dedicate funds for the wireless network buildout, operations or other purposes, due to the need to dedicate a substantial portion of operating cash flow to fund interest payments; (iii) the Company's flexibility in planning for, or reacting to, changes in its business and market conditions; (iv) the Company's ability to compete with less highly leveraged competitors; and (v) the Company's financial vulnerability in the event of a downturn in its business or the economy. The Company believes that the proceeds from the equity offerings in December 1999, together with the proceeds from the sale of senior subordinated discount notes, the financing made available to it by the Federal Communications Commission, borrowings under its bank credit facility and the equity investment it has received, will provide it with sufficient funds to build out its existing network as planned and fund operating losses until it completes its planned network buildout and generates positive cash flow. There can be no assurance that such funds will be adequate to complete the buildout of the Company's PCS network. Under those circumstances, the Company could be required to change its plans relating to the buildout of the network. F-10 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (3) PROPERTY AND EQUIPMENT Major categories of property and equipment are as follows:
December 31, ----------------- September 30, 1998 1999 2000 ------- -------- ------------- (unaudited) Furniture and fixtures...................... $ 1,779 $ 14,853 $ 22,414 Network construction and development........ 11,416 230,777 485,926 Leasehold improvements...................... 728 22,082 39,687 ------- -------- -------- 13,923 267,712 548,027 Less accumulated depreciation............... (107) (6,834) (44,702) Deposits on equipment....................... -- 1,465 111 ------- -------- -------- $13,816 $262,343 $503,436 ======= ======== ========
(4) FEDERAL COMMUNICATIONS COMMISSION LICENSING COSTS During 1996 and 1997, the Federal Communications Commission granted to the Predecessor Company as the successful bidder C-, D-, E- and F-Block licenses with an aggregate license fee of $106,716 after deducting a 25% small business discount. The Federal Communications Commission provided below market rate financing for a portion of the bid price of the C-and F-Block licenses. Based on the Company's estimates of borrowing costs for similar debt, the Company discounted the face amount of the debt to yield a market rate and the discount was applied to reduce the carrying amount of the licenses and the debt. Accordingly, the licenses were recorded at $90,475. During July 1998, the Company took advantage of a reconsideration order by the Federal Communications Commission allowing companies holding C-Block PCS licenses several options to restructure their license holdings and associated obligations. The Company elected the disaggregation option and returned one- half of the broadcast spectrum originally acquired for each of the C-Block license areas. As a result, the Company reduced the carrying amount of the related licenses by one-half, or $35,442, and reduced the discounted debt and accrued interest due to the Federal Communications Commission by $33,028. As a result of the disaggregation election, the Company recognized an extraordinary loss of approximately $2,414. AT&T Wireless contributed certain A- and B-Block PCS licenses to the Company on January 7, 1999 in exchange for preferred stock. The Company recorded such licenses at $127,307 including related costs of the acquisition. Also, in an acquisition of Central Alabama Partnership, LP 132, the Company acquired certain C-Block licenses with an estimated fair value of $9,284, exclusive of $6,072 of debt to the Federal Communications Commission. Additionally on January 7, 1999, licenses with a carrying amount, including capitalized interest and costs, totaling $21,874 were retained by the Predecessor Company (see Note 15). The assets and liabilities retained by the Predecessor Company have been reflected in these financial statements as a distribution to the Predecessor Company. Each of the Company's licenses is subject to an Federal Communications Commission requirement that the Company construct wireless network facilities offering coverage to certain percentages of the population within F-11 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) certain time periods following the grant of such licenses. Failure to comply with these requirements could result in the revocation of the related licenses or the imposition of fines on the Company by the Federal Communications Commission. (5) AT&T TRANSACTION On May 20, 1998, the Predecessor Company and Tritel entered into a Securities Purchase Agreement with AT&T Wireless and the other stockholders of Tritel, whereby the Company agreed to construct a PCS network and provide wireless services using the AT&T and SunCom(R) brand names, giving equal emphasis to each, in the south-central United States. On January 7, 1999, the parties closed the transactions contemplated in the Securities Purchase Agreement. At the closing, Tritel issued preferred stock to AT&T Wireless in exchange for 20 MHz A- and B-Block PCS licenses which were assigned to the Company, and for certain other agreements covering the Company's markets, including the following agreements. License Agreement Pursuant to a Network Membership License Agreement, dated January 7, 1999 (the "License Agreement"), between AT&T Corp. and the Company, AT&T granted to the Company a royalty-free, nontransferable, non-exclusive, nonsublicensable, limited right, and license to use certain licensed marks solely in connection with certain licensed activities. The licensed marks include the logo containing AT&T and the globe design and the expression "Member, AT&T Wireless Network." The "Licensed Activities" include (i) the provision to end-users and resellers, solely within the territory as defined in the License Agreement, of company communications services as defined in the License Agreement on frequencies licensed to the Company for Commercial Mobile Radio Services ("CMRS") provided in accordance with the License Agreement (collectively, the "Licensed Services") and (ii) marketing and offering the Licensed Services within the territory. The License Agreement also grants to the Company the right and license to use licensed marks on certain permitted mobile phones. The License Agreement contains numerous restrictions with respect to the use and modification of any of the licensed marks. Furthermore, the Company is obligated to use commercially reasonable efforts to cause all Licensed Services marketed and provided using the licensed marks to be of comparable quality to the Licensed Services marketed and provided by AT&T and its affiliates in areas that are comparable to the territory taking into account, among other things, the relative stage of development of the areas. The License Agreement also sets forth specific testing procedures to determine compliance with these standards, and affords the Company with a grace period to cure any instances of alleged noncompliance therewith. The Company may not assign or sublicense any of its rights under the License Agreement; provided, however, that the License Agreement may be assigned to the Company's lenders under the Bank Facility and after the expiration of any applicable grace and cure periods under the Bank Facility, such lenders may enforce the Company's rights under the License Agreement and assign the License Agreement to any person with AT&T's consent. The term of the License Agreement is for five years and renews for an additional five-year period if each party gives the other notice to renew the Agreement. The License Agreement may be terminated by AT&T at any time in the event of a significant breach by the Company, including the Company's misuse of any licensed marks, the Company's licensing or assigning any of the rights in the License Agreement, the Company's failure F-12 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) to maintain AT&T's quality standards or if a change in control of the Company occurs. After the initial five-year term, AT&T may also terminate the License Agreement upon the occurrence of certain transactions described in the Stockholders' Agreement. The License Agreement, along with the exclusivity provisions of the Stockholders' Agreement and the Resale Agreement will be amortized on a straight-line basis over the ten-year term of the agreement. Accumulated amortization related to these agreements at December 31, 1999 and September 30, 2000 was $4,811 and $8,479, respectively. Roaming Agreement Pursuant to the Intercarrier Roamer Service Agreement, dated as of January 7, 1999 (the "Roaming Agreement"), between AT&T Wireless Services, the Company, and their affiliates, each party agrees to provide (each in its capacity as serving provider, the "Serving Carrier") mobile wireless radio telephone service for registered customers of the other party's (the "Home Carrier") customers while such customers are out of the Home Carrier's geographic area and in the geographic area where the Serving Carrier (itself or through affiliates) holds a license or permit to construct and operate a mobile wireless radio/telephone system and station. Each Home Carrier whose customers receive service from a Serving Carrier shall pay to such Serving Carrier 100% of the Serving Carrier's charges for wireless service and 100% of pass-through charges (i.e., toll or other charges). Each Serving Carrier's service charges for use per minute or partial minute for the first three years will be at a fixed rate, and thereafter is the lesser of the fixed rate or the average AT&T Wireless Services revenues from access and airtime divided by the applicable AT&T Wireless Services minutes of use and may be adjusted to a lower rate as the parties may negotiate from time to time. Each Serving Carrier's toll charges per minute of use for the first three years will be at a fixed rate, and thereafter such other rates as the parties negotiate from time to time. The Roaming Agreement has a term of 20 years, unless terminated earlier by a party due to the other party's uncured breach of any term of the Roaming Agreement. Neither party may assign or transfer the Roaming Agreement or any of its rights thereunder except to an assignee of all or part of its PCS systems, provided that such assignee expressly assumes all or the applicable part of the obligations of such party under the Roaming Agreement. The Roaming Agreement will be amortized on a straight-line basis over the 20-year term of the agreement. Accumulated amortization related to this agreement at December 31, 1999 and September 30, 2000 was $786 and $1,386, respectively. (6) NOTE RECEIVABLE On March 1, 1999, the Company entered into agreements with AT&T Wireless, Lafayette Communications Company L.L.C. ("Lafayette") and ABC Wireless L.L.C. ("ABC") whereby the Company, AT&T Wireless and Lafayette would lend $29,500 to ABC to fund its participation in the re-auction of Federal Communications Commission licenses that were returned to the Federal Communications Commission by various companies under the July 1998 reconsideration order. The Company's portion of this loan was $7,500 and was recorded in Other Assets. Subsequent to closing of the agreements, ABC was the successful bidder for licenses covering the Tritel markets with an aggregate purchase price of $7,789. The Company has agreed, subject to Federal Communications Commission approval, to purchase these licenses for $7,789. If the licenses are not purchased by March 1, 2004, the note will mature on that date. The note has a stated interest rate of 16% per year. There F-13 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) are no required payments of principal or interest on the note until maturity. The note is secured by all assets of ABC, including, if permitted by the Federal Communications Commission, the Federal Communications Commission licenses awarded in the re-auction, and ranks pari passu with the notes to AT&T Wireless and Lafayette. (7) INCOME TAXES On January 7, 1999 the Company recorded a deferred tax liability of $55,100 primarily related to the difference in asset bases on the assets acquired from AT&T Wireless. Because the Predecessor Company was a nontaxable entity, the results presented below relate solely to the year ended December 31, 1999. Components of income tax benefit for the year ended December 31, 1999 are as follows:
For the Year Ended December 31, 1999 ---------------------------------------- Current Deferred Total ------------------------- ------------- Federal............................... $ -- $ (24,725) $ (24,725) State................................. -- (3,718) (3,718) --------- ------------- ------------- Total............................... $ -- $ (28,443) $ (28,443) ========= ============= =============
Actual tax benefit differs from the "expected" tax benefit using the federal corporate rate of 35% as follows:
December 31, 1999 ------------ Computed "expected" tax benefit.................................... $(96,564) Reduction (increase) resulting from: Change in valuation allowance for deferred tax assets............ 1,020 Nondeductible compensation related expense....................... 68,308 Nontaxable loss of Predecessor Company........................... 780 Nondeductible portion of discount accretion...................... 557 State income taxes, net of federal tax benefit................... (2,496) Other............................................................ (48) -------- $(28,443) ========
F-14 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) The tax effects of temporary differences that give rise to significant portions of the deferred tax liability at December 31, 1999 are as follows:
December 31, 1999 ------------ Deferred tax assets: Net operating loss carryforward................................. $25,232 Tax basis of capitalized start-up costs in excess of book basis.......................................................... 11,533 Discount accretion in excess of tax basis....................... 5,700 Tax basis of property and equipment in excess of book basis..... 1,865 Other........................................................... 785 ------- Total gross deferred tax assets................................... 45,115 Less: valuation allowance....................................... (1,020) ------- Net deferred tax assets........................................... 44,095 ------- Deferred tax liabilities: Intangible assets book basis in excess of tax basis............. 22,646 Federal Communications Commission licenses book basis in excess of tax basis................................................... 32,245 Capitalized interest book basis in excess of tax basis.......... 12,779 Discount accretion book basis in excess of tax basis............ 2,130 ------- Total gross deferred tax liabilities.............................. 69,800 ------- Net deferred tax liability........................................ $25,705 =======
At December 31, 1999 and September 30, 2000, the Company has net operating loss carryforwards for federal income tax purposes of $65,965 and $235,228, respectively, which are available to offset future federal taxable income, if any, through 2019. The valuation allowance for the gross deferred tax asset at December 31, 1999 and September 30, 2000 was $1,020 and $63,001, respectively. No valuation allowance has been provided for the remaining gross deferred tax asset principally due to the existence of a deferred tax liability which was recorded upon the closing of the AT&T Wireless transaction on January 7, 1999. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considered the scheduled reversal of deferred tax liabilities in making this assessment. Based upon anticipated future taxable income over the periods in which the deferred tax assets are realizable, management believes it is more likely than not the Company will realize the benefits of these deferred tax assets. F-15 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (8) NOTES PAYABLE AND LONG-TERM DEBT A summary of long-term debt is as follows:
December 31, ---------------- September 30, 1998 1999 2000 ------- -------- ------------- (unaudited) Bank facility................................... $ -- $300,000 $300,000 Senior Subordinated Discount Notes.............. -- 216,734 237,783 Federal Communications Commission debt.......... 51,599 41,905 41,946 ------- -------- -------- 51,599 558,639 579,729 Less current maturities......................... -- (923) (989) ------- -------- -------- $51,599 $557,716 $578,740 ======= ======== ========
Bank Facility During 1999, the Company entered into a loan agreement (the "Bank Facility"), which provides for (i) a $100,000 senior secured term loan (the "Term Loan A"), (ii) a $200,000 senior secured term loan (the "Term Loan B") and (iii) a $250,000 senior secured reducing revolving credit facility (the "Revolver"). Tritel PCS Inc., Tritel, Inc., Toronto Dominion (Texas), Inc., as Administrative Agent, and certain banks and other financial institutions are parties thereto. The commitment to make loans under the Revolver automatically and permanently reduces, quarterly beginning on December 31, 2002. The quarterly reductions in the commitment are $6,250 on December 31, 2002, $7,422 for each quarter in 2003, $11,328 for each quarter in 2004, $13,281 for each quarter in 2005, $16,016 for each quarter in 2006, and $25,781 for the first two quarters of 2007. Interest on the Revolver, Term Loan A and Term Loan B accrues, at the Company's option, either at a eurodollar rate plus an applicable margin or the higher of the Toronto Dominion, New York Branch's prime rate and the Federal Funds Rate (as defined in the Bank Facility) plus 0.5%, plus an applicable margin. The borrowings outstanding at December 31, 1999 and September 30, 2000 carried a 10.62% and a 10.87% average interest rate, respectively. The Bank Facility requires an annual commitment fee ranging from 0.50% to 1.75% of the unused portion of the Revolver. The Bank Facility also required the Company to purchase an interest rate hedging contract covering an amount equal to at least 50% of the total amount of the outstanding indebtedness of the Company (other than indebtedness which bears interest at a fixed rate). In May 1999, Tritel entered into such interest rate hedging contracts which are further described in Note 9. The Term Loans are required to be prepaid and commitments under the Revolving Bank Facility reduced in an aggregate amount equal to 50% of excess cash flow of each fiscal year commencing with the fiscal year ending December 31, 2001; 100% of the net proceeds of asset sales, in excess of a yearly threshold, outside of certain asset sales set forth in the Bank Facility; and 50% of the net cash proceeds of issuances of equity by Tritel PCS or its subsidiaries. All obligations of the Company under the facilities are unconditionally and irrevocably guaranteed by Tritel and all subsidiaries of Tritel PCS. The Bank Facility and guarantees, and any related hedging contracts F-16 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) provided by the lenders under the Bank Facility, are secured by substantially all of the assets of Tritel PCS and certain subsidiaries of Tritel PCS, including a first priority pledge of all of the capital stock held by Tritel or any of its subsidiaries, but excluding the Company's PCS licenses. The PCS licenses will be held by one or more single purpose subsidiaries of the Company and, in the future if the Company is permitted to pledge its PCS licenses, they will be pledged to secure the obligations of the Company under the Bank Facility. The Bank Facility contains covenants customary for similar facilities and transactions, including covenants relating to the amounts of indebtedness that the Company may incur, limitations on dividends and distributions on, and redemptions and repurchases of, capital stock and other similar payments and various financial maintenance covenants. The Bank Facility also contains covenants relating to the population covered by the Company's network and number of customers, as well as customary representations, warranties, indemnities, conditions precedent to borrowing, and events of default. Loans under the Bank Facility are available to fund capital expenditures related to the construction of the Company's PCS network, the acquisition of related businesses, working capital needs of the Company, and customer acquisition costs. All indebtedness under the Bank Facility will constitute senior debt. The terms of the Bank Facility allow the Company to incur senior subordinated debt with gross proceeds of not more than $250,000. As of December 31, 1999 and September 30, 2000, the Company has drawn $300,000 of advances under Term Loan A and Term Loan B. Senior Subordinated Discount Notes On May 11, 1999, Tritel PCS, a wholly-owned subsidiary of the Company, issued unsecured senior subordinated discount notes with a principal amount at maturity of $372,000. Such notes were issued at a discount from their principal amount at maturity for proceeds of $200,240. No interest will be paid on the notes prior to May 15, 2004. Thereafter, Tritel PCS will be required to pay interest semiannually at 12 3/4% per annum beginning on November 15, 2004 until maturity of the notes on May 15, 2009. The notes are fully unconditionally guaranteed on a joint and several basis by Tritel and by Tritel Communications, Inc. and Tritel Finance, Inc., both of which are wholly-owned subsidiaries of Tritel PCS. (See Note 20.) The notes are subordinated in right of payment to amounts outstanding under the Company's Bank Facility and to any future subordinated indebtedness of Tritel PCS or the guarantors. The indenture governing the notes limit, among other things, the Company's ability to incur additional indebtedness, pay dividends, sell or exchange assets, repurchase its stock, or make investments. Federal Communications Commission Debt The Federal Communications Commission provided below market rate financing for 90% of the bid price of the C-Block PCS licenses and 80% of the bid price of the F-Block PCS licenses. Such Federal Communications Commission debt is secured by all of the Company's rights and interest in the licenses financed. The debt incurred in 1996 by the Company for the purchase of the C-Block PCS licenses totaled $63,890 (undiscounted). The debt bears interest at 7%; however, based on the Company's estimate of borrowing costs F-17 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) for similar debt, a rate of 10% was used to determine the debt's discounted present value of $52,700. As discussed in Note 4, the Company elected to disaggregate and return one-half of the broadcast spectrum of the C-block licenses. The Federal Communications Commission permitted such spectrum to be returned effective as of the original purchase. As a result, the Company reduced the discounted debt due to the Federal Communications Commission for such licenses by $27,410. F-Block licenses were granted in 1997. The debt incurred by the Company for the purchase of such licenses totaled $28,167 (undiscounted). The debt bears interest at 6.125%, however; based on the Company's estimate of borrowing costs for similar debt, a rate of 10% was used to determine the debt's discounted present value of $23,116. In the acquisition of Central Alabama Partnership, LP 132 on January 7, 1999, the Company assumed debt of $6,072 payable to the Federal Communications Commission for the licenses acquired. Additionally, certain licenses and the related Federal Communications Commission debt for those licenses were retained by the Predecessor Company. The discounted carrying amount of the debt for the licenses retained by the Predecessor Company was $15,889. All the scheduled interest payments on the Federal Communications Commission debt were suspended for the period from January 1997 through March 1998 by the Federal Communications Commission. Payments of such suspended interest resumed in July 1998 with the total suspended interest due in eight quarterly payments through April 30, 2000. The Company is required to make quarterly principal and interest payments on the Federal Communications Commission debt. Notes Payable At December 31, 1998, the Company had $22,100 payable under a $28,500 loan agreement with a supplier. The loan agreement was secured by a pledge of the membership equity interests of certain members of Predecessor Company management and the interest rate was 9%. Amounts outstanding under this loan agreement were repaid in January 1999. At December 31, 1998, the Predecessor Company had a $1,000 line of credit with a commercial bank, that expired July 27, 1999 bearing interest at the bank's prime rate of interest plus 1% at December 31, 1998. The amount outstanding on the line of credit was $305 at December 31, 1998. This line of credit related specifically to licenses that were retained by the Predecessor Company. Amounts outstanding under this loan agreement were repaid in January 1999. Notes Payable to Related Party In March 1997, the Predecessor Company entered into a loan agreement for a $5,700 long-term note payable to Southern Farm Bureau Life Insurance Company ("SFBLIC"). SFBLIC was a member of Mercury Southern, LLC, which was a member of the Predecessor Company. This note was secured by a pledge of the membership equity interests of certain members of Predecessor Company management and interest accrued annually at 10% on the anniversary date of the note. At December 31, 1998, the balance of the note was $6,270 as a result of the capitalization of the first year's interest. The indebtedness under the note was convertible into equity at the face amount at any time at the option of SFBLIC, subject to Federal Communications Commission equity ownership limitations applicable to entrepreneurial block license holders. The Predecessor Company and SFBLIC subsequently negotiated a revised arrangement under which the amount due of $6,270 plus accrued F-18 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) interest of $476 was not paid but instead was converted into $8,976 of members' equity in the Predecessor Company on January 7, 1999. The $2,230 preferred return to the investor was accounted for as a financing cost during the year ended December 31, 1999. The interest accrued at the contractual rate was capitalized during the accrual period. As of December 31, 1999, the following is a schedule of future minimum principal payments of the Company's long-term debt due within five years and thereafter:
December 31, 1999 ------------ December 31, 2000............................................... $ 923 December 31, 2001............................................... 1,004 December 31, 2002............................................... 5,567 December 31, 2003............................................... 23,548 December 31, 2004............................................... 30,483 Thereafter...................................................... 657,950 --------- 719,475 Less unamortized discount....................................... (160,836) --------- Total......................................................... $ 558,639 =========
(9) INTEREST RATE SWAP AGREEMENTS As of December 31, 1999 and September 30, 2000, the Company was a party to interest rate swap agreements with a total notional amount of $200,000. The agreements establish a fixed effective rate of 9.05% on $200,000 of the current balance outstanding under the Bank Facility through the earlier of March 31, 2002 or the date on which the Company achieves operating cash flow breakeven. (10) REDEEMABLE PREFERRED STOCK Series A Preferred Stock The series A preferred stock, with respect to dividend rights and rights on liquidation, dissolution or winding up, ranks on a parity basis with the series B preferred stock, and ranks senior to series C preferred stock, series D preferred stock and common stock. The holders of series A preferred stock are entitled to receive cumulative quarterly cash dividends at the annual rate of 10% multiplied by the liquidation preference, which is equal to $1,000 per share plus declared but unpaid dividends. Tritel may elect to defer payment of any such dividends until the date on which the 42nd quarterly dividend payment is due, at which time, and not earlier, all deferred payments must be made. Except as required by law or in certain circumstances, the holders of the series A preferred stock do not have any voting rights. The series A preferred stock is redeemable, in whole but not in part, at the option of Tritel on or after January 15, 2009 and at the option of the holders of the series A preferred stock on or after January 15, 2019. Additionally, on or after January 15, 2007, AT&T Wireless, and qualified transferees, have the right to convert each share of series A preferred stock into shares of class A common stock. The number of shares the holder will receive upon conversion will be the liquidation preference per share divided by the market price of class A common stock times the number of shares of series A preferred stock to be converted. F-19 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) The Company issued 90,668 shares of series A preferred stock with a stated value of $90,668 to AT&T Wireless on January 7, 1999. Series B Preferred Stock The series B preferred stock ranks on a parity basis with the series A preferred stock and is identical in all respects to the series A preferred stock, except: . the series B preferred stock is redeemable at any time at the option of Tritel, . the series B preferred stock is not convertible into shares of any other security issued by Tritel, and . the series B preferred stock may be issued by Tritel pursuant to an exchange event as defined in the Restated Certification of Incorporation. No series B preferred stock has been issued by the Company. (11) STOCKHOLDERS' EQUITY The Predecessor Companies were organized as limited liability corporations (LLC) and as such had no outstanding stock. Owners (members) actually held a membership interest in the LLC. As a result, the investment of those members in the Predecessor Companies is reflected as contributed capital--Predecessor Company in the accompanying balance sheet. On January 7, 1999, the Company issued stock to the Predecessor Company as well as other parties as described herein. Preferred Stock Following is a summary of the preferred stock of the Company: 3,100,000 shares of authorized preferred stock, par value $.01 per share (the "preferred stock"), 1,100,000 of which have been designated as follows: . 200,000 shares designated "Series A Convertible Preferred Stock" (the "series A preferred stock"), 10% redeemable convertible, $1,000 per share stated and liquidation value (See Note 10); . 300,000 shares designated "Series B Preferred Stock" (the "series B preferred stock"), 10% cumulative, $1,000 per share stated and liquidation value (See Note 10); . 500,000 shares designated "Series C Convertible Preferred Stock" (the "series C preferred stock"), 6.5% cumulative convertible, $1,000 per share stated and liquidation value; and . 100,000 shares designated "Series D Convertible Preferred Stock" (the "series D preferred stock"), 6.5% cumulative convertible, $1,000 per share stated and liquidation value. Series C Preferred Stock Series C preferred stock (1) ranks junior to the series A preferred stock and the series B preferred stock with respect to dividend rights and rights on liquidation, dissolution or winding up, (2) ranks junior to the series D preferred stock with respect to rights on a statutory liquidation, (3) ranks on a parity basis with the series D F-20 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) preferred stock with respect to rights on liquidation, dissolution or winding up, except a statutory liquidation, (4) ranks on a parity basis with series D preferred stock and common stock with respect to dividend rights, and (5) ranks senior to the common stock and any other series or class of the Company's common or preferred stock, now or hereafter authorized, other than series A preferred stock, series B preferred stock or series D preferred stock, with respect to rights on liquidation, dissolution and winding up. Holders of series C preferred stock are entitled to dividends in cash or property when, as and if declared by the Board of Directors of Tritel. Upon any liquidation, dissolution or winding up of Tritel, holders of series C preferred stock are entitled to receive, after payment to any stock ranking senior to the series C preferred stock, a liquidation preference equal to (1) the quotient of the aggregate paid-in-capital of all series C preferred stock held by a stockholder divided by the total number of shares of series C preferred stock held by that stockholder plus (2) declared but unpaid dividends on the series C preferred stock, if any, plus (3) an amount equal to interest on the invested amount at the rate of 6 1/2% per annum, compounded quarterly. The holders of the series C preferred stock have the right at any time to convert each share of series C preferred stock, and upon the initial public offering in December 1999, each share of series C preferred stock automatically converted into shares of class A common stock of and class D common stock. The number of shares the holder received upon conversion was determined by dividing the aforementioned liquidation preference by the conversion price in effect at the time of $2.50 per share. On all matters to be submitted to the stockholders of Tritel, the holders of series C preferred stock shall have the right to vote on an as-converted basis as a single class with the holders of the common stock. Additionally, the affirmative vote of the holders of a majority of the series C preferred stock is required to approve certain matters. The series C preferred stock is not redeemable. The Company issued 18,262 shares of series C preferred stock with a stated value of $18,262 to the Predecessor Company on January 7, 1999 in exchange for certain of its assets, liabilities and continuing operations. The stock was recorded at the historical cost of the assets and liabilities acquired from the Predecessor Company since, for accounting purposes, this transaction was accounted for as a reorganization of the Predecessor Company into a C corporation and a name change to Tritel. The Company also issued 14,130 shares of series C preferred stock with a stated value of $14,130 to the Predecessor Company on January 7, 1999 in exchange for cash of $14,130. In the same transaction, the Company also issued 149,239 shares of series C preferred stock with a stated value of $149,239 to investors on January 7, 1999 in exchange for cash. The stock was recorded at its stated value and the costs associated with this transaction have been offset against equity. Additionally, the Company issued 2,602 shares of series C preferred stock with a stated value of $2,602 to Central Alabama Partnership, LP 132 on January 7, 1999 in exchange for its net assets. The stock was recorded at its stated value and the assets and liabilities were recorded at estimated fair values. All of the series C preferred stock outstanding converted into 73,349,620 shares of class A and 4,962,804 shares of class D common stock upon the closing of the initial public offering on December 13, 1999. Series D Preferred Stock The series D preferred stock (1) ranks junior to the series A preferred stock and the series B preferred stock with respect to dividend rights and rights on liquidation, dissolution or winding up, (2) ranks senior to the series C preferred stock with respect to rights on a statutory liquidation, (3) ranks on a parity basis with series C preferred stock with respect to rights on liquidation, dissolution and winding up, except a statutory F-21 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) liquidation, (4) ranks on a parity basis with series C preferred stock and common stock with respect to dividend rights, and (5) ranks senior to the common stock and any other series or class of Tritel's common or preferred stock, now or hereafter authorized, other than series A preferred stock, series B preferred stock or series C preferred stock, with respect to rights on liquidation, dissolution and winding up. Subject to the preceding sentence, the series D preferred stock is identical in all respects to the series C preferred stock, except: . the series D preferred stock is convertible into an equivalent number of shares of series C preferred stock at any time. This stock is then convertible to common stock at the conversion rate of the original series C preferred stock set forth on the date of the initial public offering, or 18,463,121 shares of class A common stock and 1,249,207 shares of class D common stock; . the liquidation preference for series D preferred stock equals $1,000 per share plus declared but unpaid dividends plus an amount equal to interest on $1,000 per share at the rate of 6 1/2% per annum, compounded quarterly, from the date of issuance of such share to and including the date of the payment; . the holders of series D preferred stock do not have any voting rights, other than those required by law or in certain circumstances; and . shares of series D preferred stock are not automatically convertible upon an initial public offering of the Company's stock. The Company issued 46,374 shares of series D preferred stock with a stated value of $46,374 to AT&T Wireless on January 7, 1999. Common Stock Following is a summary of the common stock of the Company: . 1,016,000,009 shares of common stock, par value $.01 per share (the "common stock"), which have been designated as follows: . 500,000,000 shares designated "Class A Voting Common Stock" (the "class A common stock"), . 500,000,000 shares designated "Class B Non-Voting Common Stock" (the "class B common stock"), . 4,000,000 shares designated "Class C Common Stock" (the "class C common stock"), . 12,000,000 shares designated "Class D Common Stock" (the "class D common stock") and . nine shares designated "Voting Preference Common Stock" (the "voting preference common stock") The common stock of Tritel is divided into two groups, the "non-tracked common stock," which is comprised of the class A common stock, the class B common stock and the voting preference common stock, and the "tracked common stock," which is comprised of the class C common stock and class D common stock. Each share of common stock is identical, and entitles the holder thereof to the same rights, powers and privileges of stockholders under Delaware law, except: . dividends on the tracked common stock track the assets and liabilities of Tritel C/F Holding Corp., a subsidiary of Tritel; . rights on liquidation, dissolution or winding up of Tritel of the tracked common stock track the assets and liabilities of Tritel C/F Holding Corp.; F-22 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) . the class A common stock, together with the series C preferred stock, has 4,990,000 votes, the class B common stock has no votes, the class C common stock has no votes, the class D common stock has no votes and the voting preference common stock has 5,010,000 votes, except that in any matter requiring a separate class vote of any class of common stock or a separate vote of two or more classes of common stock voting together as a single class, for the purposes of such a class vote, each share of common stock of such classes will be entitled to one vote per share; . in the event the Federal Communications Commission indicates that the class A common stock and the voting preference stock (1) may be voted as a single class on all matters, (2) may be treated as a single class for all quorum requirements and (3) may have one vote per share, then, absent action by the Board of Directors and upon an affirmative vote of 66 2/3% or more of the class A common stock, Tritel must seek consent from the Federal Communications Commission to permit the class A common stock and the voting preference common stock to vote and act as a single class in the manner described above; . the holders of shares of class B common stock shall be entitled to vote as a separate class on any amendment, repeal or modification of any provision of the restated certificate of incorporation that adversely affects the powers, preferences or special rights of the holders of the class B common stock; . each share of class B common stock may be converted, at any time at the holder's option, into one share of class A common stock; . each share of class A common stock may be converted, at any time at the holder's option, into one share of class B common stock; and . in the event the Federal Communications Commission indicates that it will permit the conversion of tracked common stock into either class A common stock or class B common stock, then, absent action by the Board of Directors and upon an affirmative vote of 66 2/3% or more of the class A common stock, such conversion will be allowed by Tritel at the option of the holders of the tracked common stock. As of December 31, 1999, the Company has issued 10,981,932 shares of class A common stock, 1,380,448 shares of class C common stock and 6 shares of voting preference common stock to certain members of management of the Company. The class A and class C common stock issued to management are restricted shares subject to repurchase agreements which require the holders to sell to the Company at a $0.01 repurchase price per share, the number of shares that would be equal to $2.50 per share on specified "Trigger Dates" including a change of control, termination of employment, or the seventh anniversary of the agreement. On the "Trigger Date," the holders must sell to the Company the number of shares necessary, based on the then current fair value of the stock based on the average closing price for the most recent ten trading days, to reduce the number of shares of stock held by an amount equal to the number of shares then held by the holder times $2.50 per share (in essence, requiring the holders to pay $2.50 per share for their shares of stock). Also, in the event the Company does not meet certain performance measurements, certain members of management will be required to sell to the Company a fixed number of shares at $0.01 per share. Based on the terms of the repurchase agreement, this plan is being accounted for as a variable stock plan. Accordingly, the Company will record Stock-based Compensation Expense over the vesting period for the difference between the quoted market price of the Company's stock at each measurement date and the current fair value of the stock to be repurchased from the individuals. Subsequent to year end, the Board of Directors approved a plan to modify these awards to remove the provision that requires management to surrender a portion of their shares. This modification, which was completed during the second quarter of 2000, established the measurement date upon which the value of the awards were fixed. Based on the market price of Tritel's common stock at the measurement date, Tritel will record additional non-cash compensation expense related to F-23 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) these shares for the period from 2000 to 2004 of approximately $112,000. In addition, Tritel will record a maximum of $26,000 in cash compensation expense during the period from 2000 to 2004 to reimburse the participants for the tax consequences of the modification of these awards. As of the measurement date, Tritel charged deferred compensation as a separate component of stockholders' equity with a corresponding credit against additional paid-in capital. As of September 30, 2000, the deferred compensation balance was $56,897. In conjunction with the Company's agreement with Mr. Jerry M. Sullivan, Jr. (see Note 17), the Company agreed to repurchase 1,276,000 shares of the officer's stock at $0.01 per share and allow the officer to become fully vested in his remaining 1.8 million shares without restriction or repurchase rights. As a result, the Company recorded $4,500 as compensation expense and additional paid in capital. Such amount represents the fair value of the stock at the time of the agreement without restrictions or repurchase rights. (12) STOCK OPTION PLANS In January 1999, the Company adopted a stock option plan for employees and a stock option plan for non-employee directors. Tritel's 1999 Stock Option Plan (the "Stock Option Plan") authorizes the grant of certain tax-advantaged stock options, nonqualified stock options and stock appreciation rights for the purchase of an aggregate of up to 10,462,400 shares of common stock of Tritel. The Stock Option Plan benefits qualified officers, employee directors and other key employees of, and consultants to, Tritel and its subsidiaries in order to attract and retain those persons and to provide those persons with appropriate incentives. The Stock Option Plan also allows grants or sales of common stock to those persons. The maximum term of any stock option to be granted under the Stock Option Plan is ten years. Grants of options under the Stock Option Plan are determined by the Board of Directors or a compensation committee designated by the Board. The exercise price of incentive stock options under the Stock Option Plan must not be less than the fair market value of the common stock on the grant date and the exercise price of all other options must not be less that 75% of such fair market value. The Stock Option Plan will terminate in 2009 unless extended by amendment. As of December 31, 1999, 4,585,028 restricted shares and 2,081,422 stock options with an average exercise price of $18.05 per share were granted under the Stock Option Plan. The restricted stock is subject to the repurchase agreements as discussed in Note 11. The restricted shares will vest in varying percentages, up to 80% vesting, over five years. The remaining 20% will vest if the Company meets certain performance benchmarks for development and construction of its wireless PCS network. Stock options generally vest 25% on each of the first four anniversaries of the date of the grant. A portion of the stock options granted to employees in connection with the initial public offering vest 25% on the thirty-first day after grant and 25% on each of the first three anniversaries of the date of the grant. The stock options outstanding as of December 31, 1999 vest 100% upon a change of control. Tritel's 1999 Stock Option Plan for Non-employee Directors (the "Non- employee Directors Plan") authorizes the grant of certain nonqualified stock options for the purchase of an aggregate of up to 100,000 shares of common stock of Tritel. The Non-employee Directors Plan benefits non-employee directors of Tritel in order to attract and retain those persons and to provide those persons with appropriate incentives. The F-24 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) maximum term of any stock option to be granted under the Non-employee Directors Plan is ten years. Grants of options under the Non-employee Directors are determined by the Board of Directors. The exercise price of nonqualified stock options granted under the Non- employee Directors Plan must not be less than the fair market value of the common stock on the grant date. The Non-employee Directors Plan will terminate in 2009 unless extended by amendment. As of December 31, 1999, 45,000 options with an exercise price of $18 per share were outstanding under the Non-employee Directors Plan. These options vest 20% on the date of grant and an additional 20% on each of the first four anniversaries of the date of the grant and fully vest upon a change of control. The Company has adopted the disclosure only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." Accordingly, no compensation has been recognized for the stock options. If compensation cost had been determined based on the fair value at grant date for awards in 1999 in accordance with SFAS No. 123, the Company's net loss and net loss per share would have increased to the pro forma amounts indicated below: Net loss--As reported.............................................. $247,454 Net loss--Pro forma................................................ $250,608 Net loss per share--As reported.................................... $ 33.25 Net loss per share--Pro forma...................................... $ 33.66
The fair value of each option on the date of grant is estimated using the Black-Scholes option-pricing model with the following weighted-average assumptions: Expected life........................................................ 5 years Risk-free interest rate.............................................. 6.16% Expected volatility.................................................. 56% Dividend yield....................................................... 0%
The weighted average fair value of options granted during 1999 was $8.52 per share. At December 31, 1999, 9,000 options were exercisable. The following table summarizes information about stock options outstanding at December 31, 1999:
Exercise Price Number of Remaining Per Share Options Outstanding Contractual Life -------------- ------------------- ---------------- $18.00 2,119,572 10 years $31.69 6,850 10 years
(13) FAIR VALUE OF FINANCIAL INSTRUMENTS The following disclosure of the estimated fair value of financial instruments is made pursuant to SFAS No. 107, "Disclosures About Fair Value of Financial Instruments." Fair value estimates are subject to inherent limitations. Estimates of fair value are made at a specific point in time, based on relevant market information and information about the financial instrument. The estimated fair values of financial instruments are not necessarily indicative of amounts the Company might realize in actual market transactions. Estimates of fair value are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. The carrying F-25 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) amounts at December 31, 1998 and 1999 for cash and cash equivalents, accounts receivable, notes receivable, accounts payable, accrued liabilities, notes payable, and variable rate long-term debt are reasonable estimates of their fair values. As of December 31, 1999, the carrying amount of fixed-rate long- term debt is believed to approximate fair value because such debt was discounted to reflect market interest rate at inception and such discount is believed to be approximate for valuation of this debt. (14) RELATED PARTY TRANSACTIONS On January 7, 1999, the Company entered into a secured promissory note agreement under which it agreed to lend up to $2,500 to the Predecessor Company. Interest on advances under the loan agreement is 10% per year. The interest will compound annually and interest and principal are due at maturity of the note. The note is secured by the Predecessor Company's ownership interest in the Company. Any proceeds from the sales of licenses by the Predecessor Company, net of the repayment of any Federal Communications Commission debt, are required to be applied to the note balance. If the note has not been repaid within five years, it will be repaid through a reduction of the Predecessor Company's interest in the Company based on a valuation of the Company's stock at that time. The balance of this note at December 31, 1999 was approximately $2,300. (15) ASSETS AND LIABILITIES RETAINED BY PREDECESSOR COMPANY Certain assets and liabilities, with carrying amounts of $22,070 and $17,367, respectively, principally for certain Federal Communications Commission licenses and related Federal Communications Commission debt, which were retained by the Predecessor Company have been reflected in these financial statements as a distribution to the Predecessor Company. The Predecessor Company is holding such assets and liabilities but is not currently developing the PCS markets. Of the assets retained by the Predecessor Company, Tritel was granted an option to acquire certain PCS licenses for approximately 1.2 million shares of class A common stock. During May 1999, Tritel notified the Predecessor Company of its intent to exercise this option. Such licenses will be transferred to Tritel after approval by the Federal Communications Commission. Tritel has committed to sell to AT&T Wireless or its designee such licenses. (16) LEASES The Company leases office space, equipment, and co-location tower space under noncancelable operating leases. Expense under operating leases was $3, $334, $7,200, $3,754 and $16,616 for the years ended December 31, 1997, 1998 and 1999, and for the nine months ended September 30, 1999 and 2000, respectively. Management expects that in the normal course of business these leases will be renewed or replaced by similar leases. The leases extend through 2008. Future minimum lease payments under these leases at December 31, 1999 are as follows: 2000................................................................. $13,940 2001................................................................. 13,846 2002................................................................. 13,731 2003................................................................. 13,239 2004................................................................. 8,955 Thereafter........................................................... 8,881 ------- Total.............................................................. $72,592 =======
F-26 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (17) COMMITMENTS AND CONTINGENCIES Effective September 1, 1999, Tritel, Inc. and Mr. Jerry M. Sullivan, Jr. entered into an agreement to redefine Mr. Sullivan's relationship with Tritel, Inc. and its subsidiaries. Mr. Sullivan has resigned as an officer and a director of Tritel, Inc. and all of its subsidiaries. Mr. Sullivan will retain the title Executive Vice President of Tritel, Inc. through December 31, 2001; however, under the agreement, he is not permitted to represent the Company nor will he perform any functions for Tritel, Inc. As part of the agreement, Mr. Sullivan will also receive an annual salary of $225 and an annual bonus of $113 through December 31, 2002. Mr. Sullivan became fully vested in 1,800,000 shares of class A common stock and returned all other shares held by him, including his voting preference common stock to Tritel, Inc. Accordingly, the Company has recorded $5,800 in additional compensation expense during 1999. The $5,800 was determined pursuant to the settlement of Mr. Sullivan's employment relationship with the Company, and includes $4,500 for the grant of additional stock rights, $225 annual salary and $113 annual bonus through December 31, 2002, and other related amounts. Mr. Sullivan had served as Director, Executive Vice President and Chief Operating Officer of Tritel, Inc. since 1993. The foregoing agreements supersede the employment relationship between Tritel, Inc. and Mr. Sullivan defined by the Management Agreement and Mr. Sullivan's employment agreement. In December 1998, the Company entered into an acquisition agreement with an equipment vendor whereby the Company agreed to purchase a minimum of $300,000 of equipment, software and certain engineering services over a five-year period in connection with the construction of its wireless telecommunications network. The Company agreed that the equipment vendor would be the exclusive provider of such equipment during the term of the agreement. As part of this agreement, the vendor advanced $15,000 to the Company at the closing of the transactions described herein. The $15,000 deferred credit is accounted for as a reduction in the cost of the equipment as the equipment is purchased. F-27 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (18) SUPPLEMENTAL CASH FLOW INFORMATION
Nine Months Years Ended December 31, Ended September 30, ------------------------ ----------------------- 1997 1998 1999 1999 2000 ------------------------ ----------- ----------- (unaudited) (unaudited) Cash paid for interest, net of amounts capitalized.......... $ -- $ -- $ 14,362 $ 9,201 $25,633 Significant non-cash investing and financing activities: Long-term debt incurred to obtain Federal Communications Commission licenses, net of discount.. 23,116 -- -- -- -- Capitalized interest and discount on debt........... 6,799 7,614 10,062 4,599 2,796 Deposits applied to purchase of Federal Communications Commission licenses........ 5,000 -- -- -- -- Capital expenditures included in accounts payable and accrued liabilities................ -- 5,762 81,913 33,066 49,416 Election of Federal Communications Commission disaggregation option for return of spectrum: Reduction in Federal Communications Commission licensing costs........... -- 35,442 -- -- -- Reduction in accrued interest payable and long- term debt................. -- 33,028 -- -- -- Preferred stock issued in exchange for assets and liabilities.............. -- -- 156,837 156,837 --
F-28 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (19) CONDENSED CONSOLIDATING FINANCIAL STATEMENTS The following condensed consolidating financial statements as of December 31, 1999 and September 30, 2000 and for the year ended December 31, 1999 and for the three months ended September 30, 1999 and 2000, are presented for Tritel, Tritel PCS, those subsidiaries of Tritel PCS who serve as guarantors and those subsidiaries who do not serve as guarantors of the senior subordinated discount notes. Condensed Consolidating Balance Sheet As of December 31, 1999
Non Tritel Guarantor Guarantor Consolidated Tritel, Inc. PCS, Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ --------- ------------ ------------ ------------ ------------ Current assets: Cash and cash equivalents........... $ -- $613,999 $ (4,730) $ -- $ -- $ 609,269 Other current assets... 2,462 1,407 17,426 -- -- 21,295 Intercompany receivables........... 1,799 210,673 -- -- (212,472) -- -------- -------- -------- -------- --------- ---------- Total current assets.............. 4,261 826,079 12,696 -- (212,472) 630,564 Restricted cash......... -- 6,594 -- -- -- 6,594 Property and equipment, net.................... -- -- 262,343 -- -- 262,343 Licenses and other intangibles............ 59,508 -- -- 201,946 -- 261,454 Investment in subsidiaries........... 445,301 73,286 -- -- (518,587) -- Other long term assets.. -- 62,633 82 -- (27,308) 35,407 -------- -------- -------- -------- --------- ---------- Total assets......... $509,070 $968,592 $275,121 $201,946 $(758,367) $1,196,362 ======== ======== ======== ======== ========= ========== Current liabilities: Accounts payable, accrued expenses and other current liabilities........... $ 29 $ 1,240 $111,257 $ 1,721 $ -- $ 114,247 Intercompany payables.. -- -- 196,950 15,522 (212,472) -- -------- -------- -------- -------- --------- ---------- Total current liabilities......... 29 1,240 308,207 17,243 (212,472) 114,247 Non-current liabilities: Long-term debt......... -- 516,734 27,121 40,982 (27,121) 557,716 Deferred income taxes and other............. 22,009 5,318 (20,024) 30,251 (187) 37,367 -------- -------- -------- -------- --------- ---------- Total liabilities.... 22,038 523,292 315,304 88,476 (239,780) 709,330 Series A redeemable convertible preferred stock.................. 99,586 -- -- -- -- 99,586 Stockholders' equity (deficit).............. 387,446 445,300 (40,183) 113,470 (518,587) 387,446 -------- -------- -------- -------- --------- ---------- Total liabilities, redeemable preferred stock and stockholders' equity.............. $509,070 $968,592 $275,121 $201,946 $(758,367) $1,196,362 ======== ======== ======== ======== ========= ==========
F-29 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Condensed Consolidating Balance Sheet As of September 30, 2000
Tritel PCS, Guarantor NonGuarantor Consolidated Tritel, Inc. Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ ----------- ------------ ------------ ------------ ------------ (unaudited) Current assets: Cash and cash equivalents........... $ -- $173,299 $ (4,513) $ -- $ -- $ 168,786 Other current assets... 4,708 915 40,280 -- -- 45,903 Intercompany receivables........... -- 630,789 -- -- (630,789) -- -------- -------- --------- -------- --------- ---------- Total current assets.............. 4,708 805,003 35,767 -- (630,789) 214,689 Restricted cash......... -- 4,849 -- -- -- 4,849 Property and equipment, net.................... -- -- 503,436 -- -- 503,436 Licenses and other intangibles............ 55,216 -- -- 202,281 -- 257,497 Investment in subsidiaries........... 276,538 (73,842) -- -- (202,696) -- Other long term assets.. -- 76,046 582 -- (43,656) 32,972 -------- -------- --------- -------- --------- ---------- Total assets......... $336,462 $812,056 $ 539,785 $202,281 $(877,141) $1,013,443 ======== ======== ========= ======== ========= ========== Current liabilities: Accounts payable, accrued expenses and other current liabilities........... $ 2,014 $ 1,091 $ 78,476 $ 1,521 $ -- $ 83,102 Intercompany payables.. 1,020 -- 613,312 16,457 (630,789) -- -------- -------- --------- -------- --------- ---------- Total current liabilities......... 3,034 1,091 691,788 17,978 (630,789) 83,102 Non-current liabilities: Long-term debt......... -- 537,783 42,409 40,957 (42,409) 578,740 Deferred income taxes and other liabilities........... 21,998 (3,356) (7,471) 30,247 (1,247) 40,171 -------- -------- --------- -------- --------- ---------- Total liabilities.... 25,032 535,518 726,726 89,182 (674,445) 702,013 Series A redeemable convertible preferred stock.................. 106,386 -- -- -- -- 106,386 Stockholders' equity (deficit).............. 205,044 276,538 (186,941) 113,099 (202,696) 205,044 -------- -------- --------- -------- --------- ---------- Total liabilities, redeemable preferred stock and stockholders' equity.............. $336,462 $812,056 $ 539,785 $202,281 $(877,141) $1,013,443 ======== ======== ========= ======== ========= ==========
F-30 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Condensed Consolidating Statement of Operations For the Year Ended December 31, 1999
Tritel PCS, Guarantor NonGuarantor Consolidated Tritel, Inc. Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ ------------ ------------ ------------ ------------ ------------ Revenues Service................ $ -- $ -- $ 1,186 $ -- $ -- $ 1,186 Roaming................ -- -- 3,421 -- -- 3,421 Equipment.............. -- -- 2,152 -- -- 2,152 Other.................. -- -- 1,215 1,038 (2,253) -- --------- -------- -------- ----- ------ --------- Total revenues......... -- -- 7,974 1,038 (2,253) 6,759 --------- -------- -------- ----- ------ --------- Operating expenses: Costs of services and equipment............. -- -- 6,966 -- -- 6,966 Technical operations... -- -- 18,459 -- -- 18,459 General and administrative........ 56 45 25,065 2 (2,253) 22,915 Sales and marketing.... -- -- 20,404 -- -- 20,404 Stock-based compensation.......... 190,664 -- -- -- -- 190,664 Depreciation and amortization.......... 5,620 -- 6,621 598 -- 12,839 --------- -------- -------- ----- ------ --------- Total operating expenses.............. 196,340 45 77,515 600 (2,253) 272,247 --------- -------- -------- ----- ------ --------- Operating loss......... (196,340) (45) (69,541) 438 -- (265,488) Interest income......... 170 16,553 255 -- (187) 16,791 Financing cost.......... -- -- (2,230) -- -- (2,230) Interest expense........ -- (24,924) (233) -- 187 (24,970) --------- -------- -------- ----- ------ --------- Income (loss) before income taxes.......... (196,170) (8,416) (71,749) 438 -- (275,897) Income tax benefit (expense).............. 2,051 3,135 23,420 (163) -- 28,443 --------- -------- -------- ----- ------ --------- Net income (loss)...... $(194,119) $ (5,281) $(48,329) $ 275 $ -- $(247,454) ========= ======== ======== ===== ====== ========= Condensed Consolidating Statement of Operations For the Nine Months Ended September 30, 1999 Tritel PCS, Guarantor NonGuarantor Consolidated Tritel, Inc. Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ ------------ ------------ ------------ ------------ ------------ (unaudited) Revenues Service................ $ -- $ -- $ 10 $ -- $ -- $ 10 Roaming................ -- -- 88 -- -- 88 Equipment.............. -- -- 81 -- -- 81 --------- -------- -------- ----- ------ --------- Total revenues......... -- -- 179 -- -- 179 --------- -------- -------- ----- ------ --------- Operating expenses: Costs of services and equipment............. -- -- 189 -- -- 189 Technical operations... -- -- 8,931 -- -- 8,931 General and administrative........ 3 45 17,364 2 -- 17,414 Sales and marketing.... -- -- 6,621 -- -- 6,621 Depreciation and amortization.......... 4,203 -- 1,389 9 -- 5,601 --------- -------- -------- ----- ------ --------- Total operating expenses.............. 4,206 45 34,494 11 -- 38,756 --------- -------- -------- ----- ------ --------- Operating loss......... (4,206) (45) (34,315) (11) -- (38,577) Interest income......... 114 10,178 159 -- -- 10,451 Financing cost.......... -- -- (2,230) -- -- (2,230) Interest expense........ -- (12,038) -- -- -- (12,038) --------- -------- -------- ----- ------ --------- Income (loss) before income taxes.......... (4,092) (1,905) (36,386) (11) -- (42,394) Income tax benefit...... 1,565 729 11,344 -- -- 13,638 --------- -------- -------- ----- ------ --------- Net loss............... $ (2,527) $ (1,176) $(25,042) $ (11) $ -- $ (28,756) ========= ======== ======== ===== ====== =========
F-31 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Condensed Consolidating Statement of Operations For the Nine Months Ended September 30, 2000
Tritel Guarantor Non Guarantor Consolidated Tritel, Inc. PCS, Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ --------- ------------ ------------- ------------ ------------ (unaudited) Revenues Service................ $ -- $ -- $ 43,366 $ -- $ -- $ 43,366 Roaming................ -- -- 24,120 -- -- 24,120 Equipment.............. -- -- 8,511 -- -- 8,511 Other.................. -- -- -- 5,906 (5,906) -- -------- -------- --------- ------- ------- --------- Total revenue........ -- -- 75,997 -- (5,906) 75,997 -------- -------- --------- ------- ------- --------- Operating expenses Costs of services and equipment............. -- -- 51,961 -- -- 51,961 Technical operations... -- -- 38,103 -- -- 38,103 General and administrative........ 3,042 -- 48,145 7 (5,906) 45,288 Sales and marketing.... -- -- 47,339 -- -- 47,339 Stock-based compensation.......... 79,092 -- -- -- -- 79,092 Depreciation and amortization.......... 4,292 -- 37,696 3,081 -- 45,069 -------- -------- --------- ------- ------- --------- Total operating expenses............ 86,426 -- 223,244 3,088 (5,906) 306,852 -------- -------- --------- ------- ------- --------- Operating income (loss)................ (86,426) -- (147,247) 2,818 -- (230,855) Interest income......... 251 22,194 447 -- (2,391) 20,501 Interest expense........ -- (44,050) (2,409) (3,192) 2,391 (47,260) -------- -------- --------- ------- ------- --------- Loss before income taxes................. (86,175) (21,856) (149,209) (374) -- (257,614) Income tax benefit...... 11 221 1,621 4 -- 1,857 -------- -------- --------- ------- ------- --------- Net loss............. $(86,164) $(21,635) $(147,588) $ (370) $ -- $(255,757) ======== ======== ========= ======= ======= =========
F-32 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Condensed Consolidating Statement of Cash Flows For the Year Ended December 31, 1999
Tritel Guarantor Non Guarantor Consolidated Tritel, Inc. PCS, Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ --------- ------------ ------------- ------------ ------------ Net cash (used in) provided by operating activities............. $ (3,648) $ 3,554 $ (50,981) $ -- $-- $ (51,075) --------- --------- --------- ------- ---- --------- Cash flows from investing activities: Capital expenditures... -- -- (172,448) -- -- (172,448) Advance under notes receivable............ -- (7,500) (50) -- -- (7,550) Investment in subsidiaries.......... (376,718) 376,718 -- -- -- -- Capitalized interest on debt.................. -- -- (3,863) (9,760) -- (13,623) Other.................. (325) (6,883) -- -- -- (7,208) --------- --------- --------- ------- ---- --------- Net cash (used in) provided by investing activities............. (377,043) 362,335 (176,361) (9,760) -- (200,829) --------- --------- --------- ------- ---- --------- Cash flows from financing activities: Proceeds from long term debt.................. -- 300,000 -- -- -- 300,000 Proceeds from senior subordinated debt..... -- 200,240 -- -- -- 200,240 Repayments of notes payable............... (22,100) -- -- -- -- (22,100) Payment of debt issuance costs and other deferred charges............... (8,507) (30,202) -- -- -- (38,709) Intercompany receivable/payable.... 4,556 (236,928) 222,612 9,760 -- -- Proceeds from vendor discount.............. -- 15,000 -- -- -- 15,000 Issuance of preferred stock................. 163,370 -- -- -- -- 163,370 Issuance of common stock, net............ 242,526 -- -- -- -- 242,526 --------- --------- --------- ------- ---- --------- Net cash provided by financing activities... 379,845 248,110 222,612 9,760 -- 860,327 --------- --------- --------- ------- ---- --------- Net (decrease) increase in restricted cash, cash and cash equivalents............ (846) 613,999 (4,730) -- -- 608,423 Cash and cash equivalents at beginning of period.... 846 -- -- -- -- 846 --------- --------- --------- ------- ---- --------- Cash and cash equivalents at end of period................. $ -- $ 613,999 $ (4,730) $ -- $-- $ 609,269 ========= ========= ========= ======= ==== =========
F-33 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 1999
Tritel Guarantor Non Guarantor Consolidated Tritel, Inc. PCS, Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ --------- ------------ ------------- ------------ ------------ (unaudited) Net cash (used in) provided by operating activities............. $ (94) $(50,011) $ 21,407 $ -- $-- $ (28,698) --------- -------- -------- ------- ---- --------- Cash flows from investing activities: Capital expenditures... -- -- (80,189) -- -- (80,189) Advance under notes receivable............ -- (7,500) (50) -- -- (7,550) Investment in subsidiaries.......... (118,466) 118,466 -- -- -- -- Increase in restricted cash.................. -- (7,387) -- -- -- (7,387) Capitalized interest on debt.................. -- -- (5,617) (4,376) -- (9,993) Other.................. (325) -- -- -- -- (325) --------- -------- -------- ------- ---- --------- Net cash (used in) provided by investing activities............. (118,791) 103,579 (85,856) (4,376) -- (105,444) --------- -------- -------- ------- ---- --------- Cash flows from financing activities: Proceeds from long term debt.................. -- 500,240 -- -- -- 500,240 Repayments of notes payable............... (22,100) -- -- -- -- (22,100) Payment of debt issuance costs and other deferred charges............... (22,198) (14,363) -- -- -- (36,561) Intercompany receivable/payable.... 480 (68,105) 63,249 4,376 -- -- Proceeds from vendor discount.............. -- 15,000 -- -- -- 15,000 Issuance of preferred stock................. 162,703 -- -- -- -- 162,703 Other.................. -- (302) -- -- -- (302) --------- -------- -------- ------- ---- --------- Net cash provided by financing activities... 118,885 432,470 63,249 4,376 -- 618,980 --------- -------- -------- ------- ---- --------- Net increase (decrease) in restricted cash, cash and cash equivalents............ -- 486,038 (1,200) -- -- 484,838 Cash and cash equivalents at beginning of period.... -- -- 846 -- -- 846 --------- -------- -------- ------- ---- --------- Cash and cash equivalents at end of period................. $ -- $486,038 $ (354) $ -- $-- $ 485,684 ========= ======== ======== ======= ==== =========
F-34 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Condensed Consolidating Statement of Cash Flows For the Nine Months Ended September 30, 2000
Tritel Guarantor Non Guarantor Consolidated Tritel, Inc. PCS, Inc. Subsidiaries Subsidiaries Eliminations Tritel, Inc. ------------ --------- ------------ ------------- ------------ ------------ (unaudited) Net cash used in operating activities... $(3,051) $ (241) $(131,375) $ -- $-- $(134,667) ------- --------- --------- ------- ---- --------- Cash flows from investing activities: Capital expenditures... -- -- (304,241) -- -- (304,241) Decrease in other assets................ -- 1,745 (184) -- -- 1,561 Capitalized interest on debt.................. -- -- (1,460) (1,853) -- (3,313) ------- --------- --------- ------- ---- --------- Net cash provided by (used in) investing activities............. -- 1,745 (305,885) (1,853) -- (305,993) ------- --------- --------- ------- ---- --------- Cash flows from financing activities: Repayment of long term debt.................. -- -- -- (687) -- (687) Payment of debt issuance costs and other deferred charges............... -- (198) -- -- -- (198) Intercompany receivable/payable.... 1,989 (442,006) 437,477 2,540 -- -- Payment of stock issuance costs........ (195) -- -- -- -- (195) Proceeds from exercise of stock options...... 1,257 -- -- -- -- 1,257 ------- --------- --------- ------- ---- --------- Net cash provided by (used in) financing activities............. 3,051 (442,204) 437,477 1,853 -- 177 ------- --------- --------- ------- ---- --------- Net (decrease) increase in restricted cash, cash and cash equivalents............ -- (440,700) 217 -- -- (440,483) Cash and cash equivalents at beginning of period.... -- 613,999 (4,730) -- -- 609,269 ------- --------- --------- ------- ---- --------- Cash and cash equivalents at end of period................. $ -- $ 173,299 $ (4,513) $ -- $-- $ 168,786 ======= ========= ========= ======= ==== =========
The condensed combining financial statements for 1998 of Tritel and the Predecessor Company have been provided below to comply with the current requirement to show consolidating data for guarantors and non-guarantors for all periods presented. While Tritel and its subsidiaries were formed during 1998, their only activities in 1998 were the acquisition of property and equipment approximating $1,500 and losses totaling $32. The assets of the Predecessor Company and the assets acquired from AT&T Wireless and Central Alabama were transferred to Tritel and its subsidiaries during 1999. Therefore, the following statements do not correspond with the current corporate structure and do not show data by guarantor and non-guarantor relationship to the senior subordinated discount notes. F-35 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Combining Balance Sheet As of December 31, 1998
Predecessor Companies Tritel Eliminations Combined ----------- ------ ------------ -------- ASSETS Current assets: Cash and cash equivalents......... $ 845 $ 1 $ -- $ 846 Due from affiliates............... 1,817 -- (1,576) 241 Other current assets.............. 719 -- -- 719 -------- ------ ------- -------- Total current assets............ 3,381 1 (1,576) 1,806 Property and equipment, net......... 12,263 1,553 -- 13,816 Federal Communications Commission licensing costs.................... 71,466 -- -- 71,466 Other assets........................ 1,933 -- -- 1,933 -------- ------ ------- -------- Total assets.................... $ 89,043 $1,554 $(1,576) $ 89,021 ======== ====== ======= ======== LIABILITIES AND MEMBERS' EQUITY (DEFICIT) Current liabilities: Notes payable..................... $ 22,405 $ -- $ -- $ 22,405 Due to affiliates................. -- 1,576 (1,576) -- Accounts payable and accrued expenses......................... 10,496 10 -- 10,506 -------- ------ ------- -------- Total current liabilities....... 32,901 1,586 (1,576) 32,911 -------- ------ ------- -------- Non-current liabilities: Long-term debt.................... 51,599 -- -- 51,599 Note payable to related party..... 6,270 -- -- 6,270 Other liabilities................. 224 -- -- 224 -------- ------ ------- -------- Total non-current liabilities... 58,093 -- -- 58,093 -------- ------ ------- -------- Total liabilities............... 90,994 1,586 (1,576) 91,004 Contributed capital, net............ 13,497 -- -- 13,497 Deficit accumulated during development stage.................. (15,448) (32) -- (15,480) -------- ------ ------- -------- Total members' equity (deficit)...................... (1,951) (32) -- (1,983) -------- ------ ------- -------- Total liabilities and members' equity (deficit)............... $ 89,043 $1,554 $(1,576) $ 89,021 ======== ====== ======= ========
F-36 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Combining Statement of Operations For the Year Ended December 31, 1998
Predecessor Companies Tritel Combined ----------- ------ -------- Revenues: $ -- $-- $ -- -------- ---- -------- Operating expenses: Technical operations............................ 1,918 21 1,939 General and administrative...................... 4,937 10 4,947 Sales and marketing............................. 451 1 452 Depreciation and amortization................... 348 -- 348 -------- ---- -------- Total operating expenses...................... 7,654 32 7,686 -------- ---- -------- Operating loss.................................... (7,654) (32) (7,686) Interest income................................... 77 -- 77 Interest expense.................................. (722) -- (722) -------- ---- -------- Loss before extraordinary item.................... (8,299) (32) (8,331) Loss on return of spectrum........................ (2,414) -- (2,414) -------- ---- -------- Net loss.......................................... $(10,713) $(32) $(10,745) ======== ==== ========
Combining Statement of Cash Flows For the Year Ended December 31, 1998
Predecessor Companies Tritel Combined ----------- ------ -------- Net cash (used in) provided by operating activities....................................... $(10,039) $1,543 $(8,496) -------- ------ ------- Cash flows from investing activities: Purchase of property and equipment.............. (4,428) (1,542) (5,970) Capitalized interest on debt used to obtain Federal Communications Commission licenses..... (2,905) -- (2,905) -------- ------ ------- Net cash used in investing activities............. (7,333) (1,542) (8,875) -------- ------ ------- Cash flows from financing activities: Proceeds from notes payable to others........... 38,705 -- 38,705 Repayments of notes payable to others........... (21,300) -- (21,300) Payment of debt issuance costs and other deferred charges............................... (951) -- (951) -------- ------ ------- Net cash provided by financing activities......... 16,454 -- 16,454 -------- ------ ------- Net (decrease) increase in cash and cash equivalents...................................... (918) 1 (917) Cash and cash equivalents at beginning of year.... 1,763 -- 1,763 -------- ------ ------- Cash and cash equivalents at end of year.......... $ 845 $ 1 $ 846 ======== ====== =======
Tritel, Inc. was formed during 1998. Therefore, the 1997 combining financial information is identical to the Consolidated Financial Statements. F-37 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) (20) SUBSEQUENT EVENTS (unaudited) Merger On February 28, 2000, the Company agreed to merge with TeleCorp Wireless, Inc. (formerly known as TeleCorp PCS, Inc.) through a merger of each of the Company and TeleCorp Wireless, Inc. with wholly-owned subsidiaries of a newly formed holding company. The merger was consummated on November 13, 2000. The holding company was named TeleCorp PCS, Inc. The merger resulted in the exchange of 100% of the outstanding common and preferred stock of the Company and TeleCorp Wireless for common and preferred stock of TeleCorp PCS, Inc. TeleCorp PCS, Inc. is controlled by its voting preference common stockholders. Both the Company and TeleCorp Wireless are subsidiaries of TeleCorp PCS, Inc. In connection with the merger, the AT&T network membership license agreement was extended to July 2005. Furthermore, in the merger the common and preferred stock of the Company was cancelled and the capitalization of the merger- subsidiary became the capitalization of the Company. Accordingly, after the merger the Company had issued 1,000 shares of common stock at a par value of $0.01 per share issued, outstanding and owned by TeleCorp PCS, Inc. The historical carrying value of the redeemable preferred stock, the preferred stock and the common stock including additional paid-in capital will be accounted for as common stock and additional paid-in capital of the Company after the merger. Purchase of Licenses in Georgia and Florida Digital PCS, held licenses covering 2.0 million people in Florida and southern Georgia. These markets include the cities of Pensacola, Tallahassee, and Panama City, Florida and will not be part of the territory where the Company is allowed to operate absent AT&T Wireless's consent. As part of the Company's formation, the Company acquired the option to purchase the Florida and Georgia licenses in exchange for certain shares of the Company's stock and the assumption of certain Federal Communications Commission debt. As consideration for the option, the Company agreed to pay Digital PCS an amount equal to (a) the interest that had accrued from May 20, 1998, until the closing of the exercise of the option under any Federal Communications Commission debt incurred to finance the Florida and Georgia licenses and (b) the interest that had accrued from May 20, 1998, until the closing of the exercise of the option on advances made by the Company to Digital PCS to fund interest on Federal Communications Commission debt. In May 1999, the Company exercised this option and was required to obtain consent from parties to the Company's stockholders' agreement to consummate such transaction. As a condition to obtaining such consent, the Company was required to transfer the licenses being acquired to a third party. At the time of the exercise, the Company's shares to be exchanged for the license were valued in the aggregate at approximately $3,700. The Company completed the acquisition of the licenses on October 27, 2000, in exchange for 1,480,697 shares of the Company's common stock and the Company's assumption of approximately $11,535 of Federal Communications Commission debt. In accordance with the terms of the consent, the Company simultaneously entered into an agreement to transfer the licenses to Panther Wireless, L.L.C. in exchange for Panther Wireless, L.L.C.'s assumption of all outstanding of Federal Communications Commission debt on these licenses and cash in an amount equal to 110% of the sum of (a) the amount paid to the Federal Communications Commission in respect of these licenses minus the Federal Communications Commission debt assumed, plus (b) the aggregate amount of interest paid by the Company and Digital PCS on the Federal Communications Commission debt. At the time the agreement was executed, the consideration for the licenses would have equaled approximately F-38 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) $6,300 plus the assumption of $11,535 of Federal Communications Commission debt. Panther Wireless, L.L.C. has subsequently assigned its rights and obligations under that agreement to an unrelated third party, solely in exchange for that party's assumption of Panther Wireless, L.L.C.'s obligations under the agreement. Bank Facility On October 31, 2000, the Company amended the terms of its Bank Facility to allow the Company to incur senior subordinated debt with gross proceeds of not more than $750,000 less previous subordinated debt incurred. On January 9, 2001, the Company further amended the terms of its Bank Facility to allow the Company to incur unsecured senior subordinated debt with proceeds of not more than $750,000 less previous subordinated debt incurred. On December 29, 2000, the Company drew $60,000 from the Revolver (see Note 8). On January 10, 2001, the Company drew $30,000 from the Revolver (see Note 8). The Company has subsequently paid down the $60,000 and $30,000 drawdowns on January 29, 2001 and February 12, 2001, respectively. Resignation of William S. Arnett Mr. William S. Arnett, the former president and chief operating officer of the Company, resigned in December 2000. Pursuant to a separation agreement between Mr. Arnett, and the Company, Mr. Arnett's employment with the Company was terminated as of December 15, 2000. The Company agreed to pay Mr. Arnett $450 in equal installments over two years, a lump sum for any unused vacation time and a lump sum bonus of $113. In addition, all of Mr. Arnett's shares of restricted TeleCorp PCS stock vest under the separation agreement. Mr. Arnett agreed to release the Company from any current or future claims arising out of his employment. Mr. Arnett's separation agreement became effective on January 26, 2001 and can be rescinded by Mr. Arnett until that time. Acquisition of PCS Licenses and Other Wireless Properties from ALLTEL On December 29, 2000, the Company completed the purchase from ALLTEL of two 10 MHz D-Block licenses covering approximately 1.5 million people in Birmingham and Tuscaloosa, Alabama, two markets in which the Company currently holds 15 MHz C-Block licenses. The Company also acquired certain equipment and other intangible assets of ALLTEL in the Birmingham and Tuscaloosa markets. These assets were purchased for an aggregate purchase price of $67,000 which was principally funded through the Bank Facility. In addition, the Company and AT&T Wireless Services have entered into a put and call agreement that gives the Company the right to sell the two licenses acquired from ALLTEL to AT&T Wireless Services at any time during the 18 months following the closing of this transaction for $50,000. This agreement also gives AT&T Wireless Services the right to purchase the two licenses during the same period for $50,000. However, generally, the Company can terminate AT&T Wireless Services' call right if the Company terminates our put right. In each case, the transfer of the licenses is conditioned upon receipt of the necessary regulatory approvals. F-39 TRITEL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued) (All information subsequent to December 31, 1999 is unaudited) ($ in thousands, except per share data) Senior Subordinated Notes Offering On January 18, 2001, the Company obtained the consent of the holders of the 12 3/4% senior subordinated discount notes to allow the Company to complete an offering of senior subordinated notes. On January 24, 2001, the Company issued $450,000 principal amount of 10 3/8% senior subordinated notes. The senior subordinated notes are subject to optional redemption, restrictive covenants, an exchange offer, registration rights, and transfer restrictions. The Company received $437,500 in net proceeds from the issuance. Restatement of Financial Statements As previously publicly announced on January 5, 2001, the Company became aware that the amount of outcollect revenues from roaming customers required restatement. Furthermore, subsequent to the merger with TeleCorp Wireless, Inc., management concluded that revenues are to be stated separately by type. Accordingly, on February 13, 2001, the Company restated its quarterly financial statements as of and for the three months ended March 31, 2000, as of and for the three and six months ended June 30, 2000, and as of and for the three and nine months ended September 30, 2000. The total effect to outcollect roaming revenue was a reduction of $4,079 for the nine months ended September 30, 2000. F-40 TRITEL, INC. Description of Unaudited Pro Forma Condensed Consolidated Financial Statements The following unaudited pro forma condensed consolidated financial statements give effect to the offering of senior subordinated notes (Subordinated Notes). This information was derived from the audited consolidated financial statements of the Company for the year ended December 31, 1999 and the unaudited consolidated financial statements of the Company as of and for the nine months ended September 30, 2000. The Company's financial information is only a summary and should be read in conjunction with historical financial statements and related notes as filed on Form 10-K and Form 10-Q/A with the Securities and Exchange Commission on March 30, 2000 and February 14, 2001, respectively. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 1999 and for the nine months ended September 30, 2000 assumes each of the transactions was effected on January 1, 1999. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2000 gives effect to each transaction as if it had occurred on September 30, 2000. The unaudited pro forma condensed consolidated financial statements are provided for illustrative purposes only. The unaudited pro forma condensed consolidated financial statements do not purport to be indicative of the historical results that would have been achieved had the Company previously completed these transactions or the future results that the Company will experience. F-41 TRITEL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET September 30, 2000 ($ in thousands) (unaudited)
Offering September 30, Pro forma 2000 Adjustments Total ------------- ----------- ---------- (Note 1) (Note 2) Cash and cash equivalents................. $ 168,786 $437,500 $ 606,286 Other current assets...................... 45,903 -- 45,903 Property and equipment, net............... 503,436 -- 503,436 FCC licensing costs, net.................. 202,281 -- 202,281 Other assets.............................. 93,037 12,500 105,537 ---------- -------- ---------- Total Assets............................ 1,013,443 450,000 1,463,443 ========== ======== ========== Current liabilities....................... 83,102 -- 83,102 Long-term debt............................ 578,740 450,000 1,028,740 Other liabilities......................... 40,171 -- 40,171 ---------- -------- ---------- Total liabilities....................... 702,013 450,000 1,152,013 ---------- -------- ---------- Series A 10% redeemable convertible preferred stock.......................... 106,386 -- 106,386 Total stockholders' equity................ 205,044 -- 205,044 ---------- -------- ---------- Total liabilities, redeemable preferred convertible stock and stockholders' equity................................. $1,013,443 $450,000 $1,463,443 ========== ======== ==========
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements. F-42 TRITEL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS September 30, 2000 ($ in thousands, except per share data) (unaudited)
September 30, 2000 Offering Total --------- -------- --------- (Note 1) (Note 2) Revenues Service...................................... $ 43,366 $ -- $ 43,366 Roaming...................................... 24,120 -- 24,120 Equipment.................................... 8,511 -- 8,511 --------- -------- --------- Total operating expenses................... 75,997 -- 75,997 --------- -------- --------- Operating expenses Cost of services and equipment............... 51,961 -- 51,961 Technical operations......................... 38,103 -- 38,103 General and administrative................... 45,288 -- 45,288 Selling and marketing........................ 47,339 -- 47,339 Stock-based compensation..................... 79,092 -- 79,092 Depreciation and amortization................ 45,069 -- 45,069 --------- -------- --------- Total operating expenses................... 306,852 -- 306,852 --------- -------- --------- Operating loss............................... (230,855) -- (230,855) Interest income................................ 20,501 -- 20,501 Interest expense............................... (47,260) (35,954) (83,214) --------- -------- --------- Net loss before income taxes................. (257,614) (35,954) (293,568) Income tax benefit............................. 1,857 -- 1,857 --------- -------- --------- Net loss..................................... (255,757) (35,954) (291,711) Series A preferred dividend requirement........ (6,800) -- (6,800) --------- -------- --------- Net loss available to common stockholders...... $(262,557) $(35,954) $(298,511) ========= ======== =========
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements. F-43 TRITEL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS December 31, 1999 ($ in thousands, except per share data) (unaudited)
December 31, 1999 Offering Total ------------ -------- --------- (Note 1) (Note 2) Revenues Service.................................... $ 1,186 $ -- $ 1,186 Roaming.................................... 3,421 -- 3,421 Equipment.................................. 2,152 -- 2,152 --------- -------- --------- Total revenues........................... 6,759 -- 6,759 --------- -------- --------- Operating expenses Cost of services and equipment............. 6,966 -- 6,966 Technical operations....................... 18,459 -- 18,459 General and administrative................. 22,915 -- 22,915 Selling and marketing...................... 20,404 -- 20,404 Stock-based compensation................... 190,664 -- 190,664 Depreciation and amortization.............. 12,839 -- 12,839 --------- -------- --------- Total operating expenses................. 272,247 -- 272,247 --------- -------- --------- Operating loss............................. (265,488) -- (265,488) Interest income.............................. 16,791 -- 16,791 Interest expense............................. (27,200) (47,938) (75,138) --------- -------- --------- Net loss before income taxes............... (275,897) (47,938) (323,835) Income tax benefit........................... 28,443 -- 28,443 --------- -------- --------- Net loss................................... (247,454) (47,938) (295,392) Series A preferred dividend requirement...... (8,918) -- (8,918) --------- -------- --------- Net loss available to common stockholders.... $(256,372) $(47,938) $(304,310) ========= ======== =========
The accompanying notes are an integral part of these unaudited pro forma condensed consolidated financial statements. F-44 TRITEL, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ($ in thousands, except per share data) 1. Historical Financial Information Represents the historical consolidated balance sheet and consolidated statement of operations of Tritel, Inc. (the Company). 2. Offering On January 24, 2001, the Company issued $450,000 principal amount of 10 3/8% senior subordinated notes. Adjustment to the unaudited condensed consolidated balance sheet reflects the receipt of $437,500 of proceeds for the sale of the Subordinated Notes from the offering, net of pro forma deferred financing costs of estimated underwriting discount and offering expenses of $12,500. Adjustments to interest expense, inclusive of amortization of pro forma deferred financing costs, of $47,938 and $35,954 to the unaudited condensed consolidated statements of operations for the year ended December 31, 1999 and the nine months ended September 30, 2000, respectively, assumes the offering had occurred on January 1, 1999. F-45 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- We have not authorized any dealer, salesperson or other person to give any information or represent anything not contained in this prospectus or in the accompanying letter of transmittal. You must not rely on any unauthorized information or representations. This prospectus does not offer to sell or buy any securities in any jurisdiction where it is unlawful. The information in this prospectus and the accompanying letter of transmittal is current only as of [ ], 2001. Tritel PCS, Inc. $450,000,000 Exchange Offer for our 10 3/8 Senior Subordinated Notes due 2011 ---------------- PROSPECTUS ---------------- February [ ], 2001 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers. Section 145 (a) of the General Corporation Law of the State of Delaware ("Delaware Corporation Law") provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), because the person is or was a director or officer of the corporation. Such indemnity may be against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding, if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and if, with respect to any criminal action or proceeding, the person did not have reasonable cause to believe the person's conduct was unlawful. Section 145 (b) of the Delaware Corporation Law provides, in general, that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor because the person is or was a director or officer of the corporation, against any expenses (including attorneys' fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses which the Court of Chancery or such other court shall deem proper. Section 145 (g) of the Delaware Corporation Law provides, in general, that a corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director or officer of the corporation against any liability asserted against the person in any such capacity, or arising out of the person's status as such, whether or not the corporation would have the power to indemnify the person against such liability under the provisions of the law. Section 102 (b) (7) of the Delaware Corporation Law permits a corporation to include in its certificate of incorporation a provision eliminating or limiting the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that the provision shall not eliminate or limit the liability of a director: (i) for any breach of the director's duty of loyalty to the corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) under Section 174 of the Delaware Corporation Law (relating to unlawful payment of dividends and unlawful stock purchase and redemption); or (iv) for any transaction from which the director derived an improper personal benefit. Article VI of the Registrant's bylaws provide for indemnification, to the fullest extent permitted under Delaware law for any person who is or was a director or officer of the Registrant who is or was involved or threatened to be made so involved in any proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was serving as a director, officer, employee or agent of the Registrant or was serving at the request of the Registrant as a director, officer, employee or agent of any other enterprise. The Registrant may also indemnify any and all other persons whom it shall have power to indemnify under any applicable law from time to time in effect to the extent authorized by the board of directors and permitted by such law. Such indemnification is provided only if the director, officer, employee or agent acted in good faith and in a manner that the director, officer, employee or agent reasonably believed to be in, or not opposed to, the II-1 best interests of the Registrant, and with respect to any criminal proceeding, had no reasonable cause to believe that the conduct was unlawful. The foregoing statements are subject to the detailed provisions of Section 145 of the Delaware Corporation Law and Article VI of the bylaws of the Registrant. Item 21. Exhibits and Financial Statement Schedules. The following exhibits are filed herewith:
Exhibit No. Description ------- ----------- 2.1+ Agreement and Plan of Reorganization and Contribution (included as Annex A to the joint proxy statement-prospectus forming a part of the TeleCorp-Tritel Holding Company, now known as TeleCorp PCS, Inc., Registration Statement), dated February 28, 2000, by and among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. 2.2+ Amendment No. 1 to the Agreement and Plan of Reorganization and Contribution (included as Annex B to the joint proxy statement- prospectus forming a part of the TeleCorp-Tritel Holding Company, now known as TeleCorp PCS, Inc., Registration Statement), dated May 4, 2000, by and among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. 2.3+ Amendment No. 2 to the Agreement and Plan of Reorganization and Contribution (included as Annex C to the joint proxy statement- prospectus forming a part of the TeleCorp-Tritel Holding Company, now known as TeleCorp PCS, Inc., Registration Statement), dated June 12, 2000, by and among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. 3.1.1++ Certificate of Incorporation of Tritel Holding Corp. (now known as Tritel PCS, Inc.), dated May 29, 1998. 3.1.2++ Certificate of Amendment of Certificate of Incorporation of Tritel Holding Corp. (now known as Tritel PCS, Inc.), dated April 16, 1999. 3.2++ Amended and Restated Bylaws of Tritel PCS, Inc., dated November 23, 1999. 3.3++ Amended and Restated Certificate of Incorporation of Tritel, Inc., dated November 13, 2000. 3.4++ Bylaws of Tritel, Inc., dated November 13, 2000. 3.5++ Certificate of Incorporation of Tritel Communications, Inc., dated May 29, 1998. 3.6++ Bylaws of Tritel Communications, Inc., dated May 29, 1998. 3.7++ Certificate of Incorporation of Tritel Finance, Inc., dated May 29, 1998. 3.8++ Amended and Restated Bylaws of Tritel Finance, Inc., dated November 23, 1998. 4.1 Indenture, dated as of January 24, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., and Firstar Bank, N.A., as trustee. 4.2.1++ Indenture, dated as of May 11, 1999, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., and The Bank of New York, as trustee. 4.2.2 Amendment to 12 3/4% Senior Subordinated Discount Notes due 2009 Indenture, dated as of September 30, 2000, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc., and The Bank of New York, as trustee. 4.2.3 Supplemental Indenture to 12 3/4% Senior Subordinated Discount Notes due 2009 Indenture, dated as of January 18, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc., and The Bank of New York, as trustee. 5 Opinion of Cadwalader, Wickersham & Taft regarding the legality of the notes.
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Exhibit No. Description ------- ----------- 8 Opinion of Cadwalader, Wickersham & Taft regarding certain U.S. tax matters relating to the notes (included in Exhibit 5). 10.1 Exchange and Registration Rights Agreement, dated January 24, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., Salomon Smith Barney Inc., and Lehman Brothers Inc., on behalf of themselves and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, and TD Securities (USA) Inc. 10.2 Purchase Agreement, dated January 19, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., Salomon Smith Barney Inc., and Lehman Brothers Inc., on behalf of themselves and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, and TD Securities (USA) Inc. 10.3.1++ Amended and Restated Loan Agreement, dated March 31, 1999, by and among Tritel Holding Corp. (now known as Tritel PCS, Inc.), Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.3.2++ First Amendment to Amended and Restated Loan Agreement, dated April 21, 1999, by and among Tritel Holding Corp. (now known as Tritel PCS, Inc.), Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.3.3 Second Amendment to Amended and Restated Loan Agreement and Consent, dated October 31, 2000, by and among Tritel PCS, Inc. (formerly known as Tritel Holding Corp.), Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.3.4 Third Amendment to Amended and Restated Loan Agreement and Consent, dated as of January 9, 2001, by and among Tritel PCS, Inc., Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.4 Solicitation Agency Agreement, dated as of January 11, 2001, by and among Tritel PCS, Inc., Salomon Smith Barney Inc. and Lehman Brothers Inc. 10.5* Stockholders' Agreement, dated as of November 13, 2000, by and among AT&T Wireless PCS, LLC, Cash Equity Investors, Management Stockholders, Other Stockholders, and TeleCorp PCS, Inc. 10.6.1++ AT&T Wireless Services Network Membership License Agreement, dated January 7, 1999, by and between AT&T Corp. and Tritel, Inc. 10.6.2 Amendment No. 1 to AT&T Wireless Services Network Membership License Agreement, dated November 13, 2000, by and between AT&T Corp. and Tritel, Inc. 10.7.1++ Intercarrier Roamer Service Agreement, dated January 7, 1999, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.7.2 Amendment No. 1 to Intercarrier Roamer Service Agreement, dated November 13, 2000, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.8.1 Roaming Administration Service Agreement, dated January 7, 1999, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.8.2 Amendment No. 1 to Roaming Administration Service Agreement, dated November 13, 2000, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.9++ Amended and Restated Agreement, dated April 16, 1999, by and between TeleCorp Communications, Inc., Triton PCS, Inc., Tritel Communications, Inc. and Affiliate License Co., L.L.C. 10.10++ Tritel, Inc. Amended and Restated 1998 Stock Option Plan, effective January 7, 1999.
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Exhibit No. Description ------- ----------- 10.11++ Form of Restricted Stock Agreements pursuant to the Tritel, Inc. Amended and Restated 1999 Stock Option Plan. 10.12+++ Tritel, Inc. Amended and Restated 1999 Stock Option Plan for Nonemployee Directors, effective January 7, 1999. 10.13++ Master Lease Agreement, dated October 30, 1998, by and between Tritel Communications, Inc. and Crown Communication Inc. 10.14++ Master Lease Agreement, dated December 31, 1998, by and between Signal One, LLC and Tritel Communications, Inc. 10.15++ Master Antenna Site Lease No. D41, dated October 23, 1998, by and between Pinnacle Towers Inc. and Tritel Communications, Inc. 10.16++ Installment Payment Plan Note, dated October 9, 1996, made by Mercury PCS, LLC in favor of the Federal Communications Commission in the amount of $42,525,211.95. 10.17++ First Modification of Installment Payment Plan Note for Broadband PCS F Block, dated July 2, 1998, by and between Mercury PCS II, L.L.C. and the Federal Communications Commission, effective as of July 31, 1998. 10.18++ Agreement, effective as of March 16, 1999, by and between BellSouth Telecommunications, Inc. and Tritel Communications, Inc. 10.19++ Acquisition Agreement Ericsson CMS 8800 Cellular Mobile Telephone System, made and effective as of December 30, 1998, by and among Tritel Finance, Inc., Tritel Communications, Inc., and Ericsson Inc. 10.20++ Securities Purchase Agreement, dated as of May 20, 1998, by and among AT&T Wireless PCS Inc., TWR Cellular, Inc., Cash Equity Investors, Mercury PCS, LLC, Mercury PCS II, LLC, Management Stockholders, and Tritel, Inc. 10.21++ Closing Agreement, dated as of January 7, 1999, by and among AT&T Wireless PCS, Inc., TWR Cellular, Inc., Cash Equity Investors, Airwave Communications, LLC, Digital PCS, LLC, Management Stockholders, Mercury Investor Indemnitors, and Tritel, Inc. 10.22++ Master Build To Suit And Lease Agreement, by and between Tritel Communications, Inc. and American Tower, L.P. 10.23++ Master Build To Suit And Lease Agreement, by and between Tritel Communications, Inc. and SpectraSite Communications, Inc. 10.24++ Master Build To Suit Services And License Agreement, by and between Tritel Communications, Inc. and Crown Communications, Inc. 10.25++ Master Build To Suit And Lease Agreement, by and between Tritel Communications, Inc. and SBA Towers. 10.26++ Master Site Agreement, dated July 2, 1999, by and between Tritel Communications, Inc. and BellSouth Mobility Inc. 10.27++ Master Site Agreement, dated March 10, 1999, by and between Tritel Communications, Inc. and BellSouth Mobility PCS. 10.28++ Consent to Exercise of Option, dated May 29, 1999, by and among Tritel, Inc., AT&T Wireless, Inc., TWR Cellular, Inc. and Management Stockholders. 10.29++ License Purchase Agreement, dated as of May 20, 1999, by and between Digital PCS, LLC and Tritel, Inc.
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Exhibit No. Description ------- ----------- 10.30 License Acquisition Agreement, dated as of October 27, 2000, by and among Tritel License-Florida, Inc., Tritel License-Georgia, Inc., and Panther Wireless, L.L.C. 10.31++ Amended and Restated Employment Agreement of Jerry M. Sullivan, Jr., dated as of September 1, 1999. 10.32++ Stock Purchase Agreement, dated as of September 1, 1999, by and between Jerry M. Sullivan, Jr. and Tritel, Inc. 10.33++ Mutual Release and Termination Agreement, dated as of September 1, 1999, by and between Jerry M. Sullivan, Jr. and Tritel, Inc. 10.34 Separation Agreement, effective as of January 6, 2001, by and among William S. Arnett, Tritel, Inc., and TeleCorp PCS, Inc. 10.35 Letter Agreement, dated October 20, 2000, by and between AT&T Wireless Services, Inc. and Tritel, Inc., regarding certain rights relating to licenses acquired from Alltel Corporation. 10.36 Assignment of Agreement, dated as of January 5, 2001, by and between Tritel, Inc. and Tritel License-Alabama, Inc. 12 Statement re computation of ratios. 21 Subsidiaries of Tritel, Inc. 23.1 Consent of KPMG LLP. 23.2 Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5). 24 Powers of Attorney (included in signature page). 25 Statement of Eligibility of Trustee on Form T-1. 99.1 Form of Letter of Transmittal. 99.2 Form of Notice of Guaranteed Delivery.
- -------- + Incorporated by reference to the Registration Statement on Form S-4 (File No. 333-36954) of TeleCorp-Tritel Holding Company (now known as TeleCorp PCS, Inc). ++ Incorporated by reference to the Registration Statement on Form S-4 (File No. 333-82509) of Tritel PCS, Inc. +++ Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-91207) of Tritel, Inc. * Incorporated by reference to the Current Report on Form 8-K filed on November 13, 2000 (File No. 333-36954) of TeleCorp PCS, Inc. Item 22. Undertakings The undersigned Registrants hereby undertake: (1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (a) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (b) 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 II-5 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 (c) 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; (2) that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrants' annual reports 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 this registration statement 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) that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form; (4) that every prospectus (i) that is filed pursuant to paragraph (3) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes 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; (5) to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in this registration statement when it became effective; (6) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This undertaking also includes information in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request; and (7) to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. Insofar as indemnification for liabilities under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the provisions described in Item 20 above, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is therefore unenforceable. If a claim of 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 a 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 registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Arlington, Commonwealth of Virginia, on February 14, 2001. Tritel PCS, Inc. /s/ Gerald T. Vento By: _________________________________ Gerald T. Vento Chief Executive Officer POWER OF ATTORNEY Tritel PCS, Inc. and each person whose signature appears below (1) constitutes and appoints Thomas H. Sullivan and Gerald T. Vento, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for each such person and in such person's name, in any and all capacities, (A) to sign all amendments (including pre-effective and post-effective amendments) to this registration statement; (B) to file such amendments with all exhibits and other related documents with the Securities and Exchange Commission; and (C) to perform every act necessary in connection with (A) or (B); and (2) ratifies and confirms everything that such attorneys- in-fact and agents, or any or them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue of this appointment. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Gerald T. Vento Chief Executive Officer February 14, 2001 ______________________________________ and Director (Principal Gerald T. Vento Executive Officer) /s/ Thomas H. Sullivan President, Chief Financial February 14, 2001 ______________________________________ Officer, Treasurer and Thomas H. Sullivan Director (Principal Financial and Accounting Officer)
II-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Arlington, Commonwealth of Virginia, on February 14, 2001. Tritel, Inc. /s/ Gerald T. Vento By: _________________________________ Gerald T. Vento Chief Executive Officer POWER OF ATTORNEY Tritel, Inc. and each person whose signature appears below (1) constitutes and appoints Thomas H. Sullivan and Gerald T. Vento, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for each such person and in such person's name, in any and all capacities, (A) to sign all amendments (including pre-effective and post- effective amendments) to this registration statement; (B) to file such amendments with all exhibits and other related documents with the Securities and Exchange Commission; and (C) to perform every act necessary in connection with (A) or (B); and (2) ratifies and confirms everything that such attorneys- in-fact and agents, or any or them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue of this appointment. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Gerald T. Vento Chief Executive Officer February 14, 2001 ______________________________________ and Director (Principal Gerald T. Vento Executive Officer) /s/ Thomas H. Sullivan President, Chief Financial February 14, 2001 ______________________________________ Officer, Treasurer and Thomas H. Sullivan Director (Principal Financial and Accounting Officer)
II-8 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Arlington, Commonwealth of Virginia, on February 14, 2001. Tritel Communications, Inc. /s/ Gerald T. Vento By: _________________________________ Gerald T. Vento Chief Executive Officer POWER OF ATTORNEY Tritel Communications, Inc. and each person whose signature appears below (1) constitutes and appoints Thomas H. Sullivan and Gerald T. Vento, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for each such person and in such person's name, in any and all capacities, (A) to sign all amendments (including pre-effective and post-effective amendments) to this registration statement; (B) to file such amendments with all exhibits and other related documents with the Securities and Exchange Commission; and (C) to perform every act necessary in connection with (A) or (B); and (2) ratifies and confirms everything that such attorneys- in-fact and agents, or any or them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue of this appointment. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Gerald T. Vento Chief Executive Officer February 14, 2001 ______________________________________ and Director (Principal Gerald T. Vento Executive Officer) /s/ Thomas H. Sullivan President, Chief Financial February 14, 2001 ______________________________________ Officer, Treasurer and Thomas H. Sullivan Director (Principal Financial and Accounting Officer)
II-9 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Arlington, Commonwealth of Virginia, on February 14, 2001. Tritel Finance, Inc. /s/ Gerald T. Vento By: _________________________________ Gerald T. Vento Chief Executive Officer POWER OF ATTORNEY Tritel Finance, Inc. and each person whose signature appears below (1) constitutes and appoints Thomas H. Sullivan and Gerald T. Vento, and each of them, as true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution for each such person and in such person's name, in any and all capacities, (A) to sign all amendments (including pre-effective and post-effective amendments) to this registration statement; (B) to file such amendments with all exhibits and other related documents with the Securities and Exchange Commission; and (C) to perform every act necessary in connection with (A) or (B); and (2) ratifies and confirms everything that such attorneys- in-fact and agents, or any or them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue of this appointment. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Gerald T. Vento Chief Executive Officer February 14, 2001 ______________________________________ and Director (Principal Gerald T. Vento Executive Officer) /s/ Thomas H. Sullivan President, Chief Financial February 14, 2001 ______________________________________ Officer, Treasurer and Thomas H. Sullivan Director (Principal Financial and Accounting Officer)
II-10 EXHIBIT INDEX
Exhibit No. Description ------- ----------- 2.1+ Agreement and Plan of Reorganization and Contribution (included as Annex A to the joint proxy statement-prospectus forming a part of the TeleCorp-Tritel Holding Company, now known as TeleCorp PCS, Inc., Registration Statement), dated February 28, 2000, by and among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. 2.2+ Amendment No. 1 to the Agreement and Plan of Reorganization and Contribution (included as Annex B to the joint proxy statement- prospectus forming a part of the TeleCorp-Tritel Holding Company, now known as TeleCorp PCS, Inc., Registration Statement), dated May 4, 2000, by and among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. 2.3+ Amendment No. 2 to the Agreement and Plan of Reorganization and Contribution (included as Annex C to the joint proxy statement- prospectus forming a part of the TeleCorp-Tritel Holding Company, now known as TeleCorp PCS, Inc., Registration Statement), dated June 12, 2000, by and among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. 3.1.1++ Certificate of Incorporation of Tritel Holding Corp. (now known as Tritel PCS, Inc.), dated May 29, 1998. 3.1.2++ Certificate of Amendment of Certificate of Incorporation of Tritel Holding Corp. (now known as Tritel PCS, Inc.), dated April 16, 1999. 3.2++ Amended and Restated Bylaws of Tritel PCS, Inc., dated November 23, 1999. 3.3++ Amended and Restated Certificate of Incorporation of Tritel, Inc., dated November 13, 2000. 3.4++ Bylaws of Tritel, Inc., dated November 13, 2000. 3.5++ Certificate of Incorporation of Tritel Communications, Inc., dated May 29, 1998. 3.6++ Bylaws of Tritel Communications, Inc., dated May 29, 1998. 3.7++ Certificate of Incorporation of Tritel Finance, Inc., dated May 29, 1998. 3.8++ Amended and Restated Bylaws of Tritel Finance, Inc., dated November 23, 1998. 4.1 Indenture, dated as of January 24, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., and Firstar Bank, N.A., as trustee. 4.2.1++ Indenture, dated as of May 11, 1999, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., and The Bank of New York, as trustee. 4.2.2 Amendment to 12 3/4% Senior Subordinated Discount Notes due 2009 Indenture, dated as of September 30, 2000, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc., and The Bank of New York, as trustee. 4.2.3 Supplemental Indenture to 12 3/4% Senior Subordinated Discount Notes due 2009 Indenture, dated as of January 18, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc., and The Bank of New York, as trustee. 5 Opinion of Cadwalader, Wickersham & Taft regarding the legality of the notes. 8 Opinion of Cadwalader, Wickersham & Taft regarding certain U.S. tax matters relating to the notes (included in Exhibit 5). 10.1 Exchange and Registration Rights Agreement, dated January 24, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., Salomon Smith Barney Inc., and Lehman Brothers Inc., on behalf of themselves and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, and TD Securities (USA) Inc.
Exhibit No. Description ------- ----------- 10.2 Purchase Agreement, dated January 19, 2001, by and among Tritel PCS, Inc., Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc., Salomon Smith Barney Inc., and Lehman Brothers Inc., on behalf of themselves and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC, and TD Securities (USA) Inc. 10.3.1++ Amended and Restated Loan Agreement, dated March 31, 1999, by and among Tritel Holding Corp. (now known as Tritel PCS, Inc.), Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.3.2++ First Amendment to Amended and Restated Loan Agreement, dated April 21, 1999, by and among Tritel Holding Corp. (now known as Tritel PCS, Inc.), Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.3.3 Second Amendment to Amended and Restated Loan Agreement and Consent, dated October 31, 2000, by and among Tritel PCS, Inc. (formerly known as Tritel Holding Corp.), Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.3.4 Third Amendment to Amended and Restated Loan Agreement and Consent, dated as of January 9, 2001, by and among Tritel PCS, Inc., Tritel, Inc., The Financial Institutions Signatory Thereto, and Toronto Dominion (Texas), Inc., as administrative agent. 10.4 Solicitation Agency Agreement, dated as of January 11, 2001, by and among Tritel PCS, Inc., Salomon Smith Barney Inc. and Lehman Brothers Inc. 10.5* Stockholders' Agreement, dated as of November 13, 2000, by and among AT&T Wireless PCS, LLC, Cash Equity Investors, Management Stockholders, Other Stockholders, and TeleCorp PCS, Inc. 10.6.1++ AT&T Wireless Services Network Membership License Agreement, dated January 7, 1999, by and between AT&T Corp. and Tritel, Inc. 10.6.2 Amendment No. 1 to AT&T Wireless Services Network Membership License Agreement, dated November 13, 2000, by and between AT&T Corp. and Tritel, Inc. 10.7.1++ Intercarrier Roamer Service Agreement, dated January 7, 1999, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.7.2 Amendment No. 1 to Intercarrier Roamer Service Agreement, dated November 13, 2000, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.8.1 Roaming Administration Service Agreement, dated January 7, 1999, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.8.2 Amendment No. 1 to Roaming Administration Service Agreement, dated November 13, 2000, by and between AT&T Wireless Services, Inc. and Tritel, Inc. 10.9++ Amended and Restated Agreement, dated April 16, 1999, by and between TeleCorp Communications, Inc., Triton PCS, Inc., Tritel Communications, Inc. and Affiliate License Co., L.L.C. 10.10++ Tritel, Inc. Amended and Restated 1998 Stock Option Plan, effective January 7, 1999. 10.11++ Form of Restricted Stock Agreements pursuant to the Tritel, Inc. Amended and Restated 1999 Stock Option Plan. 10.12+++ Tritel, Inc. Amended and Restated 1999 Stock Option Plan for Nonemployee Directors, effective January 7, 1999.
2
Exhibit No. Description ------- ----------- 10.13++ Master Lease Agreement, dated October 30, 1998, by and between Tritel Communications, Inc. and Crown Communication Inc. 10.14++ Master Lease Agreement, dated December 31, 1998, by and between Signal One, LLC and Tritel Communications, Inc. 10.15++ Master Antenna Site Lease No. D41, dated October 23, 1998, by and between Pinnacle Towers Inc. and Tritel Communications, Inc. 10.16++ Installment Payment Plan Note, dated October 9, 1996, made by Mercury PCS, LLC in favor of the Federal Communications Commission in the amount of $42,525,211.95. 10.17++ First Modification of Installment Payment Plan Note for Broadband PCS F Block, dated July 2, 1998, by and between Mercury PCS II, L.L.C. and the Federal Communications Commission, effective as of July 31, 1998. 10.18++ Agreement, effective as of March 16, 1999, by and between BellSouth Telecommunications, Inc. and Tritel Communications, Inc. 10.19++ Acquisition Agreement Ericsson CMS 8800 Cellular Mobile Telephone System, made and effective as of December 30, 1998, by and among Tritel Finance, Inc., Tritel Communications, Inc., and Ericsson Inc. 10.20++ Securities Purchase Agreement, dated as of May 20, 1998, by and among AT&T Wireless PCS Inc., TWR Cellular, Inc., Cash Equity Investors, Mercury PCS, LLC, Mercury PCS II, LLC, Management Stockholders, and Tritel, Inc. 10.21++ Closing Agreement, dated as of January 7, 1999, by and among AT&T Wireless PCS, Inc., TWR Cellular, Inc., Cash Equity Investors, Airwave Communications, LLC, Digital PCS, LLC, Management Stockholders, Mercury Investor Indemnitors, and Tritel, Inc. 10.22++ Master Build To Suit And Lease Agreement, by and between Tritel Communications, Inc. and American Tower, L.P. 10.23++ Master Build To Suit And Lease Agreement, by and between Tritel Communications, Inc. and SpectraSite Communications, Inc. 10.24++ Master Build To Suit Services And License Agreement, by and between Tritel Communications, Inc. and Crown Communications, Inc. 10.25++ Master Build To Suit And Lease Agreement, by and between Tritel Communications, Inc. and SBA Towers. 10.26++ Master Site Agreement, dated July 2, 1999, by and between Tritel Communications, Inc. and BellSouth Mobility Inc. 10.27++ Master Site Agreement, dated March 10, 1999, by and between Tritel Communications, Inc. and BellSouth Mobility PCS. 10.28++ Consent to Exercise of Option, dated May 29, 1999, by and among Tritel, Inc., AT&T Wireless, Inc., TWR Cellular, Inc. and Management Stockholders. 10.29++ License Purchase Agreement, dated as of May 20, 1999, by and between Digital PCS, LLC and Tritel, Inc. 10.30 License Acquisition Agreement, dated as of October 27, 2000, by and among Tritel License-Florida, Inc., Tritel License-Georgia, Inc., and Panther Wireless, L.L.C. 10.31++ Amended and Restated Employment Agreement of Jerry M. Sullivan, Jr., dated as of September 1, 1999.
3
Exhibit No. Description ------- ----------- 10.32++ Stock Purchase Agreement, dated as of September 1, 1999, by and between Jerry M. Sullivan, Jr. and Tritel, Inc. 10.33++ Mutual Release and Termination Agreement, dated as of September 1, 1999, by and between Jerry M. Sullivan, Jr. and Tritel, Inc. 10.34 Separation Agreement, effective as of January 6, 2001, by and among William S. Arnett, Tritel, Inc., and TeleCorp PCS, Inc. 10.35 Letter Agreement, dated October 20, 2000, by and between AT&T Wireless Services, Inc. and Tritel, Inc., regarding certain rights relating to licenses acquired from Alltel Corporation. 10.36 Assignment of Agreement, dated as of January 5, 2001, by and between Tritel, Inc. and Tritel License-Alabama, Inc. 12 Statement re computation of ratios. 21 Subsidiaries of Tritel, Inc. 23.1 Consent of KPMG LLP. 23.2 Consent of Cadwalader, Wickersham & Taft (included in Exhibit 5). 24 Powers of Attorney (included in signature page). 25 Statement of Eligibility of Trustee on Form T-1. 99.1 Form of Letter of Transmittal. 99.2 Form of Notice of Guaranteed Delivery.
- -------- + Incorporated by reference to the Registration Statement on Form S-4 (File No. 333-36954) of TeleCorp-Tritel Holding Company (now known as TeleCorp PCS, Inc). ++ Incorporated by reference to the Registration Statement on Form S-4 (File No. 333-82509) of Tritel PCS, Inc. +++ Incorporated by reference to the Registration Statement on Form S-1 (File No. 333-91207) of Tritel, Inc. * Incorporated by reference to the Current Report on Form 8-K filed on November 13, 2000 (File No. 333-36954) of TeleCorp PCS, Inc. 4 EX-4.1 2 0002.txt INDENTURE, DATED AS OF 01-24-2001 Exhibit 4.1 EXECUTION COPY ================================================================================ Tritel PCS, Inc. 10 3/8% Senior Subordinated Notes due 2011 _________ INDENTURE Dated as of January 24, 2001 _________ Firstar Bank, N.A., Trustee ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE 1 Definitions and Incorporation by Reference ------------------------------------------ SECTION 1.01. Definitions............................................. 1 SECTION 1.02. Other Definitions....................................... 23 SECTION 1.03. Incorporation by Reference of Trust Indenture Act....... 23 SECTION 1.04. Rules of Construction................................... 23 ARTICLE 2 The Securities -------------- SECTION 2.01. Form and Dating......................................... 24 SECTION 2.02. Execution and Authentication............................ 24 SECTION 2.03. Registrar and Paying Agent.............................. 25 SECTION 2.04. Paying Agent To Hold Money in Trust..................... 25 SECTION 2.05. Securityholder Lists.................................... 25 SECTION 2.06. Transfer and Exchange................................... 25 SECTION 2.07. Replacement Securities.................................. 26 SECTION 2.08. Outstanding Securities.................................. 27 SECTION 2.09. Temporary Securities.................................... 27 SECTION 2.10. Cancelation............................................. 27 SECTION 2.11. Defaulted Interest...................................... 27 SECTION 2.12. CUSIP Numbers........................................... 27 ARTICLE 3 Redemption ---------- SECTION 3.01. Notices to Trustee...................................... 28 SECTION 3.02. Selection of Securities To Be Redeemed.................. 28 SECTION 3.03. Notice of Redemption.................................... 28 SECTION 3.04. Effect of Notice of Redemption.......................... 29 SECTION 3.05. Deposit of Redemption Price............................. 29 SECTION 3.06. Securities Redeemed in Part............................. 29 ARTICLE 4 Covenants --------- SECTION 4.01. Payment of Securities................................... 29 SECTION 4.02. Provision of Financial Information...................... 30 SECTION 4.03. Limitation on Incurrence of Indebtedness................ 30 SECTION 4.04. Limitation on Restricted Payments....................... 32 SECTION 4.05. Limitation on Restrictions Affecting Restricted Subsidiaries............................................ 35 SECTION 4.06. Limitation on Certain Asset Dispositions................ 36 SECTION 4.07. Limitation on Transactions with Affiliates.............. 38 SECTION 4.08. Change of Control....................................... 39 SECTION 4.09. Compliance Certificate.................................. 40 SECTION 4.10. Further Instruments and Acts............................ 40 SECTION 4.11. Future Subsidiary Guarantors............................ 40
Page ---- SECTION 4.12. Limitation on Activities of the Company and the Restricted Subsidiaries..................................... 40 SECTION 4.13. Limitation on Designations of Unrestricted Subsidiaries..... 40 SECTION 4.14. Limitation on Layered Indebtedness.......................... 41 SECTION 4.15. Limitations on Liens........................................ 41 ARTICLE 5 Successor Company ----------------- SECTION 5.01. Merger, Consolidation and Certain Sales of Assets........... 42 ARTICLE 6 Defaults and Remedies --------------------- SECTION 6.01. Events of Default........................................... 43 SECTION 6.02. Acceleration................................................ 44 SECTION 6.03. Other Remedies.............................................. 45 SECTION 6.04. Waiver of Past Defaults..................................... 45 SECTION 6.05. Control by Majority......................................... 45 SECTION 6.06. Limitation on Suits......................................... 45 SECTION 6.07. Rights of Holders To Receive Payment........................ 46 SECTION 6.08. Collection Suit by Trustee.................................. 46 SECTION 6.09. Trustee May File Proofs of Claim............................ 46 SECTION 6.10. Priorities.................................................. 46 SECTION 6.11. Undertaking for Costs....................................... 46 SECTION 6.12. Waiver of Stay or Extension Laws............................ 47 ARTICLE 7 Trustee ------- SECTION 7.01. Duties of Trustee........................................... 47 SECTION 7.02. Rights of Trustee........................................... 48 SECTION 7.03. Individual Rights of Trustee................................ 48 SECTION 7.04. Trustee's Disclaimer........................................ 48 SECTION 7.05. Notice of Defaults.......................................... 49 SECTION 7.06. Reports by Trustee to Holders............................... 49 SECTION 7.07. Compensation and Indemnity.................................. 49 SECTION 7.08. Replacement of Trustee...................................... 50 SECTION 7.09. Successor Trustee by Merger................................. 50 SECTION 7.10. Eligibility; Disqualification............................... 51 SECTION 7.11. Preferential Collection of Claims Against Company........... 51 SECTION 7.12. Trustee Acting as Paying Agent or Registrar................. 51 ARTICLE 8 Discharge of Indenture; Defeasance ---------------------------------- SECTION 8.01. Discharge of Liability on Securities; Defeasance............ 51 SECTION 8.02. Conditions to Defeasance.................................... 52 SECTION 8.03. Application of Trust Money.................................. 53 SECTION 8.04. Repayment to Company........................................ 53 SECTION 8.05. Indemnity for Government Obligations........................ 53 SECTION 8.06. Reinstatement............................................... 53
Page ---- ARTICLE 9 Amendments ---------- SECTION 9.01. Without Consent of Holders............................................. 53 SECTION 9.02. With Consent of Holders................................................ 54 SECTION 9.03. Compliance with Trust Indenture Act.................................... 55 SECTION 9.04. Revocation and Effect of Consents and Waivers.......................... 55 SECTION 9.05. Notation on or Exchange of Securities.................................. 55 SECTION 9.06. Trustee To Sign Amendments............................................. 55 SECTION 9.07. Payment for Consent.................................................... 56 ARTICLE 10 Subordination ------------- SECTION 10.01. Securities Subordinate to Senior Indebtedness.......................... 56 SECTION 10.02. Payment by the Company of Proceeds upon Dissolution, Etc............... 56 SECTION 10.03. Suspension of Payment on Securities When Senior Indebtedness of the Company in Default..................................................... 57 SECTION 10.04. Payment Over by Guarantors of Proceeds upon Dissolution,............... 58 SECTION 10.05. Suspension of Payment on Guarantees When Senior Indebtedness of Guarantor in Default................................................... 58 SECTION 10.06. Payment Permitted If No Default........................................ 59 SECTION 10.07. Subrogation to Rights of Holders of Senior Indebtedness................ 59 SECTION 10.08. Provisions Solely to Define Relative Rights............................ 59 SECTION 10.09. Trustee to Effectuate Subordination.................................... 60 SECTION 10.10. No Waiver of Subordination Provisions.................................. 60 SECTION 10.11. Notice to Trustee. .................................................... 60 SECTION 10.12. Reliance on Judicial order or Certificate of Liquidating Agent......... 61 SECTION 10.13. Rights of Trustee As a Holder of Senior Indebtedness; Preservation of Trustee's Rights....................................................... 61 SECTION 10.14. Article Applicable to Paying Agents.................................... 61 SECTION 10.15. No Suspension of Remedies.............................................. 61 SECTION 10.16. Trust Moneys Not Subordinated.......................................... 61 SECTION 10.17. Trustee Not Fiduciary for Holders of Senior Indebtedness............... 62 SECTION 10.18. Notice to Holders of Senior Indebtedness............................... 62 SECTION 10.19. Distribution or Notice to Representative............................... 62 SECTION 10.20. Article 10 Not To Prevent Events of Default or Limit Right To Accelerate............................................................. 62 SECTION 10.21. Reliance by Holders of Senior Indebtedness on Subordination Provisions............................................................. 62 SECTION 10.22. Trustee's Compensation Not Prejudiced.................................. 62 ARTICLE 11 Guarantees ---------- SECTION 11.01. Guarantees............................................................. 62 SECTION 11.02. Limitation on Liability................................................ 64 SECTION 11.03. Successors and Assigns................................................. 65 SECTION 11.04. No Waiver.............................................................. 65 SECTION 11.05. Modification........................................................... 65 SECTION 11.06. Execution of Supplemental Indenture for Future Subsidiary Guarantors... 65
Page ---- ARTICLE 12 Intentionally deleted ARTICLE 13 Satisfaction and Discharge -------------------------- SECTION 13.01. Satisfaction and Discharge of Indenture............... 65 SECTION 13.02. Application of Trust Money............................ 66 ARTICLE 14 Miscellaneous ------------- SECTION 14.01. Trust Indenture Act Controls.......................... 66 SECTION 14.02. Notices............................................... 67 SECTION 14.03. Communication by Holders with Other Holders........... 67 SECTION 14.04. Certificate and Opinion as to Conditions Precedent.... 67 SECTION 14.05. Statements Required in Certificate or Opinion......... 68 SECTION 14.06. When Securities Disregarded........................... 68 SECTION 14.07. Rules by Trustee, Paying Agent and Registrar.......... 68 SECTION 14.08. Legal Holidays........................................ 68 SECTION 14.09. GOVERNING LAW......................................... 68 SECTION 14.10. No Recourse Against Others............................ 68 SECTION 14.11. Successors............................................ 68 SECTION 14.12. Multiple Originals.................................... 69 SECTION 14.13. Table of Contents; Headings........................... 69
Appendix A - Provisions Relating to Initial Securities, Private Exchange Securities and Exchange Securities Exhibit A - Form of Face of Initial Security Exhibit B - Form of Face of Exchange Security Exhibit C - Form of Supplemental Indenture Exhibit D - Form of Transferee Letter of Representation INDENTURE dated as of January 24, 2001, among Tritel PCS, Inc., a Delaware corporation (the "Company"), Tritel, Inc. (the "Parent Guarantor"), Tritel Communications, Inc. and Tritel Finance, Inc. (collectively, the "Subsidiary Guarantors"), and Firstar Bank, N.A., a national association under the laws of the United States, as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of (i) the Company's 10 3/8% Senior Subordinated Notes due 2011 issued on the date hereof (the "Initial Securities"), (ii) if and when issued as provided in the Registration Agreement (as defined in Appendix A hereto (the "Appendix")), the Company's 10 3/8% Senior Subordinated Notes due 2011 issued in the Registered Exchange Offer (as defined in the Appendix) in exchange for any Initial Securities (the "Exchange Securities") and (iii) if and when issued as provided in the Registration Agreement, the Private Exchange Securities (as defined in the Appendix, and together with the Initial Securities and any Exchange Securities issued hereunder, the "Securities") issued in the Private Exchange (as defined in the Appendix). Except as otherwise provided herein, the Securities shall be limited to $450,000,000 in aggregate principal amount outstanding. ARTICLE 1 Definitions and Incorporation by Reference ------------------------------------------ SECTION 1.01. Definitions. ----------- "Acquired Indebtedness" means, with respect to any Person, Indebtedness of such Person: (1) existing at the time such Person becomes a Restricted Subsidiary; or (2) assumed in connection with the acquisition of assets from another Person, including Indebtedness Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or such acquisition, as the case may be. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, any specified Person. For purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Annualized Pro Forma Consolidated Operating Cash Flow" means Consolidated Cash Flow for the latest two full fiscal quarters for which consolidated financial statements of the Company are available multiplied by two. For purposes of calculating "Consolidated Cash Flow" for any period for purposes of this definition only: (1) any Subsidiary of the Company that is a Restricted Subsidiary on the date of the transaction giving rise to the need to calculate "Annualized Pro Forma Consolidated Operating Cash Flow" (the "Transaction Date") shall be deemed to have been a Restricted Subsidiary at all times during such period; and 2 (2) any Subsidiary of the Company that is not a Restricted Subsidiary on the Transaction Date shall be deemed not to have been a Restricted Subsidiary at any time during such period. In addition to and without limitation of the foregoing, for purposes of this definition only, "Consolidated Cash Flow" shall be calculated after giving effect on a pro forma basis for the applicable period to, without duplication, any Asset Dispositions or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of the Company or one of the Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) Incurring, assuming or otherwise being liable for Acquired Indebtedness) occurring during the period commencing on the first day of such two-fiscal-quarter period to and including the Transaction Date (the "Reference Period"), as if such Asset Sale or Asset Acquisition occurred on the first day of the Reference Period. "Asset Acquisition" means: (1) any purchase or other acquisition (by means of transfer of cash, Indebtedness or other property to others or payment for property or services for the account or use of others or otherwise) of Capital Stock of any Person by the Company or any Restricted Subsidiary, in either case, pursuant to which such Person shall become a Restricted Subsidiary or shall be merged with or into the Company or any Restricted Subsidiary; or (2) any acquisition by the Company or any Restricted Subsidiary of the property or assets of any Person which constitute all or substantially all of an operating unit or line of business of such Person. "Asset Disposition" means any sale, transfer or other disposition (including, without limitation, by merger, consolidation or Sale/Leaseback Transaction) of: (1) shares of Capital Stock of a Subsidiary of the Company (other than directors' qualifying shares); (2) any License for the provision of wireless telecommunications services held by the Company or any Restricted Subsidiary (whether by sale of Capital Stock or otherwise); or (3) any other property or assets of the Company or any Subsidiary of the Company other than in the ordinary course of business; provided, however, that an Asset Disposition shall not include: - -------- ------- (A) any sale, transfer or other disposition of shares of Capital Stock, property or assets by a Restricted Subsidiary to the Company or to any other Restricted Subsidiary or by the Company to any Restricted Subsidiary; (B) any sale, transfer or other disposition of defaulted receivables for collection; (C) the sale, lease, conveyance or disposition or other transfer of all or substantially all of the assets of the Company as permitted under Article 5; (D) any disposition that constitutes a Change of Control; or (E) any sale, transfer or other disposition of shares of Capital Stock of any Marketing Affiliate; provided that such Marketing Affiliate is not -------- engaged in any activity 3 other than the registration, holding, maintenance or protection of trademarks and the licensing thereof; or (F) any sale, transfer or other disposition that does not (together with all related sales, transfers or dispositions) involve aggregate consideration in excess of $15,000,000. "AT&T Wireless" means AT&T Wireless Services, Inc., a Delaware corporation. "Average Life" means, as of the date of determination, with respect to any Indebtedness for borrowed money or Preferred Stock, the quotient obtained by dividing: (1) the sum of the products of the number of years from the date of determination to the dates of each successive scheduled principal or liquidation value payments of such Indebtedness or Preferred Stock, respectively, and the amount of such principal or liquidation value payments by (2) the sum of all such principal or liquidation value payments. "Bank Indebtedness" means any and all amounts payable under or in respect of the Credit Agreement and any Refinancing Indebtedness with respect thereto, as amended from time to time, including principal, premium (if any), interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company whether or not a claim for post-filing interest is allowed in such proceedings), fees, charges, expenses, reimbursement obligations, guarantees and all other amounts payable thereunder or in respect thereof. "Bankruptcy Law" means Title 11, United States Code, or any similar ------------------ federal or state law for the relief of debtors. "board of directors" of any Person means the board of directors, management committee or other governing body of such Person. "Business Day" means any date which is not a Legal Holiday. "Capital Lease Obligations" of any Person means the obligations to pay rent or other amounts under a lease of (or other Indebtedness arrangements conveying the right to use) real or personal property of such Person which are required to be classified and accounted for as a capital lease or liability on the face of a balance sheet of such Person in accordance with GAAP. The amount of such obligations shall be the capitalized amount thereof in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person. "Cash Equity Investors" means CB Capital Investors, L.P.; Equity- Linked Investors-II; Private Equity Investors III, L.P.; Hoak Communications Partners, L.P.; HCP Capital Fund, L.P.; Whitney Equity Partners, L.P.; J.H. Whitney III, L.P.; Whitney Strategic Partners III, L.P.; Media/Communications Partners III Limited Partnership; Media/Communications Investors Limited Partnership; One Liberty Fund III, L.P.; One Liberty 4 Fund IV, L.P.; One Liberty Advisors Fund, IV, L.P.; Gilde International B.V.; Toronto Dominion Investments, Inc.; Northwood Ventures LLC; Northwood Capital Partners LLC; Telecorp Investment Corp., L.L.C.; Telecorp Investment Corp. II, L.L.C.; Gerald T. Vento; Thomas H. Sullivan; Wireless 2000, Inc.; CIHC, Incorporated; Trillium PCS, LLC; Dresdner Kleinwort Benson Private Equity Partners LP; Triune PCS, LLC; JG Funding, LLC; Saunders Capital Group, LLC; Mon- Cre Wireless, Inc.; Ragland Wireless, Inc.; Cablevision Services, Inc.; Hayneville Wireless, Inc.; Moundville Communications, Inc.; James E. Campbell; William M. Mounger II; and E. B. Martin, Jr. "Cash Equivalents" means: (1) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof; (2) investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from Standard & Poor's Corporation or from Moody's Investors Service; (3) investments in certificates of deposit, banker's acceptance and time deposits maturing within 365 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000; (4) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (1) above and entered into with a financial institution satisfying the criteria described in clause (3) above; and (5) money market funds substantially all of whose assets comprise securities of the type described in clauses (1) through (3) above. "Change of Control" means the assurance of any of the following events: (1) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than a Permitted Holder or Permitted Holders or a person or group controlled by a Permitted Holder or Permitted Holders, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d- 5 under the Exchange Act, except that a person shall be deemed to have "beneficial ownership" of all such securities that such person has the right to acquire within one year, upon the happening of an event or otherwise) directly or indirectly (including, after the Merger, through ownership of Holdings), of securities of the Company representing 50% or more of the combined voting power of the Company's then outstanding Voting Stock; (2) the following individuals cease for any reason to constitute more than a majority of the number of directors then serving on the board of directors of the Company: individuals who, on the date of this Indenture, constitute the board of directors of the Company and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including, but not limited to, a consent solicitation relating to the election of directors of the Company) whose appointment or election by the board of directors of the Company or nomination for election by the Company's stockholders was approved by the vote of at least two-thirds of the directors then still in office or whose appointment, election or 5 nomination was previously so approved or recommended or made in accordance with the terms of the Stockholders' Agreement; or (3) the stockholders of the Company shall approve any Plan of Liquidation (whether or not otherwise in compliance with the provisions of this Indenture). "Code" means the Internal Revenue Code of 1986, as amended. "Commission" means the Securities and Exchange Commission. "common stock" of any Person means Capital Stock of such Person that does not rank prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "Communications Act" means the Communications Act of 1934, and any similar or successor Federal statute, and the rules and regulations and published policies of the FCC thereunder, all as amended and as the same may be in effect from time to time. "Company" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the indenture securities. "Consolidated Cash Flow" of any Person means, for any period, the Consolidated Net Income of such Person for such period: (1) increased (to the extent Consolidated Net Income for such period has been reduced thereby) by the sum of (without duplication): (A) Consolidated Interest Expense of such Person for such period; plus (B) Consolidated Income Tax Expense of such Person for such period; plus (C) the consolidated depreciation and amortization expense of such Person and its Restricted Subsidiaries for such period; plus (D) any other non-cash charges of such Person and its Restricted Subsidiaries for such period except for any non-cash charges that represent accruals of, or reserves for, cash disbursements to be made in any future accounting period; and (2) decreased (to the extent Consolidated Net Income for such period has been increased thereby) by any non-cash gains from Asset Dispositions. "Consolidated Income Tax Expense" of any Person means, for any period, the consolidated provision for income taxes of such Person and its Restricted Subsidiaries for such period calculated on a consolidated basis in accordance with GAAP. "Consolidated Interest Expense" for any Person means, for any period, without duplication: (1) the consolidated interest expense included in a consolidated income statement (without deduction of interest or finance charge income) of such Person and its Restricted Subsidiaries for such period calculated on a consolidated basis in accordance 6 with GAAP (including, without limitation, (a) any amortization of debt discount, (b) the net costs under Hedging Agreements, (c) all capitalized interest, (d) the interest portion of any deferred payment obligation and (e) all amortization of any premiums, fees and expenses payable in connection with the Incurrence of any Indebtedness); plus (2) the interest component of Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued, by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" of any Person means for any period the consolidated net income (or loss) of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided, however, that there shall be excluded therefrom: - -------- ------- (1) the net income (or loss) of any Person acquired by such Person or a Restricted Subsidiary of such Person in a pooling-of-interests transaction for any period prior to the date of such transaction; (2) the net income (but not loss) of any Restricted Subsidiary of such Person which is subject to restrictions which prevent or limit the payment of dividends or the making of distributions to such Person to the extent of such restrictions (regardless of any waiver thereof); (3) the net income of any Person that is not a Restricted Subsidiary of such Person, except to the extent of the amount of dividends or other distributions representing such Person's proportionate share of such other Person's net income for such period actually paid in cash to such Person by such other Person during such period; (4) gains or losses (other than for purposes of calculating Consolidated Net Income under clause (C) of paragraph (a) of Section 4.04) on Asset Dispositions by such Person or its Restricted Subsidiaries; (5) all extraordinary gains (but not, other than for purposes of calculating Consolidated Net Income under clause (C) of paragraph (a) under Section 4.04, losses) determined in accordance with GAAP; and (6) in the case of a successor to such Person by consolidation or merger or as a transferee of such Person's assets, any earnings (or losses) of the successor corporation prior to such consolidation, merger or transfer of assets. "Credit Agreement" means the amended and restated loan agreement dated as of March 31, 1999, as amended, waived or otherwise modified from time to time, among the Company, the financial institutions named therein as lenders, Toronto Dominion (Texas), Inc., as administrative agent for itself and on behalf of the lenders and the issuing bank (except to the extent that any such amendment, waiver or other modification thereto would be prohibited by the terms of this Indenture, unless otherwise agreed to by the holders of at least a majority in aggregate principal amount of the Securities at the time outstanding). "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. "Default" means any event that is, or after notice or lapse of time or both would become, an Event of Default. 7 "Designated Senior Indebtedness" of the Company means: (1) so long as outstanding, Bank Indebtedness; and (2) so long as outstanding, any other Senior Indebtedness which has at the time of initial issuance an aggregate outstanding principal amount in excess of $25,000,000 and which has been so designated as Designated Senior Indebtedness by the board of directors of the Company at the time of its initial issuance in a resolution delivered to the Trustee. "Designated Senior Indebtedness" of a Subsidiary Guarantor has a correlative meaning. "Discount Notes" means the 12 3/4% Senior Subordinated Discount Notes due 2009 of the Company. "Disqualified Stock" of any Person means any Capital Stock of such Person which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the first anniversary of the Stated Maturity of the Securities; provided, however, that any Capital Stock that would not -------- ------- constitute Disqualified Stock but for provisions thereof giving holders thereof the right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an "asset sale" or "change of control" occurring prior to the first anniversary of the Stated Maturity of the Securities shall not constitute Disqualified Stock if the "asset sale" or "change of control" provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions of Section 4.08. "Domestic Restricted Subsidiary" means any Restricted Subsidiary of the Company other than a Foreign Restricted Subsidiary. "Equity Offering" means any public or private sale of Qualified Stock made on a primary basis by the Company after the date of this Indenture, including through the issuance or sale of Qualified Stock to one or more Strategic Equity Investors; provided, however, that a sale to Holdings will -------- ------- constitute an Equity Offering only if funded by a substantially concurrent Equity Offering by Holdings. "Equity Interests" means Capital Stock and all warrants, options and other rights to acquire Capital Stock but excluding any debt security that is convertible into or exchangeable for, Capital Stock. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Commission thereunder. "Exchange and Registration Rights Agreement" means the Exchange and Registration Rights Agreement, to be dated the date of this Indenture, among the Company, the Subsidiary Guarantor and the Initial Purchasers. "Exchange Offer" means a registered exchange offer for the Securities undertaken by the Company pursuant to the Exchange and Registration Rights Agreement. "Exchange Securities" means, collectively, debt securities of the Company that are identical in all material respects to the Securities, except for transfer restrictions relating to the Securities, issued in a like aggregate principal amount of the Securities originally issued pursuant to the Exchange and Registration Rights Agreement. 8 "Expiration Date" means the expiration date with respect to any Offer to Purchase. "Fair Market Value" means, with respect to any asset or property, the price that could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. Unless otherwise specified in this Indenture, Fair Market Value shall be determined by the board of directors of the Company acting in good faith. "FCC" means the Federal Communications Commission, or any other similar or successor agency of the Federal government administering the Communications Act. "FCC Debt" means Indebtedness owed to the United States Treasury Department or the FCC that is Incurred in connection with the acquisition of a License. "Foreign Restricted Subsidiary" means any Restricted Subsidiary of the Company that is not organized under the laws of the United States of America or any State thereof or the District of Columbia. "GAAP" means generally accepted accounting principles, consistently applied, as in effect from time to time in the United States of America, as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as is approved by a significant segment of the accounting profession in the United States. "Guarantees" means the Parent Guarantee and the Subsidiary Guarantees. "Guarantors" means the Parent Guarantor and the Subsidiary Guarantors. "Hedging Agreement" means any interest rate, currency or commodity swap agreement, interest rate, currency or commodity future agreement, interest rate cap or collar agreement, interest rate, currency or commodity hedge agreement and any put, call or other agreement designed to protect against fluctuations in interest rates, currency exchange rates or commodity prices. "Holder" or "Securityholder" means the Person in whose name a Security is registered on the registrar's books. "Holdings" means TeleCorp PCS, Inc., a Delaware corporation, the indirect parent of the Company and the direct parent of the Parent Guarantor, until a successor replaces it and thereafter, means the successor. "Incur" means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (including by conversion, exchange or otherwise), assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation or the recording, as required pursuant to GAAP or otherwise, of any such Indebtedness or other obligation on the balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings correlative to the foregoing). Indebtedness of any Person or any of its Restricted Subsidiaries existing at the time such Person becomes a Restricted Subsidiary (or is merged into, or consolidates with, the Company or any Restricted Subsidiary), whether or not such Indebtedness was Incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary (or being merged into, or consolidated with, the Company or any Restricted Subsidiary), shall be deemed Incurred at the time any such Person becomes a 9 Restricted Subsidiary or merges into, or consolidates with, the Company or any Restricted Subsidiary. "Indebtedness" means (without duplication), with respect to any Person, whether recourse is to all or a portion of the assets of such Person and whether or not contingent: (1) every obligation of such Person for money borrowed; (2) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations Incurred in connection with the acquisition of property, assets or businesses; (3) every reimbursement obligation of such Person with respect to letters of credit, bankers' acceptances or similar facilities issued for the account of such Person; (4) every obligation of such Person issued or assumed as the deferred purchase price of property or services (but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith); (5) every Capital Lease Obligation of such Person; (6) every net obligation under Hedging Agreements or similar agreements of such Person; and (7) every obligation of the type referred to in clauses (1) through (6) of another Person and all dividends of another Person the payment of which, in either case, such Person has guaranteed or is responsible or liable for, directly or indirectly, as obligor, guarantor or otherwise. Indebtedness shall: (1) include the liquidation preference and any mandatory redemption payment obligations in respect of any Disqualified Stock of the Company and any Restricted Subsidiary and any Preferred Stock of a Subsidiary of the Company; (2) never be calculated taking into account any cash and Cash Equivalents held by such Persons; (3) not include obligations arising from agreements of the Company or a Restricted Subsidiary to provide for indemnification, adjustment of purchase price, earn-out or other similar obligations, in each case, Incurred or assumed in connection with the disposition of any business or assets of a Restricted Subsidiary. The amount of any Indebtedness outstanding as of any date shall be: (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; (2) the principal amount thereof, in the case of any Indebtedness other than Indebtedness issued with original issue discount; and (3) the greater of the maximum repurchase or redemption price or liquidation preference thereof, in the case of any Disqualified Stock or Preferred Stock. 10 "Indenture" means this Indenture as amended or supplemented from time to time. "Ineligible Subsidiary" means: (1) any Special Purpose Subsidiary; (2) any Subsidiary Guarantor; (3) any Subsidiary of the Company that, directly or indirectly, owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; and (4) any Subsidiary of the Company that, directly or indirectly, owns any Capital Stock or Indebtedness of, or owns or holds any Lien on any property of, any other Subsidiary of the Company that is not eligible to be designated as an Unrestricted Subsidiary. "Initial Purchasers" means Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (USA) Inc. "Initial Security" or "Initial Securities" means any Security or Securities issued on the date of this Indenture. "Investment" in any Person means any direct or indirect loan, advance, guarantee or other extension of credit or capital contribution to (by means of transfers of cash or other property to others or payments for property or services for the account or use of others or otherwise), or purchase or acquisition of Capital Stock, bonds, notes, debentures or other securities or evidence of Indebtedness issued by, any other Person. "Issue Date" means the date on which the Securities are originally issued. "Legal Holiday" means a Saturday, Sunday or other day on which banking institutions in the State of New York are authorized or required by law to close. "License" means any broadband Personal Communications Services license issued by the FCC in connection with the operation of a System. "License Subsidiary" means Tritel A/B Holding Corp., Tritel C/F Holding Corp., and any other Wholly Owned Subsidiary of the Company designated as a License Sub under the Credit Agreement. "Lien" means, with respect to any property or assets, any mortgage or deed of trust, pledge, hypothecation, assignment, security interest, lien, charge, easement (other than any easement not materially impairing usefulness or marketability), encumbrance, preference, priority or other security agreement with respect to such property or assets (including, without limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the foregoing). "liquidated damages" means any liquidated damages payable under the Exchange and Registration Rights Agreement. "Management Stockholders" means Gerald Vento and Thomas Sullivan. 11 "Marketing Affiliate" means any Person which engages in no activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof. "Material Indebtedness" means Indebtedness having an aggregate principal amount (or accreted value) of $50 million or more at the time outstanding. "Net Available Proceeds" from any Asset Disposition by any Person means cash or readily marketable Cash Equivalents received (including by way of sale or discounting of a note, installment receivable or other receivable, but excluding any other consideration received in the form of assumption by the acquiror of Indebtedness or other obligations relating to such properties or assets or received in any other non-cash form) therefrom by such Person, including any cash received by way of deferred payment or upon the monetization or other disposition of any non-cash consideration (including notes or other securities) received in connection with such Asset Disposition, net of (1) all legal, title and recording tax expenses, commissions and other fees and expenses Incurred and all federal, state, foreign and local taxes accrued as a liability as a consequence of such Asset Disposition; (2) all payments made by such Person or any of its Restricted Subsidiaries on any Indebtedness which is secured by such assets in accordance with the terms of any Lien upon or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such Asset Disposition or by applicable law, be repaid out of the proceeds from such Asset Disposition; (3) all payments made with respect to liabilities associated with the assets which are the subject of the Asset Disposition, including, without limitation, trade payables and other accrued liabilities; (4) appropriate amounts to be provided by such Person or any Restricted Subsidiary thereof, as the case may be, as a reserve in accordance with GAAP against any liabilities associated with such assets and retained by such Person or any Restricted Subsidiary thereof, as the case may be, after such Asset Disposition, including, without limitation, liabilities under any indemnification obligations and severance and other employee termination costs associated with such Asset Disposition, until such time as such amounts are no longer reserved or such reserve is no longer necessary (at which time any remaining amounts will become Net Available Proceeds to be allocated in accordance with the provisions of clause (a)(3) of Section 4.06); and (5) all distributions and other payments made to minority interest holders in Restricted Subsidiaries of such Person or joint ventures as a result of such Asset Disposition. "Net Investment" means the excess of: (1) the aggregate amount of all Investments made in any Unrestricted Subsidiary or joint venture by the Company or any Restricted Subsidiary on or after the date of this Indenture (in the case of an Investment made other than in cash, the amount shall be the Fair Market Value of such Investment as determined in good faith by the Board of the Company or such Restricted Subsidiary); over (2) the aggregate amount returned in cash on or with respect to such Investments whether through interest payments, principal payments, dividends or other distributions or payments; provided, however, that such -------- ------- payments or distributions shall not be (and have not been) included in clause (C) of the paragraph (a) of Section 4.04; provided -------- 12 further that, with respect to all Investments made in any Unrestricted ------- Subsidiary or joint venture, the amounts referred to in clause (1) above with respect to such Investments shall not exceed the aggregate amount of all such Investments made in such Unrestricted Subsidiary or joint venture. "Offer" means any written offer sent by the Company that is the subject of an Offer to Purchase. "Offer to Purchase" means an Offer sent by first class mail, postage prepaid, to each holder of Securities at such holder's address appearing in the register for the Securities on the date of the Offer offering to purchase up to the principal amount of the Securities specified in such Offer at the purchase price specified in such Offer (as determined pursuant to this Indenture). Unless otherwise required by applicable law, the Offer shall specify an Expiration Date of the Offer to Purchase which shall be not less than 30 days nor more than 60 days after the date of such Offer and a Purchase Date for purchase of Securities within five Business Days after the Expiration Date. The Company shall notify the Trustee at least 15 Business Days (or such shorter period as is acceptable to the Trustee) prior to the mailing of the Offer of the Company's obligation to make an Offer to Purchase, and the Offer shall be mailed by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. The Offer shall contain all the information required by applicable law to be included therein. The Offer shall contain all instructions and materials necessary to enable holders of Securities to tender their Securities pursuant to the Offer to Purchase. The Offer shall also state: (1) the provision of this Indenture pursuant to which the Offer to Purchase is being made; (2) the Expiration Date and the Purchase Date; (3) the Purchase Amount; (4) the Purchase Price; (5) that such holder may tender all or any portion of the Securities registered in the name of such holder and that any portion of a Security tendered must be tendered in an integral multiple of $1,000 of principal amount; (6) the place or places where Securities are to be surrendered for tender pursuant to the Offer to Purchase; (7) that interest on any Security not tendered or tendered but not purchased by the Company pursuant to the Offer to Purchase will continue to accrue; (8) that on the Purchase Date the Purchase Price will become due and payable upon each Security being accepted for payment pursuant to the Offer to Purchase and that interest thereon shall cease to accrue on and after the Purchase Date; (9) that each holder electing to tender all or any portion of a Security pursuant to the Offer to Purchase shall be required to surrender such Security at the place or places specified in the Offer prior to the close of business on the Expiration Date (such Security being, if the Company or the Trustee so requires, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the holder thereof or such holder's attorney duly authorized in writing); (10) that holders will be entitled to withdraw all or any portion of Securities tendered if the Company (or its paying agent) receives, not later than the close of 13 business on the fifth Business Day next preceding the Expiration Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the principal amount of the Security the holder tendered, the certificate number of the Security the holder tendered and a statement that such holder is withdrawing all or a portion of such holder's tender; (11) that (a) if Securities in an aggregate principal amount less than or equal to the Purchase Amount are duly tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase all such Securities and (b) if Securities in an aggregate principal amount in excess of the Purchase Amount are tendered and not withdrawn pursuant to the Offer to Purchase, the Company shall purchase Securities having an aggregate principal amount equal to the Purchase Amount on a pro rata basis (with such adjustments as may be deemed appropriate so that only Securities in denominations of $1,000 of principal amount or integral multiples thereof shall be purchased); and (12) that in the case of any holder whose Security is purchased only in part, the Company shall execute and the Trustee shall authenticate and deliver to the holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such holder, in an aggregate principal amount equal to and in exchange for the unpurchased portion of the Security so tendered. An Offer to Purchase shall be governed by and effected in accordance with the provisions above pertaining to any Offer. "Officer" means the Chief Executive Officer, the Executive Vice President, the Chief Financial Officer, the Chief Operating Officer, the President, any Vice President, the Treasurer or any Secretary of the Company or a Subsidiary of the Company, as the case may be. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion delivered to the Trustee from legal counsel who is acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or the Trustee. "Parent Guarantee" means the guarantee of the obligations with respect to the Securities issued by the Parent Guarantor pursuant to the terms of this Indenture, such Parent Guarantee having subordination provisions equivalent to those contained in this Indenture with respect to the Securities and being substantially in the form prescribed in this Indenture. "Parent Guarantor" means Tritel, Inc. and any successors or assigns permitted under this Indenture. "Permitted Asset Swap" means any exchange of assets by the Company or a Restricted Subsidiary where the Company and/or its Restricted Subsidiaries receive consideration at least 75% of which consists of (1) cash, (2) assets that are used or useful in a Permitted Business or (3) any combination thereof. "Permitted Business" means: (1) the delivery or distribution of telecommunications, voice, data or video services; or (2) any business or activity reasonably related or ancillary thereto, including, without limitation, any business conducted by the Company or any Restricted Subsidiary 14 on the date of this Indenture and the acquisition, holding or exploitation of any license relating to the delivery of the services described in clause (1) above. "Permitted Holder" means: (1) each of AT&T Wireless, TWR Cellular, the Cash Equity Investors, the Management Stockholders, Digital PCS, L.L.C, Wireless 2000, Inc. and any of their respective Affiliates and the respective successors (by merger, consolidation, transfer or otherwise) to all or substantially all of the respective businesses and assets of any of the foregoing; provided -------- that Triton PCS, Inc. shall be deemed an Affiliate of AT&T Wireless so long as AT&T Wireless owns at least 10% of the equity interests of Triton PCS, Inc.; and (2) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) controlled by one or more persons identified in clause (1) above. "Permitted Investments" means: (1) Investments in Cash Equivalents; (2) Investments representing Capital Stock or obligations issued to the Company or any Restricted Subsidiary in the course of the good faith settlement of claims against any other Person or by reason of a composition or readjustment of debt or a reorganization of any debtor of the Company or any Restricted Subsidiary; (3) deposits including interest-bearing deposits, maintained in the ordinary course of business in banks; (4) any Investment in any Person; provided, however, that, after -------- ------- giving effect to such Investment, such Person is or becomes a Restricted Subsidiary or such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary; (5) trade receivables and prepaid expenses, in each case arising in the ordinary course of business; provided, however, that such receivables -------- ------- and prepaid expenses would be recorded as assets of such Person in accordance with GAAP; (6) endorsements for collection or deposit in the ordinary course of business by such Person of bank drafts and similar negotiable instruments of such other Person received as payment for ordinary course of business trade receivables; (7) any interest rate agreements with an unaffiliated Person otherwise permitted by clause (5) or (6) of paragraph (a) of Section 4.03; (8) Investments received as consideration for an Asset Disposition in compliance with the provisions of this Indenture described under Section 4.06; (9) loans or advances to employees of the Company or any Restricted Subsidiary in the ordinary course of business in an aggregate amount not to exceed $5,000,000 in the aggregate at any one time outstanding; (10) any Investment acquired by the Company or any of its Restricted Subsidiaries as a result of a foreclosure by the Company or any of its Restricted Subsidiaries or in connection with the settlement of any outstanding Indebtedness or trade payable; 15 (11) loans and advances to officers, directors and employees for business-related travel expense, moving expense and other similar expenses, each Incurred in the ordinary course of business; (12) any Investment for which the sole consideration is Qualified Stock; and (13) other Investments (with each such Investment being valued as of the date made and without giving effect to subsequent changes in value) in an aggregate amount not to exceed $15,000,000 at any one time outstanding. "Permitted Junior Securities" means (1) Equity Interests in the Company or any Guarantor; or (2) debt securities that are subordinated to all Senior Indebtedness and to any debt securities issued in exchange for Senior Indebtedness, to substantially the same extent as, or to a greater extent than, the Securities and the Guarantees are subordinated to Senior Indebtedness under this Indenture. "Permitted Liens" means: --------------- (a) Liens to secure Indebtedness permitted to be Incurred under clause (2) of Section 4.03(a); (b) Liens to secure Indebtedness permitted to be Incurred under clause (3) of Section 4.03(a); provided that any such Lien may not extend to any -------- property of the Company or any Restricted Subsidiary, other than the property acquired, constructed or leased with the proceeds of such Indebtedness and any improvements or accessions to such property; (c) Liens to secure FCC Debt permitted to be Incurred under clause (9) of Section 4.03(a) and any interest or title of a lessor in the property subject to a Capitalized Lease Obligation permitted to be Incurred under clause (8) of Section 4.03(a); (d) Liens consisting of the interests of other Persons under operating leases entered into in the ordinary course of business by the Company or a Restricted Subsidiary; (e) Liens granted by a Restricted Subsidiary to secure Indebtedness owing to the Company or another Restricted Subsidiary; (f) Liens securing Hedging Agreements so long as such Hedging Agreements relate to Indebtedness that is, and is permitted to be Incurred under Section 4.03, secured by a Lien on the same property covered by such Hedging Agreements; (g) Liens arising from the rendering of a final judgment or order that does not at the time constitute an Event of Default; (h) Liens for taxes, assessments or governmental charges or levies on the property of the Company or any Restricted Subsidiary if the same shall not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision that shall be required in conformity with GAAP shall have been made therefor; (i) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens and other similar Liens, on property of the Company or any Restricted Subsidiary arising in the ordinary course of business and securing payment of obligations that are not more than 60 days past due or are being contested in good faith and by appropriate proceedings; 16 (j) Liens on the property of the Company or any Restricted Subsidiary Incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of- money bonds, surety bonds or arising from partial or progress payments by a customer or other obligations of a like nature and Incurred in a manner consistent with industry practice, in each case which are not Incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate impair in any material respect the use of property in the operation of the business of the Company and the Restricted Subsidiaries taken as a whole; (k) Liens on property at the time the Company or any Restricted Subsidiary acquired such property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that any such Lien may not extend to any other property of - -------- ------- the Company or any Restricted Subsidiary; provided further, however, that such ---------------- ------- Liens shall not have been Incurred in anticipation of or in connection with the transaction or series of transactions pursuant to which such property was acquired by the Company or any Restricted Subsidiary; (l) Liens on the property or Capital Stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that any such -------- ------- Lien may not extend to any other property of the Company or any other Restricted Subsidiary that is not a direct Subsidiary of such Person; provided further, ---------------- however, that any such Lien was not Incurred in anticipation of or in connection - ------- with the transaction or series of transactions pursuant to which such Person became a Restricted Subsidiary; (m) pledges or deposits by the Company or any Restricted Subsidiary under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which the Company or any Restricted Subsidiary is a party, or deposits to secure public or statutory obligations of the Company or any Restricted Subsidiary, or deposits for the payment of rent, in each case Incurred in the ordinary course of business; (n) utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character; (o) Liens existing on the date of issue of the Securities not otherwise described in clauses (a) through (n) above; (p) Liens not otherwise described in clauses (a) through (o) above on the property of any Restricted Subsidiary that is not a Subsidiary Guarantor to secure any Indebtedness permitted to be Incurred by such Restricted Subsidiary pursuant to Section 4.03; and (q) Liens on the property of the Company or any Restricted Subsidiary to secure any Refinancing, in whole or in part, of any Indebtedness secured by Liens referred to in clause (b), (c), (k), (l), (o) or (p) above; provided, -------- however, that any such Lien shall be limited to all or part of the same property - ------- that secured the original Lien (together with improvements and accessions to such property) and the aggregate principal amount of Indebtedness that is secured by such Lien shall not be increased to an amount greater than the sum of: (1) the outstanding principal amount, or, if greater, the committed amount, of the Indebtedness secured by Liens described under clause (b), (c), (k), (l), (o) or (p) above, as the case may be, at the time the original Lien became a Permitted Lien under this Indenture, and 17 (2) an amount necessary to pay any fees and expenses, including premiums and defeasance costs, Incurred by the Company or such Restricted Subsidiary in connection with such Refinancing. "Person" means any individual, corporation, limited or general partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Plan of Liquidation" means, with respect to any Person, a plan (including by operation of law) that provides for, contemplates, or the effectuation of which is preceded or accompanied by (whether or not substantially contemporaneously): (1) the sale, lease, conveyance or other disposition of all or substantially all of the assets of such Person; and (2) the distribution of all or substantially all of the proceeds of such sale, lease, conveyance or other disposition and all or substantially all of the remaining assets of such Person to holders of Capital Stock of such Person. "Preferred Stock," as applied to the Capital Stock of any Person, means Capital Stock of such Person of any class or classes (however designated) that ranks prior, as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding up of such Person, to shares of Capital Stock of any other class of such Person. "principal" of a Security means the principal of the Security plus the premium, if any, payable on the Security which is due or overdue or is to become due at the relevant time. "Private Exchange Securities" means, collectively, debt securities of the Company that are identical in all material respects to the Exchange Securities, except for transfer restrictions relating to such Private Exchange Securities, issued by the Company (under the same indenture as the Exchange Securities) simultaneously with the delivery of the Exchange Securities in the Exchange Offer to any Securityholder that holds any Securities acquired by it that have, or that are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, or to any Securityholder that is not entitled to participate in the Exchange Offer, upon the request of any such holder, in exchange for a like aggregate principal amount of Securities held by such holder. "Public Sale" means any underwritten public offering, made on a primary basis pursuant to a registration statement filed with, and declared effective by, the Commission in accordance with the Securities Act. "Purchase Amount" means the aggregate principal amount of the outstanding Securities offered to be purchased by the Company pursuant to any Offer to Purchase (including, if less than 100%, the manner by which such amount has been determined pursuant to a specified provision of this Indenture requiring such Offer to Purchase). "Purchase Date" means the settlement date with respect to any Offer to Purchase. "Purchase Money Indebtedness" means any Indebtedness (including, without limitation, Capital Lease Obligations); provided that the net proceeds -------- of such Indebtedness are utilized solely for the purpose of financing the cost (including, without limitation, the cost of design, development, site acquisition, construction, integration, handset manufacture or 18 acquisition or microwave relocation) of assets used or usable in a Permitted Business (including, without limitation, through the acquisition of Capital Stock of an entity engaged in a Permitted Business). "Purchase Price" means, with respect to any Offer to Purchase, the purchase price to be paid by the Company for each $1,000 aggregate principal amount of Securities accepted for payment (as specified pursuant to this Indenture). "Qualified License" means, as of the date of determination, any License covering or adjacent to any geographical area in respect of which the Company or any Restricted Subsidiary owns, as of the Business Day immediately prior to such date of determination, at least one other License covering a substantial portion of such area. "Qualified Stock" means any Capital Stock of the Company other than Disqualified Stock. "Refinance" means refinance, renew, extend, replace or refund; and "Refinancing" and "Refinanced" have correlative meanings. "Refinancing Indebtedness" means Indebtedness that is Incurred to refund, refinance, replace, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness of the Company or any Restricted Subsidiary existing on the date of this Indenture or Incurred in compliance with this Indenture (including Indebtedness of the Company that Refinances Refinancing Indebtedness); provided, however, that: -------- ------- (1) the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being Refinanced; (2) the Refinancing Indebtedness has an Average Life at the time such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness being Refinanced; (3) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced plus the amount of any premium required to be paid in connection with such Refinancing pursuant to the terms of the Indebtedness being Refinanced or the amount of any premium reasonably determined by the issuer of such Indebtedness as necessary to accomplish such Refinancing by means of a tender offer, exchange offer or privately negotiated repurchase, plus the expenses of such issuer reasonably Incurred in connection therewith; and (4) if the Indebtedness being Refinanced is pari passu with the ---- ----- Securities, such Refinancing Indebtedness is made pari passu with, or ---- ----- subordinate in right of payment to, the Securities, and, if the Indebtedness being Refinanced is subordinate in right of payment to the Securities, such Refinancing Indebtedness is subordinate in right of payment to the Securities on terms no less favorable to the holders of Securities than those contained in the Indebtedness being Refinanced; provided further, however, that Refinancing Indebtedness shall not include - -------- ------- ------- (A) Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the Company; or 19 (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary. "Representative" means the trustee, agent or representative (if any) for an issue of Senior Indebtedness. "Restricted Subsidiary" means any Subsidiary of the Company other than an Unrestricted Subsidiary. "Sale/Leaseback Transaction" means an arrangement relating to property owned on the date of this Indenture or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases it from such Person, other than leases between the Company and a Wholly Owned Subsidiary or between Wholly Owned Subsidiaries. "Secured Indebtedness" means any Indebtedness of the Company secured by a Lien. "Secured Indebtedness" of a Guarantor has a correlative meaning. "Securities Act" means the Securities Act of 1933, as amended. "Security" or "Securities" means any Security or Securities issued under this Indenture, including any Initial Security or Initial Securities or any Exchange Security or Exchange Securities or any Private Exchange Security or Private Exchange Securities issued in exchange therefor in connection with an Exchange Offer undertaken pursuant to the Exchange and Registration Rights Agreement. "Securityholder" or "Holder" means the Person in whose name a Security is registered on the registrar's books. "Senior Indebtedness" of the Company means the principal of, premium (if any) and accrued and unpaid interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization of the Company, regardless of whether or not a claim for post-filing interest is allowed in such proceedings) on, and fees and other amounts owing in respect of Bank Indebtedness and all other Indebtedness of the Company, including FCC Debt, whether outstanding on the date of this Indenture or thereafter Incurred, unless in the instrument creating or evidencing the same or pursuant to which the same is outstanding it is provided that such obligations are not superior in right of payment to the Securities; provided, however, that Senior Indebtedness shall not -------- ------- include: (1) any obligation of the Company to any Subsidiary of the Company; (2) any liability for federal, state, local or other taxes owed or owing by the Company; (3) any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities); (4) any Indebtedness or obligation of the Company, and any accrued and unpaid interest in respect thereof, that by its terms is subordinate or junior in any respect to any other Indebtedness or obligation of the Company, including any Senior Subordinated Indebtedness of the Company and any Subordinated Indebtedness of the Company; (5) any obligations with respect to any Capital Stock; or 20 (6) any Indebtedness Incurred in violation of this Indenture. "Senior Indebtedness" of any Subsidiary Guarantor has a correlative meaning. "Senior Subordinated Indebtedness" of the Company means the Securities, the Discount Notes and any other Indebtedness of the Company that specifically provides that such Indebtedness is to rank pari passu with the ---- ----- Securities in right of payment and is not subordinated by its terms in right of payment to any Indebtedness or other obligation of the Company which is not Senior Indebtedness. "Senior Subordinated Indebtedness" of a Guarantor has a correlative meaning. "Significant Subsidiary" means any Restricted Subsidiary that would be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the Commission. "Special Purpose Subsidiary" means any License Subsidiary. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). "Stockholders' Agreement" means the Stockholders' Agreement dated as of November 13, 2000, among AT&T Wireless, the Cash Equity Investors, the Management Stockholders, E. B. Martin, Jr., William M. Mounger II and Holdings, as such agreement may be amended from time to time in accordance with the provisions of such agreement, so long as the terms of any such amendment are no less favorable to the Securityholders than the terms of the Stockholders' Agreement in effect on the date of this Indenture. "Strategic Equity Investor" means any of the Cash Equity Investors, any Affiliate thereof, any other Person engaged in a Permitted Business whose Total Equity Market Capitalization exceeds $500,000,000 or any other Person who has at least $100,000,000 total funds under management and who has issued an irrevocable, unconditional commitment to purchase Qualified Stock of the Company for an aggregate purchase price that does not exceed 20% of the value of the funds under management by such Person. "Subordinated Indebtedness" means any Indebtedness of the Company or any Guarantor (whether outstanding on the date of this Indenture or thereafter Incurred) which is by its terms expressly subordinate or junior in right of payment to the Securities or the Guarantee of such Guarantor, as the case may be. "Subsidiary" of any Person means: (1) a corporation more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries thereof; or (2) any other Person (other than a corporation) in which such Person, or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, has at least a majority ownership and voting power relating to the policies, management and affairs thereof. 21 "Subsidiary Guarantee" means each guarantee of the obligations with respect to the Securities issued by a Subsidiary of the Company pursuant to the terms of this Indenture, each such Subsidiary Guarantee having subordination provisions equivalent to those contained in this Indenture with respect to the Securities and being substantially in the form prescribed in this Indenture. "Subsidiary Guarantor" means any Subsidiary of the Company that has issued a Subsidiary Guarantee. "System" means, as to any Person, assets constituting a radio communications system authorized under the rules for wireless communications services (including any license and the network, marketing, distribution, sales, customer interface and operations and functions relating thereof) owned and operated by such Person. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa- ----- 77bbbb) as in effect on the date of this Indenture. "Total Assets" means the total assets of the Company, as shown on the most recent quarterly balance sheet of the Company. "Total Consolidated Indebtedness" means, at any date of determination, an amount equal to: (1) the accreted value of all Indebtedness, in the case of any Indebtedness issued with original issue discount; plus (2) the principal amount of all Indebtedness, in the case of any other Indebtedness, of the Company and its Restricted Subsidiaries outstanding as of the date of determination. "Total Equity Market Capitalization" of any Person means, as of any day of determination, the sum of (a) the product of (1) the aggregate number of outstanding primary shares of common stock of such Person on such day (which shall not include any options or warrants on, or securities convertible or exchangeable into, shares of common stock of such Person) multiplied by (2) the average closing price of such common stock listed on a national securities exchange or the Nasdaq National Market System over the 20 consecutive Business Days immediately preceding such day plus (b) the liquidation value of any outstanding shares of Preferred Stock of such Person on such day. "Total Invested Capital" means, as of any date of determination, the sum of, without duplication: (1) the total amount of equity contributed to the Company as of September 30, 2000 as set forth on the September 30, 2000 consolidated balance sheet of the Company; plus (2) irrevocable, unconditional commitments from any Strategic Equity Investor to purchase Capital Stock of the Company (other than Disqualified Stock) within 36 months of the date of issuance of such commitment, but in any event not later than the Stated Maturity of the Securities; provided, -------- however, that such commitments shall exclude commitments related to any ------- Investment in any Person incorporated, formed or created for the purpose of acquiring one or more Qualified Licenses unless such Person shall become a Restricted Subsidiary; plus 22 (3) the aggregate net cash proceeds received by the Company from capital contributions or the issuance or sale of Capital Stock of the Company (other than Disqualified Stock, but including Qualified Stock issued upon the conversion of convertible Indebtedness or upon the exercise of options, warrants or rights to purchase Qualified Stock) subsequent to the date of this Indenture, other than issuances or sales of Capital Stock to a Restricted Subsidiary and other than capital contributions from, or issuances or sales of Capital Stock to, any Strategic Equity Investor in connection with (a) any Investment in any Person incorporated, formed or created for the purpose of acquiring one or more Qualified Licenses and (b) any Investment in any Person engaged in a Permitted Business, unless, in either case, such Person shall become a Restricted Subsidiary; provided, -------- however, such aggregate net cash proceeds shall exclude any amounts ------- included as commitments to purchase Capital Stock in the preceding clause (2); plus (4) the Fair Market Value of assets that are used or useful in a Permitted Business or of the Capital Stock of a Person engaged in a Permitted Business received by the Company as a capital contribution or in exchange for Capital Stock of the Company (other than Disqualified Stock) subsequent to September 30, 2000, other than (x) capital contributions from a Restricted Subsidiary or issuance or sales of Capital Stock of the Company to a Restricted Subsidiary or (y) the proceeds from the sale of Qualified Stock to an employee stock ownership plan or other trust established by the Company or any of its subsidiaries; plus (5) the aggregate net cash proceeds received by the Company or any Restricted Subsidiary from the sale, disposition or repayment of any Investment made after the date of this Indenture and constituting a Restricted Payment in an amount equal to the lesser of (a) the return of capital with respect to such Investment and (b) the initial amount of such Investment, in either case, less the cost of the disposition of such Investment; plus (6) an amount equal to the consolidated Net Investment of the Company and/or any of its Restricted Subsidiaries in any Subsidiary that has been designated as an Unrestricted Subsidiary after the date of this Indenture upon its redesignation as a Restricted Subsidiary in accordance with Section 4.13; plus (7) Total Consolidated Indebtedness; minus (8) the aggregate amount of all Restricted Payments (including any Designation Amount, but other than a Restricted Payment of the type referred to in clause (3)(b) of paragraph (c) of Section 4.04) declared or made on or after the date of this Indenture. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means the Chairman of the Board of Directors, the President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "Unrestricted Subsidiary" means (1) any Subsidiary of the Company (other than an Ineligible Subsidiary) designated after the date of this Indenture as such pursuant to, and in compliance with, Section 4.13 and (2) any Marketing Affiliate. Any such designation of any Subsidiary of the Company may be revoked by a resolution of the board of directors of the 23 Company delivered to the Trustee certifying compliance with Section 4.13, subject to the provisions of Section 4.13. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option. "Voting Stock" of any Person means the Capital Stock of such Person which ordinarily has voting power for the election of directors (or Persons performing similar functions) of such Person, whether at all times or only so long as no senior class of securities has such voting power by reason of any contingency. "Wholly Owned Subsidiary" means a Restricted Subsidiary, all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by the Company and/or by one or more Wholly Owned Subsidiaries. SECTION 1.02. Other Definitions -----------------
Defined in Term Section ---- ------------- "Change of Control Offer".................................. 4.04(b) "covenant defeasance option"............................... 8.01(b) "cross acceleration provision"............................. 6.01 "Designation Amount"....................................... 4.13 "Event of Default"......................................... 6.01 "Guaranteed Obligations"................................... 11.01 "judgment default provision"............................... 6.01 "legal defeasance option".................................. 8.01(b) "Non-Payment Event of Default"............................. 10.03 "Notice of Default"........................................ 6.01 "Paying Agent"............................................. 2.03 "Payment Blockage Notice".................................. 10.03 "Payment Event of Default"................................. 10.03 "protected purchaser"...................................... 2.07 "Registrar"................................................ 2.03 "Revocation"............................................... 4.13 "Surviving Entity"......................................... 5.01(a)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This ------------------------------------------------- Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: "indenture securities" means the Securities and the Guarantees. "indenture security holder" means a Holder or Securityholder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. 24 "obligor" on the indenture securities means the Company, the Guarantors and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise --------------------- requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; (6) unsecured Indebtedness shall not be deemed to be subordinate or junior to Secured Indebtedness merely by virtue of its nature as unsecured Indebtedness; (7) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP; (8) the principal amount of any Preferred Stock shall be (i) the maximum liquidation value of such Preferred Stock or (ii) the maximum mandatory redemption or mandatory repurchase price with respect to such Preferred Stock, whichever is greater. ARTICLE 2 The Securities -------------- SECTION 2.01. Form and Dating. Provisions relating to the Initial --------------- Securities, the Private Exchange Securities and the Exchange Securities are set forth in the Appendix, which is hereby incorporated in and expressly made a part of this Indenture. The (i) Initial Securities and the Trustee's certificate of authentication and (ii) Private Exchange Securities and the Trustee's certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Exchange Securities and the Trustee's certificate of authentication shall each be substantially in the form of Exhibit B hereto, which is hereby incorporated in and expressly made a part of this Indenture. The Securities may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company or any Guarantor is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company). Each Security shall be dated the date of its authentication. The Securities shall be issuable only in registered form without interest coupons and only in denominations of $1,000 of principal amount and integral multiples thereof. SECTION 2.02. Execution and Authentication. One or more Officers shall ---------------------------- sign the Securities for the Company by manual or facsimile signature. 25 If an Officer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee shall authenticate and make available for delivery Securities for original issue in an aggregate principal amount of $450,000,000 and otherwise as set forth in the Appendix. The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Company. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.03. Registrar and Paying Agent. The Company shall maintain -------------------------- an office or agency where Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Company may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent, and the term "Registrar" includes any co-registrars. The Company initially appoints the Trustee as (i) Registrar and Paying Agent in connection with the Securities and (ii) the Securities Custodian (as defined in the Appendix) with respect to the Global Securities (as defined in the Appendix). The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. Any such agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of any such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically organized Wholly Owned Subsidiaries may act as Registrar or Paying Agent . The Company may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, -------- ------- that no such removal shall become effective until (1) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (2) notification to the Trustee that the Company or the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (1) above. The Registrar or Paying Agent may resign at any time upon written notice; provided, however, that the Trustee -------- ------- may resign as Registrar or Paying Agent only if the Trustee also resigns as Trustee in accordance with Section 7.08. SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due ----------------------------------- date of the principal and interest on any Security, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay such principal and interest then so becoming due. The Company shall require each Paying Agent (other than the Company or the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Securities and shall notify the Trustee of any default by the Company in 26 making any such payment. If the Company or a Subsidiary of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as -------------------- current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 2.06. Transfer and Exchange. The Securities shall be issued in --------------------- registered form and shall be transferable only upon the surrender of a Security for registration of transfer and in compliance with the Appendix. When a Security is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of Section 8-401(a)(l) of the Uniform Commercial Code are met. When Securities are presented to the Registrar with a request to exchange them for an equal principal amount of Securities of other denominations, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Securities (in the form of Exhibit A or Exhibit B, as appropriate) at the Registrar's request. The Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section 2.06. The Company shall not be required to make and the Registrar need not register transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed. Prior to the due presentation for registration of transfer of any Security, the Company, any Guarantor, the Trustee, the Paying Agent and the Registrar will treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest, if any, on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, any Guarantor, the Trustee, the Paying Agent, or the Registrar shall be affected by notice to the contrary. Any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of beneficial interest in such Global Security may be effected only through a book-entry system maintained by (i) the Holder of such Global Security (or its agent) or (ii) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book entry. All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange. SECTION 2.07. Replacement Securities. If a mutilated Security is ---------------------- surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i) satisfies the Company and the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (ii) makes such request to the Company or the Trustee prior to the Security being acquired by a protected purchaser as defined in Section 8-303 27 of the Uniform Commercial Code (a "protected purchaser") and (iii) satisfies any other reasonable requirements of the Trustee. If required by the Company or the Trustee, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent and the Registrar from any loss that any of them may suffer if a Security is replaced. The Company and the Trustee may charge the Holder for their expenses in replacing a Security. In the event any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable, the Company in its discretion may pay such Security instead of issuing a new Security in replacement thereof. Every replacement Security is an additional obligation of the Company. The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Securities. SECTION 2.08. Outstanding Securities. Securities outstanding at any ---------------------- time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancelation and those described in this Section 2.08 as not outstanding. Subject to Section 14.06, a Security does not cease to be outstanding because the Company or an Affiliate of the Company holds the Security. If a Security is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Security is held by a protected purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest and liquidated damages payable on that date with respect to the Securities (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture, then on and after that date such Securities (or portions thereof) cease to be outstanding and interest on them ceases to accrue. SECTION 2.09. Temporary Securities. In the event that Definitive -------------------- Securities (as defined in the Appendix) are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Company considers appropriate for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Securities and deliver them in exchange for temporary Securities upon surrender of such temporary Securities at the office or agency of the Company, without charge to the Holder. SECTION 2.10. Cancelation. The Company at any time may deliver ----------- Securities to the Trustee for cancelation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment or cancelation and deliver canceled Securities to the Company pursuant to written direction by an Officer. The Company may not issue new Securities to replace Securities it has redeemed, paid or delivered to the Trustee for cancelation. The Trustee shall not authenticate Securities in place of canceled Securities other than pursuant to the terms of this Indenture. SECTION 2.11. Defaulted Interest. If the Company defaults in a payment ------------------ of interest on the Securities, the Company shall pay the defaulted interest (plus interest on such 28 defaulted interest to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the Persons who are Securityholders on a subsequent special record date. The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail or cause to be mailed to each Securityholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities may ------------- use CUSIP numbers (if then generally in use) and, if so, the Trustee shall use CUSIP numbers in notices of redemption solely as a convenience to Holders; provided, however, that any such notice may state that (i) none of the Company, - -------- ------- any Subsidiary Guarantor, the Trustee or the Paying Agent shall be responsible for selection or use of such CUSIP numbers, (ii) no representation is made as to the correctness of such CUSIP numbers either as printed on the Securities or as contained in any notice of a redemption and (iii) 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. ARTICLE 3 Redemption ---------- SECTION 3.01. Notices to Trustee. If the Company elects to redeem ------------------ Securities pursuant to paragraph 5 of the Securities, it shall notify the Trustee in writing of the redemption date and the principal amount of Securities to be redeemed. The Company shall give each notice to the Trustee provided for in this Section 3.01 at least 60 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate (which Officers' Certificate shall comply with the requirements of Section 14.04(1) and 14.05) and an Opinion of Counsel (which Opinion of Counsel shall comply with the requirements of Section 14.04(2) and 14.05) from the Company to the effect that such redemption will comply with the conditions herein. If fewer than all the Securities are to be redeemed, the record date relating to such redemption shall be selected by the Company and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than -------------------------------------- all the Securities are to be redeemed, the Trustee shall select the Securities to be redeemed pro rata or by lot or by a method that complies with applicable legal and securities exchange requirements, if any, and that the Trustee in its sole discretion shall deem to be fair and appropriate and in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances. The Trustee shall make the selection from outstanding Securities not previously called for redemption. The Trustee may select for redemption portions of the principal amount of Securities that have denominations larger than $1,000. Securities and portions thereof the Trustee selects shall be in amounts of $1,000 of principal amount or a whole multiple of $1,000 thereof. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of Securities to be redeemed. SECTION 3.03. Notice of Redemption. At least 30 days but not more than -------------------- 60 days before a date for redemption of Securities, the Company shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder's registered address. 29 The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price and the amount of accrued interest to the redemption (3) the name and address of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent date; to collect the redemption price; (5) if fewer than all the outstanding Securities are to be redeemed, the certificate numbers of certificated securities and principal amounts of the particular Securities to be redeemed; (6) that, unless the Company defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (7) the CUSIP number, if any, printed on the Securities being redeemed; and (8) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities. At the Company's written request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense. In such event, the Company shall provide the Trustee with the information required by this Section. SECTION 3.04. Effect of Notice of Redemption. Once notice of ------------------------------ redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice, plus accrued interest and liquidated damages, if any, to the redemption date; provided, however, that if the redemption date is -------- ------- after a regular record date and on or prior to the interest payment date, the accrued interest shall be payable to the Securityholder of the redeemed Securities registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the --------------------------- redemption date, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest and liquidated damages (if any) on all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption that have been delivered by the Company to the Trustee for cancelation. On and after the redemption date, interest will cease to accrue on Securities or portions thereof called for redemption so long as the Company has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest and liquidated damages (if any) on, the Securities to be redeemed. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a --------------------------- Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company's expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered. 30 ARTICLE 4 Covenants --------- SECTION 4.01. Payment of Securities. The Company shall promptly pay --------------------- the principal of and interest on the Securities on the dates and in the manner provided in the Securities and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture. The Company shall pay interest on overdue principal at the rate specified therefor in the Securities, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. SECTION 4.02. Provision of Financial Information. (a) Whether or not ---------------------------------- required by the rules and regulations of the Commission, so long as any Securities are outstanding, the Company shall furnish to the holders of Securities: (1) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such forms, including a section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries and, with respect to annual information only, a report thereon by the Company's certified independent accountants; and (2) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports, in each case within the time period specified in the Commission's rules and regulations. (b) Following the consummation of the Exchange Offer contemplated by the Exchange and Registration Rights Agreement, whether or not required by the rules and regulations of the Commission, the Company shall file a copy of all such information and reports specified in Sections 4.02(a)(1) and 4.02(a)(2) with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to prospective investors upon request. In addition, the Company shall, for so long as any Securities remain outstanding, furnish to the holders of Securities, upon request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The Company shall also comply with Section 314(a) of the TIA. SECTION 4.03. Limitation on Incurrence of Indebtedness. (a) The ---------------------------------------- Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness), except: (1) Indebtedness of the Company or any Subsidiary Guarantor if, immediately after giving effect to the Incurrence of such Indebtedness and the receipt and application of the net proceeds therefrom (including, without limitation, the application or use of the net proceeds therefrom to repay Indebtedness, consummate an Asset Acquisition or make any Restricted Payment): (a) the ratio of (x) Total Consolidated Indebtedness to (y) Annualized Pro Forma Consolidated Operating Cash Flow would be less than: 7.0 to 1.0; or 31 (b) in the case of any Incurrence of Indebtedness prior to May 15, 2004 only, Total Consolidated Indebtedness would be equal to or less than 75% of Total Invested Capital; (2) Bank Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount not to exceed $1,000,000,000 at any time outstanding; (3) Purchase Money Indebtedness; (4) Indebtedness owed by the Company to any Restricted Subsidiary or Indebtedness owed by a Restricted Subsidiary to the Company or another Restricted Subsidiary; provided, however, that, upon either (a) the -------- ------- transfer or other disposition by such Restricted Subsidiary or the Company of any Indebtedness so permitted under this clause (4) to a Person other than the Company or another Restricted Subsidiary or (b) the issuance (other than of directors' qualifying shares), sale, transfer or other disposition of shares of Capital Stock or other ownership interests (including by consolidation or merger) of such Restricted Subsidiary to a Person other than the Company or another such Restricted Subsidiary, the exception provided by this clause (4) shall no longer be applicable to such Indebtedness and such Indebtedness shall be deemed to have been Incurred at the time of any such issuance, sale, transfer or other disposition, as the case may be; (5) Indebtedness of the Company or any Restricted Subsidiary under any Hedging Agreement to the extent entered into to protect the Company or such Restricted Subsidiary from fluctuations in interest rates on any other Indebtedness permitted under this Indenture (including the Securities), currency exchange rates or commodity prices and not for speculative purposes; (6) Refinancing Indebtedness Incurred to Refinance any Indebtedness Incurred under the prior clause (1) or (3) above, or (12) below, the Discount Notes, guarantees of the Discount Notes, the Securities, the Subsidiary Guarantees, Indebtedness existing on the date of this Indenture, or any Refinancing Indebtedness in respect of Refinancing Indebtedness Incurred pursuant to this clause (6); (7) Indebtedness of the Company under the Securities and Indebtedness of the Subsidiary Guarantors under the Subsidiary Guarantees, in each case Incurred in accordance with this Indenture; (8) Capital Lease Obligations of the Company or any Restricted Subsidiary in an aggregate principal amount not in excess of the greater of $50,000,000 or 5.0% of Total Assets at any time outstanding; (9) FCC Debt assumed in connection with any acquisition after the date of this Indenture; (10) Indebtedness of the Company or any Restricted Subsidiary consisting of a guarantee of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be Incurred by another provision of this Section 4.03; (11) Indebtedness of the Company or any Restricted Subsidiary in respect of statutory obligations, performance, surety or appeal bonds or other obligations of a like nature Incurred in the ordinary course of business; (12) Indebtedness of a Restricted Subsidiary existing at the time such Restricted Subsidiary was acquired by the Company (other than Indebtedness Incurred in 32 connection with, or in contemplation of, the transaction or series of related transactions pursuant to which such Restricted Subsidiary was acquired by the Company); provided, however, that on the date such -------- ------- Restricted Subsidiary is acquired by the Company, the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to clause (1) above after giving effect to the Incurrence of such Indebtedness pursuant to this clause (12) and the acquisition of such Restricted Subsidiary; and (13) Indebtedness of the Company not otherwise permitted to be Incurred pursuant to clauses (1) through (12) above which, together with any other outstanding Indebtedness Incurred pursuant to this clause (13), has an aggregate principal amount not in excess of $75,000,000 at any time outstanding. (b) Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary or which is secured by a Lien on an asset acquired by the Company or a Restricted Subsidiary (whether or not such Indebtedness is assumed by the acquiring person) shall be deemed Incurred at the time the Person becomes a Restricted Subsidiary or at the time of the asset acquisition, as the case may be. (c) For purposes of determining compliance with this Section 4.03: (1) in the event that an item of Indebtedness meets the criteria of more than one of the categories of Indebtedness permitted pursuant to clauses (1) through (13) above, the Company shall, in its sole discretion, be permitted to classify such item of Indebtedness in any manner that complies with this Section 4.03 and may from time to time reclassify such items of Indebtedness in any manner that would comply with this Section 4.03 at the time of such reclassification; (2) Indebtedness permitted by this Section 4.03 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.03 permitting such Indebtedness; (3) in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in this Section 4.03, the Company, in its sole discretion, shall classify such Indebtedness and only be required to include the amount of such Indebtedness in one of such clauses; and (4) accrual of interest (including interest paid-in-kind) and the accretion of accreted value shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 4.03. (d) Notwithstanding any other provision of this Section 4.03: (1) the maximum amount of Indebtedness that the Company or any Restricted Subsidiary may Incur pursuant to this Section 4.03 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of currencies; and (2) Indebtedness Incurred pursuant to the Credit Agreement prior to or on the date of this Indenture shall be treated as Incurred pursuant to clause (2) of paragraph (a) of this Section 4.03. 33 SECTION 4.04. Limitation on Restricted Payments. (a) The Company shall ---------------------------------- not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, on or prior to December 31, 2002; (1) declare or pay any dividend, or make any distribution of any kind or character (whether in cash, property or securities), in respect of any class of Capital Stock of the Company, excluding any dividends or distributions payable solely in shares of Qualified Stock of the Company or in options, warrants or other rights to acquire Qualified Stock of the Company; (2) purchase, redeem or otherwise acquire or retire for value any shares of Capital Stock of the Company, any options, warrants or rights to purchase or acquire such shares or any securities convertible or exchangeable into such shares (other than any such shares of Capital Stock, options, warrants, rights or securities that are owned by the Company or a Restricted Subsidiary); (3) make any Investment (other than a Permitted Investment) in any Person other than the Company or a Restricted Subsidiary; or (4) redeem, defease, repurchase, retire or otherwise acquire or retire for value, prior to its scheduled maturity, repayment or any sinking fund payment, Subordinated Indebtedness, each of the transactions described in clauses (1) through (4) (other than any exception to any such clause) being a "Restricted Payment"; and at any time after December 31, 2002, the Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, make a Restricted Payment if, at the time thereof: (A) a Default or an Event of Default shall have occurred and be continuing at the time of or after giving effect to such Restricted Payment; (B) immediately after giving effect to such Restricted Payment, the Company could not Incur at least $1.00 of additional Indebtedness pursuant to clause (1) of Section 4.03; and (C) immediately upon giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after the date of this Indenture (including any Designation Amount) exceeds the sum (without duplication) of: (1) the amount of (x) the Consolidated Cash Flow of the Company after December 31, 2002, through the end of the latest full fiscal quarter for which consolidated financial statements of the Company are available preceding the date of such Restricted Payment (treated as a single accounting period), less (y) 150% of the cumulative Consolidated Interest Expense of the Company after December 31, 2002, through the end of the latest full fiscal quarter for which consolidated financial statements of the Company are available preceding the date of such Restricted Payment (treated as a single accounting period); plus (2) the aggregate net cash proceeds received by the Company as a capital contribution in respect of Qualified Stock or from the proceeds of a sale of Qualified Stock made after the date of this Indenture (excluding in each case (x) the proceeds from a sale of Qualified Stock to a Restricted Subsidiary and (y) the proceeds from a sale of Qualified Stock to an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries); plus 34 (3) the aggregate net cash proceeds received by the Company or any Restricted Subsidiary from the sale, disposition or repayment (other than to the Company or a Restricted Subsidiary) of any Investment made after the date of this Indenture and constituting a Restricted Payment in an amount equal to the lesser of (x) the return of capital with respect to such Investment and (y) the initial amount of such Investment, in either case, less the cost of disposition of such Investment; plus (4) an amount equal to the consolidated Net Investment on the date of Revocation made by the Company and/or any Restricted Subsidiary in any Subsidiary of the Company that has been designated as an Unrestricted Subsidiary after the date of this Indenture upon its redesignation as a Restricted Subsidiary in accordance with Section 4.13. (b) For purposes of: (1) the preceding clause (a)(C)(2), the value of the aggregate net cash proceeds received by the Company from, or as a capital contribution in connection with, the issuance of Qualified Stock either upon the conversion of convertible Indebtedness of the Company or any of its Restricted Subsidiaries or in exchange for outstanding Indebtedness of the Company or any of its Restricted Subsidiaries or upon the exercise of options, warrants or rights shall be the net cash proceeds received by the Company or any Restricted Subsidiary upon the issuance of such Indebtedness, options, warrants or rights plus the incremental amount received by the Company or any Restricted Subsidiary upon the conversion, exchange or exercise thereof; (2) the preceding clause (a)(C)(4), the value of the consolidated Net Investment on the date of Revocation shall be equal to the Fair Market Value of the aggregate amount of the Company's and/or any Restricted Subsidiary's Investments in such Subsidiary of the Company on the applicable date of Designation; and (3) determining the amount expended for Restricted Payments, cash distributed shall be valued at the face amount thereof and property other than cash shall be valued at its Fair Market Value on the date such Restricted Payment is made by the Company or a Restricted Subsidiary, as the case may be. (c) The provisions of this Section 4.04 shall not prohibit: (1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at such date of declaration such payment would comply with the provisions of this Indenture; (2) so long as no Default or Event of Default shall have occurred and be continuing, the purchase, redemption, retirement or other acquisition of any Capital Stock of the Company out of the net cash proceeds of the substantially concurrent capital contribution to the Company in connection with Qualified Stock or out of the net cash proceeds received by the Company from the substantially concurrent issue or sale (other than to a Restricted Subsidiary or to an employee stock ownership plan or other trust established by the Company or any of its Subsidiaries) of Qualified Stock; provided that any such net cash proceeds shall be excluded from clause -------- (a)(C)(2); (3) so long as no Default or Event of Default shall have occurred and be continuing, the purchase, redemption, retirement, defeasance or other acquisition of Subordinated Indebtedness of the Company made by exchange for or conversion into, or out of the net cash proceeds received by the Company, or out of a capital contribution to 35 the Company in connection with a substantially concurrent issue and sale (other than to a Restricted Subsidiary) of, (a) Qualified Stock (provided that (x) any such net cash proceeds are excluded from clause (a)(C)(2), and (y) such proceeds, if from a sale other than a Public Sale, are not applied to optionally redeem Securities on or prior to December 31, 2002) or (b) other Subordinated Indebtedness of the Company that has an Average Life equal to or greater than the Average Life of the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired and that is subordinated in right of payment to the Securities at least to the same extent as the Subordinated Indebtedness being purchased, redeemed, retired, defeased or otherwise acquired; (4) so long as no Default or Event of Default shall have occurred and be continuing, the making of a direct or indirect Investment constituting a Restricted Payment in an amount not to exceed the amount of the net cash proceeds of capital contributions in respect of Qualified Stock or from the issue or sale (other than to a Restricted Subsidiary) of Qualified Stock of the Company, in each case made no more than one year prior to the date of such investment; provided that (a) any such net cash proceeds are excluded -------- from clause (a)(C)(2), and (b) such proceeds, if from a sale other than a Public Sale, are not applied to optionally redeem Securities on or prior to December 31, 2002; (5) so long as no Default or Event of Default has occurred and is continuing, the repurchase, redemption, acquisition or retirement for value of any Capital Stock of the Holdings held by any member of management of the Company or any of its Subsidiaries pursuant to any management equity subscription agreement, stock option agreement, restricted stock agreement or other similar agreement; provided that (a) the aggregate amount of such -------- dividends or distributions shall not exceed $10,000,000 in any twelve-month period, (b) any unused amount in any twelve-month period may be carried forward to one or more future twelve-month periods and (c) the aggregate of all unused amounts that may be carried forward to any future twelve-month period shall not exceed $20,000,000. (6) payments to the Parent Guarantor to reimburse the Parent Guarantor for its out-of-pocket operating and administrative expenses attributable to the Company, provided this reimbursement shall not exceed $10,000,000 in any fiscal year; (7) payments to Holdings pursuant to a tax sharing agreement so long as such payments in the aggregate do not exceed the lesser of (A) the aggregate amount of taxes that would be payable by the Company and its Subsidiaries if they were filing on a separate return basis as a consolidated entity and (B) the aggregate amount of taxes paid by Holdings and its consolidated subsidiaries; (8) payments or distributions to dissenting stockholders pursuant to applicable law in connection with a consolidation, merger or transfer of assets that complies with the provisions of this Indenture applicable to mergers, consolidations and transfers of all or substantially all of the property and assets of the Company; (9) the repurchase, redemption or other acquisition or retirement for value of the Company's Capital Stock to the extent necessary in the good faith judgment of the board of directors of the Company evidenced by a board resolution delivered to the Trustee to prevent the loss or secure the renewal or reinstatement of any material license or franchise held by the Company or any Restricted Subsidiary from any government agency; provided -------- that no Capital Stock shall be repurchased, redeemed or otherwise acquired from any Permitted Holder pursuant to this clause (9); or 36 (10) the repurchase of Indebtedness subordinated to the Securities at a purchase price not greater than 101% of the principal amount thereof (plus accrued and unpaid interest) pursuant to a mandatory offer to repurchase made upon the occurrence of a Change of Control; provided that -------- the Company first make an Offer to Purchase the Securities (and repurchase all tendered notes) under this Indenture pursuant to the provisions of Section 4.08 of this Indenture. (d) Restricted Payments made pursuant to clauses (1), (5), (6), (8) and (10) of paragraph (c) shall be included in making the determination of available amounts under clause (C) of paragraph (a) and Restricted Payments made pursuant to clauses (2), (3), (4), (7), and (9) of paragraph (c) shall not be included in making the determination of available amounts under clause (C) of paragraph (a). SECTION 4.05. Limitation on Restrictions Affecting Restricted ----------------------------------------------- Subsidiaries. The Company shall not, and shall not cause or permit any - ------------ Restricted Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist any consensual encumbrances or restrictions of any kind on the ability of any Restricted Subsidiary to: (1) pay, directly or indirectly, dividends, in cash or otherwise, or make any other distributions in respect of its Capital Stock or pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary; (2) make any Investment in the Company or any other Restricted Subsidiary; or (3) transfer any of its property or assets to the Company or any other Restricted Subsidiary, except for such encumbrances or restrictions existing under or by reason of: (A) any agreement in effect on the date of this Indenture as any such agreement is in effect on such date; (B) any agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on which such Restricted Subsidiary was acquired by the Company and outstanding on such date and not Incurred in anticipation or contemplation of becoming a Restricted Subsidiary; provided, however, that such encumbrance or restriction shall not apply to -------- ------- any property or assets of the Company or any Restricted Subsidiary other than such Restricted Subsidiary; (C) customary provisions contained in an agreement which has been entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of a Restricted Subsidiary; provided, however, that such encumbrance or restriction is applicable only -------- ------- to such Restricted Subsidiary or its property and assets; (D) any agreement effecting a Refinancing or amendment of Indebtedness Incurred pursuant to any agreement referred to in clause (A) or (B) above; provided, however, that the provisions contained in such -------- ------- Refinancing or amendment agreement relating to such encumbrance or restriction are no more restrictive in any material respect than the provisions contained in the agreement that is the subject thereof in the reasonable judgment of the board of directors of the Company; (E) this Indenture; 37 (F) applicable law or any applicable rule, regulation or order; (G) customary provisions restricting subletting or assignment of any lease governing any leasehold interest of any Restricted Subsidiary; (H) purchase money obligations for property acquired in the ordinary course of business that impose restrictions of the type referred to in clause (3) of this Section 4.05; and (I) restrictions of the type referred to in clause (3) of this Section 4.05 contained in security agreements securing Indebtedness of a Restricted Subsidiary to the extent that such Liens restrict the transfer of property subject to such agreements. SECTION 4.06. Limitation on Certain Asset Dispositions. (a) The ----------------------------------------- Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, make any Asset Disposition unless: (1) the Company or such Restricted Subsidiary, as the case may be, receives consideration for such Asset Disposition at least equal to the Fair Market Value of the assets sold or disposed of as determined by the board of directors of the Company in good faith and evidenced by a resolution of such board of directors filed with the Trustee; (2) other than in the case of a Permitted Asset Swap, not less than 75% of the consideration received by the Company or such Restricted Subsidiary from the disposition consists of: (A) cash or Cash Equivalents; (B) the assumption of Indebtedness (other than non-recourse Indebtedness or any Subordinated Indebtedness) of the Company or such Restricted Subsidiary or other obligations relating to such assets (accompanied by an irrevocable and unconditional release of the Company or such Restricted Subsidiary from all liability on the Indebtedness or other obligations assumed); or (C) notes, other obligations or common stock received by the Company or such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents concurrently with the receipt of such notes or other obligations (to the extent of the cash actually received by the Company); and (3) all Net Available Proceeds, less any amounts invested within 365 days of such Asset Disposition to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, an entity primarily engaged in a Permitted Business, to make a capital expenditure or to acquire other long-term assets that are used or useful in a Permitted Business, are applied, on or prior to the 365th day after such Asset Disposition, unless and to the extent that the Company shall determine to make an Offer to Purchase, to the permanent reduction and prepayment of any Senior Indebtedness of the Company then outstanding (including a permanent reduction of the commitments in respect thereof). (b) Any Net Available Proceeds from any Asset Disposition which is subject to the immediately preceding sentence that are not applied as provided in the immediately preceding sentence shall be used promptly after the expiration of the 365th day after such Asset 38 Disposition (or earlier if the Company so elects) to make an Offer to Purchase outstanding Securities at a purchase price in cash equal to 100% of the principal amount on the Purchase Date, plus accrued and unpaid interest to the Purchase Date; provided, however, that if the Company elects (or is required by -------- ------- the terms of any other Senior Subordinated Indebtedness) an offer may be made ratably to purchase the Securities and such other Senior Subordinated Indebtedness. Notwithstanding the foregoing, the Company may defer making any Offer to Purchase outstanding Securities (and any offer to purchase other Senior Subordinated Indebtedness ratably) until there are aggregate unutilized Net Available Proceeds from Asset Dispositions otherwise subject to the two immediately preceding sentences equal to or in excess of $15,000,000 (at which time the entire unutilized Net Available Proceeds from Asset Dispositions otherwise subject to the two immediately preceding sentences, and not just the amount in excess of $15,000,000, shall be applied as required pursuant to this paragraph). Any remaining Net Available Proceeds following the completion of the required Offer to Purchase (and any offer to purchase other Senior Subordinated Indebtedness ratably) may be used by the Company for any other purpose (subject to the other provisions of this Indenture), and the amount of Net Available Proceeds then required to be otherwise applied in accordance with this Section 4.06 shall be reset to zero. These provisions shall not apply to a transaction consummated in compliance with the provisions of Section 5.01. (c) Pending application as set forth above, the Net Available Proceeds of any Asset Disposition may be invested in cash or Cash Equivalents or used to reduce temporarily Indebtedness outstanding under any revolving credit agreement to which the Company is a party and pursuant to which it has Incurred Indebtedness. (d) The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.06. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.06, the Company shall be required to comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.06 by virtue thereof. SECTION 4.07. Limitation on Transactions with Affiliates. (a) The ------------------------------------------ Company shall not, and shall not cause or permit any Restricted Subsidiary to, directly or indirectly, conduct any business or enter into, renew or extend any transaction with any of their respective Affiliates, including, without limitation, the purchase, sale, lease or exchange of property, the rendering of any service or the making of any guarantee, loan, advance or Investment, either directly or indirectly, unless the terms of such transaction are at least as favorable as the terms that could be obtained at such time by the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on an arm's-length basis with a Person that is not such an Affiliate; provided, -------- however, that: - ------- (1) in any transaction involving aggregate consideration in excess of $10,000,000, the Company shall deliver an Officers' Certificate to the Trustee stating that a majority of the disinterested directors of the board of directors of the Company or such Restricted Subsidiary, as the case may be, have determined, in their good faith judgment, that the terms of such transaction are at least as favorable as the terms that could be obtained by the Company or such Restricted Subsidiary, as the case may be, in a comparable transaction made on an arm's-length basis between unaffiliated parties; and (2) if the aggregate consideration is in excess of $25,000,000, the Company shall also deliver to the Trustee, prior to the consummation of the transaction, the favorable written opinion of a nationally recognized accounting, appraisal or investment banking firm as to the fairness of the transaction to the holders of the Securities, from a financial point of view; provided, however, that the requirements set forth in this clause (2) -------- ------- shall not apply in the case of exchanges of licenses and related assets between the Company or 39 any of its Subsidiaries and AT&T Corp. or AT &T Wireless or any of their respective Subsidiaries so long as the Fair Market Value of licenses and related assets exchanged by the Company or any of its Subsidiaries shall not exceed $50,000,000. (b) Notwithstanding the foregoing, the restrictions set forth in this Section 4.07 shall not apply to: (1) transactions between or among the Company and/or any Restricted Subsidiaries; (2) any Restricted Payment or Permitted Investment permitted by Section 4.04; (3) directors' fees, indemnification and similar arrangements, officers' indemnification, employment agreements, employee stock option or employee benefit plans and employee salaries and bonuses paid or created in the ordinary course of business; (4) any transactions pursuant to agreements existing on the date of this Indenture and described in the offering memorandum dated January 19, 2001, on terms substantially consistent with those set forth in such offering memorandum; (5) transactions with AT&T or any of its Affiliates relating to the marketing or provision of telecommunication services or related hardware, software or equipment on terms that are no less favorable (when taken as a whole) to the Company or such Restricted Subsidiary, as applicable, than those available from unaffiliated third parties; (6) transactions involving the leasing or sharing or other use by the Company or any Restricted Subsidiary of communications network facilities (including, without limitation, cable or fiber lines, equipment or transmission capacity) of any Affiliate of the Company (such Affiliate being a "Related Party") on terms that are no less favorable (when taken as a whole) to the Company or such Restricted Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (7) transactions involving the provision of telecommunication services by a Related Party in the ordinary course of its business to the Company or any Restricted Subsidiary, or by the Company or any Restricted Subsidiary to a Related Party, on terms that are no less favorable (when taken as a whole) to the Company or such Restricted Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (8) any sales agency agreements pursuant to which an Affiliate has the right to market any or all of the products or services of the Company or any of the Restricted Subsidiaries; (9) transactions involving the sale, transfer or other disposition of any shares of Capital Stock of any Marketing Affiliate; provided that such -------- Marketing Affiliate is not engaged in any activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof; and (10) customary commercial banking, investment banking, underwriting, placement agent or financial advisory fees paid in connection with services rendered to the Company and its subsidiaries in the ordinary course. SECTION 4.08. Change of Control. (a) Upon the occurrence of a Change ----------------- of Control, each holder of Securities shall have the right to require the Company to repurchase all or 40 any part of such holder's Securities at a purchase price in cash equal to 101% of the principal amount on the Purchase Date, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). (b) Within 30 days following any Change of Control, the Company shall be required to mail a notice to each holder of Securities, with a copy to the Trustee (the "Change of Control Offer"), stating that the Company is commencing an Offer to Purchase all outstanding Securities at a purchase price in cash equal to 101% of the principal amount on the Purchase Date, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of holders of record on the relevant record date to receive interest due on the relevant interest payment date). (c) The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company. The Company's obligation to make a Change of Control Offer will be reinstated unless such third party purchases all Securities validly tendered and not withdrawn under such Change of Control Offer in accordance with its terms. (d) The Company shall be required to comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Securities pursuant to this Section 4.08. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.08, the Company shall be required to comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.08 by virtue thereof. (e) In the event that, at the time of a Change of Control, the terms of the Bank Indebtedness restrict or prohibit the repurchase of Securities pursuant to this Section 4.08, then, prior to the mailing of the notice to holders of Securities as provided in the immediately following paragraph, but in any event within 30 days following any Change of Control, the Company shall be required to: (1) repay in full all Bank Indebtedness; or (2) obtain the requisite consent under the agreements governing such Bank Indebtedness to permit the repurchase of the Securities as required by this Section 4.08. SECTION 4.09. Compliance Certificate. The Company shall deliver to the ---------------------- Trustee within 120 days after the end of each fiscal year of the Company an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Company is taking or proposes to take with respect thereto. The Company also shall comply with Section 314(a)(4) of the TIA (including the making of all representations and warranties mandated thereby). SECTION 4.10. Further Instruments and Acts. Upon request of the ---------------------------- Trustee, the Company shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 4.11. Future Subsidiary Guarantors. The Company shall cause ---------------------------- (1) each Domestic Restricted Subsidiary that Incurs Indebtedness and (2) each Foreign Restricted Subsidiary that Incurs Material Indebtedness to become a Subsidiary Guarantor, and, if applicable, execute and deliver to the Trustee a supplemental indenture in the form set forth in 41 Exhibit C pursuant to which such Restricted Subsidiary will guarantee payment of the Securities; provided that the Company shall not cause any Special Purpose -------- Subsidiary to become a Subsidiary Guarantor unless such Special Purpose Subsidiary Incurs Indebtedness other than Indebtedness in respect of the Credit Agreement (or any Refinancing Indebtedness Incurred to Refinance such Indebtedness) or FCC Debt; provided further that in the event that a Subsidiary ---------------- Guarantor no longer has outstanding, other than the Subsidiary Guarantee, any Indebtedness (in the case of a Domestic Restricted Subsidiary) or Material Indebtedness (in the case of a Foreign Restricted Subsidiary), the Subsidiary Guarantee of that Subsidiary Guarantor shall terminate. Each Subsidiary Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Restricted Subsidiary without rendering the Subsidiary Guarantee, as it relates to such Restricted Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. SECTION 4.12. Limitation on Activities of the Company and the ----------------------------------------------- Restricted Subsidiaries. The Company shall not, and shall not permit any - ----------------------- Restricted Subsidiary to, engage in any business other than a Permitted Business, except to such extent as is not material to the Company and its Restricted Subsidiaries, taken as a whole. SECTION 4.13. Limitation on Designations of Unrestricted Subsidiaries. ------------------------------------------------------- (a) The Company may designate any Subsidiary of the Company (other than an Ineligible Subsidiary) as an "Unrestricted Subsidiary" under this Indenture (a "Designation") only if: (1) no Default or Event of Default shall have occurred and be continuing at the time of or after giving effect to such Designation; (2) the Company would be permitted under this Indenture to make an Investment at the time of Designation (assuming the effectiveness of such Designation) in an amount (the "Designation Amount") equal to the Fair Market Value of the aggregate amount of its Investments in such Subsidiary on such date; and (3) except in the case of a Subsidiary of the Company in which an Investment is being made pursuant to, and as permitted by, paragraph (c) of Section 4.04, the Company would be permitted to Incur $1.00 of additional Indebtedness pursuant to clause (a)(1) of Section 4.03 at the time of Designation (assuming the effectiveness of such Designation). (b) In the event of any such Designation, the Company shall be deemed to have made an Investment constituting a Restricted Payment pursuant to Section 4.04 for all purposes of this Indenture in the Designation Amount. (c) The Company may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall then constitute a Restricted Subsidiary, if no Default shall have occurred and be continuing at the time of and after giving effect to such Revocation. In the event of any such Revocation, the Company shall be deemed to continue to have a permanent Investment in an Unrestricted Subsidiary constituting a Restricted Payment pursuant Section 4.04 for all purposes under this Indenture in an amount (if positive) equal to: (1) the Fair Market Value of the aggregate amount of the Company's Investments in such Subsidiary at the time of such Revocation; less (2) the portion (proportionate to the Company's equity interest in such Subsidiary) of the Fair Market Value of the net assets of such Subsidiary at the time of such Revocation. 42 (d) All Designations and Revocations must be evidenced by a resolution of the board of directors of the Company delivered to the Trustee certifying compliance with the foregoing provisions. SECTION 4.14. Limitation on Layered Indebtedness. The Company shall ---------------------------------- not: (1) directly or indirectly Incur any Indebtedness that by its terms would expressly rank senior in right of payment to the Securities and rank subordinate in right of payment to any other Indebtedness of the Company; or (2) cause or permit any Subsidiary Guarantor to, and no Subsidiary Guarantor shall, directly or indirectly, Incur any Indebtedness that by its terms would expressly rank senior in right of payment to the Subsidiary Guarantee of such Subsidiary Guarantor and rank subordinate in right of payment to any other Indebtedness of such Subsidiary Guarantor; provided that no Indebtedness shall be deemed to be subordinated solely by - -------- virtue of being unsecured. SECTION 4.15. Limitations on Liens. The Company shall not, and shall -------------------- not permit any Subsidiary Guarantor to, create, Incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind securing Indebtedness that is pari passu with the Securities or the applicable Guarantee, ---- ----- as the case may be, or is Subordinated Indebtedness, upon any of their property or assets, now owned or hereafter acquired (other than Permitted Liens), unless all payments due under this Indenture and the Securities are secured equally and ratably with (or prior to, in the case of Subordinated Indebtedness) the obligations so secured until such time as such obligations are no longer secured by such Lien; provided that this restriction shall not apply to any Lien -------- securing Acquired Indebtedness created prior to the Incurrence of such Indebtedness by the Company or any Subsidiary Guarantor (and to successive extensions or refinancings thereof), where such Lien only extends to the assets that were subject to such Lien prior to the related acquisition by the Company or the Subsidiary Guarantor. ARTICLE 5 Successor Company ----------------- SECTION 5.01. Merger, Consolidation and Certain Sales of Assets. (a) ------------------------------------------------- The Company shall not consolidate or merge with or into any Person, or sell, assign, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary to consolidate or merge with or into any Person, or to sell, assign, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Restricted Subsidiaries), whether as an entirety or substantially an entirety in one transaction or a series of related transactions, including by way of liquidation or dissolution, to any Person unless, in each such case: (1) the entity formed by or surviving any such consolidation or merger (if other than the Company or such Restricted Subsidiary, as the case may be), or to which such sale, assignment, lease, conveyance or other disposition shall have been made (the "Surviving Entity"), is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) the Surviving Entity assumes by supplemental indenture all of the obligations of the Company on the Securities and under this Indenture; 43 (3) immediately after giving effect to such transaction and the use of any net proceeds therefrom on a pro forma basis, the Company or the Surviving Entity, as the case may be, could Incur at least $1.00 of Indebtedness pursuant to clause (1) of Section 4.03; provided, however that -------- ------- this clause (3) shall not apply in the case of a merger between TeleCorp Wireless PCS, Inc. (or any successor entity) and the Company; (4) immediately after giving effect to such transaction and treating any Indebtedness which becomes an obligation of the Company or any of its Restricted Subsidiaries as a result of such transactions as having been Incurred by the Company or such Restricted Subsidiary, as the case may be, at the time of the transaction, no Default or Event of Default shall have occurred and be continuing; and (5) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such merger, consolidation or sale of assets and such supplemental indenture, if any, comply with this Indenture. (b) The Company shall not permit any Guarantor to consolidate or merge with or into any Person, or sell, assign, lease, convey or otherwise dispose of all or substantially all of such Guarantor's assets, whether as an entirety or substantially an entirety in one transaction or a series of related transactions, including by way of liquidation or dissolution, to any Person unless, in each such case: (1) the entity formed by or surviving any such consolidation or merger (if other than such Guarantor), or to which such sale, assignment, lease, conveyance or other disposition shall have been made, is a corporation organized and existing under the laws of the United States, any state thereof or the District of Columbia; (2) such corporation assumes by supplemental indenture all of the obligations of the Guarantor, if any, under its Guarantee; (3) in the case of a Subsidiary Guarantor only, immediately after giving effect to such transaction and treating any Indebtedness which becomes an obligation of such Guarantor as a result of such transactions as having been Incurred by such Guarantor at the time of the transaction, no Default or Event of Default shall have occurred and be continuing; and (4) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such merger, consolidation or sale of assets and such supplemental indenture, if any, comply with this Indenture. (c) The provisions of Section 5.01(a) and 5.01(b) shall not apply to any merger of a Restricted Subsidiary with or into the Company or a Wholly Owned Subsidiary, the release of any Guarantor in accordance with the terms of its Guarantee and this Indenture in connection with any transaction complying with the provisions of Section 4.06. 44 ARTICLE 6 Defaults and Remedies --------------------- SECTION 6.01. Events of Default. An Event of Default occurs under ------------------ this Indenture if: (1) the Company defaults in any payment of interest on any Security when due and payable, whether or not such payment shall be prohibited by Article 10, continued for 30 days; (2) the Company defaults in the payment of the principal of any Security when due and payable at its Stated Maturity, upon required redemption or repurchase, upon declaration or otherwise, whether or not such payment shall be prohibited by Article 10; (3) the Company fails to comply with its obligations under Section 5.01; (4) the Company fails to comply for 30 days after notice with any of its obligations under Section 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.11, 4.12, 4.13, 4.14 or 4.15 (in each case, other than a failure to purchase Securities); (5) the Company fails to comply for 60 days after notice with its other agreements contained in this Indenture or the Securities; (6) the Company or any Significant Subsidiary fails to pay any Indebtedness within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $15,000,000 or its foreign currency equivalent (the "cross acceleration provision") and such failure continues for 10 days after receipt of the notice specified below; (7) the Company or any Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency; (8) a court of competent jurisdiction renders a final judgment or decree (not subject to appeal) for the payment of money in excess of $15,000,000 or its foreign currency equivalent at the time it is entered against the Company or a Significant Subsidiary and such judgment or decree is not discharged, waived or stayed if: (A) an enforcement proceeding thereon is commenced by any creditor; or 45 (B) such judgment or decree remains outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed (the "judgment default provision"); or (9) any Guarantee ceases to be in full force and effect (except as contemplated by the terms thereof) or any Guarantor or Person acting by or on behalf of such Guarantor denies or disaffirms such Guarantor's obligations under this Indenture or any Guarantee and such Default continues for 10 days after receipt of the notice specified below. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. A Default under clause (4), (5), and (6) shall not constitute an Event of Default until the Trustee or the holders of at least 25% in aggregate principal amount of the outstanding Securities notify the Company of the Default and the Company does not cure such Default within the time specified in clauses (4), (5) or (6) after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default". The Company shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers' Certificate of any event which with the giving of notice or the lapse of time would become an Event of Default, its status and what action the Company is taking or proposes to take with respect thereto. SECTION 6.02. Acceleration. If an Event of Default (other than an ------------ Event of Default specified in clause (7) of Section 6.01 with respect to the Company) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the outstanding Securities by notice to the Company, may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in clause (7) of Section 6.01 with respect to the Company occurs, the principal of and interest on all the Securities shall ipso facto become and be immediately due and payable without any declaration or - ---- ----- other act on the part of the Trustee or any Securityholders. The Holders of a majority in aggregate principal amount of the outstanding Securities by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except non-payment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is -------------- continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Securities or to enforce the performance of any provision of the Securities or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. 46 SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in ----------------------- principal amount of the Securities by notice to the Trustee may waive an existing Default and its consequences except (i) a Default in the payment of the principal amount of, or interest on a Security or (ii) a Default arising from the failure to redeem or purchase any Security when required pursuant to the terms of this Indenture or (iii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in ------------------- principal amount of the Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of other Securityholders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed -------- ------- proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 6.06. Limitation on Suits. Except to enforce the right to ------------------- receive payment of principal, premium (if any) or interest when due, no Securityholder may pursue any remedy with respect to this Indenture or the Securities unless: (1) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25% in principal amount of the Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and (5) the Holders of a majority in principal amount of the Securities do not give the Trustee a direction inconsistent with the request during such 60-day period. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. Rights of Holders To Receive Payment. Notwithstanding ------------------------------------ any other provision of this Indenture, the right of any Holder to receive payment of principal of and liquidated damages and interest on the Securities held by such Holder, on or after the respective due dates expressed in the Securities, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default -------------------------- specified in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07. 47 SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file -------------------------------- such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to the Company, any Subsidiary or Guarantor, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. If the Trustee collects any money or ---------- property pursuant to this Article 6, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; SECOND: to holders of Senior Indebtedness of the Company to the extent required by Article 10; THIRD: to Securityholders for amounts due and unpaid on the Securities for principal and interest, ratably, and any liquidated damages without preference or priority of any kind, according to the amounts due and payable on the Securities for principal, any liquidated damages and interest, respectively; and FOURTH: to the Company. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail to each Securityholder and the Company a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. 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, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Securities. SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company -------------------------------- nor any Subsidiary Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and each Subsidiary Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. 48 ARTICLE 7 Trustee ------- SECTION 7.01. Duties of Trustee. (a) If an Event of Default has ----------------- occurred and is continuing, the Trustee shall exercise 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 Person would exercise or use under the circumstances in the conduct of such Person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform 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; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own wilful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.01. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise Incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.01 and to the provisions of the TIA. SECTION 7.02. Rights of Trustee. (a) 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, bond, debenture 49 or other paper or document believed to be genuine and to have been signed or presented by the proper party or parties. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers' Certificate or Opinion of Counsel. (c) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through, agents, attorneys, custodians or nominees and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee appointed with due care by it hereunder. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute wilful misconduct or negligence. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) 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, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Securities at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney. (g) The Trustee shall not be accountable for the use by the Company of the proceeds of the Securities. SECTION 7.03. Individual Rights of Trustee. The Trustee in its ---------------------------- individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be -------------------- responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Company's use of the proceeds from the Securities, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Securities or in the Securities other than the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default occurs and is ------------------ continuing and if it is actually known to a Trust Officer, the Trustee shall mail to each Securityholder notice of the Default within the earlier of 90 days after it occurs or 30 days after it actually becomes known to a Trust Officer. Except in the case of a Default in payment of principal of, premium (if any) or interest on any Security (including payments pursuant to the mandatory redemption provisions of such Security, if any), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. 50 SECTION 7.06. Reports by Trustee to Holders. As promptly as ----------------------------- practicable after each May 15 beginning with the May 15 following the date of this Indenture, and in any event prior to July 15 in each year, the Trustee shall mail to each Securityholder a brief report dated as of May 15 that complies with Section 313(a) of the TIA. The Trustee shall also comply with Section 313(b) of the TIA. A copy of each report at the time of its mailing to Securityholders shall be filed with the Commission and each stock exchange (if any) on which the Securities are listed. The Company agrees to notify promptly the Trustee in writing whenever the Securities become listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Company shall pay to -------------------------- the Trustee from time to time reasonable compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses Incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Company and each Guarantor, jointly and severally shall indemnify the Trustee, its directors, officers, employees and agents against any and all loss, liability or expense (including reasonable attorneys' fees and expenses) Incurred by or in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Company of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Company shall not -------- ------- relieve the Company or any Guarantor of its indemnity obligations hereunder. The Company shall defend the claim and the indemnified party shall provide reasonable cooperation at the Company's expense in the defense. Such indemnified parties may have separate counsel and the Company and the Guarantors, as applicable shall pay the fees and expenses of such counsel; provided, however, -------- ------- that the Company shall not be required to pay such fees and expenses if it assumes such indemnified parties' defense and, in such indemnified parties' reasonable judgment, there is no conflict of interest between the Company and the Guarantor, as applicable, and such parties in connection with such defense. The Company need not reimburse any expense or indemnify against any loss, liability or expense Incurred by an indemnified party through such party's own wilful misconduct, negligence or bad faith. To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest and any liquidated damages on particular Securities. The Company's payment obligations pursuant to this Section 7.07 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any Bankruptcy Law or the resignation or removal of the Trustee. When the Trustee Incurs expenses after the occurrence of a Default specified in clause (7) or (8) of Section 6.01 with respect to the Company, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any ---------------------- time by so notifying the Company. The Holders of a majority in principal amount of the Securities may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; 51 (3) a receiver or other public officer takes charge of the Trustee or its property; (4) the Trustee otherwise becomes incapable of acting; or (5) the Trustee increases its fees (exclusive of fees for extraordinary services) by more than 10% in any twelve month period. If the Trustee resigns, is removed by the Company or by the Holders of a majority in principal amount of the Securities and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Securityholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section, the Company's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee --------------------------- consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee may authenticate such Securities in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all ----------------------------- times satisfy the requirements of Section 310(a) of the TIA. The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Section 3.10(b) of the TIA; provided, however, that there shall be excluded from -------- ------- the operation of Section 3.10(b)(1) of the TIA any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in Section 3.10(b)(1) of the TIA are met. 52 SECTION 7.11. Preferential Collection of Claims Against Company. The ------------------------------------------------- Trustee shall comply with Section 311(a) of the TIA, excluding any creditor relationship listed in Section 311(b) of the TIA. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the TIA to the extent indicated. SECTION 7.12. Trustee Acting as Paying Agent or Registrar. In the ------------------------------------------- event that the Trustee is also acting as a Paying Agent or Registrar hereunder, the rights and protections afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Paying Agent or Registrar. ARTICLE 8 Discharge of Indenture; Defeasance ---------------------------------- SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a) ------------------------------------------------ When (i) the Company delivers to the Trustee all outstanding Securities (other than Securities replaced pursuant to Section 2.07) for cancelation or (ii) all outstanding Securities have become due and payable, whether at maturity or as a result of the mailing of a notice of redemption pursuant to Article 3, and the Company irrevocably deposits with the Trustee funds or U.S. Government Obligations on which payment of principal and interest when due will be sufficient to pay at maturity or upon redemption all outstanding Securities, including interest thereon to maturity or such redemption date (other than Securities replaced pursuant to Section 2.07), and if in either case the Company pays all other sums payable hereunder by the Company, then this Indenture shall, subject to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Company accompanied by an Officers' Certificate and an Opinion of Counsel and at the cost and expense of the Company. (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate (i) all of its obligations under the Securities and this Indenture ("legal defeasance option") or (ii) its obligations under Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14 and 4.15 and the operation of Section 5.01(a)(3), 5.01(a)(4), 5.01(a)(5), 6.01(4), 6.01(6), 6.01(7) (with respect to Significant Subsidiaries of the Company only), 6.01(8) (with respect to Significant Subsidiaries of the Company only), ("covenant defeasance option"). The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. In the event that the Company terminates all of its obligations under the Securities and this Indenture by exercising its legal defeasance option or its covenant defeasance option, the obligations under the Guarantees shall each be terminated simultaneously with the termination of such obligations. If the Company exercises its legal defeasance option, payment of the Securities may not be accelerated because of an Event of Default. If the Company exercises its covenant defeasance option, payment of the Securities may not be accelerated because of an Event of Default specified in Section 6.01(4), 6.01(6), 6.01(7) (with respect to Significant Subsidiaries of the Company only), 6.01(8) (with respect to Significant Subsidiaries of the Company only), and 6.01(9), or because of the failure of the Company to comply with clauses (3), (4) and (5) of Section 5.01(a). Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates. (c) Notwithstanding clauses (a) and (b) above, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and in this Article 8 shall survive until 53 the Securities have been paid in full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall survive. SECTION 8.02. Conditions to Defeasance. The Company may exercise its ------------------------ legal defeasance option or its covenant defeasance option only if: (1) the Company irrevocably deposits in trust with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and interest on the Securities to maturity or redemption, as the case may be; (2) the Company delivers to the Trustee a certificate from a nationally recognized firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Securities to maturity or redemption, as the case may be; (3) 123 days pass after the deposit is made and during the 123-day period no Default specified in clause (7) or (8) of Section 6.01 with respect to the Company occurs which is continuing at the end of the period; (4) the deposit does not constitute a default under any other agreement binding on the Company and is not prohibited by Article 10; (5) the Company delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940; (6) in the case of the legal defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (ii) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (7) in the case of the covenant defeasance option, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Securityholders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (8) the Company delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Securities as contemplated by this Article 8 have been complied with. Before or after a deposit, the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date in accordance with Article 3. SECTION 8.03. Application of Trust Money. The Trustee shall hold in -------------------------- trust money or U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying 54 Agent and in accordance with this Indenture to the payment of principal of and interest on the Securities. Money and securities so held in trust are not subject to Article 10. SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent -------------------- shall promptly turn over to the Company upon request any excess money or securities held by them at any time. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Securityholders entitled to the money must look to the Company for payment as general creditors. SECTION 8.05. Indemnity for Government Obligations. The Company shall ------------------------------------ pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable ------------- to apply any money or U.S. Government Obligations in accordance with this Article 8 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to this Article 8 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 8; provided, however, that, if the -------- ------- Company has made any payment of interest on or principal of any Securities because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE 9 Amendments ---------- SECTION 9.01. Without Consent of Holders. (a) Without the consent of -------------------------- any Holder of Securities, the Company, the Guarantors and the Trustee may amend this Indenture to: (1) cure any ambiguity, omission, defect or inconsistency; (2) comply with Article 5; (3) provide for uncertificated Securities in addition to, or in place of, certificated Securities; provided, however, that the uncertificated -------- ------- Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code; (4) make any change in Article 10 that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company (or any Representative thereof) under Article 10; (5) add additional guarantees with respect to the Securities; (6) secure the Securities; (7) add to the covenants of the Company for the benefit of the Securityholders; 55 (8) surrender any right or power herein conferred upon the Company; (9) make any change that does not adversely affect the rights of any Securityholder; (10) provide for the issuance of the Exchange Securities or Private Exchange Securities, subject to the provisions of this Indenture; or (11) comply with any requirement of the Commission in connection with the qualification of this Indenture under the TIA. (b) No amendment may be made under this Section 9.01, that adversely affects the rights under Article 10 of any holder of Senior Indebtedness of the Company then outstanding unless the holders of such Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change. (c) After an amendment under this Section 9.01 becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of the amendment. SECTION 9.02. With Consent of Holders. The Company, the Guarantors and ----------------------- the Trustee may amend this Indenture or the Securities without notice to any Securityholder but with the written consent of the Holders of a majority in aggregate principal amount of the Securities then outstanding (including consents obtained in connection with a tender offer or exchange for the Securities). However, (a) without the consent of each Securityholder affected, an amendment may not: (1) reduce the amount of Securities whose Holders must consent to an amendment; (2) reduce the rate of, or extend the time for payment of, interest or any liquidated damages on any Security; (3) reduce the principal of, or extend the Stated Maturity of, any Security; (4) reduce the premium payable upon the redemption of any Security or change the time at which any Security may be redeemed in accordance with Article 3; (5) make any Security payable in money other than that stated in the Security; (6) impair the right of any Holder of Securities to receive payment of principal of and interest or any liquidated damages on such Holder's Securities on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's Securities; or (7) make any change in the amendment provisions which require the consent of each Holder of Securities or in the waiver provisions; and (b) without the consent of the holders of 66 2/3% in aggregate principal amount of the Securities then outstanding, no amendment may: (1) make any change to the subordination provisions of this Indenture that adversely affects the rights of any holder of Securities; or 56 (2) modify a Guarantee in any manner adverse to the holders of Securities. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section 9.02 becomes effective, the Company shall mail to Securityholders a notice briefly describing such amendment. The failure to give such notice to all Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.02. SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to ----------------------------------- this Indenture or the Securities shall comply with the TIA as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent --------------------------------------------- to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate from the Company certifying that the requisite number of consents have been received. After an amendment or waiver becomes effective, it shall bind every Securityholder. An amendment or waiver becomes effective upon the (i) receipt by the Company or the Trustee of the requisite number of consents, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Company and the Trustee. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 9.05. Notation on or Exchange of Securities. If an amendment ------------------------------------- changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any -------------------------- amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of the Company and the Guarantors enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). 57 SECTION 9.07. Payment for Consent. Neither the Company nor any ------------------- Affiliate of the Company shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE 10 Subordination ------------- SECTION 10.01. Securities Subordinate to Senior Indebtedness. (a) The --------------------------------------------- Company covenants and agrees, and each Holder, by its acceptance thereof, likewise covenants and agrees, for the benefit of the Holders, from time to time, of Senior Indebtedness that, to the extent and in the manner hereinafter set forth in this Article, the Indebtedness represented by the Securities and the payment of the principal of (and premium and liquidated damages, if any) and interest on each and all of the Securities are hereby expressly made subordinate and subject in right of payment as provided in this Article to the prior payment in full in cash of all Senior Indebtedness, whether outstanding on the date of this Indenture or thereafter Incurred; provided, however, that the Securities, -------- ------- the Indebtedness represented thereby and the payment of the principal of (and premium and liquidated damages, if any) and interest on the Securities in all respects shall rank pari passu with, or prior to, all existing and future ---- ----- unsecured indebtedness (including, without limitation, Indebtedness) of the Company that is subordinated to Senior Indebtedness. The Securities shall in all respects rank pari passu with all other Senior Subordinated Indebtedness of the ---- ----- Company, including the Discount Notes, and only Indebtedness of the Company that is Senior Indebtedness of the Company shall rank senior to the Securities in accordance with the provisions set forth herein. For purposes of this Article 10, the Indebtedness evidenced by the Securities shall be deemed to include the liquidated damages payable pursuant to the provisions set forth in the Securities and the Registration Agreement. All provisions of this Article 10 shall be subject to Section 10.16. (b) Each Guarantor agrees, and each Securityholder by accepting a Security agrees, that the obligations of a Guarantor hereunder are subordinated in right of payment, to the extent and in the manner provided in this Article 10, to the prior payment in full of all existing and future Senior Indebtedness of such Guarantor and that the subordination is for the benefit of and enforceable by the holders of such Senior Indebtedness of such Guarantor. The obligations hereunder with respect to a Guarantor shall in all respects rank pari passu with all other Senior Subordinated Indebtedness of such Guarantor, - ---- ----- including the guarantees in respect of the Discount Notes, and shall rank senior to all existing and future Subordinated Indebtedness of such Guarantor; and only Indebtedness of such Guarantor that is Senior Indebtedness of such Guarantor shall rank senior to the obligations of such Guarantor in accordance with the provisions set forth herein. SECTION 10.02. Payment by the Company of Proceeds upon Dissolution, ---------------------------------------------------- Etc. Upon any distribution to creditors of the Company in a liquidation or - --- dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, an assignment for the benefit of creditors or any marshaling of the Company's assets and liabilities: (1) the holders of Senior Indebtedness of the Company shall be entitled to receive payment in full in cash of all obligations due in respect of such Senior Indebtedness (including interest after the commencement of any such proceeding, whether or not allowed, at the rate specified in the applicable Senior Indebtedness) before the Holders will be entitled to receive any payment with respect to the Securities 58 (except that Holders may receive and retain Permitted Junior Securities and payments made from the trust described in Section 8.02 hereof); and (2) in the event that, notwithstanding the foregoing provisions of this Section, the Trustee or any Holder shall have received any payment in respect of the Securities (other than a payment in Permitted Junior Securities and from the trust described in Section 8.02 hereof) when (i) the payment is prohibited by this Article, and (ii) the Trustee or the Holder has actual knowledge or otherwise receives notice that such payment is prohibited, the Trustee or the Holder, as the case may be, shall hold the payment in trust for the benefit of the holder of Senior Indebtedness of the Company, and upon the written request of the holders of Senior Indebtedness of the Company, the Trustee or the Holder, as the case may be, shall deliver the amounts in trust to the holders of Senior Indebtedness of the Company or their proper Representative. The consolidation of the Company with, or the merger of the Company into, another Person or the liquidation or dissolution of the Company following the conveyance, transfer or lease of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article 5 shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of the Company for the purposes of this Section if the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance, transfer or lease such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions set forth in Article 5. SECTION 10.03. Suspension of Payment on Securities When Senior ----------------------------------------------- Indebtedness of the Company in Default. (a) Unless Section 10.02 shall be - -------------------------------------- applicable, the Company shall not make any payment upon or in respect of the Securities (except in Permitted Junior Securities and from the trust described in Section 8.02 hereof) if: (i) a default in the payment (including any such default following acceleration of maturity) of the principal of, premium, if any, or interest on Designated Senior Indebtedness occurs and is continuing beyond any applicable period of grace (a "Payment Event of Default"), or (ii) any other default occurs and is continuing (a "Non-Payment Event of Default") on any series of Designated Senior Indebtedness which permits holders of that series of Designated Senior Indebtedness to accelerate its maturity and the Trustee receives a written notice of such default (a "Payment Blockage Notice") from the Company or the holders of any Designated Senior Indebtedness. (b) Payments on the Securities may and shall be resumed: (i) in the case of a Payment Event of Default, upon the date on which such default is cured or waived; and (ii) in case of a Non-Payment Event of Default, the earlier of the date on which such Non-Payment Event of Default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Indebtedness has been accelerated. No new period of payment blockage may be commenced by a Payment Blockage Notice unless and until 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice and all scheduled payments of principal, interest and premium and liquidated damages, if any, on the Securities that have come due have been paid in full in cash. No Non-Payment Event of Default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment 59 Blockage Notice, unless such default has been cured or waived for a period of not less than 90 days. SECTION 10.04. Payment Over by Guarantors of Proceeds upon ------------------------------------------- Dissolution, Etc. Upon any distribution to creditors of any Guarantor in a - ---------------- liquidation or dissolution of such Guarantor or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to such Guarantor or its property, an assignment for the benefit of creditors or any marshaling of such Guarantor's assets and liabilities: (1) the holders of Senior Indebtedness of such Guarantor shall be entitled to receive indefeasible payment in full in cash of all obligations due in respect of such Senior Indebtedness (including interest after the commencement of any such proceeding, whether nor not allowed, at the rate specified in the applicable Senior Indebtedness) before the Holders will be entitled to receive any payment with respect to the respective Guarantee, and until all obligations with respect to Senior Indebtedness of such Guarantor and Senior Indebtedness of the Company are paid in full in cash, any distribution to which the Holders would be entitled shall be made to the holders of such Senior Indebtedness (except that Holders may receive and retain Permitted Junior Securities and payments made from the trust described in Section 8.02 hereof); and (2) in the event that, notwithstanding the foregoing provisions of this Section, the Trustee or any Holder shall have received any payment in respect of the Securities (other than a payment in Permitted Junior Securities and from the trust described in Section 8.02 hereof) when (i) the payment is prohibited by this Article, and (ii) the Trustee or the Holder has actual knowledge or otherwise receives notice that such payment is prohibited, the Trustee or the Holder, as the case may be, shall hold the payment in trust for the benefit of the holder of Senior Indebtedness of such Guarantor, and upon the written request of the holders of Senior Indebtedness of such Guarantor, the Trustee or the Holder, as the case may be, shall deliver the amounts in trust to the holders of Senior Indebtedness of such Guarantor or their proper Representative. The consolidation of any Guarantor with, or the merger of any Guarantor into, another Person or the liquidation or dissolution of any Guarantor following the conveyance, transfer or lease of its properties and assets substantially as an entirety to another Person upon the terms and conditions set forth in Article 5 shall not be deemed a dissolution, winding up, liquidation, reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of such Guarantor for the purposes of this Section if the Person formed by such consolidation or into which such Guarantor is merged or the Person which acquires by conveyance, transfer or lease such properties and assets substantially as an entirety, as the case may be, shall, as a part of such consolidation, merger, conveyance, transfer or lease, comply with the conditions set forth in Article 5. SECTION 10.05. Suspension of Payment on Guarantees When Senior ----------------------------------------------- Indebtedness of Guarantor in Default. (a) Unless Section 10.04 shall be - ------------------------------------ applicable, a Guarantor shall not make any payment upon or in respect of such Guarantor's Guarantee (except in such Permitted Junior Securities) if: (i) a Payment Event of Default on Designated Senior Indebtedness of such Guarantor or Designated Senior Indebtedness of the Company occurs and is continuing beyond any applicable period of grace from Indebtedness, or (ii) any Non-Payment Event of Default occurs and is continuing with respect to Designated Senior Indebtedness of such Guarantor or Designated Senior Indebtedness of the Company which permits holders of the Designated Senior Indebtedness of such Guarantor or Designated Senior Indebtedness of the Company as to which such default 60 relates to accelerate its maturity and the Trustee receives a Payment Blockage Notice from the Company or the respective holders of such Designated Senior Indebtedness. (b) Payments on the Guarantees may and shall be resumed: (i) in the case of a Payment Event of Default, upon the date on which such default is cured or waived; and (ii) in case of a Non-Payment Event of Default, the earlier of the date on which such Non-Payment Event of Default is cured or waived or 179 days after the date on which the applicable Payment Blockage Notice is received, unless the maturity of any Designated Senior Indebtedness has been accelerated. No new period of payment blockage may be commenced by a Payment Blockage Notice unless and until 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice. No Non-Payment Event of Default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice, unless such default has been cured or waived for a period of not less than 90 days. SECTION 10.06. Payment Permitted If No Default. Nothing contained in ------------------------------- this Article or elsewhere in this Indenture, in any of the Securities or in any Guarantee shall prevent the Company or any Guarantors, as applicable, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors or other marshaling of assets and liabilities of the Company or any Guarantor referred to in Section 10.02 or 10.04 under the conditions described in Section 10.03 or 10.05, from making payments at any time of principal of (and premium and liquidated damages, if any, on) or interest on the Securities or under a Guarantee, as applicable. SECTION 10.07. Subrogation to Rights of Holders of Senior ------------------------------------------ Indebtedness. Subject to the payment in full of all Senior Indebtedness, the - ------------ Holders shall be subrogated (equally and ratably with the holders of all indebtedness of the Company or any Guarantor which by its express terms is subordinated to Senior Indebtedness of the Company or such Guarantor to the same extent as the Securities or the Guarantees are subordinated and which is entitled to like rights of subrogation) to the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and securities applicable to the Senior Indebtedness until the principal of (and premium, if any) and interest on the Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the Holders or the Trustee would be entitled except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the holders of Senior Indebtedness by Holders or the Trustee, shall, as among the Company, the Guarantors, their respective creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment or distribution by the Company or any Guarantor to or on account of the Senior Indebtedness. SECTION 10.08. Provisions Solely to Define Relative Rights. The ------------------------------------------- provisions of this Article are and are intended solely for the purpose of defining the relative rights of the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall (a) impair, as between the Company, or any Guarantor as applicable, and the Holders, the obligation of the Company or such Guarantor, which is absolute and unconditional, to pay to the Holders the principal of (and premium and liquidated damages, if any) and interest on the Securities as and when the same shall become due and payable in accordance with their terms; or (b) affect the relative rights against the Company or any Guarantor of the Holders and creditors of the Company or such Guarantor other than the holders of Senior Indebtedness; or (c) prevent the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness. 61 SECTION 10.09. Trustee to Effectuate Subordination. Each Holder of a ----------------------------------- Security by his acceptance thereof authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and appoints the Trustee his attorney-in- fact for any and all such purposes. SECTION 10.10. No Waiver of Subordination Provisions. (a) No right of ------------------------------------- any present or future holder of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or any Guarantor, or by any act or failure to act, in good faith, by any such holder, or by any non-compliance by the Company or any Guarantor with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. (b) Without in any way limiting the generality of paragraph (a) of this Section, the holders of Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the --------------------------------------------------------------------- Securities, without Incurring responsibility to the Holders and without - ---------- impairing or releasing the subordination provided in this Article or the obligations hereunder of the Holders to the holders of Senior Indebtedness, do any one or more of the following: (1) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Indebtedness; (3) release any Person liable in any manner for the collection of Senior Indebtedness; and (4) exercise or refrain from exercising any rights against the Company, any Guarantor and any other Person. SECTION 10.11. Notice to Trustee. (a) The Company shall give prompt ----------------- written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee in respect of the Securities. Notwithstanding the provisions of this Article or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice thereof from the Company or the representative therefor; and, prior to the receipt of any such written notice, the Trustee, subject to TIA Sections 315(a) through 315(d), shall be entitled in all respects to assume that no such facts exist; provided, however, that, if the Trustee shall not have received the notice provided for in this Section at least three Business Days prior to the date upon which by the terms hereof any money may become payable for any purpose (including, without limitation, the payment of the principal of (and premium and liquidated damages, if any) or interest on any Security), then, anything herein contained to the contrary notwithstanding, the Trustee shall have full power and authority to receive such money and to apply the same to the purpose for which such money was received and shall not be affected by any notice to the contrary which may be received by it within three Business Days prior to such date. A Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness of the Company or a Guarantor may give the notice; provided, however, that if an issue -------- ------- of Senior Indebtedness of the Company or a Guarantor has a Representative, only the Representative may give the notice. (b) Subject to TIA Sections 315(a) through 315(d), the Trustee shall be entitled to conclusively rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a Representative therefor) to establish that such notice has been given by a holder of Senior Indebtedness (or a Representative therefor). In the event that the Trustee determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness held by such Person, the 62 extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. SECTION 10.12. Reliance on Judicial order or Certificate of -------------------------------------------- Liquidating Agent. Upon any payment or distribution of assets of the Company - ----------------- referred to in this Article, the Trustee, subject to TIA Sections 315(a) through 315(d), and the Holders shall be entitled to rely upon any order or decree entered by any court of competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other Person making such payment or distribution, delivered to the Trustee or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. SECTION 10.13. Rights of Trustee As a Holder of Senior Indebtedness; ----------------------------------------------------- Preservation of Trustee's Rights. The Trustee in its individual capacity shall - -------------------------------- be entitled to all the rights set forth in this Article with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. The Registrar and co- registrar and the Paying Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 10 with respect to any Senior Indebtedness of a Guarantor which may at any time be held by it, to the same extent as any other holder of Senior Indebtedness of such Guarantor; and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 10 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07. SECTION 10.14. Article Applicable to Paying Agents. In case at any ----------------------------------- time any Paying Agent other than the Trustee shall have been appointed by the Company and be then acting hereunder, the term "Trustee" as used in this Article shall in such case (unless the context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place of the Trustee; provided, however, that Section 10.13 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. SECTION 10.15. No Suspension of Remedies. Nothing contained in this ------------------------- Article shall limit the right of the Trustee or the Holders to take any action to accelerate the maturity of the Securities pursuant to Article 6 or to pursue any rights or remedies hereunder or under applicable law, except as provided in Article 6. SECTION 10.16. Trust Moneys Not Subordinated. Notwithstanding anything ----------------------------- contained herein to the contrary, payments from cash or the proceeds of U.S. Government Obligations held in trust under Article 8 hereof by the Trustee (or other qualifying trustee) and which were deposited in accordance with the terms of Article 8 hereof and not in violation of Section 10.03 hereof for the payment of principal of (and premium, if any) and interest on the Securities shall not be subordinated to the prior payment of any Senior Indebtedness or subject to the restrictions set forth in this Article, and none of the Holders shall be obligated to pay over any such amount to the Company or any holder of Senior Indebtedness or any other creditor of the Company. SECTION 10.17. Trustee Not Fiduciary for Holders of Senior ------------------------------------------- Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the - ------------ holders of Senior Indebtedness 63 and shall not be liable to any such holders if it shall in good faith mistakenly pay over or distribute to Holders or to the Company or to any other Person cash, property or securities to which any holders of Senior Indebtedness shall be entitled by virtue of this Article or otherwise. With respect to the holders of Senior Indebtedness, the Trustee undertakes to perform or to observe only such of its covenants or obligations as are specifically set forth in this Article and no implied covenants or obligations with respect to holders of Senior Indebtedness shall be read into this Indenture against the Trustee. SECTION 10.18. Notice to Holders of Senior Indebtedness. The Company ---------------------------------------- shall promptly notify holders of its Senior Indebtedness if payment of the Securities is accelerated in accordance with Article 6 because of an Event of Default. SECTION 10.19. Distribution or Notice to Representative. Whenever a ---------------------------------------- distribution is to be made or a notice given to holders of Senior Indebtedness of the Company or a Guarantor, the distribution may be made and the notice given to their Representative (if any). SECTION 10.20. Article 10 Not To Prevent Events of Default or Limit ---------------------------------------------------- Right To Accelerate. The failure to make a payment pursuant to the Securities by - ------------------- reason of any provision in this Article 10 shall not be construed as preventing the occurrence of a Default. Nothing in this Article 10 shall have any effect on the right of the Securityholders or the Trustee to accelerate the maturity of the Securities. The failure of a Guarantor to make a payment on any of its obligations by reason of any provision in this Article 10 shall not be construed as preventing the occurrence of a default by such Guarantor under such obligations. Except as expressly provided herein, nothing in this Article 10 shall have any effect on the right of the Securityholders or the Trustee to make a demand for payment on a Guarantor pursuant to Article 11. SECTION 10.21. Reliance by Holders of Senior Indebtedness on --------------------------------------------- Subordination Provisions. Each Securityholder by accepting a Security - ------------------------ acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness of the Company, whether such Senior Indebtedness was created or acquired before or after the issuance of the Securities, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and such holder of such Senior Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness. SECTION 10.22. Trustee's Compensation Not Prejudiced. Nothing in this ------------------------------------- Article shall apply to amounts due to the Trustee pursuant to other sections of this Indenture. ARTICLE 11 Guarantees ---------- SECTION 11.01. Guarantees. Subject to the release provisions of this ---------- Indenture, each Guarantor hereby jointly and severally irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment when due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of the Company under this Indenture (including obligations to the Trustee) and the Securities, whether for payment of principal of, interest on or liquidated damages in respect of, the Securities and all other monetary obligations of the Company under this Indenture and the Securities and (b) the full and punctual performance within applicable grace periods of all other obligations of the Company whether for expenses, indemnification or otherwise under this Indenture and the Securities (all the foregoing 64 being hereinafter collectively called the "Guaranteed Obligations") by executing a Guarantee. Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from each such Guarantor, and that each such Guarantor shall remain bound under this Article 11 notwithstanding any extension or renewal of any Guaranteed Obligation. Each Guarantor waives presentation to, demand of, payment from and protest to the Company of any of the Guaranteed Obligations and also waives notice of protest for non-payment. Each Guarantor waives notice of any default under the Securities or the Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be affected by (a) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Securities or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Securities or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (e) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Guaranteed Obligations; or (f) any change in the ownership of such Guarantor, except as provided in Section 11.02(b). Each Guarantor hereby waives any right to which it may be entitled to have its obligations hereunder divided among the Guarantors, such that such Guarantor's obligations would be less than the full amount claimed. Each Guarantor hereby waives any right to which it may be entitled to have the assets of the Company first be used and depleted as payment of the Company's or such Guarantor's obligations hereunder prior to any amounts being claimed from or paid by such Guarantor hereunder. Each Guarantor hereby waives any right to which it may be entitled to require that the Company be sued prior to an action being initiated against such Guarantor. Each Guarantor further agrees that its Guarantee herein constitutes a guarantee of payment, performance and compliance when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Guaranteed Obligations. The Guarantee of each Guarantor is, to the extent and in the manner set forth in Article 10, subordinated and subject in right of payment to the prior payment in full of the principal of and premium, if any, and interest on all Senior Indebtedness of the relevant Guarantor and is made subject to such provisions of this Indenture. Except as expressly set forth in Sections 8.01(b), 11.02 and 11.06, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under this Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, wilful or otherwise, in the performance of the obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of any Guarantor as a matter of law or equity. Each Guarantor agrees that its Guarantee shall remain in full force and effect until payment in full of all the Guaranteed Obligations (except as otherwise provided in Section 8.01(b)). Each Guarantor further agrees that its Guarantee herein shall continue to be 65 effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Guaranteed Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Company or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Company to pay the principal of or interest on any Guaranteed Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Guaranteed Obligation, each Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii) accrued and unpaid interest on such Guaranteed Obligations (but only to the extent not prohibited by law) and (iii) all other monetary obligations of the Company to the Holders and the Trustee. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Guaranteed Obligations guaranteed hereby until payment in full of all Guaranteed Obligations and all obligations to which the Guaranteed Obligations are subordinated as provided in Article 10. Each Guarantor further agrees that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of any Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purposes of this Section 11.01. Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorneys' fees and expenses) Incurred by the Trustee or any Holder in enforcing any rights under this Section 11.01. Upon request of the Trustee, each Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 11.02. Limitation on Liability. (a) Any term or provision of ----------------------- this Indenture to the contrary notwithstanding, the maximum, aggregate amount of the Guaranteed Obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. (b) A Guarantee as to any Guarantor shall terminate and be of no further force or effect and such Guarantor shall be deemed to be released from all obligations under this Article 11 (i) in the event that such Guarantor no longer has outstanding, other than the Guarantee, any Indebtedness (in the case of a Domestic Restricted Subsidiary) or Material Indebtedness (in the case of a Foreign Restricted Subsidiary) or (ii) upon (x) the merger or consolidation of such Guarantor with or into any Person other than the Company or a Subsidiary or Affiliate of the Company where such Guarantor is not the surviving entity of such consolidation or merger or (y) the sale by the Company or any Subsidiary of the Company (or any pledgee of the Company) of a majority of the Capital Stock of such Guarantor, where, after such sale, such Guarantor is no longer a Subsidiary of the Company; provided, however, that each such merger, -------- ------- consolidation or sale (or, in the case of a sale by such a pledgee, the disposition of the proceeds of such sale) shall comply with Section 4.06 and Section 5.01(b). At 66 the written request of the Company, the Trustee shall execute and deliver an appropriate instrument evidencing such release. SECTION 11.03. Successors and Assigns. This Article 11 shall be ---------------------- binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 11.04. No Waiver. Neither a failure nor a delay on the part of --------- either the Trustee or the Holders in exercising any right, power or privilege under this Article 11 shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article 11 at law, in equity, by statute or otherwise. SECTION 11.05. Modification. No modification, amendment or waiver of ------------ any provision of this Article 11, nor the consent to any departure by any Guarantor therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other or further notice or demand in the same, similar or other circumstances. SECTION 11.06. Execution of Supplemental Indenture for Future ---------------------------------------------- Subsidiary Guarantors. Each Subsidiary which is required to become a Subsidiary - --------------------- Guarantor pursuant to Section 4.11 shall promptly execute and deliver to the Trustee a supplemental indenture in the form of Exhibit C hereto pursuant to which such Subsidiary shall become a Subsidiary Guarantor under this Article 11 and shall guarantee the Guaranteed Obligations. Concurrently with the execution and delivery of such supplemental indenture, the Company shall deliver to the Trustee an Opinion of Counsel and an Officers' Certificate to the effect that such supplemental indenture has been duly authorized, executed and delivered by such Subsidiary and that, subject to the application of bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other similar laws relating to creditors' rights generally and to the principles of equity, whether considered in a proceeding at law or in equity, the Subsidiary Guarantee of such Subsidiary Guarantor is a legal, valid and binding obligation of such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in accordance with its terms. ARTICLE 12 Intentionally deleted ARTICLE 13 Satisfaction and Discharge -------------------------- SECTION 13.01. Satisfaction and Discharge of Indenture. This Indenture --------------------------------------- shall be discharged and shall cease to be of further effect (except as to surviving rights of registration of transfer or exchange of Securities as expressly provided for herein) as to all outstanding Securities hereunder, and the Trustee, upon Company Request and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when 67 (a) either (1) all such Securities theretofore authenticated and delivered (other than lost, stolen or destroyed Securities which have been replaced or paid as provided in Section 2.07) have been delivered to the Trustee for cancellation; or (2) all Securities not theretofore delivered to the Trustee for cancellation (x) have become due and payable, (y) will become due and payable at their Stated Maturity within one year, or (z) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee, acting reasonably, in the name, and at the expense, of the Company; and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust an amount in United States dollars or direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing prior to the date the Securities have become due and payable, the Stated Maturity of the Securities or the relevant redemption date for the Securities, as the case may be, sufficient to pay and discharge the entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, including the principal of, premium, if any, and accrued interest at maturity, Stated Maturity or redemption date; (b) the Company or any Guarantor has paid or caused to be paid all other sums payable hereunder by the Company and any Guarantor; and (c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that (i) all conditions precedent herein relating to the satisfaction and discharge hereof have been complied with and (ii) such satisfaction and discharge will not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company, any Guarantor or any Subsidiary is a party or by which the Company, any Guarantor or any of the Company's Subsidiaries is bound. Notwithstanding the satisfaction and discharge hereof, the obligations of the Company to the Trustee under Section 7.07 and, if United States dollars shall have been deposited with the Trustee pursuant to subclause (2) of subsection (a) of this Section 13.01, the obligations of the Trustee under Section 13.02 shall survive. SECTION 13.02. Application of Trust Money. Subject to the provisions -------------------------- of the last paragraph of Section 2.04, all United States dollars deposited with the Trustee pursuant to Section 13.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of, premium, if any, and interest on, the Securities for whose payment such United States dollars have been deposited with the Trustee. ARTICLE 14 Miscellaneous ------------- SECTION 14.01. Trust Indenture Act Controls. If any provision of this ---------------------------- Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the TIA, the required provision shall control. 68 SECTION 14.02. Notices. Any notice or communication shall be in ------- writing and delivered in person or mailed by first-class mail addressed as follows: if to the Company: Tritel PCS, Inc. 1010 N. Glebe Road, Suite 800 Arlington, VA 22201 (703) 236-1100 Attention of: Thomas H. Sullivan if to the Trustee: Firstar Bank, N.A. 101 East Fifth Street St. Paul, Minnesota 55101 (651) 229-2600 Attention of: Corporate Trust Department The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 14.03. Communication by Holders with Other Holders. ------------------------------------------- Securityholders may communicate pursuant to Section 312(b) of the TIA with other Securityholders with respect to their rights under this Indenture or the Securities. The Company, the Trustee, the Registrar and anyone else shall have the protection of Section 312(c) of the TIA. SECTION 14.04. Certificate and Opinion as to Conditions Precedent. -------------------------------------------------- Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee: (1) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. 69 SECTION 14.05. Statements Required in Certificate or Opinion. Each --------------------------------------------- certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual 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 individual, he has made such examination or investigation as is necessary to enable him 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 individual, such covenant or condition has been complied with. SECTION 14.06. When Securities Disregarded. In determining whether the --------------------------- Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by the Company, any Guarantor or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 14.07. Rules by Trustee, Paying Agent and Registrar. The -------------------------------------------- Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 14.08. Legal Holidays. If a payment date is a Legal Holiday, -------------- payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 14.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL ------------- BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. SECTION 14.10. No Recourse Against Others. A director, officer, -------------------------- employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Securities. SECTION 14.11. Successors. All agreements of the Company and each ---------- Guarantor in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. 70 SECTION 14.12. Multiple Originals. The parties may sign any number of ------------------ copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 14.13. Table of Contents; Headings. The table of contents, --------------------------- cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. 71 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. TRITEL PCS, INC., by /s/ Thomas H. Sullivan -------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer and Treasurer TRITEL, INC., by /s/ Thomas H. Sullivan -------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer and Treasurer TRITEL COMMUNICATIONS, INC., by /s/ Thomas H. Sullivan -------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer and Treasurer TRITEL FINANCE, INC., by /s/ Thomas H. Sullivan -------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer and Treasurer FIRSTAR BANK, N.A., as Trustee, by /s/ Frank P. Leslie III -------------------------------- Name: Frank P. Leslie III Title: Vice President APPENDIX A PROVISIONS RELATING TO INITIAL SECURITIES, ------------------------------------------ PRIVATE EXCHANGE SECURITIES --------------------------- AND EXCHANGE SECURITIES ----------------------- 1. Definitions ----------- 1.1 Definitions ----------- For the purposes of this Appendix A the following terms will have the meanings indicated below: "Applicable Procedures" means, with respect to any transfer or transaction involving a Regulation S Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Global Security, Euroclear and Cedel, in each case to the extent applicable to such transaction and as in effect from time to time. "Cedel" means Cedel Bank, S.A., or any successor securities clearing agency. "Definitive Security" means a certificated Initial Security or Exchange Security (bearing the Restricted Securities Legend if the transfer of such Security is restricted by applicable law) that does not include the Global Securities Legend. "Depositary" means The Depository Trust Company, its nominees and their respective successors. "Euroclear" means the Euroclear Clearance System or any successor securities clearing agency. "Global Securities Legend" means the legend set forth under that caption in Exhibit A to this Indenture. "IAI" means an institutional "accredited investor" as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Initial Purchasers" means Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (USA) Inc. "Private Exchange" means an offer by the Company, pursuant to the Registration Agreement, to issue and deliver to certain purchasers, in exchange for the Initial Securities held by such purchasers as part of their initial distribution, a like aggregate principal amount of Private Exchange Securities. "Private Exchange Securities" means the Securities of the Company issued in exchange for Initial Securities pursuant to this Indenture in connection with the Private Exchange pursuant to the Registration Agreement. "Purchase Agreement" means the Purchase Agreement dated January 19, 2001, among the Company, the Guarantors and the Initial Purchasers. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Registered Exchange Offer" means the offer by the Company, pursuant to the Registration Agreement, to certain Holders of Initial Securities, to issue and deliver to such 2 Holders, in exchange for their Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act. "Registration Agreement" means the Exchange and Registration Rights Agreement dated January 24, 2001 , among the Company, the Guarantors and the Initial Purchasers . "Regulation S" means Regulation S under the Securities Act. "Regulation S Securities" means all Initial Securities offered and sold outside the United States in reliance on Regulation S. "Restricted Period," with respect to any Securities, means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Securities are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the Issue Date with respect to such Securities. "Restricted Securities Legend" means the legend set forth in Section 2.3(e)(i) herein. "Rule 501" means Rule 501(a)(1), (2), (3) or (7) under the Securities Act. "Rule 144A" means Rule 144A under the Securities Act. "Rule 144A Securities" means all Initial Securities offered and sold to QIBs in reliance on Rule 144A. "Securities Act" means the Securities Act of 1933, as amended. "Securities Custodian" means the custodian with respect to a Global Security (as appointed by the Depositary) or any successor person thereto, who will initially be the Trustee. "Shelf Registration Statement" means a registration statement filed by the Company in connection with the offer and sale of Initial Securities pursuant to the Registration Agreement. "Transfer Restricted Securities" means Definitive Securities and any other Securities that bear or are required to bear the Restricted Securities Legend. 1.2 Other Definitions -----------------
Term: Defined in Section: ---- ------------------ "Agent Members".................................................. 2.1(b) "IAI Global Security"............................................ 2.1(a) "Global Security"................................................ 2.1(a) "Regulation S Global Security"................................... 2.1(a) "Rule 144A Global Security"...................................... 2.1(a)
3 2. The Securities -------------- 2.1 Form and Dating --------------- 4 The Initial Securities issued on the date hereof will be (i) offered and sold by the Company pursuant to the Purchase Agreement and (ii) resold, initially only to (A) QIBs in reliance on Rule 144A and (B) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Initial Securities may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501. (a) Global Securities. Rule 144A Securities shall be issued initially ----------------- in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "Rule 144A Global Security") and Regulation S Securities shall be issued initially in the form of one or more global Securities (collectively, the "Regulation S Global Security"), in each case without interest coupons and bearing the Global Securities Legend and Restricted Securities Legend, which shall be deposited on behalf of the purchasers of the Securities represented thereby with the Securities Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in this Indenture. One or more global securities in definitive, fully registered form without interest coupons and bearing the Global Securities Legend and the Restricted Securities Legend (collectively, the "IAI Global Security") shall also be issued on the date of this Indenture, deposited with the Securities Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in this Indenture to accommodate transfers of beneficial interests in the Securities to IAIs subsequent to the initial distribution. Beneficial ownership interests in the Regulation S Global Security shall not be exchangeable for interests in the Rule 144A Global Security, the IAI Global Security or any other Security without a Restricted Securities Legend until the expiration of the Restricted Period. The Rule 144A Global Security, the IAI Global Security and the Regulation S Global Security are each referred to herein as a "Global Security" and are collectively referred to herein as "Global Securities." The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided. (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a --------------------- Global Security deposited with or on behalf of the Depositary. The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and pursuant to an order of the Company, authenticate and deliver initially one or more Global Securities that (a) shall be registered in the name of the Depositary for such Global Security or Global Securities or the nominee of such Depositary and (b) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions or held by the Trustee as Securities Custodian. Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as Securities Custodian or under such Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security. (c) Definitive Securities. Except as provided in Section 2.3 or 2.4, --------------------- owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of certificated Securities. 5 2.2 Authentication. The Trustee shall authenticate and make available for -------------- delivery upon a written order of the Company signed by two Officers (1) Initial Securities for original issue on the date hereof in an aggregate principal amount of $450,000,000 and (2) the (A) Exchange Securities for issue only in a Registered Exchange Offer and (B) Private Exchange Securities for issue only a Private Exchange, in the case of each of (A) and (B) pursuant to the Registration Agreement and for a like principal amount of Initial Securities exchanged pursuant thereto. Such order shall specify the amount of the Securities to be authenticated, the date on which the original issue of Securities is to be authenticated and whether the Securities are to be Initial Securities, Exchange Securities or Private Exchange Securities. The aggregate principal amount of Securities outstanding at any time may not exceed $450,000,000 except as provided in Section 2.07 of this Indenture. 2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive --------------------- ----------------------------------- Securities. When Definitive Securities are presented to the Registrar with a - ---------- request: (x) to register the transfer of such Definitive Securities; or (y) to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, -------- ------- that the Definitive Securities surrendered for transfer or exchange: (i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and (ii) are accompanied by the following additional information and documents, as applicable: (A) if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Security); or (B) if such Definitive Securities are being transferred to the Company, a certification to that effect (in the form set forth on the reverse side of the Initial Security); or (C) if such Definitive Securities are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (i) a certification to that effect (in the form set forth on the reverse side of the Initial Security) and (ii) if the Company so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). (b) Restrictions on Transfer of a Definitive Security for a ------------------------------------------------------- Beneficial Interest in a Global Security. A Definitive Security may not be - ----------------------------------------- exchanged for a beneficial interest in a Global Security except upon satisfaction of the requirements set forth below. Upon receipt by 6 the Trustee of a Definitive Security, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, together with: (i) certification (in the form set forth on the reverse side of the Initial Security) that such Definitive Security is being transferred (A) to a QIB in accordance with Rule 144A, (B) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit D or (C) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act; and (ii) written instructions directing the Trustee to make, or to direct the Securities Custodian to make, an adjustment on its books and records with respect to such Global Security to reflect an increase in the aggregate principal amount of the Securities represented by the Global Security, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Securities Custodian, the aggregate principal amount of Securities represented by the Global Security to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Security equal to the principal amount of the Definitive Security so canceled. If no Global Securities are then outstanding and the Global Security has not been previously exchanged for certificated securities pursuant to Section 2.4, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers' Certificate, a new Global Security in the appropriate principal amount. (c) Transfer and Exchange of Global Securities. (i) The transfer and ------------------------------------------ exchange of Global Securities or beneficial interests therein shall be effected through the Depositary, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Security shall deliver a written order given in accordance with the Depositary's procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Security or another Global Security and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Security and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Security being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Security or the IAI Global Security to a transferee who takes delivery of such interest through the Regulation S Global Security, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear or Cedel. In the case of a transfer of a beneficial interest in either the Regulation S Global Security or the Rule 144A Global Security for an interest in the IAI Global Security, the transferee must furnish a signed letter substantially in the form of Exhibit D to the Trustee. (ii) If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and 7 records the date and a corresponding decrease in the principal amount of Global Security from which such interest is being transferred. (iii) Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. (iv) In the event that a Global Security is exchanged for Definitive Securities pursuant to Section 2.4 prior to the consummation of the Registered Exchange Offer or the effectiveness of the Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Securities intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company. (d) Restrictions on Transfer of Regulation S Global Security. (i) --------------------------------------------------------- Prior to the expiration of the Restricted Period, interests in the Regulation S Global Security may only be held through Euroclear or Cedel. During the Restricted Period, beneficial ownership interests in the Regulation S Global Security may only be sold, pledged or transferred through Euroclear or Cedel in accordance with the Applicable Procedures and only (A) to the Company, (B) so long as such security is eligible for resale pursuant to Rule 144A, to a person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (C) in an offshore transaction in accordance with Regulation S, (D) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act, (E) to an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of Securities of $250,000 or (F) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the expiration of the Restricted Period, transfers by an owner of a beneficial interest in the Regulation S Global Security to a transferee who takes delivery of such interest through the Rule 144A Global Security or the IAI Global Security shall be made only in accordance with Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Security to the effect that such transfer is being made to (i) a person whom the transferor reasonably believes is a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (ii) an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of the Securities of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in the Regulation S Global Security for an interest in the IAI Global Security, the transferee must furnish a signed letter substantially in the form of Exhibit D to the Trustee. (ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the Regulation S Global Security shall be transferable in accordance with applicable law and the other terms of this Indenture. (e) Legend. ------ (i) Except as permitted by the following paragraphs (ii), (iii) or (iv), each Security certificate evidencing the Global Securities and the Definitive Securities (and all 8 Securities issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only): "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION." THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE." Each Security evidencing a Global Security offered and sold to QIBs pursuant to Rule 144A shall bear a legend in substantially the following form "EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER." Each Definitive Security shall bear the following additional legend: "IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION 9 AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS." (ii) Upon any sale or transfer of a Transfer Restricted Security that is a Definitive Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Security if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Security). (iii) After a transfer of any Initial Securities or Private Exchange Securities during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities or Private Exchange Securities, as the case may be, all requirements pertaining to the Restricted Securities Legend on such Initial Securities or such Private Exchange Securities shall cease to apply and the requirements that any such Initial Securities or such Private Exchange Securities be issued in global form shall continue to apply. (iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities pursuant to which Holders of such Initial Securities are offered Exchange Securities in exchange for their Initial Securities, all requirements pertaining to Initial Securities that Initial Securities be issued in global form shall continue to apply, and Exchange Securities in global form without the Restricted Securities Legend shall be available to Holders that exchange such Initial Securities in such Registered Exchange Offer. (v) Upon the consummation of a Private Exchange with respect to the Initial Securities pursuant to which Holders of such Initial Securities are offered Private Exchange Securities in exchange for their Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities be issued in global form shall continue to apply, and Private Exchange Securities in global form with the Restricted Securities Legend shall be available to Holders that exchange such Initial Securities in such Private Exchange. (vi) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Security acquired pursuant to Regulation S, all requirements that such Initial Security bear the Restricted Securities Legend shall cease to apply and the requirements requiring any such Initial Security be issued in global form shall continue to apply. (f) Cancelation or Adjustment of Global Security. At such time as all -------------------------------------------- beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by the Depositary to the Trustee for cancelation or retained and canceled by the Trustee. At any time prior to such cancelation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction. 10 (g) Obligations with Respect to Transfers and Exchanges of ------------------------------------------------------ Securities. - ---------- 11 (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate, Definitive Securities and Global Securities at the Registrar's request. (ii) No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.08 and 9.05 of the Indenture). (iii) Prior to the due presentation for registration of transfer of any Security, the Company, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving payment of principal of and interest on such Security and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Company, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary. (iv) The Company shall not be required to make and the Registrar need not register transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed. (v) All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange. (h) No Obligation of the Trustee. ---------------------------- (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. 12 2.4 Definitive Securities --------------------- (a) A Global Security deposited with the Depositary or with the Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security or if at any time the Depositary ceases to be a "clearing agency" registered under the Exchange Act, and a successor depositary is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Securities under this Indenture. (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. Any portion of a Global Security transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 of principal amount and any integral multiple thereof and registered in such names as the Depositary shall direct. Any certificated Initial Security in the form of a Definitive Security delivered in exchange for an interest in the Global Security shall, except as otherwise provided by Section 2.3(e), bear the Restricted Securities Legend. (c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Securities. (d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to the Trustee a reasonable supply of Definitive Securities in fully registered form without interest coupons. EXHIBIT A [FORM OF FACE OF INITIAL SECURITY] [Global Securities Legend] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. [Restricted Securities Legend] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. [Legend for Definitive Securities] IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS." No. $ 10 3/8% Senior Subordinated Note due 2011 CUSIP No. Tritel PCS, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum listed on the Schedule of Increases or Decreases in Global Security attached hereto on January 15, 2011. Interest Payment Dates: January 15 and July 15. Record Dates: January 1 and July 1. 2 Additional provisions of this Security are set forth on the other side of this Security. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. Dated: TRITEL PCS, INC., by ________________________________ Name: Title: by ________________________________ Name: Title: 3 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the Indenture. Dated: FIRSTAR BANK, N.A., as Trustee by _________________________________ Authorized Signatory 4 [FORM OF REVERSE SIDE OF INITIAL SECURITY] 10 3/8% Senior Subordinated Note due 2011 1. Interest -------- (a) Tritel PCS, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company shall pay interest semiannually on January 15 and July 15 of each year commencing on July 15, 2001. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid or duly provided for, from January 24, 2001, until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay cash interest on overdue principal at the rate borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. (b) Liquidated Damages. The holder of this Security is entitled to the ------------------ benefits of an Exchange and Registration Rights Agreement, dated as of January 24, 2001, among the Company, Tritel, Inc. ("Tritel"), Tritel Communications, Inc. and Tritel Finance, Inc. (together with Tritel, the "Guarantors") and the Initial Purchasers named therein (the "Registration Agreement"). Capitalized terms used in this paragraph (b) but not defined herein have the meanings assigned to them in the Registration Agreement. If (i) the Shelf Registration Statement or Exchange Offer Registration Statement, as applicable under the Registration Agreement, is not filed with the Commission on or prior to 90 days after the Issue Date, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is not declared effective within 210 days after the Issue Date, (iii) the Registered Exchange Offer is not consummated on or prior to 240 days after the Issue Date, or (iv) the Shelf Registration Statement is filed and declared effective within 210 days after the Issue Date but shall thereafter cease to be effective (at any time that the Company is obligated to maintain the effectiveness thereof) without being succeeded within 45 days by an additional Registration Statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default"), the Company shall pay liquidated damages to each holder of Transfer Restricted Securities, during the period of such Registration Default, in an amount equal to $0.192 per week per $1,000 of principal amount of the Securities constituting Transfer Restricted Securities held by such holder until the applicable Registration Statement is filed or declared effective, the Registered Exchange Offer is consummated or the Shelf Registration Statement again becomes effective, as the case may be. All accrued liquidated damages shall be paid to holders in the same manner as interest payments on the Securities on semi-annual payment dates which correspond to interest payment dates for the Securities. Following the cure of all Registration Defaults, the accrual of liquidated damages shall cease. The Trustee shall have no responsibility with respect to the determination of the amount of any such liquidated damages. For purposes of the foregoing, "Transfer Restricted Securities" means (i) each Initial Security until the date on which such Initial Security has been exchanged for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) each Initial Security or Private Exchange Security until the date on which such Initial Security or Private Exchange Security has been effectively registered under the Securities Act and disposed of in accordance with a Shelf Registration Statement or (iii) each Initial Security or Private Exchange Security until the date on which such Initial Security or Private Exchange Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. 2. Method of Payment ----------------- 5 The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the January 1 or July 1 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal, premium, liquidated damages and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium, liquidated damages and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will make all payments in respect of a certificated Security (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof; provided, however, that payments on -------- ------- the Securities may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar -------------------------- Initially, Firstar Bank, N.A. , a national association under the laws of the United States (the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture --------- The Company issued the Securities under an Indenture dated as of January 24, 2001, (the "Indenture"), among the Company, the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the ----- "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the Indenture, and Securityholders are referred to the Indenture and the TIA for a statement of such terms and provisions. The Securities are senior subordinated unsecured obligations of the Company limited to $450,000,000 aggregate principal amount at any one time outstanding (subject to Sections 2.01 and 2.08 of the Indenture). This Security is one of the Initial Securities referred to in the Indenture. The Securities include the Initial Securities and any Exchange Securities and Private Exchange Securities issued in exchange for Initial Securities. The Initial Securities, the Exchange Securities and the Private Exchange Securities are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by Restricted Subsidiaries, enter into or permit certain transactions with Affiliates Asset Dispositions. The Indenture also imposes limitations on the ability of the Company to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of the property of the Company. To guarantee the due and punctual payment of the principal and interest on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether, by acceleration or otherwise, according 6 to the terms of the Securities and the Indenture, the Guarantors jointly and severally, unconditionally guarantee the Guaranteed Obligations on a senior subordinated basis pursuant to the terms of the Indenture. 5. Optional Redemption ------------------- Except as set forth in the following paragraph, the Securities will not be redeemable at the option of the Company prior to January 15, 2006. Thereafter, the Securities will be redeemable at the option of the Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest, if any, due on the relevant interest payment date), if redeemed during the 12-month period commencing on January 15 of the years set forth below: Redemption Year Price ---------------------------------------------------------------- 2006 105.188% 2007 103.458% 2008 101.729% 2009 and thereafter 100.000% In addition, at any time and from time to time prior to January 15, 2004, the Company may redeem up to a maximum of 35% of the original aggregate principal amount of the Securities with the proceeds of one or more Equity Offerings (1) by the Company, (2) Tritel, Inc. or (3) by Holdings to the extent that the proceeds thereof are contributed to the Company, at a redemption price equal to 110.375% of the principal amount on the redemption date; provided, -------- however, that, after giving effect to any such redemption at least 65% of the - ------- original aggregate principal amount of the Securities remains outstanding. In addition, any such redemption shall be made within 180 days of such Equity Offering upon not less than 30 nor more than 60 days' notice mailed to each holder of Securities being redeemed and otherwise in accordance with the procedures set forth in the Indenture. At any time on or prior to January 15, 2006, the Securities may be redeemed as a whole but not in part at the option of the Company, upon not less than 30 or more than 60 days' prior notice mailed by first-class mail to each Holder's registered address, at a redemption price equal to 100% of the principal amount thereof plus the Make Whole Premium as of, and accrued but unpaid interest, if any, to, the redemption date, subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date. "Make Whole Premium" means with respect to a Security at any redemption date, the greater of (i) 1.0% of the principal amount of such Security or (ii) the excess of (A) the present value of (1) the redemption price of such Security at January 15, 2006 (such redemption price being set forth in the table above) plus (2) all required interest payments due on such Security through January 15, 2006, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the then-outstanding principal amount of such Security. "Treasury Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15(519) which has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source or similar market data) most nearly equal to the period from the redemption date to January 15, 2006; provided, however, that if -------- ------- the period from the redemption date to January 15, 2006 is not equal to the constant maturity of a United States Treasury security 7 for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to January 15, 2006 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. 6. Sinking Fund ------------ The Securities are not subject to any sinking fund. 7. Notice of Redemption -------------------- Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his or her registered address. Securities in denominations larger than $1,000 of principal amount may be redeemed in part but only in whole multiples of $1,000 of principal amount. If money sufficient to pay the redemption price of and accrued and unpaid interest and liquidated damages, if any, on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption. 8. Repurchase of Securities at the Option of Holders upon Change of Control ------------------------------------------------------------------------ Upon a Change of Control, each Holder of Securities will have the right, subject to certain conditions specified in the Indenture, to require the Company to repurchase all or any part of such holder's Securities at a purchase price in cash equal to 101% of the principal amount on the Purchase Date, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as provided in, and subject to the terms of, the Indenture. 9. Subordination ------------- The Securities are subordinated to Senior Indebtedness, as defined in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. The Company and each Guarantor agrees, and each Securityholder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 10. Denominations; Transfer; Exchange --------------------------------- The Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Securities to be redeemed. 8 11. Persons Deemed Owners --------------------- The registered Holder of this Security may be treated as the owner of it for all purposes. 12. Unclaimed Money --------------- If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 13. Discharge and Defeasance ------------------------ Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be. 14. Amendment, Waiver ----------------- Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended without prior notice to any Securityholder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities and (ii) any default or noncompliance with any provision may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder of Securities, the Company and the Trustee may amend the Indenture or the Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities (provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code); (iv) to add Guarantees with respect to the Securities; (v) to secure the Securities; (vi) to add additional covenants or to surrender rights and powers conferred on the Company; (vii) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA; (viii) to make any change that does not adversely affect the rights of any Securityholder; (ix) to make any change in the subordination provisions of the Indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company (or any representative thereof) under such subordination provisions; or (x) to provide for the issuance of the Exchange Securities or Private Exchange Securities. 15. Defaults and Remedies --------------------- If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences. 9 If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Securities unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount of the outstanding Securities have requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Securities are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 16. Trustee Dealings with the Company --------------------------------- Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 17. No Recourse Against Others -------------------------- A director, officer, employee or stockholder, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 18. Authentication -------------- This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security. 19. Abbreviations ------------- Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 20. Governing Law ------------- THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT 11 GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 21. CUSIP Numbers ------------- Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. 22. Holders' Compliance with Registration Agreement. ------------------------------------------------ Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Agreement, including, without limitation, the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein. The Company will furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security. 12 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to ______________________________________________________________________ (Print or type assignee's name, address and zip code) ______________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint ______________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: ______________________ Your Signature: __________________________ _______________________________________________________________________ Sign exactly as your name appears on the other side of this Security. 13 CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER RESTRICTED SECURITIES This certificate relates to $_________ principal amount of Securities held in (check applicable space) ____ book-entry or _____ definitive form by the undersigned. The undersigned (check one box below): [_] has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Security held by the Depositary a Security or Securities in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Security (or the portion thereof indicated above); [_] has requested the Trustee by written order to exchange or register the transfer of a Security or Securities. In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act, the undersigned confirms that such Securities are being transferred in accordance with its terms: CHECK ONE BOX BELOW (1) [_] to the Company; or (2) [_] pursuant to an effective registration statement under the Securities Act of 1933; or (3) [_] inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or (4) [_] outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or (5) [_] to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933) that has furnished to the Trustee a signed letter containing certain representations and agreements; or (6) [_] pursuant to another available exemption from registration provided by Rule 144 under the Securities Act of 1933. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered holder thereof; provided, however, that if box -------- ------- (4), (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested 14 to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933. _________________________________ Your Signature Signature Guarantee: Date: ___________________ _________________________________ Signature must be guaranteed Signature of Signature Guarantee by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee ____________________________________________________________ TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED. The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Dated: ________________ __________________________________ NOTICE: To be executed by an executive officer 15 [TO BE ATTACHED TO GLOBAL SECURITIES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY The initial principal amount of this Global Security is $ . The following increases or decreases in this Global Security have been made: Date of Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized Exchange Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or Global Security Global Security such decrease or increase Securities Custodian
16 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of Control) of the Indenture, check the box: Asset Disposition [_] Change of Control [_] If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the principal amount: $___________ Date: __________________ Your Signature:______________________________________ (Sign exactly as your name appears on the other side of the Security) Signature Guarantee:__________________________________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee EXHIBIT B [FORM OF FACE OF EXCHANGE SECURITY] No. $ 10 3/8% Senior Subordinated Note due 2011 CUSIP No. Tritel PCS, Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum listed on the Schedule of Increases or Decreases in Global Security attached hereto on January 15, 2011 Interest Payment Dates: January 15 and July 15. Record Dates: January 1 and July 1. 2 Additional provisions of this Security are set forth on the other side of this Security. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. Dated: TRITEL PCS, INC., by ___________________________ Name: Title: by ___________________________ Name: Title: 3 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities referred to in the Indenture. Dated: FIRSTAR BANK, N.A., as Trustee by _________________________________ Authorized Signatory 4 [FORM OF REVERSE SIDE OF EXCHANGE SECURITY] 10 3/8% Senior Subordinated Note due 2011 1. Interest. -------- Tritel PCS, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the "Company"), promises to pay interest on the principal amount of this Security at the rate per annum shown above. The Company shall pay interest semiannually on January 15 or July 15 of each year. Interest on the Securities shall accrue from the most recent date to which interest has been paid or, if no interest has been paid or duly provided for, from January 24, 2001 until the principal hereof is due. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay cash interest on overdue principal at the rate borne by the Securities plus 1% per annum, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful. 2. Method of Payment ----------------- The Company shall pay interest on the Securities (except defaulted interest) to the Persons who are registered holders of Securities at the close of business on the January 1 or July 1 next preceding the interest payment date even if Securities are canceled after the record date and on or before the interest payment date. Holders must surrender Securities to a Paying Agent to collect principal payments. The Company shall pay principal, premium and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. Payments in respect of the Securities represented by a Global Security (including principal, premium and interest) shall be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company. The Company will make all payments in respect of a certificated Security (including principal, premium and interest), by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Securities may also be made, in the case - -------- ------- of a Holder of at least $1,000,000 aggregate principal amount of Securities, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar -------------------------- Initially, Firstar Bank, N.A., a national association under the laws of the United States (the "Trustee"), will act as Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Company or any of its domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture --------- The Company issued the Securities under an Indenture dated as of January 24, 2001 (the "Indenture"), among the Company, the Guarantors and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture (the ----- "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the 5 Indenture, and Securityholders are referred to the Indenture and the TIA for a statement of such terms and provisions. The Securities are senior subordinated unsecured obligations of the Company limited to $450,000,000 principal amount at any one time outstanding (subject to Sections 2.01 and 2.08 of the Indenture). This Security is one of the Initial Securities referred to in the Indenture. The Securities include the Original Securities and any Exchange Securities and Private Exchange Securities issued in exchange for the Initial Securities pursuant to the Indenture. The Initial Securities, the Exchange Securities and the Private Exchange Securities are treated as a single class of securities under the Indenture. The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other things, make certain Investments and other Restricted Payments, pay dividends and other distributions, Incur Indebtedness, enter into consensual restrictions upon the payment of certain dividends and distributions by Restricted Subsidiaries, enter into or permit certain transactions with Affiliates, and make Asset Dispositions. The Indenture also imposes limitations on the ability of the Company to consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of the property of the Company. To guarantee the due and punctual payment of the principal and interest, if any, on the Securities and all other amounts payable by the Company under the Indenture and the Securities when and as the same shall be due and payable, whether , by acceleration or otherwise, according to the terms of the Securities and the Indenture, the Guarantors have, jointly and severally, unconditionally guaranteed the Guaranteed Obligations on a senior subordinated basis pursuant to the terms of the Indenture. 5. Optional Redemption ------------------- Except as set forth in the following paragraph, the Securities will not be redeemable at the option of the Company prior to January 15, 2006. Thereafter, the Securities will be redeemable at the option of the Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice, at the following redemption prices (expressed as percentages of principal amount ), plus accrued and unpaid interest, if any, to the redemption date (subject to the right of holders of record on the relevant record date to receive interest, if any, due on the relevant interest payment date), if redeemed during the 12-month period commencing on January 15 of the years set forth below: Redemption Year Price ------------------------------------------------------ 2006 105.188% 2007 103.458% 2008 101.729% 2009 and thereafter 100.000% In addition, at any time and from time to time prior to January 15, 2004, the Company may redeem up to a maximum of 35% of the original aggregate principal amount of the Securities with the proceeds of one or more Equity Offerings (1) by the Company, (2) Tritel, Inc. or (3) by Holdings to the extent that the proceeds thereof are contributed to the Company, at a redemption price equal to 110.375% of the principal amount on the redemption date; provided, -------- however, that, after giving effect to any such redemption at least 65% of the - ------- original aggregate principal amount of the Securities remains outstanding. In addition, any such redemption shall be made within 180 days of such Equity Offering upon not less than 30 nor more than 60 days' notice mailed to each holder of Securities being redeemed and otherwise in accordance with the procedures set forth in the Indenture. 6 At any time on or prior to January 15, 2006, the Securities may be redeemed as a whole but not in part at the option of the Company, upon not less than 30 or more than 60 days' prior notice mailed by first-class mail to each Holder's registered address, at a redemption price equal to 100% of the principal amount thereof plus the Make Whole Premium as of, and accrued but unpaid interest, if any, to, the redemption date, subject to the right of Holders on the relevant record date to receive interest due on the relevant interest payment date. "Make Whole Premium" means with respect to a Security at any redemption date, the greater of (i) 1.0% of the principal amount of such Security or (ii) the excess of (A) the present value of (1) the redemption price of such Security at January 15, 2006 (such redemption price being set forth in the table above) plus (2) all required interest payments due on such Security through January 15, 2006, computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the then-outstanding principal amount of such Security. "Treasury Rate" means the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H. 15(519) which has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source or similar market data) most nearly equal to the period from the redemption date to January 15, 2006; provided, however, that if -------- ------- the period from the redemption date to January 15, 2006 is not equal to the constant maturity of a United States Treasury security 8 for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the redemption date to January 15, 2006 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used. 6. Sinking Fund ------------ The Securities are not subject to any sinking fund. 7. Notice of Redemption -------------------- Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his or her registered address. Securities in denominations larger than $1,000 of principal amount may be redeemed in part but only in whole multiples of $1,000 of principal amount. If money sufficient to pay the redemption price of and accrued and unpaid interest and liquidated damages, if any, on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Securities (or such portions thereof) called for redemption. 8. Repurchase of Securities at the Option of Holders upon Change of Control ------------------------------------------------------------------------ Upon a Change of Control, each Holder of Securities will have the right, subject to certain conditions specified in the Indenture, to require the Company to repurchase all or any part of such holder's Securities at a purchase price in cash equal to 101% of the principal amount on the Purchase Date, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), as provided in, and subject to the terms of, the Indenture. 7 9. Subordination ------------- The Securities are subordinated to Senior Indebtedness, as defined in the Indenture. To the extent provided in the Indenture, Senior Indebtedness must be paid before the Securities may be paid. The Company and each Guarantor agrees, and each Securityholder by accepting a Security agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 10. Denominations; Transfer; Exchange --------------------------------- The Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to a selection of Securities to be redeemed. 11. Persons Deemed Owners --------------------- The registered Holder of this Security may be treated as the owner of it for all purposes. 12. Unclaimed Money --------------- If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. 13. Discharge and Defeasance ------------------------ Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Securities to redemption or maturity, as the case may be. 14. Amendment, Waiver ----------------- Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Securities may be amended without prior notice to any Securityholder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities and (ii) any default or noncompliance with any provision may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Securities. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder of Securities, the Company and the Trustee may amend the Indenture or the Securities (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply with Article 5 of the Indenture; (iii) to provide for uncertificated Securities in addition to or in place of certificated Securities (provided that the uncertificated Securities are issued in registered form for purposes of Section 163(f) of the Code, or in a manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of the Code); (iv) to add Guarantees with respect to the Securities; (v) to secure the Securities; (vi) to add additional covenants or to surrender rights and 8 powers conferred on the Company; (vii) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA; (viii) to make any change that does not adversely affect the rights of any Securityholder; (ix) to make any change in the subordination provisions of the Indenture that would limit or terminate the benefits available to any holder of Senior Indebtedness of the Company (or any representative thereof) under such subordination provisions; or (x) to provide for the issuance of the Exchange Securities or Private Exchange Securities. 15. Defaults and Remedies --------------------- If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company) and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities may declare the principal of and accrued but unpaid interest on all the Securities to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Company occurs, the principal of and interest on all the Securities shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Securities may rescind any such acceleration with respect to the Securities and its consequences. If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Securities unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount of the outstanding Securities have requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Securities have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Securities are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 16. Trustee Dealings with the Company --------------------------------- Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. 17. No Recourse Against Others -------------------------- A director, officer, employee or stockholder, as such, of the Company or any Guarantor shall not have any liability for any obligations of the Company under the Securities or 9 the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 18. Authentication -------------- This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security. 19. Abbreviations ------------- Customary abbreviations may be used in the name of a Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST 20. Governing Law ------------- THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 21. CUSIP Numbers ------------- Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security. 10 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to ______________________________________________________________________ (Print or type assignee's name, address and zip code) ______________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably_____________________________ appoint agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: ______________________ Your Signature: _________________________ ______________________________________________________________________ Sign exactly as your name appears on the other side of this Security. Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee. 11 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Security purchased by the Company pursuant to Section 4.06 (Asset Disposition) or 4.08 (Change of Control) of the Indenture, check the box: Asset Sale [_] Change of Control [_] If you want to elect to have only part of this Security purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the principal amount: $___________ Date: __________________ Your Signature:____________________________ (Sign exactly as your name appears on the other side of the Security) Signature Guarantee:_____________________________________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee EXHIBIT C FORM OF SUPPLEMENTAL INDENTURE SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of , among [GUARANTOR] (the "New Guarantor"), a subsidiary of TRITEL PCS, INC. (or its successor), a Delaware corporation (the "Company"), TRITEL, INC., TRITEL COMMUNICATIONS, INC., TRITEL FINANCE, INC. and FIRSTAR BANK, N.A., a national association under the laws of the United States, as trustee under the indenture referred to below (the "Trustee"). W I T N E S S E T H : WHEREAS the Company and Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc. (the "Existing Guarantors") have heretofore executed and delivered to the Trustee an Indenture (the "Indenture") dated as of January 24, 2001, providing for the issuance of an aggregate principal amount of up to $450,000,000 of 10d% Senior Subordinated Notes due 2011 (the "Securities"); WHEREAS Section 4.11 of the Indenture provides that under certain circumstances the Company is required to cause the New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which the New Guarantor shall unconditionally guarantee all the Company's obligations under the Securities pursuant to a Guarantee on the terms and conditions set forth herein; and WHEREAS pursuant to Section 9.01 of the Indenture, the Trustee, the Company and the Existing Guarantors are authorized to execute and deliver this Supplemental Indenture; NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the New Guarantor, the Company, the Existing Guarantors and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Securities as follows: 1. Agreement to Guarantee. The New Guarantor hereby agrees, jointly ---------------------- and severally with the Existing Guarantors, to unconditionally guarantee the Company's obligations under the Securities on the terms and subject to the conditions set forth in Article 10 of the Indenture and to be bound by all other applicable provisions of the Indenture and the Securities. 2. Ratification of IndentEXHIBIT C FORM OF SUPPLEMENTAL INDENTURE -------------------------------------------------------------- SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of , among [GUARANTOR] (the "New Guarantor"), a subsidiary of TRITEL PCS, INC. (or its successor), a Delaware corporation (the "Company"), TRITEL, INC., TRITEL COMMUNICATIONS, INC., TRITEL FINANCE, INC. and FIRSTAR BANK, N.A., a national association under the laws of the United States, as trustee under the indenture referred to below (the "Trustee"). 3. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE ------------- GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 2 4. Trustee Makes No Representation. The Trustee makes no ------------------------------- representation as to the validity or sufficiency of this Supplemental Indenture. 5. Counterparts. The parties may sign any number of copies of this ------------ Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 6. Effect of Headings. The Section headings herein are for convenience ------------------ only and shall not effect the construction thereof. IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written. [NEW GUARANTOR], by ________________________________ Name: Title: TRITEL PCS, INC., by ________________________________ Name: Title: TRITEL, INC., by ________________________________ Name: Title: TRITEL COMMUNICATIONS, INC., by ________________________________ Name: Title: TRITEL FINANCE, INC., by ________________________________ Name: Title: 3 FIRSTAR BANK, N.A., as Trustee by _________________________________ Name: Title: EXHIBIT D Form of Transferee Letter of Representation Tritel PCS, Inc. In care of Firstar Bank, N.A. 101 East Fifth Street St. Paul, Minnesota 55101 Ladies and Gentlemen: This certificate is delivered to request a transfer of $ principal amount of the 10 3/8% Senior Subordinated Notes due 2011 (the "Securities") of Tritel PCS, Inc. ("Tritel"). Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows: Name:________________________ Address:_____________________ Taxpayer ID Number:__________ The undersigned represents and warrants to you that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor" at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment. 2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing the Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which Tritel or any affiliate of Tritel was the owner of such Securities (or any predecessor thereto) (the "Resale Restriction Termination Date") only (a) to Tritel, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act ("Rule 144A"), to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) in an offshore transaction within the meaning of, and in compliance with, Regulation S under the Securities Act, (e) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional "accredited investor", in each case in a minimum principal amount of Securities of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the 2 foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to Tritel and the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that Tritel and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to Tritel and the Trustee. TRANSFEREE:___________________________ by:__________________________________ EX-4.2.2 3 0003.txt AMENDMENT TO 12 3/4% SENIOR SUB NOTES Exhibit 4.2.2 Amendment to 12 3/4% Senior Subordinated Discount Notes due 2009 Indenture ------------------------------------------------------------- This Amendment (the "Amendment"), dated as of September 30, 2000, to the 12 3/4% Senior Subordinated Discount Notes due 2009 Indenture, dated as of May 11, 1999 (the "Indenture"), among Tritel PCS, Inc., as issuer (the "Company"), Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc., as guarantors (the "Guarantors"), and The Bank of New York, as trustee (the "Trustee"), is entered into by and between the Company, the Guarantors and the Trustee. WHEREAS, the Company, the Guarantors and the Trustee entered into the Indenture; WHEREAS, the Company, the Guarantors and the Trustee wish to amend the Indenture in order to cure a defect therein; and WHEREAS, Section 9.01(a) of the Indenture provides that the Company, the Guarantors and the Trustee may amend the Indenture without the consent of any Holder (as defined in the Indenture) of the 12 3/4 Senior Subordinated Discount Notes due 2009 to cure any ambiguity, defect or inconsistency; NOW, THEREFORE, in consideration of the foregoing and pursuant to Section 9.01(a) of the Indenture, the undersigned parties agree as follows: 1. Amendment to Section 6.02 Acceleration. From and after the -------------------------------------- Amendment Effective Date (as defined in Section 2 hereof), the first sentence of Section 6.02 of the Indenture is hereby amended and restates in its entirety to read as follows: "If any Event of Default specified in clause (9) or (10) of Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, shall occur, then all outstanding Notes shall become due and payable immediately without further action or notice." 2. Amendment of Effectiveness Date. This Amendment shall be effective ------------------------------- on the date (the "Amendment Effective Date") that a counterpart hereof shall have been executed by each of the Company, the Guarantors and the Trustee. 3. Execution. This Amendment may be executed in multiple --------- counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties hereto agree to accept facsimile signatures as an original signature. 4. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS AMENDMENT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 5. Trustee's Disclaimer. The recitals contained herein shall be -------------------- taken as the statements of the Company and the Guarantors, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity of sufficiency of this Amendment. -2- IN WITNESS WHEREOF, the undersigned have executed this Amendment, in one or more counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument, as of the 30 day of September 2000. TRITEL PCS, INC. By: /s/ E.B. Martin, Jr. -------------------------------------- Name: E.B. Martin, Jr. Title: Chief Financial Officer, Executive Vice President and Treasurer TRITEL, INC. By: /s/ E.B. Martin, Jr. -------------------------------------- Name: E.B. Martin, Jr. Title: Chief Financial Officer, Executive Vice President and Treasurer TRITEL COMMUNICATIONS, INC. By: /s/ E.B. Martin, Jr. -------------------------------------- Name: E.B. Martin, Jr. Title: Chief Financial Officer, Executive Vice President and Treasurer TRITEL FINANCE, INC. By: /s/ E.B. Martin, Jr. -------------------------------------- Name: E.B. Martin, Jr. Title: Chief Financial Officer, Executive Vice President and Treasurer THE BANK OF NEW YORK, as trustee By: /s/ Robert A. Massimillo -------------------------------------- Name: Robert A. Massimillo Title: Assistant Vice President EX-4.2.3 4 0004.txt SUPPLEMENTAL INDENTURE TO 12 3/4% SENIOR SUB NOTES Exhibit 4.2.3 EXECUTION COPY Supplemental Indenture to 12 3/4% Senior Subordinate Discount Notes Due 2009 Indenture This Supplemental Indenture (the "Supplemental Indenture"), dated as of January 18, 2001 is by and among Tritel PCS, Inc., as issuer (the "Company"), Tritel, Inc., Tritel Communications, Inc. and Tritel Finance, Inc., as guarantors (the "Guarantors"), and The Bank of New York, as trustee (the "Trustee"). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Indenture (as defined below). WHEREAS, the Company, the Guarantors, and the Trustee entered into an Indenture dated as of May 11, 1999, and amended as of September 30, 2000 (as amended, the "Indenture"), relating to the 12 3/4% Senior Subordinated Discount Notes due 2009 (the "12 3/4% Notes"); WHEREAS, the Company desires to be able to offer and sell notes that rank pari passu to the 12 3/4% Notes; WHEREAS, the penultimate paragraph of Section 4.09 of the Indenture currently restricts the Company's ability to incur indebtedness that ranks pari passu with the 12 3/4% Notes; WHEREAS, the Company, the Guarantors, and the Trustee wish to amend the Indenture through this Supplemental Indenture to remove such restrictions; WHEREAS, the Company requires approval of its board of directors, and has obtained such approval, to amend the Indenture; WHEREAS, the Indenture may be amended with the consent of the Holders of at least a majority in aggregate Accreted Value of the 12 3/4% Notes currently outstanding voting as a single class (the "Required Consent"); and WHEREAS, the Company, the Guarantors, and the Trustee have obtained the Required Consent to amend the Indenture; NOW, THEREFORE, in consideration of the foregoing and pursuant to Section 9.02 of the Indenture, the undersigned parties agree as follows: 1. Amendment to Section 4.09. From and after the Supplement ------------------------- Effective Date (as defined in Section 2 hereof), the penultimate paragraph of Section 4.09 of the Indenture is hereby deleted in its entirety. 2. Amendment of Effectiveness Date. This Supplemental Indenture ------------------------------- shall be effective on the date (the "Supplement Effective Date") that a counterpart hereof shall have been executed by each of the Company, the Guarantors and the Trustee. 3. Counterpart Originals. This Supplemental Indenture may be --------------------- executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties hereto agree to accept facsimile signatures as an original signature. 4. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL ------------- GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 5. Successors. All agreements of the Company in this Supplemental ---------- Indenture shall bind its successors. All agreements of the Trustee in this Supplemental Indenture shall bind its successors. 6. Severability. In case any provision in this Supplemental ------------ Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 7. Trustee's Disclaimer. The recitals contained herein shall be -------------------- taken as the statements of the Company and the Guarantors, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Supplemental Indenture. [SIGNATURE PAGE FOLLOWS] 2 IN WITNESS WHEREOF, the undersigned have executed this Supplemental Indenture, in one or more counterparts, as of the 18th day of January 2001. TRITEL PCS, INC. By: /s/ Thomas H. Sullivan ------------------------------ Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer & Treasurer TRITEL, INC. By: /s/ Thomas H. Sullivan ------------------------------ Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer & Treasurer TRITEL COMMUNICATIONS, INC. By: /s/ Thomas H. Sullivan ------------------------------ Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer & Treasurer TRITEL FINANCE, INC. By: /s/ Thomas H. Sullivan ------------------------------ Name: Thomas H. Sullivan Title: Executive Vice President - Chief Financial Officer & Treasurer THE BANK OF NEW YORK, as trustee By: /s/ Robert A. Massimillo ------------------------------ Name: Robert A. Massimillo Title: Assistant Vice President 3 EX-5 5 0005.txt OPINION OF CADWALADER, WICKERSHAM & TAFT Exhibit 5 [Letterhead of Cadwalader, Wickersham & Taft] February [14], 2001 Tritel PCS, Inc. Tritel, Inc. Tritel Communications, Inc. Tritel Finance, Inc. 1010 N. Glebe Road Suite 800 Arlington, Virginia 22201 Re: Tritel PCS, Inc. - Exchange Offer for 10 3/8% Senior Subordinated Notes due --------------------------------------------------------------------------- 2011 ----- Ladies and Gentlemen: We have acted as special counsel for Tritel PCS, Inc., a Delaware corporation (the "Company"), Tritel, Inc., a Delaware corporation ("Tritel"), Tritel Communications, Inc., a Delaware corporation ("Tritel Communications"), and Tritel Finance, Inc. a Delaware corporation ("Tritel Finance") in connection with the filing by the Company with the Securities Exchange Commission (the "Commission") of a registration statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the proposed issuance by the Company, in exchange (the "Exchange Offer") for up to $450,000,000 aggregate principal amount of the Company's unregistered 10 3/8% Senior Subordinated notes due 2011 (the "Old Notes") of a like principal amount of the Company's registered 10 3/8% Senior Subordinated Notes due 2011 (the "Exchange Notes"), which is registered under the Securities Act. The Old Notes were issued, and the Exchange Notes are to be issued, under an indenture dated as of January 24, 2001 (the "Indenture"), by and among the Company, as issuer, Tritel, Tritel Communications, and Tritel Finance, as guarantors (in such capacity, the "Guarantors"), and Firstar Bank, N.A., as trustee. Capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Indenture, as applicable. In rendering the opinions expressed below, we have examined and relied upon, among other things, (a) the Registration Statement, including the prospectus constituting a part thereof, (b) the Indenture which has been filed as an exhibit to the Registration Statement and (c) originals or copies, certified or otherwise identified to our satisfaction, of such certificates, corporate, public or other records, other agreements, instruments and documents and have made such other and further investigations as we have deemed relevant and necessary for the purpose of rendering this opinion letter. In connection with such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents and instruments of all documents and instruments submitted to us as copies or specimens, and the authenticity of the originals of such documents and instruments submitted to us as copies or specimens. As to questions of fact material to this opinion, we have relied upon certificates of public officials and of officers and representatives of the Company and the Guarantors. We express no other opinion herein concerning any law other than the law of the State of New York, and to the extent expressly referred to in this opinion letter, the federal laws of the United States and the General Corporation Law of the State of Delaware. While we are not licensed to practice law in the State of Delaware, we have reviewed applicable provisions of the Delaware General Corporation Law as we have deemed appropriate in connection with the opinion expressed. Based upon the foregoing and subject to the qualifications set forth herein, we are of the opinion that: 1. The Indenture has been duly authorized, executed and delivered by the Company and the Guarantors, and, assuming due authorization, execution and delivery of the Indenture by the Trustee, constitutes legal, valid and binding obligations of the Company and the Guarantors, enforceable against the Company and the Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to or affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). 2. The Exchange Notes have been duly authorized, and when the Exchange Notes are executed and authenticated in accordance with the provisions of the Indenture and delivered in exchange for the Old Notes pursuant to the Exchange Offer, the Exchange Notes will constitute legal, valid and binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to or affecting creditors' rights generally, and to general principles of equity (regardless of whether enforceability is sought in a proceeding at law or in equity); in expressing the opinion set forth in this paragraph 2, we have assumed that the form of the Exchange Notes will conform to that included in the Indenture. 3. The guarantees by the Guarantors of the Exchange Notes have been duly authorized, and when the Exchange Notes are executed and authenticated in accordance with the provisions of the Indenture and delivered in exchange for the Old Notes pursuant to the Exchange Offer, the guarantees will constitute a legal, valid and binding obligations of the Guarantors, entitled to the benefits of the Indenture and enforceable against the Guarantors in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to or affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity). 4. The statements made in the prospectus constituting a part of the Registration Statement under the caption "Certain U.S. Federal Tax Considerations," insofar as such statements purport to summarize certain federal income tax laws of the United States of America, constitute a fair summary of the principal federal income tax consequences of an investment in the Exchange Notes. We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the reference to this firm in the prospectus constituting a part of the Registration Statement under the caption "Legal Matters," without admitting that we are "experts" within the meaning of the Securities Act or the rules and regulations of the Commission issued thereunder with respect to any part of the Registration Statement, including this exhibit. Very truly yours, /s/ Cadwalader, Wickersham & Taft EX-10.1 6 0006.txt EXCHANGE AND REGISTRATION RIGHTS AGREEMENT 1-24-01 Exhibit 10.1 EXECUTION COPY TRITEL PCS, INC $450,000,000 10 3/8% Senior Subordinated Notes due 2011 EXCHANGE AND REGISTRATION RIGHTS AGREEMENT January 24, 2001 SALOMON SMITH BARNEY INC. LEHMAN BROTHERS INC. Merrill Lynch, Pierce, Fenner & Smith Incorporated Banc of America Securities LLC TD Securities (USA) Inc. c/o Lehman Brothers Three World Financial Center New York, New York 10285 Ladies and Gentlemen: Tritel PCS, Inc., a Delaware corporation (the "Company"), proposes to ------- issue and sell to Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (together, the "Initial Purchasers"), upon the terms and subject ------------------ to the conditions set forth in a purchase agreement dated January 19, 2001 (the "Purchase Agreement"), $450,000,000 aggregate principal amount at maturity of ------------------ its 10 3/8% senior subordinated notes due 2011 (the "Notes") to be guaranteed ----- on a senior subordinated basis by Tritel, Inc., the parent of the Company, Tritel Communications, Inc., Tritel Finance Inc., two subsidiaries of the Company, and, in the future, by certain other subsidiaries of the Company that incur indebtedness (together, the "Guarantors"). Capitalized terms used but not ---------- defined herein shall have the meanings given to such terms in the Purchase Agreement. As an inducement to the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the Company and each of the Guarantors agree with the Initial Purchasers, for the benefit of the holders (including the Initial Purchasers) of the Notes, the Exchange Notes (as defined herein) and the Private Exchange Notes (as defined herein) (collectively, the "Holders"), as follows: ------- 2 1. Registered Exchange Offer. The Company and each of the Guarantors shall (i) prepare and, not later than 90 days following the date of original issuance of the Notes (the "Issue Date"), file with the Securities and Exchange ---------- Commission (the "Commission") a registration statement (the "Exchange Offer ---------- -------------- Registration Statement") on an appropriate form under the Securities Act of - ---------------------- 1933, as amended (the "Securities Act"), with respect to a proposed offer to the -------------- Holders of the Notes (the "Registered Exchange Offer") who are not prohibited by ------------------------- applicable law or interpretations thereof by the Commission's staff from participating in the Registered Exchange Offer to issue and deliver to such Holders, in exchange for the Notes, a like aggregate principal amount of debt securities of the Company (the "Exchange Notes") that are identical in all -------------- material respects to the Notes, except for the transfer restrictions and registration rights relating to the Notes, (ii) use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act no later than 210 days after the Issue Date and the Registered Exchange Offer to be consummated no later than 240 days after the Issue Date and (iii) keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date on which notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period"). The ---------------------------------- Exchange Notes will be issued under the Indenture or an indenture (the "Exchange -------- Notes Indenture") among the Company, each of the Guarantors and the Trustee or - --------------- such other bank or trust company that is reasonably satisfactory to the Initial Purchasers, as trustee (the "Exchange Notes Trustee"), such indenture to be ---------------------- identical in all material respects to the Indenture, except for the transfer restrictions and registration rights relating to the Notes (as described above). All references in this Agreement to "Registration Statement" and "prospectus" shall, except where the context otherwise requires, include any Registration Statement (or amendment or supplement thereto) and prospectus (or amendment thereto), respectively, filed with the Commission pursuant to Section 6 of this Agreement. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Notes for Exchange Notes (assuming that such Holder (a) is not an affiliate of the Company or an Exchanging Dealer (as defined herein) not complying with the requirements of the next sentence, (b) is not an Initial Purchaser holding Notes that have, or that are reasonably likely to have, the status of an unsold allotment in an initial distribution, (c) acquires the Exchange Notes in the ordinary course of such Holder's business, (d) has no arrangements or understandings with any person to participate in the distribution of the Exchange Notes and (e) is not otherwise prohibited by applicable law or interpretations thereof by the Commission's staff from participating in the Registered Exchange Offer) and to trade such Exchange Notes from and after their receipt without any limitations or restrictions 3 under the Securities Act and without material restrictions under the securities laws of the several states of the United States. The Company, each of the Guarantors, the Initial Purchasers and each Exchanging Dealer acknowledge that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, (i) each Holder that is a broker-dealer electing to exchange Notes, acquired for its own account as a result of market-making activities or other trading activities, for Exchange Notes (an "Exchanging Dealer"), is ----------------- required to deliver a prospectus containing substantially the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Notes received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if an Initial Purchaser elects to sell Exchange Notes acquired in exchange for Notes constituting any portion of an unsold allotment, such Initial Purchaser is required to deliver a prospectus containing the information required by Item 507 and 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale. If, prior to the consummation of the Registered Exchange Offer, any Holder holds any Notes acquired by it that have, or that are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, or any Holder is not entitled to participate in the Registered Exchange Offer, the Company shall, upon the request of any such Holder, simultaneously with the delivery of the Exchange Notes in the Registered Exchange Offer, issue and deliver to any such Holder, in exchange for the Notes held by such Holder (the "Private Exchange"), a like aggregate principal amount ---------------- of debt securities of the Company (the "Private Exchange Notes") that are ---------------------- identical in all material respects to the Exchange Notes, except for the transfer restrictions relating to such Private Exchange Notes. The Private Exchange Notes will be issued under the same indenture as the Exchange Notes, and the Company shall use commercially reasonable efforts to cause the Private Exchange Notes to bear the same CUSIP number as the Exchange Notes. In connection with the Registered Exchange Offer, the Company shall: (a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Registered Exchange Offer open for not less than 30 days (or longer, if required by applicable law) after the date on which notice of the Registered Exchange Offer is mailed to the Holders; (c) utilize the services of a depositary (which may be the Trustee or an affiliate of the Trustee) for the 4 Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York; (d) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York City time, on the last business day on which the Registered Exchange Offer shall remain open; and (e) otherwise comply in all respects with all laws that are applicable to the Registered Exchange Offer. As soon as practicable after the close of the Registered Exchange Offer and any Private Exchange, as the case may be, the Company shall: (a) accept for exchange all Notes validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; (b) deliver to the Trustee for cancelation all Notes so accepted for exchange; and (c) cause the Trustee or the Exchange Notes Trustee, as the case may be, promptly to authenticate and deliver to each Holder, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. The Company shall use its commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein in order to permit such prospectus to be used by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Notes; provided that (i) in the case where such -------- prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers have sold all Exchange Notes held by them and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Notes for a period of not less than 180 days after the consummation of the Registered Exchange Offer. The Indenture or the Exchange Notes Indenture, as the case may be, shall provide that the Notes, the Exchange Notes and the Private Exchange Notes shall vote and consent together on all matters as one class and that none of the Notes, the Exchange Notes or the Private Exchange Notes will have the right to vote or consent as a separate class on any matter. Interest on each Exchange Note and Private Exchange Note issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange 5 therefor or, if no interest has been paid on the Notes, from the Issue Date. Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Notes received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Notes or the Exchange Notes within the meaning of the Securities Act, (iii) such Holder is not an affiliate of the Company or, if it is such an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Notes and (v) if such Holder is a broker- dealer, that it will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such Exchange Notes. Notwithstanding any other provisions hereof, the Company and each of the Guarantors will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not, as of the consummation of the Registered Exchange Offer, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 2. Shelf Registration. If (i) because of any change in applicable law or interpretations thereof by the Commission's staff the Company is not permitted to effect the Registered Exchange Offer as contemplated by Section 1 hereof or (ii) any Notes validly tendered pursuant to the Registered Exchange Offer are not exchanged for Exchange Notes within 240 days after the Issue Date or (iii) any Initial Purchaser so requests with respect to Notes or Private Exchange Notes not eligible to be exchanged for Exchange Notes in the Registered Exchange Offer and held by it following the consummation of the Registered Exchange Offer or (iv) any applicable law or interpretations thereof by the Commission's staff do not permit any Holder to participate in the Registered Exchange Offer or (v) any Holder that participates in the Registered Exchange Offer does not receive freely 6 transferable Exchange Notes in exchange for tendered Notes or (vi) the Company so elects, then the following provisions shall apply: (a) The Company and each of the Guarantors shall use their commercially reasonable efforts to file as promptly as practicable (but in no event more than 45 days after so required or requested pursuant to this Section 2) with the Commission, and thereafter shall use their commercially reasonable efforts to cause to be declared effective, a shelf registration statement on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 3 of this Agreement) by the Holders thereof from time to time in accordance with the methods of distribution set forth in such registration statement (hereafter, a "Shelf Registration Statement" and, together with any ---------------------------- Exchange Offer Registration Statement, a "Registration Statement"); ---------------------- provided that no Holder (other than an Initial Purchaser) shall be entitled -------- to have the Notes held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder. (b) The Company and each of the Guarantors shall use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part thereof to be used by Holders of Transfer Restricted Securities for a period ending on the earlier of (i) two years from the Issue Date or such shorter period that will terminate when all the Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant thereto and (ii) the date on which the Notes become eligible for resale without volume restrictions pursuant to Rule 144 under the Securities Act (in any such case, such period being called the "Shelf ----- Registration Period"). The Company and each of the Guarantors shall be ------------------- deemed not to have used their commercially reasonable efforts to keep the Shelf Registration Statement effective during the requisite period if any of them voluntarily take any action that would result in Holders of Transfer Restricted Securities covered thereby not being able to offer and sell such Transfer Restricted Securities during that period, unless (i) such action is required by applicable law or (ii) such action is taken by the Company and each of the Guarantors in good faith and for valid business reasons (not including avoidance of their obligations hereunder), provided that the Company and each of the Guarantors within 90 days thereafter comply with the requirements of Section 4(k) hereof. Any such period during which the Company and each of the Guarantors fail to keep the Shelf Registration Statement effective and usable for offers and sales of Notes, Private Exchange Notes and Exchange Notes is referred to as a "Suspension ---------- Period". A Suspension Period shall commence on and include the date the ------ Company and each of the Guarantors give notice that the 7 Shelf Registration Statement is no longer effective or the prospectus included therein is no longer usable for offers and sales of Notes, Private Exchange Notes and Exchange Notes and shall end on the date when each Holder of Notes, Private Exchange Notes and Exchange Notes covered by such Shelf Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 4(k) hereof or is advised in writing by the Company and the each of the Guarantors that use of the prospectus may be resumed. Not more than one Suspension Period shall be permitted in any period of 360 consecutive days. If one or more Suspension Periods occur, the two-year time period referenced above shall be extended by the number of days included in each such Suspension Period. (c) Notwithstanding any other provisions hereof, the Company and each of the Guarantors will ensure that (i) any Shelf Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Shelf Registration Statement and any amendment thereto (in either case, other than with respect to information included therein in reliance upon or in conformity with written information furnished to the Company by or on behalf of any Holder specifically for use therein (the "Holders' ------- Information")) does not contain an untrue statement of a material fact or ----------- omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Shelf Registration Statement, and any supplement to such prospectus (in either case, other than with respect to Holders' Information), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 3. Liquidated Damages. (a) The parties hereto agree that the Holders of Transfer Restricted Securities will suffer damages if the Company and each of the Guarantors fails to fulfill their obligations under Section 1 or Section 2, as applicable, and that it would not be feasible to ascertain the extent of such damages. Accordingly, if (i) the applicable Registration Statement is not filed with the Commission on or prior to 90 days after the Issue Date, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is not declared effective within 210 days after the Issue Date (or in the case of a Shelf Registration Statement required to be filed in response to a change in applicable law or interpretations thereof by the Commission's staff, if later, within 45 days after publication of the change in law or interpretation), (iii) the Registered Exchange Offer is not consummated on or prior to 240 days after the Issue Date, or (iv) the Shelf Registration Statement is filed and declared effective within 210 days after the Issue Date (or in the case of 8 a Shelf Registration Statement required to be filed in response to a change in applicable law or interpretations thereof by the Commission's staff, if later, within 45 days after publication of the change in law or interpretation) but shall thereafter cease to be effective (at any time that the Company is obligated to maintain the effectiveness thereof) without being succeeded within 45 days by an additional Registration Statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration ------------ Default"), the Company and each of the Guarantors will be jointly and severally - ------- obligated to pay liquidated damages to each Holder of Transfer Restricted Securities, during the period of one or more such Registration Defaults, in an amount equal to $ 0.192 per week per $1,000 of principal amount of Transfer Restricted Securities held by such Holder until (i) the applicable Registration Statement is filed, (ii) the Exchange Offer Registration Statement is declared effective and the Registered Exchange Offer is consummated, (iii) the Shelf Registration Statement is declared effective or (iv) the Shelf Registration Statement again becomes effective, as the case may be. Following the cure of all Registration Defaults, the accrual of liquidated damages will cease. As used herein, the term "Transfer Restricted Securities" means (i) each Note until the ------------------------------ date on which such Note has been exchanged for a freely transferable Exchange Note in the Registered Exchange Offer, (ii) each Note or Private Exchange Note until the date on which it has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iii) each Note or Private Exchange Note until the date on which it is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary in this Section 3(a), the Company and each of the Guarantors shall not be required to pay liquidated damages to a Holder of Transfer Restricted Securities if such Holder failed to comply with its obligations to make the representations set forth in the second to last paragraph of Section 1 or failed to provide the information required to be provided by it, if any, pursuant to Section 4(o). (b) The Company shall notify the Trustee and the Paying Agent (as defined in the Indenture) under the Indenture within three business days of the happening of each and every Registration Default. The Company and each of the Guarantors shall pay the liquidated damages due on the Transfer Restricted Securities by depositing with the Paying Agent (which may not be the Company for these purposes), in trust, for the benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on the next interest payment date specified by the Indenture and the Notes, sums sufficient to pay the liquidated damages then due. The liquidated damages due shall be payable on each interest payment date specified by the Indenture and the Notes to the record holder entitled to receive the interest payment to be made on such date. Each obligation to pay liquidated damages shall be deemed to accrue from and including the date of the applicable Registration Default. 9 (c) The parties hereto agree that the liquidated damages provided for in this Section 3 constitute a reasonable estimate of and are intended to constitute the sole damages that will be suffered by Holders of Transfer Restricted Securities by reason of the failure of (i) the Shelf Registration Statement or the Exchange Offer Registration Statement to be filed, (ii) the Shelf Registration Statement to remain effective or (iii) the Exchange Offer Registration Statement to be declared effective and the Registered Exchange Offer to be consummated, in each case to the extent required by this Agreement. 4. Registration Procedures. In connection with any Registration Statement, the following provisions shall apply: (a) The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and shall, in its reasonable judgment, reflect in each such document, when so filed with the Commission, such comments as any Initial Purchaser may reasonably propose; (ii) include information substantially to the effect set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement, and include information substantially to the effect set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; and (iii) if requested by any Initial Purchaser, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement. (b) The Company shall advise each Initial Purchaser, each Exchanging Dealer and the Holders (if applicable) and, if requested by any such person, confirm such advice in writing (which advice pursuant to clause (ii) through (v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): (i) when any Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post-effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of any Registration 10 Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes, the Exchange Notes or the Private Exchange Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event that requires the making of any changes so that the Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or any prospectus forming part of any Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) If any event contemplated by clauses (ii) through (v) of Section 4(b) of this Agreement occurs during the period for which the Company and each of the Guarantors are required to maintain an effective Registration Statement, the Company and each of the Guarantors will as promptly as is practicable prepare and file with the Commission a post-effective amendment to the Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Notes, Exchange Notes or Private Exchange Notes from a Holder, the prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) The Company and each of the Guarantors will use all commercially reasonable efforts to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of any Registration Statement. (e) The Company will furnish to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any such Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference) and as many conformed copies of such Registration Statement as such Holder reasonably requests. 11 (f) The Company will, during the Shelf Registration Period, promptly deliver to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, as many copies of the prospectus (including each preliminary prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company and each of the Guarantors consent to the use of such prospectus or any amendment or supplement thereto by each of the selling Holders of Transfer Restricted Securities in connection with the lawful offer and sale of the Transfer Restricted Securities covered by such prospectus or any amendment or supplement thereto. (g) The Company will furnish to each Initial Purchaser and each Exchanging Dealer, and to any other Holder who so requests, without charge, one conformed copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any Initial Purchaser or Exchanging Dealer or any such Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference) and as many conformed copies of such Exchange Offer Registration Statement as such Holder reasonably requests. (h) The Company will, during the Exchange Offer Registration Period or the Shelf Registration Period, as applicable, promptly deliver to each Initial Purchaser, each Exchanging Dealer and such other persons that are required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement or the Shelf Registration Statement and any amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or other persons may reasonably request; and the Company and each of the Guarantors consent to the use of such prospectus or any amendment or supplement thereto by any such Initial Purchaser, Exchanging Dealer or other persons, as applicable, in connection with any lawful offer or sale covered by such prospectus or any amendment or supplement thereto, as aforesaid. (i) Prior to the effective date of any Registration Statement, the Company and each of the Guarantors will use commercially reasonable efforts to register or qualify, or cooperate with the Holders of Notes, Exchange Notes or Private Exchange Notes included therein and their respective counsel in connection with the registration or qualification of, such Notes, Exchange Notes or Private Exchange Notes for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Notes, Exchange Notes or Private Exchange Notes 12 covered by such Registration Statement; provided that the Company and each -------- of the Guarantors will not be required to qualify generally to do business in any jurisdiction where they are not then so qualified or to take any action which would subject them to general service of process or to taxation in any such jurisdiction where they are not then so subject. (j) The Company and each of the Guarantors will reasonably cooperate with the Holders of Notes, Exchange Notes or Private Exchange Notes to facilitate the timely preparation and delivery of certificates representing Notes, Exchange Notes or Private Exchange Notes to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing prior to sales of Notes, Exchange Notes or Private Exchange Notes pursuant to such Registration Statement. (k) If any event contemplated by Section 4(b)(ii) through (v) occurs during the period for which the Company and each of the Guarantors are required to maintain an effective Registration Statement, the Company and each of the Guarantors will as promptly as is practicable prepare and file with the Commission a post-effective amendment to the Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Notes, Exchange Notes or Private Exchange Notes from a Holder, the prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (l) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for each of the Notes, the Exchange Notes and the Private Exchange Notes, as the case may be, and provide the applicable trustee with printed certificates for the Notes, the Exchange Notes or the Private Exchange Notes, as the case may be, in a form eligible for deposit with The Depository Trust Company. (m) The Company and each of the Guarantors will comply with all applicable rules and regulations of the Commission and the Company will make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earning statement satisfying the provisions of Section 11(a) of the Securities Act; provided that in no event shall such earning statement be -------- delivered later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the applicable Registration Statement, which statement shall cover such 12- month period. 13 (n) The Company and each of the Guarantors will cause the Indenture or the Exchange Notes Indenture, as the case may be, to be qualified under the Trust Indenture Act as required by applicable law in a timely manner. (o) The Company may require each Holder of Transfer Restricted Securities to be registered pursuant to any Shelf Registration Statement to furnish to the Company such information concerning the Holder and the distribution of such Transfer Restricted Securities as the Company may from time to time reasonably require for inclusion in such Shelf Registration Statement, and the Company may exclude from such registration the Transfer Restricted Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request. (p) In the case of a Shelf Registration Statement, each Holder of Transfer Restricted Securities to be registered pursuant thereto agrees by acquisition of such Transfer Restricted Securities that, upon receipt of any notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder will discontinue disposition of such Transfer Restricted Securities until such Holder's receipt of copies of the supplemental or amended prospectus contemplated by Section 4(k) or until advised in writing (the "Advice") by the Company that the use of the applicable prospectus may be ------ resumed. If the Company shall give any notice under Section 4(b)(ii) through (v) during the period that the Company is required to maintain an effective Registration Statement (the "Effectiveness Period"), such -------------------- Effectiveness Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each seller of Transfer Restricted Securities covered by such Registration Statement shall have received (x) the copies of the supplemental or amended prospectus contemplated by Section 4(k) (if an amended or supplemental prospectus is required) or (y) the Advice (if no amended or supplemental prospectus is required). (q) In the case of a Shelf Registration Statement, the Company and each of the Guarantors shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form and reasonably acceptable to the Company) and take all such other action, if any, as Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold or the managing underwriters (if any) shall reasonably request in order to facilitate any disposition of Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration Statement. (r) In the case of a Shelf Registration Statement, the Company shall (i) make reasonably available for inspection by a representative of, and Special Counsel (as defined below) acting for, Holders of a majority in 14 aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold and any underwriter participating in any disposition of Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries and (ii) use its commercially reasonable efforts to have its officers, directors, employees, accountants and counsel supply all relevant information reasonably requested by such representative, Special Counsel or any such underwriter (an "Inspector") in connection with such --------- Shelf Registration Statement. (s) In the case of a Shelf Registration Statement, the Company shall, if requested by Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold, their Special Counsel or the managing underwriters (if any) in connection with such Shelf Registration Statement, use its commercially reasonable efforts to cause (i) its counsel to deliver an opinion relating to the Shelf Registration Statement and the Notes, Exchange Notes or Private Exchange Notes, as applicable, substantially in the form delivered by counsel for the Company in connection with the issuance and sale of the Notes, (ii) its officers to execute and deliver all customary documents and certificates requested by Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold, their Special Counsel or the managing underwriters (if any) and (iii) its independent public accountants to provide a comfort letter or letters in customary form, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. 5. Registration Expenses. The Company and each of the Guarantors will jointly and severally bear all expenses incurred in connection with the performance of their obligations under Sections 1, 2, 3 and 4 and the Company will reimburse the Initial Purchasers and the Holders for the reasonable fees and disbursements of Cravath, Swaine & Moore (in addition to any local counsel) unless otherwise instructed by the Holders of a majority in aggregate principal amount of the Notes, the Exchange Notes and the Private Exchange Notes to be sold pursuant to each Registration Statement (the "Special Counsel") acting for --------------- the Initial Purchasers or Holders in connection therewith. 6. [Intentionally omitted] 7. Indemnification. (a) In the event of a Shelf Registration Statement or in connection with any prospectus delivery pursuant to an Exchange Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as applicable, the Company and each of the Guarantors shall jointly and severally indemnify and hold harmless each Holder (including, without limitation, any such Initial Purchaser or Exchanging Dealer, its 15 affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 7 and Section 8 as a Holder) from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of Notes, Exchange Notes or Private Exchange Notes), to which that Holder may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Holder promptly upon demand for any legal or other expenses reasonably incurred by that Holder in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, ----------------- that the Company and each of the Guarantors shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, an untrue statement or alleged untrue statement in, or omission or alleged omission from, any of such documents in reliance upon and in conformity with any Holders' Information; and provided, further that with ----------------- respect to any such untrue statement in or omission from any related preliminary prospectus, the indemnity agreement contained in this Section 7(a) shall not inure to the benefit of any Holder from whom the person asserting any such loss, claim, damage, liability or action received Notes, Exchange Notes or Private Exchange Notes to the extent that such loss, claim, damage, liability or action of or with respect to such Holder results from the fact that both (1) a copy of the final prospectus was not sent or given to such person at or prior to the written confirmation of the sale of such Notes, Exchange Notes or Private Exchange Notes to such person and (2) the untrue statement in or omission from the related preliminary prospectus was corrected in the final prospectus unless, in either case, such failure to deliver the final prospectus was a result of non-compliance by the Company with Sections 4(e), 4(f), 4(g) or 4(h), as applicable. (b) In the event of a Shelf Registration Statement, each Holder shall indemnify and hold harmless the Company, its affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 7(b) and Section 8 as the Company), from and against any 16 loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any Holders' Information furnished to the Company by such Holder, and shall reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that no such Holder ----------------- shall be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration Statement or prospectus. (c) Promptly after receipt by an indemnified party under this Section 7 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party pursuant to Section 7(a) or 7(b), notify the indemnifying party in writing of the claim or the commencement of that action; provided, -------- however, that the failure to notify the indemnifying party shall not relieve it - ------- from any liability which it may have under this Section 7 except to the extent that it has been prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the ----------------- indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 7. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than the reasonable costs of investigation; provided, however, ----------------- that an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be 17 at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 7(a) and 7(b) of this Agreement, shall use all commercially reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. 8. Contribution. If the indemnification provided for in Section 7 of this Agreement is unavailable or insufficient to hold harmless an indemnified party under Section 7(a) or 7(b) of this Agreement, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and each of the Guarantors from the initial offering and sale of the Notes, on the one hand, and by a Holder from receiving Notes, Exchange 18 Notes or Private Exchange Notes, as applicable, registered under the Securities Act, on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and each of the Guarantors, on the one hand, and such Holder, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company and each of the Guarantors or information supplied by the Company and each of the Guarantors, on the one hand, or to any Holders' Information supplied by such Holder, on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 8 were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 8 shall be deemed to include, for purposes of this Section 8, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or claim. Notwithstanding the provisions of this Section 8, an indemnifying party that is a Holder of Notes, Exchange Notes or Private Exchange Notes shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes, Exchange Notes or Private Exchange Notes sold by such indemnifying party to any purchaser exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 9. Rules 144 and 144A. The Company shall use its commercially reasonable efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any Holder of Transfer Restricted Securities, make publicly available other information so long as necessary to permit sales of such Holder's securities pursuant to Rules 144 and 144A. The Company and each of the Guarantors covenant that they will take such further action as any Holder of Transfer Restricted Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Transfer Restricted Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A 19 (including, without limitation, the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of Transfer Restricted Securities, the Company and each of the Guarantors shall deliver to such Holder a written statement as to whether they have complied with such requirements. Notwithstanding the foregoing, nothing in this Section 9 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 10. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities included in such offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed), and such Holders shall be responsible for all underwriting commissions and discounts in connection therewith. No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 11. Miscellaneous. (a) Amendments and Waivers. No failure or delay by the Company, each of the Guarantors, any Holder in exercising any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or amendment or discontinuance of steps to enforce any such right preclude any other or further exercise thereof or the exercise of any other right. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority in aggregate principal amount of the Notes, the Exchange Notes and the Private Exchange Notes, taken as a single class. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Notes, Exchange Notes or Private Exchange Notes are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal amount of the Notes, the Exchange Notes and the Private Exchange Notes being sold by such Holders pursuant to such Registration Statement. (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier or air courier guaranteeing next-day delivery: 20 (i) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 11(b), which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (USA) Inc.; (ii) if to an Initial Purchaser, initially at its address set forth in the Purchase Agreement; and (iii) if to the Company, initially at the address of the Company set forth in the Purchase Agreement. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business day after being delivered to a next-day air courier; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient's telecopier machine, if sent by telecopier. (c) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns. (d) Counterparts. This Agreement may be executed in any number of counterparts (which may be delivered in original form or by telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement. (e) Definition of Terms. For purposes of this Agreement, (i) the term "business day" means any day on which the New York Stock Exchange, Inc. is open for trading, (ii) the term "subsidiary" has the meaning set forth in Rule 405 under the Securities Act and (iii) except where otherwise expressly provided, the term "affiliate" has the meaning set forth in Rule 405 under the Securities Act. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (h) Remedies. In the event of a breach by the Company, any Guarantor or any Holder of any of their obligations under this Agreement, each Holder, the Company or each Guarantor, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages (other than the recovery of damages for a breach by the Company or any Guarantor of its obligations under Sections 1 or 2 hereof for 21 which liquidated damages have been paid pursuant to Section 3 hereof), will be entitled to specific performance of its rights under this Agreement. The Company, each of the Guarantors and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by each such person of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, each such person shall waive the defense that a remedy at law would be adequate. (i) No Inconsistent Agreements. Each of the Company and the Guarantors represents, warrants and agrees that (i) it has not entered into, and shall not, on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof, (ii) it has not previously entered into any agreement which remains in effect granting any registration rights with respect to any of its debt securities to any person and (iii) (with respect to the Company) without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount of the then outstanding Transfer Restricted Securities, it shall not grant to any person the right to request the Company to register any debt securities of the Company under the Securities Act unless the rights so granted are not in conflict or inconsistent with the provisions of this Agreement. (j) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders of Transfer Restricted Securities in such capacity) shall have the right to include any securities of the Company in any Shelf Registration or Registered Exchange Offer other than Transfer Restricted Securities. (k) Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. Please confirm that the foregoing correctly sets forth the agreement among the Company, each of the Guarantors and the Initial Purchasers. Very truly yours, TRITEL PCS, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer TRITEL, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer TRITEL COMMUNICATIONS, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer TRITEL FINANCE, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer Accepted: SALOMON SMITH BARNEY INC., by /s/ M. Ian G. Gilchrist ------------------------------ Name: M. Ian G. Gilchrist Title: Managing Director LEHMAN BROTHERS INC., by /s/ Perry Hoffmeister ------------------------------ Name: Perry Hoffmeister Title: Managing Director ANNEX A Each broker-dealer that receives Exchange Notes for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the expiration of the Exchange Offer, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution". ANNEX B Each broker-dealer that receives Exchange Notes for its own account in exchange for Notes, where such Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See "Plan of Distribution". ANNEX C PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Notes for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the expiration of the Exchange Offer, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until [ ], all dealers effecting transactions in the Exchange Notes may be required to deliver a prospectus. The Company will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for their own account pursuant to the Registered Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer that resells Exchange Notes that were received by it for its own account pursuant to the Registered Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration of the Exchange Offer the Company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Registered Exchange Offer (including the expenses of one counsel for the Holders of the Notes) other than commissions or concessions of any broker-dealers and will indemnify the Holders of the Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. ANNEX D [_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: Address: If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. EX-10.2 7 0007.txt PURCHASE AGREEMENT DATED 01-19-2001 Exhibit 10.2 EXECUTION COPY $450,000,000 TRITEL PCS, INC. 10 3/8% Senior Subordinated Notes due 2011 PURCHASE AGREEMENT ------------------ January 19, 2001 Salomon Smith Barney Inc. Lehman Brothers Inc. Merrill Lynch, Pierce, Fenner & Smith Incorporated Banc of America Securities LLC TD Securities (USA) Inc. c/o Lehman Brothers Inc. Three World Financial Center New York, New York 10285 Ladies and Gentlemen: Tritel PCS, Inc., a Delaware corporation (the "Company"), proposes, ------- upon the terms and considerations set forth herein, to issue and sell to you, as the initial purchasers (the "Initial Purchasers"), $450,000,000 in aggregate ------------------ principal amount of its 10 3/8% senior subordinated notes due 2011 (the "Notes" ----- and, together with the Exchange Notes (as defined below), the "Securities"). The ---------- Notes will (i) have terms and provisions which are summarized in the Offering Memorandum (as defined below in Section 1) dated as of the date hereof and (ii) are to be issued pursuant to an Indenture (the "Indenture") to be entered into --------- among the Company, the Guarantors (as defined below) and Firstar Bank, N.A., as trustee (the "Trustee"). The Company's obligations under the Notes, including ------- the due and punctual payment of interest on the Notes, will be unconditionally guaranteed by Tritel, Inc., the parent of the Company, and by Tritel Communications, Inc. and Tritel Finance, Inc., two of the subsidiaries of the Company, and in the future, by certain other subsidiaries of the Company that incur indebtedness (together, the "Guarantors"). This is to confirm the ---------- agreement concerning the purchase of the Notes from the Company by the Initial Purchasers. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Offering Memorandum. 2 1. Preliminary Offering Memorandum and Offering Memorandum. The Notes will be offered and sold to the Initial Purchasers pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the "Securities Act"). The Company has prepared a preliminary offering memorandum, -------------- dated January 12, 2001 (the "Preliminary Offering Memorandum") and a final ------------------------------- offering memorandum, dated January 19, 2001 (the "Offering Memorandum" and, ------------------- together with the Preliminary Offering Memorandum, the "Offering Documents"), ------------------ relating to the Company and the Notes. Any references herein to the Offering Documents shall be deemed to include all amendments and supplements thereto. The Company and each of the Guarantors hereby confirms that it has authorized the use of the Offering Documents in connection with the offering and resale of the Notes by the Initial Purchasers. The Company proposes to issue and sell to the Initial Purchasers $450,000,000 principal amount of its Notes. It is understood and acknowledged that upon original issuance thereof, and until such time as the same is no longer required under the applicable requirements of the Securities Act, the Notes (and all securities issued in exchange therefor, in substitution thereof) shall bear the following legend: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE 3 UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. Each Security evidencing a Global Security offered and sold to QIBs (as defined below) pursuant to Rule 144A shall bear a legend in substantially the following form: EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. Each Definitive Security (as defined in the Indenture) shall bear the following additional legend: IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. The Initial Purchasers have advised the Company that they will make offers (the "Exempt Resales") of the Notes purchased by them hereunder on the -------------- terms set forth in the Offering Memorandum, solely to (i) persons (each, a "144A ---- Purchaser") whom they reasonably believe to be "qualified institutional buyers" - --------- as defined in Rule 144A under the Securities Act ("QIBs") and (ii) outside the ---- United States to certain persons in offshore transactions in reliance on Regulation S under the Securities Act ("Regulations") specified in clauses (i) ----------- and (ii) being referred to herein as the "Eligible Purchasers". The Initial ------------------- Purchasers will offer the Notes to Eligible Purchasers initially at a price equal to 100% of the principal amount thereof. Such price may be changed at any time without notice. 4 Holders (including subsequent transferees) of the Notes will have the registration rights set forth in the exchange and registration rights agreement (the "Exchange and Registration Rights Agreement", to be dated the Closing Date ------------------------------------------ (as defined in Section 4 herein), in substantially the form of Exhibit A hereto, for so long as such Notes constitute "Transfer Restricted Securities" (as ------------------------------ defined in the Exchange and Registration Rights Agreement). Pursuant to the Exchange and Registration Rights Agreement, the Company will agree to file with the Securities and Exchange Commission (the "Commission") under the ---------- circumstances set forth therein, a registration statement under the Securities Act (the "Registration Statement") or under certain circumstances, a shelf ---------------------- registration statement pursuant to Rule 415 under the Securities Act (the "Shelf ----- Registration Statement") relating to the Company's Notes, to be offered in - ---------------------- exchange for the Notes (the "Exchange Notes"). -------------- 2. Representations, Warranties and Agreements of the Company. The Company and each of the Guarantors represent and warrant to, and agree with, the several Initial Purchasers on and as of the date hereof and the Closing Date that: (a) Each of the Offering Documents, as of its respective date, did not, and on the Closing Date the Offering Memorandum will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company and each of the Guarantors make no representation or warranty as to information contained in or omitted from the Offering Documents in reliance upon and in conformity with written information relating to the Initial Purchasers furnished to the Company by or on behalf of any Initial Purchaser specifically for use therein (the "Initial Purchasers' Information"). ------------------------------- (b) Each of the Offering Documents, as of its respective date, contains all of the information that, if requested by a prospective purchaser of the Notes, would be required to be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act. (c) The Offering Documents with respect to the Notes have been prepared by the Company and each of the Guarantors for use by the Initial Purchasers in connection with the Exempt Resales. No order or decree preventing the use of the Offering Documents, or any order asserting that the transactions contemplated by this Agreement are subject to the registration requirements of the Securities Act, has been issued and no proceeding for that purpose has commenced or is pending or, to the knowledge of the Company or any of the Guarantors, is contemplated. (d) Assuming the accuracy of the representations and warranties of the Initial Purchasers contained in Section 3 and their compliance with the agreements set forth therein, it is not necessary, in connection with the issuance and sale of the Notes to the Initial Purchasers and the offer, resale and delivery of the Notes by the Initial Purchasers in the 5 manner contemplated by this Agreement and the Offering Memorandum, to register the Notes under the Securities Act or to qualify the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust Indenture --------------- Act"). --- (e) Except as set forth in Exhibit B hereto, Tritel, Inc. and the Company have no subsidiaries and hold no minority interest in any entity. Tritel, Inc., the Company and the Company's subsidiaries have been duly incorporated or formed and are validly existing as corporations, limited liability companies or limited partnerships in good standing under the laws of their respective jurisdictions of incorporation or formation, are duly qualified to do business and are in good standing as foreign corporations, limited liability companies or limited partnerships in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to so qualify or have such power or authority could not, singularly or in the aggregate, be reasonably expected to have a material adverse effect on the condition (financial or otherwise), results of operations, business or business prospects of Tritel, Inc., the Company and the Company's subsidiaries taken as a whole (a "Material Adverse Effect"). ----------------------- (f) As of the Closing Date, all of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and the capital stock of the Company conforms in all material respects to the description thereof set forth in Exhibit C attached hereto. All of the outstanding shares of capital stock of Tritel, Inc. and each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and, except as set forth on Exhibit C hereto, are owned directly or indirectly by the Company or TeleCorp PCS, Inc., in the case of Tritel, Inc., free and clear of any lien, charge, encumbrance, security interest, restriction upon voting or transfer or any other claim of any third party, other than liens, charges, encumbrances and security interests created by the Credit Agreement dated as of March 31, 1999, among Tritel, Inc., the Company, the lenders identified therein, Toronto Dominion (Texas), Inc., as administrative agent for the lenders and the financial institutions signatory thereto, as lenders. The table under the heading "Capitalization" in the Offering Memorandum accurately sets forth the Company's capitalization as of September 30, 2000, and as of September 30, 2000, as adjusted for the sale of the Notes and the recapitalization of Tritel, Inc. after the merger of Tritel, Inc. and TeleCorp Wireless, Inc. into two wholly-owned subsidiaries of TeleCorp PCS, Inc. (g) Each of the Company and the Guarantors has full right, power and authority to execute and deliver this Agreement, the Indenture, the Exchange and Registration Rights Agreement and the Notes (in the case of the Company only) (collectively, the "Transaction Documents") and to --------------------- perform its obligations hereunder and thereunder; and all corporate actions required to be taken for the due and proper authorization, execution and delivery of 6 each of the Transaction Documents and the consummation of the transactions contemplated thereby has been duly and validly taken. (h) This Agreement has been duly authorized, executed and delivered by the Company and each of the Guarantors and constitutes a valid and legally binding agreement of the Company and each of the Guarantors. (i) The Exchange and Registration Rights Agreement has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (j) The Indenture has been duly authorized by the Company and each of the Guarantors and, when duly executed and delivered in accordance with its terms by each of the parties thereto, will constitute a valid and legally binding agreement of the Company and each of the Guarantors enforceable against the Company and each of the Guarantors in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). On the Closing Date, the Indenture will conform in all material respects to the requirements of the Trust Indenture Act and the rules and regulations of the Commission applicable to an indenture which is qualified thereunder. (k) The Notes have been duly authorized by the Company and each of the Guarantors and, when duly executed, authenticated, issued and delivered as provided in the Indenture and paid for as provided herein, will be duly and validly issued and outstanding and will constitute valid and legally binding obligations of the Company, as issuer, and each of the Guarantors, as guarantor, entitled to the benefits of the Indenture and enforceable against the Company as issuer, and each of the Guarantors, as guarantor, in accordance with their terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (l) The Exchange Notes that may be issued in exchange for the Notes pursuant to the Exchange and Registration Rights Agreement have been duly authorized by the Company, and, when duly executed, authenticated, issued and delivered as provided in the Indenture 7 to the holders of Notes who acquire such Exchange Notes pursuant to the exchange offer contemplated by the Exchange and Registration Rights Agreement, will be duly and validly issued and outstanding, and will constitute valid and binding obligations of the Company and each of the Guarantors entitled to the benefits of the Indenture and enforceable in accordance with their terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws affecting creditors' rights generally and by general equitable principles (whether considered in a proceeding in equity or at law). (m) Each Transaction Document and each other document described in the Offering Memorandum conforms in all material respects to the description thereof contained in the Offering Memorandum. (n) The execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance, authentication, sale and delivery of the Notes and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents (1) will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of Tritel, Inc., the Company or any of the Company's subsidiaries (other than as provided by the Indenture) pursuant to, any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which Tritel, Inc., the Company or any of the Company's subsidiaries is a party or by which Tritel, Inc., the Company or any of the Company's subsidiaries is bound or to which any of the property or assets of Tritel, Inc., the Company or any of the Company's subsidiaries is subject, nor will such actions result in any violation of the provisions of the charter or by-laws of Tritel, Inc., the Company or any of the Company's subsidiaries or any statute or any judgment, order, decree, rule or regulation of any court or arbitrator or governmental agency or body having jurisdiction over the Company or any of the Guarantors or any of their properties or assets, except where such conflict, breach, violation, default or lien, change or encumbrance would not, singularly or in the aggregate, have a Material Adverse Effect; and (2) no consent, approval, authorization or order of, or filing or registration with, any such court or arbitrator or governmental agency or body under any such statute, judgment, order, decree, rule or regulation is required for the execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance, authentication, sale and delivery of the Notes and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents, except for such consents, approvals, authorizations, filings, registrations or qualifications (i) which shall have been obtained or made prior to the Closing Date, (ii) as may be required to be obtained or made under the Securities Act and the rules and regulations promulgated thereunder (the "Rules and Regulations") and applicable state securities --------------------- laws as provided in the Exchange and Registration Rights Agreement, (iii) the 8 failure to obtain (A) could not reasonably be expected to have a Material Adverse Effect or (B) would not materially and adversely affect the legal, valid and binding obligations of the Company or any of the Guarantors under the Transaction Documents or the ability of the Company or any of the Guarantors to perform its obligations under any of the Transaction Documents or (iv) which are otherwise not material in the context of the sale of the Notes. (o) To the best knowledge of the Company, KPMG LLP are independent certified public accountants with respect to Tritel, Inc., the Company and the Company's subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants ("AICPA") and its interpretations and rulings thereunder. The ----- historical financial statements (including the related notes) contained in the Offering Memorandum comply in all material respects with the requirements applicable to a registration statement on Form S-1 under the Securities Act (except that disclosure of earnings per share and certain supporting schedules are omitted); such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods covered thereby and fairly present the financial position of the entities purported to be covered thereby at the respective dates indicated and the results of their operations and their cash flows for the respective periods indicated; and the financial information contained in the Offering Memorandum under the headings "Summary--Summary Historical Consolidated Financial and Other Data", "Capitalization", "Selected Historical Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" is derived from the accounting records of the entities covered thereby and fairly presents the information purported to be shown thereby. The other historical financial information and data included in the Offering Memorandum are, in all material respects, fairly presented. (p) There are no legal or governmental proceedings pending to which Tritel, Inc., the Company or any of the Company's subsidiaries is a party or of which any property or assets of Tritel, Inc., the Company or any of the Company's subsidiaries is the subject, other than proceedings described in the Offering Memorandum which (i) singularly or in the aggregate, if determined adversely to Tritel, Inc., the Company or any of the Company's subsidiaries, could reasonably be expected to have a Material Adverse Effect or (ii) question the validity or enforceability of any of the Transaction Documents or any action taken or to be taken pursuant thereto; and to the best knowledge of the Company, no such proceedings are threatened or contemplated by governmental authorities or threatened by others. (q) To the best knowledge of the Company, no action has been taken and no statute, rule, regulation or order has been enacted, adopted or issued by any governmental agency or body which prevents the issuance of the Notes or suspends the sale of the Notes in any jurisdiction; no injunction, restraining order or order of any nature by any federal or state court of competent jurisdiction has been issued with respect to Tritel, Inc., the Company or any of the Company's subsidiaries which would prevent or suspend the issuance or sale of the Notes or the use of the Offering Documents in any jurisdiction; no action, suit or 9 proceeding is pending against or, to the best knowledge of the Company, threatened against or affecting Tritel, Inc., the Company or any of the Company's subsidiaries before any court or arbitrator or any governmental agency, body or official, domestic or foreign, which could reasonably be expected to interfere with or adversely affect the issuance of the Notes or in any manner draw into question the validity or enforceability of any of the Transaction Documents or any action taken or to be taken pursuant thereto; and the Company has complied with any and all requests by any securities authority in any jurisdiction for additional information to be included in the Offering Documents. (r) Neither Tritel, Inc., the Company nor any of the Company's subsidiaries is (i) in violation of its charter, by-laws, operating agreement or limited partnership agreement, as appropriate, (ii) in default, and no event has occurred which, with notice or lapse of time or both, would constitute a default, in the due performance or observance of any term, covenant or condition contained in any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets is subject or (iii) in violation of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject, except, in the case of clause (ii) or clause (iii), for any default or violation that could not reasonably be expected to have a Material Adverse Effect. (s) Except as disclosed in the Offering Memorandum, Tritel, Inc., the Company and each of the Company's subsidiaries possess all material licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate federal, state or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of their respective properties or the conduct of their respective businesses as described in the Offering Memorandum, except where the failure to possess or make the same would not, singularly or in the aggregate, have a Material Adverse Effect, and neither Tritel, Inc., the Company nor any of the Company's subsidiaries has received notification of any revocation or modification of any such license, certificate, authorization or permit or has any reason to believe that any such license, certificate, authorization or permit will not be renewed in the ordinary course. (t) Tritel, Inc., the Company and each of the Company's subsidiaries have filed all federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof and have paid all taxes due thereon, and no tax deficiency has been determined adversely to Tritel, Inc., the Company or any of the Company's subsidiaries which has had (nor does Tritel, Inc., the Company or any of the Company's subsidiaries have any knowledge of any tax deficiency which, if determined adversely to Tritel, Inc., the Company or any of the Company's subsidiaries, could reasonably be expected to have) a Material Adverse Effect. (u) Neither Tritel, Inc., the Company nor any of the Company's subsidiaries is (i) an "investment company" or a company "controlled by" an investment company within the 10 meaning of the Investment Company Act of 1940, as amended (the "Investment ---------- Company Act"), and the rules and regulations of the Commission thereunder ----------- or (ii) a "holding company" or a "subsidiary company" of a holding company or an "affiliate" thereof within the meaning of the Public Utility Holding Company Act of 1935, as amended. (v) Tritel, Inc., the Company and each of the Company's subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to financial assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences to the extent necessary. (w) Tritel, Inc., the Company and each of the Company's subsidiaries have insurance covering their respective properties, operations, personnel and businesses, which insurance is in amounts and insures against such losses and risks as are adequate to protect Tritel, Inc., the Company and the Company's subsidiaries and their respective businesses, determined by reference to the insurance maintained by other companies in the wireless communications industry. Neither Tritel, Inc., the Company nor any of the Company's subsidiaries has received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance. (x) Except as disclosed in the Offering Memorandum, Tritel, Inc., the Company and each of the Company's subsidiaries own or possess adequate rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses, except where the failure to possess such rights could not reasonably be expected to have a Material Adverse Effect; and the conduct of their respective businesses will not conflict in any respect with, and Tritel, Inc., the Company and the Company's subsidiaries have not received any notice of any claim of conflict with, any such rights of others that, if determined adversely to Tritel, Inc., the Company or any of the Company's subsidiaries would, individually or in the aggregate, have a Material Adverse Effect. (y) Tritel, Inc., the Company and each of the Company's subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property which are material to the business of Tritel, Inc., the Company and the Company's subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except such as (i) do not materially interfere with the use made and proposed to be made of such property by Tritel, Inc., the Company and the 11 Company's subsidiaries or (ii) could not reasonably be expected to have a Material Adverse Effect. (z) No labor disturbance by or dispute with the employees of Tritel, Inc., the Company or any of the Company's subsidiaries exists or, to the best knowledge of the Company, is contemplated or threatened. (aa) No "prohibited transaction" (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"), or Section ----- 4975 of the Internal Revenue Code of 1986, as amended from time to time (the "Code")) or "accumulated funding deficiency" (as defined in Section ---- 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the 30-day notice requirement under Section 4043 of ERISA has been waived) has occurred with respect to any employee benefit plan of Tritel, Inc., the Company or any of the Company's subsidiaries which could reasonably be expected to have a Material Adverse Effect; each such employee benefit plan is in compliance in all material respects with applicable law, including ERISA and the Code, except where such noncompliance, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; Tritel, Inc., the Company and each of the Company's subsidiaries have not incurred and do not expect to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan for which Tritel, Inc., the Company or any of the Company's subsidiaries would have any liability; and each such pension plan that is intended to be qualified under Section 401(a) of the Code has filed for or received a favorable determination letter from the Internal Revenue Service and the Company has not amended any such pension plan in any way that could reasonably be expected to cause the loss of such qualification. (bb) There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission or other release of any kind of toxic or other wastes or other hazardous substances by, due to or caused by Tritel, Inc., the Company or any of the Company's subsidiaries (or, to the best knowledge of the Company, any other entity (including any predecessor) for whose acts or omissions Tritel, Inc., the Company or any of the Company's subsidiaries is or could reasonably be expected to be liable) upon any of the property now or previously owned or leased by Tritel, Inc., the Company or any of the Company's subsidiaries, or upon any other property, in violation of any statute or any ordinance, rule, regulation, order, judgment, decree or permit or which would, under any statute or any ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability, except for any violation or liability that could not reasonably be expected to have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company has knowledge, except for any such disposal, discharge, emission or other release 12 of any kind which could not reasonably be expected to have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Effect. (cc) Neither the Company nor, to the best knowledge of the Company and each of the Guarantors, any director, officer, agent, employee or other person associated with or acting on behalf of Tritel, Inc., the Company or any of the Company's subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment. (dd) Except as described in the Offering Memorandum, there are no outstanding subscriptions, rights, warrants, calls or options to acquire, or instruments convertible into or exchangeable for, or agreements or understandings with respect to the sale or issuance of, any shares of capital stock of or other equity or other ownership interest in Tritel, Inc., the Company or any of the Company's subsidiaries. (ee) Neither Tritel, Inc., the Company nor any of the Company's subsidiaries owns any "margin securities" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), and none of the proceeds of the sale of the Notes --------------------- will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Notes to be considered a "purpose credit" within the meanings of Regulation T, U or X of the Federal Reserve Board. (ff) Neither Tritel, Inc., the Company nor any of the Company's subsidiaries is a party to any contract, agreement or understanding with any person that would give rise to a valid claim against the Company or the Initial Purchasers for a brokerage commission, finder's fee or like payment in connection with the offering and sale of the Notes. (gg) The Notes satisfy the eligibility requirements of Rule 144A(d)(3) under the Securities Act. (hh) None of the Company, any of its affiliates or any person acting on its or their behalf, with respect to the Notes, has engaged or will engage in any directed selling efforts (as such term is defined in Regulation S), and all such persons have complied and will comply with the offering restrictions requirement of Regulation S to the extent applicable. (ii) Neither the Company nor any of its affiliates has, directly or through any agent, sold, offered for sale, solicited offers to buy or otherwise negotiated in respect of, any 13 security (as such term is defined in the Securities Act), which is or will be integrated with the sale of the Notes in a manner that would require registration of the Notes under the Securities Act. (jj) None of the Company, any of its affiliates or any other person acting on its or their behalf has engaged, in connection with the offering of the Notes, in any form of general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act. (kk) There are no securities of the Company registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or listed ------------ on a national securities exchange or quoted in a U.S. automated inter- dealer quotation system. (ll) Neither the Company nor any of the Guarantors has taken or will take, directly or indirectly, any action prohibited by Regulation M under the Exchange Act in connection with the offering of the Notes. (mm) No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either of the Offering Documents has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. (nn) None of Tritel, Inc., the Company or any of the Company's subsidiaries does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Florida Statutes Section 517.075. (oo) Since the date as of which information is given in the Offering Memorandum, (i) there has been no material adverse change or any development involving a prospective material adverse change in the condition, financial or otherwise, or in the earnings, business affairs, management or business prospects of Tritel, Inc., the Company and the Company's subsidiaries, taken as a whole, whether or not arising in the ordinary course of business, (ii) neither the Company nor any of the Guarantors has incurred any material liability or obligation, direct or contingent, other than in the ordinary course of business, (iii) neither the Company nor any of the Guarantors has entered into any material transaction other than in the ordinary course of business and (iv) there has not been any change in the capital stock or long-term debt of the Company or any of the Guarantors, or any dividend or distribution of any kind declared, paid or made by the Company or any of the Guarantors on any class of their respective capital stock. (pp) (i) Tritel, Inc., the Company and the Company's subsidiaries have the full use and benefit of all broadband personal communications services ("PCS") licenses issued by the Federal Communications Commission (the --- "FCC") to Tritel, Inc., the Company and the Company's subsidiaries (the --- "Licenses") necessary to operate assets constituting a radio -------- 14 communications system authorized under the rules for wireless communications services (including any license and the network, marketing, distribution, sales, customer interface and operations functions relating thereto) owned and operated by Tritel, Inc., the Company or any of the Company's subsidiaries in the Major Trading Areas (as defined in 47 C.F.R. (S)24.202) and the Basic Trading Areas (as defined in 47 C.F.R. (S)24.202) listed on Exhibit D attached hereto and each other area in which Tritel, Inc., the Company or any of the Company's subsidiaries conducts a broadband PCS business; (ii) such Licenses have been duly issued by the FCC, are (in the case of Licenses listed on Exhibit D) or will be held by a direct or indirect wholly owned subsidiary of the Company and are in full force and effect and (iii) Tritel, Inc., the Company and the Company's subsidiaries are in compliance in all material respects with all of the provisions of each such License held by any of them. (qq) (i) Tritel, Inc., the Company and each of the Company's subsidiaries are in compliance in all material respects with the Communications Act of 1934, and any similar or successor federal statute, and the rules and regulations and published policies of the FCC thereunder, as amended and as in effect from time to time (collectively, the "Communications Act"), and all requirements of the FCC, including the "very ------------------ small business" requirements; (ii) except as set forth in the Offering Memorandum, the Company has no knowledge of any investigation, notice of apparent liability, violation, forfeiture or other order or complaint issued by or before the FCC, or of any other proceedings (other than proceedings relating to the wireless communications industries generally) of or before the FCC, which could reasonably be expected to have a Material Adverse Effect; (iii) no event has occurred which (A) has resulted in, or after notice or lapse of time or both would result in, revocation, suspension, adverse modifications, non-renewal, impairment, restriction or termination of, or order of forfeiture with respect to, any License in any respect which could reasonably be expected to have a Material Adverse Effect or (B) affects or could reasonably be expected in the future to affect any of the rights of Tritel, Inc., the Company or any of the Company's subsidiaries under any License held by Tritel, Inc., the Company or any of the Company's subsidiaries in any respect which could reasonably be expected to have a Material Adverse Effect; (iv) Tritel, Inc., the Company and each of the Company's subsidiaries have duly filed in a timely manner all material filings, reports, applications, documents, instruments and information required to be filed under the Communications Act, and all such filings were when made true, correct and complete in all material respects; and (v) the Company has no reason to believe that each License of Tritel, Inc., the Company or any of the Company's subsidiaries will not be renewed in the ordinary course. (rr) The Company is in compliance in all material respects with its "Minimum Build-Out Plan", as defined in the TeleCorp PCS Stockholders' Agreement dated November 13, 2000, among AT&T Wireless PCS Inc., the Cash Equity Investors (as identified therein), the Management Stockholders (as identified therein), other stockholders, and TeleCorp PCS, Inc. 3. Purchase of the Notes by the Initial Purchasers; Agreements to Sell, Purchase and Resell. (a) The Company and each of the Guarantors hereby agree, on the basis of the 15 representations, warranties and agreements of the Initial Purchasers contained herein and subject to all the terms and conditions set forth herein, to issue and sell to the Initial Purchasers and, upon the basis of the representations, warranties and agreements of the Company and each of the Guarantors herein contained and subject to all the terms and conditions set forth herein, each Initial Purchaser agrees, severally and not jointly, to purchase from the Company, at a purchase price of 97.5% the principal amount thereof, the principal amount of Notes set forth opposite the name of such Initial Purchaser in Schedule I hereto. The Company and each of the Guarantors shall not be obligated to deliver any of the Notes to be delivered hereunder except upon payment for all of the Notes to be purchased as provided herein. (b) Each of the Initial Purchasers hereby represents and warrants to the Company and each of the Guarantors that it will offer the Notes for sale upon the terms and conditions set forth in this Agreement and in the Offering Memorandum. Each of the Initial Purchasers hereby represents and warrants to, and agrees with, the Company and each of the Guarantors that such Initial Purchaser (i) is a QIB with such knowledge and experience in financial and business matters as are necessary in order to evaluate the merits and risks of an investment in the Notes; (ii) is purchasing the Notes pursuant to a private sale exempt from registration under the Act; (iii) in connection with the Exempt Resales, will solicit offers to buy the Notes only from, and will offer to sell the Notes only to, the Eligible Purchasers in accordance with this Agreement and on the terms contemplated by the Offering Memorandum; and (iv) will not offer or sell the Notes, nor has it offered or sold the Notes by, or otherwise engaged in, any form of general solicitation or general advertising (within the meaning of Regulation D; including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising) in connection with the offering of the Notes. The Initial Purchasers have advised the Company that they will offer the Notes to Eligible Purchasers at a price initially equal to 100% of the principal amount thereof, plus accrued interest, if any, from the date of issuance of the Notes. Such price may be changed by the Initial Purchasers at any time thereafter without notice. (c) Each of the Initial Purchasers understands that the Company and each of the Guarantors and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 7(d) and 7(e) of this Agreement, counsel to the Company and counsel to the Initial Purchasers, will rely upon the accuracy and truth of the foregoing representations, warranties and agreements and the Initial Purchasers hereby consents to such reliance. 4. Delivery of and Payment for the Notes; Delivery of the Notes and Payment Therefor. (a) Delivery to the Initial Purchasers of and payment for the Notes shall be made at the office of Cravath, Swaine & Moore, at 9:00 a.m., New York City time, on January 24, 2001 (the "Closing Date"). ------------ The place of closing for the Notes and the Closing Date may be varied by agreement between each of the Initial Purchasers and the Company. 16 (b) The Notes will be delivered to the Initial Purchasers against payment of the purchase price therefor in immediately available funds. The Notes will be evidenced by one or more single global securities in definitive form (the "Global Note") and/or by additional definitive ----------- securities, and will be registered, in the case of the Global Note, in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), and in the other cases, in such names and in such denominations as Salomon Smith Barney Inc. and Lehman Brothers Inc., on behalf of the Initial Purchasers, shall request prior to 9:30 a.m., New York City time, on the second business day preceding the Closing Date. The Notes to be delivered to the Initial Purchasers shall be made available to the Initial Purchasers in New York City for inspection and packaging to Salomon Smith Barney Inc. and Lehman Brothers Inc., on behalf of the Initial Purchasers, not later than 9:30 a.m., New York City time, on the business day next preceding the Closing Date. 5. Further Agreements of the Company and each of the Guarantors. The Company and each of the Guarantors further agree: (a) At all times prior to the resale of the Notes by the Initial Purchasers, to advise the Initial Purchasers promptly and, if requested, confirm such advice in writing, of the happening of any event which makes any statement of a material fact made in the Offering Memorandum untrue or which requires the making of any additions to or changes in the Offering Memorandum (as amended or supplemented from time to time) to make the statements therein, in the light of the circumstances under which they were made, not misleading; to advise the Initial Purchasers of any order of any governmental authority preventing or suspending the use of the Offering Documents, of any suspension of the qualification of the Notes for offering or sale in any jurisdiction and of the initiation or threatening of any proceeding for any such purpose promptly upon receipt of notice of such order, suspension or initiation or threatening of any such proceeding; and, prior to the resale of the Notes by the Initial Purchasers, to use its best efforts to prevent the issuance of any such order preventing or suspending the use of the Offering Documents or suspending any such qualification and, if any such suspension is issued, to obtain the lifting thereof at the earliest possible time and thereafter to use commercially reasonable efforts to prevent the issuance of any such order preventing or suspending the use of the Offering Documents or suspending any such qualification and, if any such suspension is issued, to obtain the lifting thereof at the earliest possible time. (b) To furnish to each of the Initial Purchasers, without charge, as many copies of the Offering Documents (and any supplements and amendments thereto) as may be reasonably requested. (c) Prior to making any amendment or supplement to the Offering Memorandum, the Company and each of the Guarantors shall furnish a copy thereof to the Initial Purchasers and counsel to the Initial Purchasers and will not effect any such amendment or supplement to which the Initial Purchasers shall reasonably object by notice to the Company and each of the Guarantors after a reasonable period (under the circumstances) of review. 17 (d) If, at any time prior to completion of the distribution of the Notes by the Initial Purchasers to subsequent purchasers, any event shall occur or condition exist as a result of which it is necessary, in the opinion of counsel for the Initial Purchasers or counsel for the Company and the Guarantors, to amend or supplement the Offering Memorandum in order that the Offering Memorandum will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the circumstances existing at the time it is delivered to a purchaser, or if it is necessary to amend or supplement the Offering Memorandum to comply with applicable law, to promptly prepare such amendment or supplement as may be necessary to correct such untrue statement or omission or so that the Offering Memorandum, as so amended or supplemented, will comply with applicable law and to furnish the Initial Purchasers such number of copies as they may reasonably request. (e) So long as any of the Notes remain outstanding and is a "restricted security" within the meaning of Rule 144(a)(3) under the Securities Act during any period in which the Company and each of the Guarantors is not subject to and in compliance with Section 13 or 15(d) of the Exchange Act, to furnish to holders of the Notes and prospective purchasers of the Notes designated by such holders, upon request of such holders or such prospective purchasers, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (f) For so long as the Notes are outstanding, the Company and each of the Guarantors shall furnish to the Initial Purchasers copies of all public reports and all reports and financial statements furnished by the Company and each of the Guarantors to the principal national securities exchange upon which securities of the Company and each of the Guarantors listed pursuant to requirements of or agreements with such exchange or to the Commission pursuant to the Exchange Act or any rule or regulation of the Commission thereunder. (g) Promptly from time to time to take such action as the Initial Purchasers may reasonably request to qualify the Notes for offering and sale under the securities laws of such jurisdictions as the Initial Purchasers may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Notes; provided, however, that in no event will the Company and each of the Guarantors be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Notes, in any jurisdiction where it is not now so subject. In each jurisdiction in which the Notes have been so qualified, the Company and each of the Guarantors will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification in effect for so long as any of the Notes are outstanding. The Company and each of the Guarantors will also supply the Initial Purchasers with such information as is necessary for the determination of the legality of the Notes for investment under the laws of such jurisdictions as the Initial Purchasers may reasonably request. 18 (h) For a period of 180 days from the date of the Offering Memorandum, not to offer for sale, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file a registration statement for, or announce any offer, sale, contract for sale of or other disposition of any debt securities issued or guaranteed by Tritel, Inc., the Company or any of the Company's subsidiaries (other than (i) the Notes or the Exchange Notes, (ii) debt securities issued or guaranteed by Tritel, Inc., the Company or any of the Company's subsidiaries pursuant to any credit arrangement with a vendor or supplier or any financial institution acting on behalf of such vendor or supplier; provided that any such credit arrangement contains terms prohibiting the remarketing of all debt securities issued or guaranteed thereunder for a period of not less than 180 days from the date of the Offering Memorandum, (iii) the 12 3/4% Senior Subordinated Discount Notes due 2009 issued by the Company pursuant to an Indenture dated May 11, 1999 and (iv) any debt securities issued by Tritel, Inc., the Company or any of the Company's subsidiaries to the U.S. Government in connection with the acquisition of any License from the FCC or any debt securities assumed by Tritel, Inc., the Company or any of the Company's subsidiaries in connection with the acquisition of any License or any entity engaged in a Permitted Business). (i) To provide reasonable assistance to the Initial Purchasers in arranging for the Notes to be designated Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market securities in ------ accordance with the rules and regulations adopted by the National Association of Securities Dealers, Inc. ("NASD") relating to trading in the ---- PORTAL Market and for the Notes to be eligible for clearance and settlement through the DTC. (j) Not to, and to cause its affiliates not to, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as such term is defined in the Securities Act) which could be integrated with the sale of the Notes in a manner which would require registration of the Notes under the Securities Act. (k) Except following the effectiveness of the Registration Statement or the Shelf Registration Statement, as the case may be, not to, and to cause its affiliates (as defined in Rule 144 under the Securities Act) not to, solicit any offer to buy or offer to sell the Notes by means of any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and not to offer, sell, contract to sell or otherwise dispose of, directly or indirectly, any securities under circumstances where such offer, sale, contract or disposition would cause the exemption afforded by Section 4(2) of the Securities Act to cease to be applicable to the offering and sale of the Securities as contemplated by this Agreement and the Offering Memorandum. (l) Not to, for two years following the date on which the Notes are issued, be or become, or be or become owned by, an open-end investment company, unit investment trust or face-amount certificate company that is or is required to be registered under Section 8 of 19 the Investment Company Act, and to not be or become, or be or become owned by, a closed-end investment company required to be registered, but not registered thereunder. (m) During the period from the Closing Date until two years after the Closing Date, without the prior written consent of the Initial Purchasers, not to, and not permit any of its affiliates to, resell any of the Notes that have been reacquired by them, except for Notes purchased by the Company or any of its affiliates and resold in a transaction registered under the Securities Act. (n) In connection with the offering of the Notes, until Salomon Smith Barney Inc. and Lehman Brothers Inc., on behalf of the Initial Purchasers, shall have notified the Company of the completion of the resale of the Notes, not to, and to cause its affiliated purchasers (as defined in Regulation M under the Exchange Act) not to, either alone or with one or more other persons, bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Notes, or attempt to induce any person to purchase any Notes; and not to, and to cause its affiliated purchasers not to, make bids or purchase for the purpose of creating actual, or apparent, active trading in or of raising the price of the Notes. (o) In connection with the offering of the Notes, to make its officers, employees, independent accountants and legal counsel reasonably available upon request by the Initial Purchasers. (p) To furnish to each of the Initial Purchasers on the Closing Date a copy of the independent accountants' report included in the Offering Memorandum signed by the accountants rendering such report. (q) To do and perform all things required to be done and performed by it under this Agreement that are within its control prior to or after the Closing Date, and to use commercially reasonable efforts to satisfy all conditions precedent on its part to the delivery of the Notes. (r) To not take any action prior to the Closing Date which would require the Offering Memorandum to be amended or supplemented pursuant to Section 4(d). (s) Prior to the Closing Date, not to issue any press release or other communication directly or indirectly or hold any press conference with respect to the Company, its condition, financial or otherwise, or earnings, business affairs or business prospects (except for routine oral marketing communications in the ordinary course of business and consistent with the past practices of the Company and of which the Initial Purchasers are notified), without the prior written consent of the Initial Purchasers, unless in the judgment of the Company and its counsel, and after notification to the Initial Purchasers, such press release or communication is required by law. 20 (t) To apply the net proceeds from the sale of the Notes as set forth in the Offering Memorandum under the heading "Use of Proceeds". 6. Conditions to the Initial Purchasers' Obligations. The respective obligations of the several Initial Purchasers hereunder are subject to the accuracy, on and as of the date hereof and the Closing Date, of the representations and warranties of the Company and each of the Guarantors contained herein, to the accuracy of the statements of the Company and each of the Guarantors and their respective officers made in any certificates delivered pursuant hereto, to the performance by the Company and each of the Guarantor of their respective obligations hereunder, and to each of the following additional terms and conditions: (a) The Offering Memorandum (and any amendments or supplements thereto) shall have been printed and copies distributed to the Initial Purchasers as promptly as practicable on or following the date of this Agreement or at such other date and time as to which the Initial Purchasers may agree; and no stop order suspending the sale of the Notes in any jurisdiction shall have been issued and no proceeding for that purpose shall have been commenced or shall be pending or threatened. (b) The Initial Purchasers shall not have discovered and disclosed to the Company on or prior to the Closing Date that the Offering Memorandum or any amendment or supplement thereto contains any untrue statement of a fact which, in the opinion of counsel for the Initial Purchasers, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. (c) All corporate proceedings and other legal matters incident to the authorization, form and validity of the Transaction Documents, the Offering Memorandum and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be satisfactory in all material respects to counsel for the Initial Purchasers, the Company and each of the Guarantors shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters. (d) Each of Cadwalader, Wickersham & Taft and James H. Neeld, IV, shall have furnished to the Initial Purchasers its or his written opinion, as counsel to the Company and general counsel to the Company, respectively, addressed to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers substantially to the effect set forth in Exhibits E and F attached hereto, respectively. Wiley, Rein & Fielding shall have furnished to the Initial Purchasers its written opinion as special communications counsel to the Company, addressed to the Initial Purchasers and dated the Closing Date, in form and substance reasonably satisfactory to the Initial Purchasers substantially to the effect set forth in Exhibit G attached hereto. 21 (e) The Initial Purchasers shall have received from Cravath, Swaine & Moore, counsel to the Initial Purchasers, such opinion or opinions, dated the Closing Date, with respect to such matters as the Initial Purchasers may reasonably require, and the Company shall have furnished to such counsel such documents and information as they may reasonably request for the purpose of enabling them to pass upon such matters. (f) The Company shall have furnished to the Initial Purchasers a letter (the "Initial Letter"), dated the date hereof, in form and substance -------------- reasonably satisfactory to the Initial Purchasers, from KPMG LLP, independent public accountants, containing statements and information with respect to the financial statements and certain financial information, including the financial information contained or referred to in the Offering Memorandum, as identified by the Initial Purchasers, substantially to the effect set forth in Exhibit H hereto. (g) The Company shall have furnished to the Initial Purchasers a letter (the "Bring-Down Letter") of KPMG LLP, addressed to the Initial ----------------- Purchasers and dated the Closing Date, (i) confirming that they are independent public accountants with respect to Tritel, Inc., the Company and the Company's subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the AICPA and its interpretations and rulings thereunder, (ii) stating, as of the date of the Bring-Down Letter (or, with respect to matters involving changes or developments since the respective dates as of which specified financial information is given in the Offering Memorandum, as of a date not more than three business days prior to the date of the Bring-Down Letter), that the conclusions and findings of such accountants with respect to the financial information and other matters covered by the Initial Letter are accurate and (iii) confirming in all material respects the conclusions and findings set forth in the Initial Letter. (h) The Company and each of the Guarantors shall have furnished to the Initial Purchasers a certificate, dated the Closing Date, of the Chief Executive Officer and the Chief Financial Officer of the Company and each of the Guarantors stating that: (i) such officers have carefully examined the Offering Memorandum, (ii) in their opinion, the Offering Memorandum, as of its date, did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and since the date of the Offering Memorandum, no event has occurred which should have been set forth in a supplement or amendment to the Offering Memorandum so that the Offering Memorandum (as so amended or supplemented) would not include any untrue statement of a material fact and would not omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, 22 (iii) as of the Closing Date, the representations and warranties of the Company or each of the Guarantors, as applicable, in this Agreement are true and correct in all material respects, the Company or each of the Guarantors, as applicable, has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder on or prior to the Closing Date and (iv) with respect to officers of Tritel, Inc. and the Company only, subsequent to the date of the most recent financial statements contained in the Offering Memorandum, there has been no material adverse change in the financial position or results of operation of Tritel, Inc., the Company or any of the Company's subsidiaries, or any material change, or any material development including a prospective material change, in or affecting the condition (financial or otherwise), results of operations, business or prospects of Tritel, Inc., the Company and the Company's subsidiaries taken as a whole, which is not disclosed in the Offering Memorandum. (i) The Initial Purchasers shall have received on the Closing Date the Exchange and Registration Rights Agreement executed by the Company and each of the Guarantors. (j) The Company, each of the Guarantors and the Trustee shall have executed and delivered the Indenture, and the Company shall have executed and delivered, and the Trustee shall have authenticated the Notes on or prior to the Closing Date. (k) The Notes shall have been approved by the NASD for trading in the PORTAL Market. (l) If any event shall have occurred that requires the Company under Section 5(d) of this Agreement to prepare an amendment or supplement to the Offering Memorandum, such amendment or supplement shall have been prepared, the Initial Purchasers shall have been given a reasonable opportunity to comment thereon, and copies thereof shall have been delivered to the Initial Purchasers reasonably in advance of the Closing Date. (m) There shall not have occurred any invalidation of Rule 144A under the Securities Act by any court or any withdrawal or proposed withdrawal of any rule or regulation under the Securities Act or the Exchange Act by the Commission or any amendment or proposed amendment thereof by the Commission which in the reasonable judgment of the Initial Purchasers would materially impair the ability of the Initial Purchasers to purchase, hold or effect resales of the Notes as contemplated hereby. (n) Subsequent to the execution and delivery of this Agreement or, if earlier, the dates as of which information is given in the Offering Memorandum (exclusive of any amendment or supplement thereto), there shall not have been any change in the capital stock or long-term debt or any change, or any development involving a prospective change, in or 23 affecting the condition (financial or otherwise), results of operations, business or prospects of Tritel, the Company and the Company's subsidiaries taken as a whole, the effect of which, in any such case described above, is, in the reasonable judgment of the Initial Purchasers, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Notes on the terms and in the manner contemplated by this Agreement and the Offering Memorandum (exclusive of any amendment or supplement thereto). (o) No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would, as of the Closing Date, prevent the issuance or sale of the Notes in any jurisdiction in which issuance or sale of the Notes is contemplated by the Offering Memorandum; and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale of the Notes in any jurisdiction in which the issuance or sale of the Notes is contemplated by the Offering Memorandum. (p) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Notes or any of the Company's other debt securities or preferred stock by any "nationally recognized statistical rating organization", as such term is defined by the Commission for purposes of Rule 436(g)(2) of the rules and regulations of the Commission under the Securities Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review (other than an announcement with positive implications of a possible upgrading), its rating of the Notes or any of the Company's other debt securities or preferred stock. (q) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the New York Stock Exchange, the American Stock Exchange or the over-the-counter market shall have been suspended or limited, or minimum prices shall have been established on any such exchange or market by the Commission, by any such exchange or by any other regulatory body or governmental authority having jurisdiction, or trading in any securities of the TeleCorp PCS on any exchange or in the over-the-counter market shall have been suspended, (ii) any moratorium on commercial banking activities shall have been declared by federal or New York state authorities, (iii) an outbreak or escalation of hostilities or a declaration by the United States of a national emergency or war or (iv) a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) the effect of which, in the case of this clause (iv), is, in the judgment of the Initial Purchasers, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or the delivery of the Notes on the terms and in the manner contemplated by this Agreement and in the Offering Memorandum (exclusive of any amendment or supplement thereto). 24 All opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Initial Purchasers. 7. Termination. The obligations of the Initial Purchasers hereunder may be terminated by notice given to and received by the Company prior to delivery of and payment for the Notes if, prior to that time, any of the events described in Section 6(m), 6(n), 6(o), 6(p), and 6(q) shall have occurred and be continuing. 8. Defaulting Initial Purchasers. If, on the Closing Date, any Initial Purchaser defaults in the performance of its obligations under this Agreement, the remaining non-defaulting Initial Purchasers, or those other initial purchasers satisfactory to the Company and the remaining non-defaulting Initial Purchasers who so agree, shall have the right, but shall not be obligated, to purchase, in such proportion as may be agreed upon among them, the aggregate principal amount of all of the Notes to be purchased on the Closing Date. If the remaining Initial Purchasers or other initial purchasers satisfactory to the remaining non-defaulting Initial Purchasers do not elect to purchase the aggregate principal amount of Notes which the defaulting Initial Purchaser agreed but failed to purchase on such Closing Date, this Agreement shall terminate without liability on the part of any of the non-defaulting Initial Purchasers or the Company, except that the Company will continue to be liable for the payment of expenses to the extent set forth in Sections 9 and 12 of this Agreement. As used in this Agreement, the term "Initial Purchaser" includes, for all purposes of this Agreement unless the context requires otherwise, any party not listed in Schedule I hereto who, pursuant to this Section 8, purchases Notes which a defaulting Initial Purchaser agreed but failed to purchase. Any action taken hereunder will not relieve a defaulting Initial Purchaser from liability in respect of any default by it under this Agreement. 9. Reimbursement of Initial Purchasers' Expenses. If (a) the Company shall fail to tender the Notes for delivery to the Initial Purchasers by reason of any failure, refusal or inability on the part of the Company to perform any agreement on its part to be performed, or (b) because any other condition of the obligations hereunder required to be fulfilled by the Company is not fulfilled, the Company will reimburse the Initial Purchasers for all reasonable out-of- pocket expenses (including fees and disbursements of counsel) incurred by the Initial Purchasers in connection with this Agreement and the proposed purchase of the Notes, and upon demand the Company shall pay the full amount thereof to the Initial Purchasers. If this Agreement is terminated pursuant to Section 8 of this Agreement by reason of the default of one or more Initial Purchasers, the Company shall not be obligated to reimburse any defaulting Initial Purchaser on account of those expenses. 10. Indemnification and Contribution. (a) The Company and each Guarantor, jointly and severally, shall indemnify and hold harmless each Initial Purchaser, its affiliates, their respective officers, directors, employees, representatives and agents and each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of Sections 10(a) and 10(b) of this Agreement as an Initial Purchaser), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof 25 (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Notes), to which that Initial Purchaser may become subject, whether commenced or threatened under the Securities Act, the Exchange Act, any other federal or statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any of the Offering Documents, (ii) the omission or alleged omission to state in any of the Offering Documents any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (iii) any act or failure to act or any alleged act or failure to act by any Initial Purchaser in connection with, or relating in any manner to, the Notes or the offering contemplated hereby, and which is included as part of or referred to in any loss, claim, damage, liability or action arising out of or based upon matters covered by clause (i) or (ii) above; provided that the Company and each of the Guarantors shall not be liable under this clause (iii) to the extent that it is determined in a final judgment by a court of competent jurisdiction that such loss, claim, damage, liability or action resulted directly from any such acts or failures to act undertaken or omitted to be taken by such Initial Purchaser through its gross negligence or willful misconduct), and shall reimburse each Initial Purchaser and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Initial Purchaser, officer, employee or controlling person in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in any of the Offering Documents, or in any such amendment or supplement, in reliance upon and in conformity with written information concerning such Initial Purchaser furnished to the Company through the Initial Purchasers by or on behalf of any Initial Purchaser specifically for inclusion therein; and provided, further that with respect to any such untrue statement in or omission from any related preliminary prospectus, the indemnity agreement contained in this Section 10 (a) shall not inure to the benefit of any such Initial Purchaser to the extent that such loss, claim, damage, liability or action of or with respect to such Initial Purchaser results from the fact that both (A) to the extent required by applicable law, a copy of the Offering Memorandum was not sent or given to such person at or prior to the written confirmation of the sale of such Notes to such person and (B) the untrue statement in or omission from the related Preliminary Offering Memorandum was corrected in the Offering Memorandum unless, in either case, such failure to deliver the final prospectus was a result of non-compliance by the Company with Section 5(b). The foregoing indemnity agreement is in addition to any liability which the Company or each of the Guarantors may otherwise have to any Initial Purchaser or to any officer, employee or controlling person of that Guarantor. (b) Each Initial Purchaser, severally and not jointly, shall indemnify and hold harmless the Company, its affiliates, their respective officers, directors, employees, representatives and agents and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of Sections 10(b) and 10(d) of this Agreement as the Company), from and against any loss, claim, damage or liability, joint or several, 26 or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Securities Act or the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any of the Offering Documents or (ii) the omission or alleged omission to state in any of the Offering Documents any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Initial Purchaser furnished to the Company by or on behalf of that Initial Purchaser specifically for inclusion therein, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Initial Purchaser may otherwise have to the Company or any such director, officer, employee or controlling person. (c) Promptly after receipt by an indemnified party under this Section 10 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 10, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 10 except to the extent it has been prejudiced (through the forfeiture of substantive rights or defenses) by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 10. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 10 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel reasonably 27 satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 10(a) and 10(b) of this Agreement, shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. The obligations of the Company, each of the Guarantors and the Initial Purchasers in this Section 10 are in addition to any other liability that the Company, each of the Guarantors or the Initial Purchasers, as the case may be, may otherwise have, including in respect of any breaches of representations, warranties and agreements made herein by any such party. (d) If the indemnification provided for in this Section 10 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 10(a) or 10(b) of this Agreement in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and each of the Guarantors on the one hand and the Initial Purchasers on the other from the offering of the Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and each of the Guarantors, on the one hand and the Initial Purchasers on the other with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company and each of the Guarantors, on the one hand and the Initial Purchasers on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes purchased under this Agreement (before deducting expenses) received by the Company and each of the Guarantors, on the one hand, and the total underwriting discounts and commissions received by the Initial Purchasers with respect to the Notes purchased under this 28 Agreement, on the other hand, bear to the total gross proceeds from the offering of the Notes under this Agreement. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company, each of the Guarantors or the Initial Purchasers, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section shall be deemed to include, for purposes of this Section 10(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10(d), no Initial Purchasers shall be required to contribute any amount in excess of the amount by which the total discounts and commissions received by such Initial Purchaser with respect to the Notes purchased by it under this Agreement exceeds the amount of any damages which such Initial Purchaser has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Initial Purchasers' obligations to contribute as provided in this Section 10(d) are several in proportion to their respective underwriting obligations and not joint. (e) The Initial Purchasers severally confirm and the Company acknowledges that (i) the penultimate paragraph on the cover page of and (ii) the fourth, sixth (but only the first, third, sixth and seventh sentences thereof), seventh (but only the first sentence thereof), eighth, ninth, twelfth and fourteenth paragraphs of the "Plan of Distribution" in the Offering Memorandum are correct and constitute the only information concerning the Initial Purchasers furnished in writing to the Company by or on behalf of the Initial Purchasers specifically for inclusion in the Offering Documents. 11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the Initial Purchasers, the Company, each of the Guarantors and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except as provided in Section 10 of this Agreement with respect to affiliates, officers, directors, employees, representatives, agents and controlling persons of the Company, each of the Guarantors and the Initial Purchasers and in Section 5(e) of this Agreement with respect to holders and prospective purchasers of the Notes. Nothing in this Agreement is intended or shall be construed to give any person, other than the persons referred to in this Section 11, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein. 29 12. Expenses. The Company and each of the Guarantors agree with the Initial Purchasers to pay (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Notes and any taxes payable in that connection; (ii) the costs incident to the preparation, printing and distribution of the Offering Documents and any amendments or supplements thereto; (iii) the costs of reproducing and distributing each of the Transaction Documents; (iv) the costs incident to the preparation, printing and delivery of the certificates evidencing the Notes, including stamp duties and transfer taxes, if any, payable upon issuance of the Notes; (v) the fees and expenses of the Company's counsel and independent accountants; (vi) the fees and expenses of qualifying the Notes under the securities laws of the several jurisdictions as provided in Section 4(h) and of preparing, printing and distributing Blue Sky Memoranda (including related fees and expenses of counsel for the Initial Purchasers); (vii) any fees charged by rating agencies for rating the Notes; (viii) the fees and expenses of the Trustee and any paying agent (including related fees and expenses of any counsel to such parties); (ix) all expenses and application fees incurred in connection with the application for the inclusion of the Notes on the PORTAL Market and the approval of the Notes for book-entry transfer by DTC; and (ix) all other costs and expenses incident to the performance of the obligations of the Company under this Agreement which are not otherwise specifically provided for in this Section 12; provided, however, that except as provided in this Section 12 and Section 9, the Initial Purchasers shall pay their own costs and expenses. 13. Survival. The respective indemnities, representations, warranties and agreements of the Company, each of the Guarantors and the Initial Purchasers contained in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Notes and shall remain in full force and effect, regardless of any investigation made by or on behalf of any of them or any person controlling any of them. 14. Notices, etc. All statements, requests, notices and agreements hereunder shall be in writing, and: (a) If to the Initial Purchasers, shall be delivered or sent by mail or fax transmission to Salomon Smith Barney Inc., 390 Greenwich Street, New York, New York 10013, Attention: High Yield Capital Markets (Fax: 212-723- 8589) and Lehman Brothers Inc., Three World Financial Center, New York, New York 10285, Attention: Syndicate Department (Fax: 212-526-6588), with a copy, in the case of any notice pursuant to Section 10(c) of this agreement, to General Counsel, Salomon Smith Barney Inc., 388 Greenwich Street, New York, New York 10013 (Fax: 212-816-7912) and the Director of Litigation, Office of the General Counsel, Lehman Brothers Inc., 3 World Financial Center, 10th Floor, New York, New York 10285. (b) If to the Company or any Guarantor, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Offering Memorandum, Attention: Executive Vice President-Chief Financial Officer (Fax: (703) 236-1376), with a copy to Cadwalader, Wickersham & Taft, 100 Maiden Lane, New York, New York 10038, 30 Attention: Brian Hoffmann (Fax: (212) 504-6666); and to Tritel, Inc., 111 E. Capitol St., Suite 500, Jackson, MS 39201, Attn: General Counsel (Fax: (601) 914-8282. provided, however, that any notice to an Initial Purchaser pursuant to Section 10(c) of this Agreement shall be delivered or sent by mail or fax transmission to such Initial Purchaser at its address set forth on the signature page hereof. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof. The Company shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Initial Purchasers by Salomon Smith Barney Inc. and Lehman Brothers Inc. 15. Definition of the Terms "Business Day" and "Subsidiary". For purposes of this Agreement, (a) "business day" means any day on which the New York Stock Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations. 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK. 17. Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument. 18. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. If the foregoing correctly sets forth the agreement among the Company, each of the Guarantors and the Initial Purchasers, please indicate your acceptance in the space provided for that purpose below. Very truly yours, TRITEL PCS, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer TRITEL, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer TRITEL COMMUNICATIONS, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer TRITEL FINANCE, INC. By /s/ Thomas H. Sullivan ----------------------------------- Name: Thomas H. Sullivan Title: Executive Vice President- Chief Financial Officer and Treasurer Accepted: SALOMON SMITH BARNEY INC., By /s/ M. Ian G. Gilchrist --------------------------------- Name: M. Ian G. Gilchrist Title: Managing Director Address for notices pursuant to Section 11(c): 390 Greenwich Street New York, New York 10013 LEHMAN BROTHERS INC., By /s/ Perry Hoffmeister --------------------------------- Name: Perry Hoffmeister Title: Managing Director Address for notices pursuant to Section 11(c): Three World Financial Center New York, New York 10285 SCHEDULE I Principal Amount Of --------------------- Name Of Initial Purchaser Notes To Be Purchased - ------------------------- --------------------- EXHIBIT A Exchange and Registration Rights Agreement TRITEL PCS, INC $450,000,000 10 3/8 % Senior Subordinated Notes due 2011 EXCHANGE AND REGISTRATION RIGHTS AGREEMENT January , 2001 SALOMON SMITH BARNEY INC. LEHMAN BROTHERS INC. Merrill Lynch, Pierce, Fenner & Smith Incorporated Banc of America Securities LLC TD Securities (USA) Inc. c/o Lehman Brothers Three World Financial Center New York, New York 10285 Ladies and Gentlemen: Tritel PCS, Inc., a Delaware corporation (the "Company"), proposes to ------- issue and sell to Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (together, the "Initial Purchasers"), upon the terms and subject ------------------ to the conditions set forth in a purchase agreement dated January 19, 2001 (the "Purchase Agreement"), $450,000,000 aggregate principal amount at maturity of ------------------ its 10 3/8 % senior subordinated notes due 2011 (the "Notes") to be guaranteed ----- on a senior subordinated basis by Tritel, Inc., the parent of the Company, Tritel Communications, Inc., Tritel Finance Inc., two subsidiaries of the Company, and, in the future, by certain other subsidiaries of the Company that incur indebtedness (together, the "Guarantors"). Capitalized terms used but not ---------- defined herein shall have the meanings given to such terms in the Purchase Agreement. As an inducement to the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the Company and 2 each of the Guarantors agree with the Initial Purchasers, for the benefit of the holders (including the Initial Purchasers) of the Notes, the Exchange Notes (as defined herein) and the Private Exchange Notes (as defined herein) (collectively, the "Holders"), as follows: ------- 1. Registered Exchange Offer. The Company and each of the Guarantors shall (i) prepare and, not later than 90 days following the date of original issuance of the Notes (the "Issue Date"), file with the Securities and Exchange ---------- Commission (the "Commission") a registration statement (the "Exchange Offer ---------- -------------- Registration Statement") on an appropriate form under the Securities Act of - ---------------------- 1933, as amended (the "Securities Act"), with respect to a proposed offer to the -------------- Holders of the Notes (the "Registered Exchange Offer") who are not prohibited by ------------------------- applicable law or interpretations thereof by the Commission's staff from participating in the Registered Exchange Offer to issue and deliver to such Holders, in exchange for the Notes, a like aggregate principal amount of debt securities of the Company (the "Exchange Notes") that are identical in all -------------- material respects to the Notes, except for the transfer restrictions and registration rights relating to the Notes, (ii) use their commercially reasonable efforts to cause the Exchange Offer Registration Statement to become effective under the Securities Act no later than 210 days after the Issue Date and the Registered Exchange Offer to be consummated no later than 240 days after the Issue Date and (iii) keep the Exchange Offer Registration Statement effective for not less than 30 days (or longer, if required by applicable law) after the date on which notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period"). The ---------------------------------- Exchange Notes will be issued under the Indenture or an indenture (the "Exchange -------- Notes Indenture") among the Company, each of the Guarantors and the Trustee or - --------------- such other bank or trust company that is reasonably satisfactory to the Initial Purchasers, as trustee (the "Exchange Notes Trustee"), such indenture to be ---------------------- identical in all material respects to the Indenture, except for the transfer restrictions and registration rights relating to the Notes (as described above). All references in this Agreement to "Registration Statement" and "prospectus" shall, except where the context otherwise requires, include any Registration Statement (or amendment or supplement thereto) and prospectus (or amendment thereto), respectively, filed with the Commission pursuant to Section 6 of this Agreement. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder electing to exchange Notes for Exchange Notes (assuming that such Holder (a) is not an affiliate of the Company or an Exchanging Dealer (as defined herein) not complying with the requirements of the next sentence, (b) is not an Initial Purchaser holding Notes that have, or that are reasonably likely to have, the status of an unsold allotment in an initial distribution, (c) acquires the Exchange Notes in the ordinary course of such Holder's business, (d) has no arrangements or understandings with any person to participate in the distribution of the Exchange Notes and (e) is not otherwise prohibited by applicable law or interpretations thereof by the Commission's staff from participating in the Registered Exchange Offer) and to trade such Exchange Notes from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States. The Company, each of the Guarantors, the Initial Purchasers and each Exchanging 3 Dealer acknowledge that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, (i) each Holder that is a broker- dealer electing to exchange Notes, acquired for its own account as a result of market-making activities or other trading activities, for Exchange Notes (an "Exchanging Dealer"), is required to deliver a prospectus containing ----------------- substantially the information set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Notes received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) if an Initial Purchaser elects to sell Exchange Notes acquired in exchange for Notes constituting any portion of an unsold allotment, such Initial Purchaser is required to deliver a prospectus containing the information required by Item 507 and 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale. If, prior to the consummation of the Registered Exchange Offer, any Holder holds any Notes acquired by it that have, or that are reasonably likely to be determined to have, the status of an unsold allotment in an initial distribution, or any Holder is not entitled to participate in the Registered Exchange Offer, the Company shall, upon the request of any such Holder, simultaneously with the delivery of the Exchange Notes in the Registered Exchange Offer, issue and deliver to any such Holder, in exchange for the Notes held by such Holder (the "Private Exchange"), a like aggregate principal amount ---------------- of debt securities of the Company (the "Private Exchange Notes") that are ---------------------- identical in all material respects to the Exchange Notes, except for the transfer restrictions relating to such Private Exchange Notes. The Private Exchange Notes will be issued under the same indenture as the Exchange Notes, and the Company shall use commercially reasonable efforts to cause the Private Exchange Notes to bear the same CUSIP number as the Exchange Notes. In connection with the Registered Exchange Offer, the Company shall: (a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Registered Exchange Offer open for not less than 30 days (or longer, if required by applicable law) after the date on which notice of the Registered Exchange Offer is mailed to the Holders; (c) utilize the services of a depositary (which may be the Trustee or an affiliate of the Trustee) for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York; (d) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York City time, on the last business day on which the Registered Exchange Offer shall remain open; and 4 (e) otherwise comply in all respects with all laws that are applicable to the Registered Exchange Offer. As soon as practicable after the close of the Registered Exchange Offer and any Private Exchange, as the case may be, the Company shall: (a) accept for exchange all Notes validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; (b) deliver to the Trustee for cancelation all Notes so accepted for exchange; and (c) cause the Trustee or the Exchange Notes Trustee, as the case may be, promptly to authenticate and deliver to each Holder, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Notes of such Holder so accepted for exchange. The Company shall use its commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein in order to permit such prospectus to be used by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Notes; provided that (i) in the case where such -------- prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers have sold all Exchange Notes held by them and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Notes for a period of not less than 180 days after the consummation of the Registered Exchange Offer. The Indenture or the Exchange Notes Indenture, as the case may be, shall provide that the Notes, the Exchange Notes and the Private Exchange Notes shall vote and consent together on all matters as one class and that none of the Notes, the Exchange Notes or the Private Exchange Notes will have the right to vote or consent as a separate class on any matter. Interest on each Exchange Note and Private Exchange Note issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Notes surrendered in exchange therefor or, if no interest has been paid on the Notes, from the Issue Date. Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Notes received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Notes or the Exchange Notes within the meaning of the Securities Act, (iii) such 5 Holder is not an affiliate of the Company or, if it is such an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Notes and (v) if such Holder is a broker-dealer, that it will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making activities or other trading activities and that it will deliver a prospectus in connection with any resale of such Exchange Notes. Notwithstanding any other provisions hereof, the Company and each of the Guarantors will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not, as of the consummation of the Registered Exchange Offer, include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 2. Shelf Registration. If (i) because of any change in applicable law or interpretations thereof by the Commission's staff the Company is not permitted to effect the Registered Exchange Offer as contemplated by Section 1 hereof or (ii) any Notes validly tendered pursuant to the Registered Exchange Offer are not exchanged for Exchange Notes within 240 days after the Issue Date or (iii) any Initial Purchaser so requests with respect to Notes or Private Exchange Notes not eligible to be exchanged for Exchange Notes in the Registered Exchange Offer and held by it following the consummation of the Registered Exchange Offer or (iv) any applicable law or interpretations thereof by the Commission's staff do not permit any Holder to participate in the Registered Exchange Offer or (v) any Holder that participates in the Registered Exchange Offer does not receive freely transferable Exchange Notes in exchange for tendered Notes or (vi) the Company so elects, then the following provisions shall apply: (a) The Company and each of the Guarantors shall use their commercially reasonable efforts to file as promptly as practicable (but in no event more than 45 days after so required or requested pursuant to this Section 2) with the Commission, and thereafter shall use their commercially reasonable efforts to cause to be declared effective, a shelf registration statement on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 3 of this Agreement) by the Holders thereof from time to time in accordance with the methods of distribution set forth in such registration statement (hereafter, a "Shelf Registration Statement" and, together with any ---------------------------- Exchange Offer Registration Statement, a "Registration Statement"); ---------------------- provided that no Holder (other than an Initial Purchaser) shall be entitled -------- to have the Notes held by it covered by such 6 Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder. (b) The Company and each of the Guarantors shall use their commercially reasonable efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part thereof to be used by Holders of Transfer Restricted Securities for a period ending on the earlier of (i) two years from the Issue Date or such shorter period that will terminate when all the Transfer Restricted Securities covered by the Shelf Registration Statement have been sold pursuant thereto and (ii) the date on which the Notes become eligible for resale without volume restrictions pursuant to Rule 144 under the Securities Act (in any such case, such period being called the "Shelf ----- Registration Period"). The Company and each of the Guarantors shall be deemed - ------------------- not to have used their commercially reasonable efforts to keep the Shelf Registration Statement effective during the requisite period if any of them voluntarily take any action that would result in Holders of Transfer Restricted Securities covered thereby not being able to offer and sell such Transfer Restricted Securities during that period, unless (i) such action is required by applicable law or (ii) such action is taken by the Company and each of the Guarantors in good faith and for valid business reasons (not including avoidance of their obligations hereunder), provided that the Company and each of the Guarantors within 90 days thereafter comply with the requirements of Section 4(k) hereof. Any such period during which the Company and each of the Guarantors fail to keep the Shelf Registration Statement effective and usable for offers and sales of Notes, Private Exchange Notes and Exchange Notes is referred to as a "Suspension Period". A Suspension Period shall commence on and include the ----------------- date the Company and each of the Guarantors give notice that the Shelf Registration Statement is no longer effective or the prospectus included therein is no longer usable for offers and sales of Notes, Private Exchange Notes and Exchange Notes and shall end on the date when each Holder of Notes, Private Exchange Notes and Exchange Notes covered by such Shelf Registration Statement either receives the copies of the supplemented or amended prospectus contemplated by Section 4(k) hereof or is advised in writing by the Company and the each of the Guarantors that use of the prospectus may be resumed. Not more than one Suspension Period shall be permitted in any period of 360 consecutive days. If one or more Suspension Periods occur, the two-year time period referenced above shall be extended by the number of days included in each such Suspension Period. (c) Notwithstanding any other provisions hereof, the Company and each of the Guarantors will ensure that (i) any Shelf Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations of the Commission thereunder, (ii) any Shelf Registration Statement and any amendment thereto (in either case, other than with respect to information included therein in reliance upon or in conformity with written information furnished to the Company by or on behalf of any Holder specifically for use therein (the "Holders' Information")) does not contain an untrue -------------------- statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the 7 statements therein not misleading and (iii) any prospectus forming part of any Shelf Registration Statement, and any supplement to such prospectus (in either case, other than with respect to Holders' Information), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 3. Liquidated Damages. (a) The parties hereto agree that the Holders of Transfer Restricted Securities will suffer damages if the Company and each of the Guarantors fails to fulfill their obligations under Section 1 or Section 2, as applicable, and that it would not be feasible to ascertain the extent of such damages. Accordingly, if (i) the applicable Registration Statement is not filed with the Commission on or prior to 90 days after the Issue Date, (ii) the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, is not declared effective within 210 days after the Issue Date (or in the case of a Shelf Registration Statement required to be filed in response to a change in applicable law or interpretations thereof by the Commission's staff, if later, within 45 days after publication of the change in law or interpretation), (iii) the Registered Exchange Offer is not consummated on or prior to 240 days after the Issue Date, or (iv) the Shelf Registration Statement is filed and declared effective within 210 days after the Issue Date (or in the case of a Shelf Registration Statement required to be filed in response to a change in applicable law or interpretations thereof by the Commission's staff, if later, within 45 days after publication of the change in law or interpretation) but shall thereafter cease to be effective (at any time that the Company is obligated to maintain the effectiveness thereof) without being succeeded within 45 days by an additional Registration Statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default"), the Company and each of the Guarantors will be jointly -------------------- and severally obligated to pay liquidated damages to each Holder of Transfer Restricted Securities, during the period of one or more such Registration Defaults, in an amount equal to $ 0.192 per week per $1,000 of principal amount of Transfer Restricted Securities held by such Holder until (i) the applicable Registration Statement is filed, (ii) the Exchange Offer Registration Statement is declared effective and the Registered Exchange Offer is consummated, (iii) the Shelf Registration Statement is declared effective or (iv) the Shelf Registration Statement again becomes effective, as the case may be. Following the cure of all Registration Defaults, the accrual of liquidated damages will cease. As used herein, the term "Transfer Restricted Securities" means (i) each ------------------------------ Note until the date on which such Note has been exchanged for a freely transferable Exchange Note in the Registered Exchange Offer, (ii) each Note or Private Exchange Note until the date on which it has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iii) each Note or Private Exchange Note until the date on which it is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act. Notwithstanding anything to the contrary in this Section 3(a), the Company and each of the Guarantors shall not be required to pay liquidated damages to a Holder of Transfer Restricted Securities if such Holder failed to comply with its obligations to make the representations set forth in the second to last paragraph of Section 1 or failed to provide the information required to be provided by it, if any, pursuant to Section 4(o). 8 (b) The Company shall notify the Trustee and the Paying Agent (as defined in the Indenture) under the Indenture within three business days of the happening of each and every Registration Default. The Company and each of the Guarantors shall pay the liquidated damages due on the Transfer Restricted Securities by depositing with the Paying Agent (which may not be the Company for these purposes), in trust, for the benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on the next interest payment date specified by the Indenture and the Notes, sums sufficient to pay the liquidated damages then due. The liquidated damages due shall be payable on each interest payment date specified by the Indenture and the Notes to the record holder entitled to receive the interest payment to be made on such date. Each obligation to pay liquidated damages shall be deemed to accrue from and including the date of the applicable Registration Default. (c) The parties hereto agree that the liquidated damages provided for in this Section 3 constitute a reasonable estimate of and are intended to constitute the sole damages that will be suffered by Holders of Transfer Restricted Securities by reason of the failure of (i) the Shelf Registration Statement or the Exchange Offer Registration Statement to be filed, (ii) the Shelf Registration Statement to remain effective or (iii) the Exchange Offer Registration Statement to be declared effective and the Registered Exchange Offer to be consummated, in each case to the extent required by this Agreement. 4. Registration Procedures. In connection with any Registration Statement, the following provisions shall apply: (a) The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and shall, in its reasonable judgment, reflect in each such document, when so filed with the Commission, such comments as any Initial Purchaser may reasonably propose; (ii) include information substantially to the effect set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement, and include information substantially to the effect set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; and (iii) if requested by any Initial Purchaser, include the information required by Item 507 or 508 of Regulation S-K, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement. (b) The Company shall advise each Initial Purchaser, each Exchanging Dealer and the Holders (if applicable) and, if requested by any such person, confirm such advice in writing (which advice pursuant to clause (ii) through (v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made): 9 (i) when any Registration Statement and any amendment thereto has been filed with the Commission and when such Registration Statement or any post- effective amendment thereto has become effective; (ii) of any request by the Commission for amendments or supplements to any Registration Statement or the prospectus included therein or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes, the Exchange Notes or the Private Exchange Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (v) of the happening of any event that requires the making of any changes so that the Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or any prospectus forming part of any Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) If any event contemplated by clauses (ii) through (v) of Section 4(b) of this Agreement occurs during the period for which the Company and each of the Guarantors are required to maintain an effective Registration Statement, the Company and each of the Guarantors will as promptly as is practicable prepare and file with the Commission a post-effective amendment to the Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Notes, Exchange Notes or Private Exchange Notes from a Holder, the prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) The Company and each of the Guarantors will use all commercially reasonable efforts to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of any Registration Statement. (e) The Company will furnish to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, one 10 conformed copy of such Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any such Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference) and as many conformed copies of such Registration Statement as such Holder reasonably requests. (f) The Company will, during the Shelf Registration Period, promptly deliver to each Holder of Transfer Restricted Securities included within the coverage of any Shelf Registration Statement, without charge, as many copies of the prospectus (including each preliminary prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company and each of the Guarantors consent to the use of such prospectus or any amendment or supplement thereto by each of the selling Holders of Transfer Restricted Securities in connection with the lawful offer and sale of the Transfer Restricted Securities covered by such prospectus or any amendment or supplement thereto. (g) The Company will furnish to each Initial Purchaser and each Exchanging Dealer, and to any other Holder who so requests, without charge, one conformed copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any Initial Purchaser or Exchanging Dealer or any such Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference) and as many conformed copies of such Exchange Offer Registration Statement as such Holder reasonably requests. (h) The Company will, during the Exchange Offer Registration Period or the Shelf Registration Period, as applicable, promptly deliver to each Initial Purchaser, each Exchanging Dealer and such other persons that are required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement or the Shelf Registration Statement and any amendment or supplement thereto as such Initial Purchaser, Exchanging Dealer or other persons may reasonably request; and the Company and each of the Guarantors consent to the use of such prospectus or any amendment or supplement thereto by any such Initial Purchaser, Exchanging Dealer or other persons, as applicable, in connection with any lawful offer or sale covered by such prospectus or any amendment or supplement thereto, as aforesaid. (i) Prior to the effective date of any Registration Statement, the Company and each of the Guarantors will use commercially reasonable efforts to register or qualify, or cooperate with the Holders of Notes, Exchange Notes or Private Exchange Notes included therein and their respective counsel in connection with the registration or qualification of, such Notes, Exchange Notes or Private Exchange Notes for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Notes, Exchange Notes or Private Exchange Notes covered by such Registration 11 Statement; provided that the Company and each of the Guarantors will not be -------- required to qualify generally to do business in any jurisdiction where they are not then so qualified or to take any action which would subject them to general service of process or to taxation in any such jurisdiction where they are not then so subject. (j) The Company and each of the Guarantors will reasonably cooperate with the Holders of Notes, Exchange Notes or Private Exchange Notes to facilitate the timely preparation and delivery of certificates representing Notes, Exchange Notes or Private Exchange Notes to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing prior to sales of Notes, Exchange Notes or Private Exchange Notes pursuant to such Registration Statement. (k) If any event contemplated by Section 4(b)(ii) through (v) occurs during the period for which the Company and each of the Guarantors are required to maintain an effective Registration Statement, the Company and each of the Guarantors will as promptly as is practicable prepare and file with the Commission a post-effective amendment to the Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Notes, Exchange Notes or Private Exchange Notes from a Holder, the prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (l) Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for each of the Notes, the Exchange Notes and the Private Exchange Notes, as the case may be, and provide the applicable trustee with printed certificates for the Notes, the Exchange Notes or the Private Exchange Notes, as the case may be, in a form eligible for deposit with The Depository Trust Company. (m) The Company and each of the Guarantors will comply with all applicable rules and regulations of the Commission and the Company will make generally available to its security holders as soon as practicable after the effective date of the applicable Registration Statement an earning statement satisfying the provisions of Section 11(a) of the Securities Act; provided that in no event -------- shall such earning statement be delivered later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the applicable Registration Statement, which statement shall cover such 12-month period. (n) The Company and each of the Guarantors will cause the Indenture or the Exchange Notes Indenture, as the case may be, to be qualified under the Trust Indenture Act as required by applicable law in a timely manner. 12 (o) The Company may require each Holder of Transfer Restricted Securities to be registered pursuant to any Shelf Registration Statement to furnish to the Company such information concerning the Holder and the distribution of such Transfer Restricted Securities as the Company may from time to time reasonably require for inclusion in such Shelf Registration Statement, and the Company may exclude from such registration the Transfer Restricted Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request. (p) In the case of a Shelf Registration Statement, each Holder of Transfer Restricted Securities to be registered pursuant thereto agrees by acquisition of such Transfer Restricted Securities that, upon receipt of any notice from the Company pursuant to Section 4(b)(ii) through (v), such Holder will discontinue disposition of such Transfer Restricted Securities until such Holder's receipt of copies of the supplemental or amended prospectus contemplated by Section 4(k) or until advised in writing (the "Advice") by the Company that the use of the applicable prospectus may be ------ resumed. If the Company shall give any notice under Section 4(b)(ii) through (v) during the period that the Company is required to maintain an effective Registration Statement (the "Effectiveness Period"), such -------------------- Effectiveness Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each seller of Transfer Restricted Securities covered by such Registration Statement shall have received (x) the copies of the supplemental or amended prospectus contemplated by Section 4(k) (if an amended or supplemental prospectus is required) or (y) the Advice (if no amended or supplemental prospectus is required). (q) In the case of a Shelf Registration Statement, the Company and each of the Guarantors shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form and reasonably acceptable to the Company) and take all such other action, if any, as Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold or the managing underwriters (if any) shall reasonably request in order to facilitate any disposition of Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration Statement. (r) In the case of a Shelf Registration Statement, the Company shall (i) make reasonably available for inspection by a representative of, and Special Counsel (as defined below) acting for, Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold and any underwriter participating in any disposition of Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries and (ii) use its commercially reasonable efforts to have its officers, directors, employees, accountants and counsel supply all relevant information reasonably requested by such representative, Special Counsel or any such underwriter (an "Inspector") in connection with such --------- Shelf Registration Statement. 13 (s) In the case of a Shelf Registration Statement, the Company shall, if requested by Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold, their Special Counsel or the managing underwriters (if any) in connection with such Shelf Registration Statement, use its commercially reasonable efforts to cause (i) its counsel to deliver an opinion relating to the Shelf Registration Statement and the Notes, Exchange Notes or Private Exchange Notes, as applicable, substantially in the form delivered by counsel for the Company in connection with the issuance and sale of the Notes, (ii) its officers to execute and deliver all customary documents and certificates requested by Holders of a majority in aggregate principal amount of the Notes, Exchange Notes and Private Exchange Notes being sold, their Special Counsel or the managing underwriters (if any) and (iii) its independent public accountants to provide a comfort letter or letters in customary form, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72. 5. Registration Expenses. The Company and each of the Guarantors will jointly and severally bear all expenses incurred in connection with the performance of their obligations under Sections 1, 2, 3 and 4 and the Company will reimburse the Initial Purchasers and the Holders for the reasonable fees and disbursements of Cravath, Swaine & Moore (in addition to any local counsel) unless otherwise instructed by the Holders of a majority in aggregate principal amount of the Notes, the Exchange Notes and the Private Exchange Notes to be sold pursuant to each Registration Statement (the "Special Counsel") acting for --------------- the Initial Purchasers or Holders in connection therewith. 6. [Intentionally omitted] 7. Indemnification. (a) In the event of a Shelf Registration Statement or in connection with any prospectus delivery pursuant to an Exchange Offer Registration Statement by an Initial Purchaser or Exchanging Dealer, as applicable, the Company and each of the Guarantors shall jointly and severally indemnify and hold harmless each Holder (including, without limitation, any such Initial Purchaser or Exchanging Dealer, its affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls such Holder within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 7 and Section 8 as a Holder) from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of Notes, Exchange Notes or Private Exchange Notes), to which that Holder may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Holder promptly upon demand for 14 any legal or other expenses reasonably incurred by that Holder in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and -------- ------- each of the Guarantors shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, an untrue statement or alleged untrue statement in, or omission or alleged omission from, any of such documents in reliance upon and in conformity with any Holders' Information; and provided, further that with respect to any such untrue -------- ------- statement in or omission from any related preliminary prospectus, the indemnity agreement contained in this Section 7(a) shall not inure to the benefit of any Holder from whom the person asserting any such loss, claim, damage, liability or action received Notes, Exchange Notes or Private Exchange Notes to the extent that such loss, claim, damage, liability or action of or with respect to such Holder results from the fact that both (1) a copy of the final prospectus was not sent or given to such person at or prior to the written confirmation of the sale of such Notes, Exchange Notes or Private Exchange Notes to such person and (2) the untrue statement in or omission from the related preliminary prospectus was corrected in the final prospectus unless, in either case, such failure to deliver the final prospectus was a result of non-compliance by the Company with Sections 4(e), 4(f), 4(g) or 4(h), as applicable. (b) In the event of a Shelf Registration Statement, each Holder shall indemnify and hold harmless the Company, its affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively referred to for purposes of this Section 7(b) and Section 8 as the Company), from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Securities Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any Holders' Information furnished to the Company by such Holder, and shall reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that no such Holder -------- ------- shall be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Notes, Exchange Notes or Private Exchange Notes pursuant to such Shelf Registration Statement or prospectus. (c) Promptly after receipt by an indemnified party under this Section 7 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect 15 thereof is to be made against the indemnifying party pursuant to Section 7(a) or 7(b), notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying -------- ------- party shall not relieve it from any liability which it may have under this Section 7 except to the extent that it has been prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, -------- further, that the failure to notify the indemnifying party shall not relieve it - ------- from any liability which it may have to an indemnified party otherwise than under this Section 7. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than the reasonable costs of investigation; provided, however, that an indemnified party -------- ------- shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (ii) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (iv) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections 7(a) and 7(b) of this Agreement, shall use all commercially reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an 16 unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. 8. Contribution. If the indemnification provided for in Section 7 of this Agreement is unavailable or insufficient to hold harmless an indemnified party under Section 7(a) or 7(b) of this Agreement, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company and each of the Guarantors from the initial offering and sale of the Notes, on the one hand, and by a Holder from receiving Notes, Exchange Notes or Private Exchange Notes, as applicable, registered under the Securities Act, on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and each of the Guarantors, on the one hand, and such Holder, on the other, with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to the Company and each of the Guarantors or information supplied by the Company and each of the Guarantors, on the one hand, or to any Holders' Information supplied by such Holder, on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 8 were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 8 shall be deemed to include, for purposes of this Section 8, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or claim. Notwithstanding the provisions of this Section 8, an indemnifying party that is a Holder of Notes, Exchange Notes or Private Exchange Notes shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes, Exchange Notes or Private Exchange Notes sold by such indemnifying party to any purchaser exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 9. Rules 144 and 144A. The Company shall use its commercially reasonable efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the written request of any Holder of Transfer Restricted Securities, make publicly available other information so long as necessary to permit sales of such Holder's securities pursuant to Rules 144 and 144A. The Company and each of the Guarantors covenant that they will take such further action as any 17 Holder of Transfer Restricted Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Transfer Restricted Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including, without limitation, the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of Transfer Restricted Securities, the Company and each of the Guarantors shall deliver to such Holder a written statement as to whether they have complied with such requirements. Notwithstanding the foregoing, nothing in this Section 9 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 10. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities included in such offering, subject to the consent of the Company (which shall not be unreasonably withheld or delayed), and such Holders shall be responsible for all underwriting commissions and discounts in connection therewith. No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 11. Miscellaneous. (a) Amendments and Waivers. No failure or delay by the Company, each of the Guarantors, any Holder in exercising any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or amendment or discontinuance of steps to enforce any such right preclude any other or further exercise thereof or the exercise of any other right. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the Company has obtained the written consent of Holders of a majority in aggregate principal amount of the Notes, the Exchange Notes and the Private Exchange Notes, taken as a single class. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Notes, Exchange Notes or Private Exchange Notes are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal amount of the Notes, the Exchange Notes and the Private Exchange Notes being sold by such Holders pursuant to such Registration Statement. (b) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier or air courier guaranteeing next-day delivery: 18 (i) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section 11(b), which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to Salomon Smith Barney Inc., Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banc of America Securities LLC and TD Securities (USA) Inc.; (ii) if to an Initial Purchaser, initially at its address set forth in the Purchase Agreement; and (iii) if to the Company, initially at the address of the Company set forth in the Purchase Agreement. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business day after being delivered to a next-day air courier; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient's telecopier machine, if sent by telecopier. (c) Successors and Assigns. This Agreement shall be binding upon the Company and its successors and assigns. (d) Counterparts. This Agreement may be executed in any number of counterparts (which may be delivered in original form or by telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original, and all of which taken together shall constitute one and the same agreement. (e) Definition of Terms. For purposes of this Agreement, (i) the term "business day" means any day on which the New York Stock Exchange, Inc. is open for trading, (ii) the term "subsidiary" has the meaning set forth in Rule 405 under the Securities Act and (iii) except where otherwise expressly provided, the term "affiliate" has the meaning set forth in Rule 405 under the Securities Act. (f) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (h) Remedies. In the event of a breach by the Company, any Guarantor or any Holder of any of their obligations under this Agreement, each Holder, the Company or each Guarantor, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages (other than the recovery of damages for a breach by the Company or any Guarantor of 19 its obligations under Sections 1 or 2 hereof for which liquidated damages have been paid pursuant to Section 3 hereof), will be entitled to specific performance of its rights under this Agreement. The Company, each of the Guarantors and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by each such person of any of the provisions of this Agreement and hereby further agree that, in the event of any action for specific performance in respect of such breach, each such person shall waive the defense that a remedy at law would be adequate. (i) No Inconsistent Agreements. Each of the Company and the Guarantors represents, warrants and agrees that (i) it has not entered into, and shall not, on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof, (ii) it has not previously entered into any agreement which remains in effect granting any registration rights with respect to any of its debt securities to any person and (iii) (with respect to the Company) without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount of the then outstanding Transfer Restricted Securities, it shall not grant to any person the right to request the Company to register any debt securities of the Company under the Securities Act unless the rights so granted are not in conflict or inconsistent with the provisions of this Agreement. (j) No Piggyback on Registrations. Neither the Company nor any of its security holders (other than the Holders of Transfer Restricted Securities in such capacity) shall have the right to include any securities of the Company in any Shelf Registration or Registered Exchange Offer other than Transfer Restricted Securities. (k) Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. Please confirm that the foregoing correctly sets forth the agreement among the Company, each of the Guarantors and the Initial Purchasers. Very truly yours, TRITEL PCS, INC., by by ___________________________ Name: Title: TRITEL, INC., by by ___________________________ Name: Title: TRITEL COMMUNICATIONS, INC., by ___________________________ Name: Title: TRITEL FINANCE, INC., by by ___________________________ Name: Title: Accepted: SALOMON SMITH BARNEY INC., by ___________________________ Name: Title: LEHMAN BROTHERS INC., by ___________________________ Name: Title: ANNEX A Each broker-dealer that receives Exchange Notes for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the expiration of the Exchange Offer, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution". ANNEX B Each broker-dealer that receives Exchange Notes for its own account in exchange for Notes, where such Notes were acquired by such broker-dealer as a result of market- making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. See "Plan of Distribution". ANNEX C PLAN OF DISTRIBUTION Each broker-dealer that receives Exchange Notes for its own account pursuant to the Registered Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Notes where such Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the expiration of the Exchange Offer, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale. In addition, until [ ], all dealers effecting transactions in the Exchange Notes may be required to deliver a prospectus. The Company will not receive any proceeds from any sale of Exchange Notes by broker-dealers. Exchange Notes received by broker-dealers for their own account pursuant to the Registered Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or at negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Notes. Any broker-dealer that resells Exchange Notes that were received by it for its own account pursuant to the Registered Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Notes and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration of the Exchange Offer the Company will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Registered Exchange Offer (including the expenses of one counsel for the Holders of the Notes) other than commissions or concessions of any broker-dealers and will indemnify the Holders of the Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. ANNEX D [_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: Address: If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. EXHIBIT B Tritel PCS, Inc. Subsidiaries* ----------------------------- ---------------------------------------------------------------------------- Subsidiary State of Formation ---------------------------------------------------------------------------- Tritel Communications, Inc. DE ---------------------------------------------------------------------------- Tritel Finance, Inc. DE ---------------------------------------------------------------------------- Tritel C/F Holding Corp. DE ---------------------------------------------------------------------------- Tritel A/B Holding Corp. DE ---------------------------------------------------------------------------- NexCom, Inc. DE ---------------------------------------------------------------------------- ClearCall, Inc. DE ---------------------------------------------------------------------------- Global PCS, Inc. DE ---------------------------------------------------------------------------- ClearWave, Inc. DE ---------------------------------------------------------------------------- DigiNet PCS, Inc. DE ---------------------------------------------------------------------------- Tritel License - Alabama, Inc. DE ---------------------------------------------------------------------------- AirCom PCS, Inc. AL ---------------------------------------------------------------------------- QuinCom, Inc. AL ---------------------------------------------------------------------------- DigiCom, Inc. DE ---------------------------------------------------------------------------- DigiCall, Inc. DE ---------------------------------------------------------------------------- Tritel License -- Florida, Inc. DE ---------------------------------------------------------------------------- Tritel License -- Georgia, Inc. DE ---------------------------------------------------------------------------- _____________________ *The Company is the only subsidiary of Tritel, Inc. EXHIBIT C Description of the Company's Capital Stock The Company has issued an outstanding 1,000 shares of common stock, par value $0.01, all of which are held by Tritel, Inc. EXHIBIT D FCC Licenses A. AirCom PCS, Inc. --------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz --------------------------------------------------------------------------- KNLF457 Montgomery, AL BTA305 C 15 --------------------------------------------------------------------------- KNLF604 Anniston, AL BTA017 C 15 --------------------------------------------------------------------------- KNLF605 Birmingham, AL BTA044 C 15 --------------------------------------------------------------------------- KNLF606 Decatur, AL BTA108 C 15 --------------------------------------------------------------------------- KNLF607 Gadsden, AL BTA158 C 15 --------------------------------------------------------------------------- KNLF608 Huntsville, AL BTA198 C 15 --------------------------------------------------------------------------- KNLF609 Tuscaloosa, AL BTA450 C 15 --------------------------------------------------------------------------- B. DigiCall, Inc. --------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz --------------------------------------------------------------------------- KNLG908 Biloxi, MS BTA042 F 10 --------------------------------------------------------------------------- KNLG918 Hattiesburg, MS BTA186 F 10 --------------------------------------------------------------------------- KNLG922 Laurel, MS BTA246 E 10 --------------------------------------------------------------------------- KNLG925 McComb-Brookhaven, MS BTA269 F 10 --------------------------------------------------------------------------- C. DigiCom, Inc. --------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz --------------------------------------------------------------------------- KNLG909 Bowling Green-Glasgow, KY BTA052 F 10 --------------------------------------------------------------------------- KNLG923 Louisville, KY BTA263 F 10 --------------------------------------------------------------------------- D. QuinCom, Inc. --------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz --------------------------------------------------------------------------- KNLG912 Dothan-Enterprise, AL BTA115 F 10 --------------------------------------------------------------------------- KNLG914 Florence, AL BTA146 F 10 --------------------------------------------------------------------------- KNLG927 Mobile, AL BTA302 F 10 --------------------------------------------------------------------------- KNLG928 Montgomery, AL BTA305 F 10 --------------------------------------------------------------------------- KNLG933 Selma, AL BTA415 F 10 --------------------------------------------------------------------------- 2 E. Tritel License-Alabama, Inc. --------------------------------------------------------------------------- Call Sign BTA Name BTA No. BLK MHz --------------------------------------------------------------------------- KNLG288 Birmingham, AL BTA044 D 10 --------------------------------------------------------------------------- KNLG350 Tuscaloosa, AL BTA450 D 10 --------------------------------------------------------------------------- F. ClearCall, Inc. ------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ------------------------------------------------------------------------- WPOI258 Knoxville MTA044 A 20 1 ------------------------------------------------------------------------- G. ClearWave, Inc. ------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ------------------------------------------------------------------------- WPOI257 Memphis-Jackson MTA028 B 20 2 ------------------------------------------------------------------------- H. DigiNet PCS, Inc. ------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ------------------------------------------------------------------------- WPOI256 Nashville MTA043 B 20 3 ------------------------------------------------------------------------- I. Global PCS, Inc. ------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ------------------------------------------------------------------------- WPOI255 Louisville-Lexington- MTA026 A 20 4 Evansville ------------------------------------------------------------------------- J. NexCom, Inc. ------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ------------------------------------------------------------------------- WPOI259 Atlanta MTA011 A 20 5 ------------------------------------------------------------------------- Notes: 3 1. Geographic partition of the Knoxville MTA (MTA044) consisting only of the BTA of Knoxville, TN (BTA232). 2. Geographic partition of the Memphis-Jackson MTA (MTA028) consisting only of the BTAs of Columbus-Starkville, MS (BTA094); Greenville-Greenwood, MS (BTA175); Jackson, MS (BTA210); Meridian, MS (BTA292); Natchez, MS (BTA315); Tupelo- Corinth, MS (BTA449); Vicksburg, MS (BTA455); and, the county of Montgomery, MS in the Memphis, MS BTA (BTA290). 3. Geographic partition of the Nashville MTA (MTA043) consisting only of the BTAs of Clarksville, TN-Hopkinsville, KY (BTA083); Cookeville, TN (BTA096); and Nashville, TN (BTA314). 4. Geographic partition of the Louisville-Lexington-Evansville MTA (MTA026) consisting only of the BTAs of Bowling Green-Glasgow, KY (BTA052); Corbin, KY (BTA098); Lexington, KY (BTA252); Louisville, KY (BTA263); Madisonville, KY (BTA273); Owensboro, KY (BTA338); and Somerset, KY (BTA423). 4. Geographic partition of the Atlanta MTA (MTA011) consisting only of the BTAs of Chattanooga, TN (BTA076); Cleveland, TN (BTA085); Dalton, GA (BTA102); La Grange, GA (BTA237); Opelika-Auburn, AL (BTA334); Rome, GA (BTA384); and, the counties of Carroll, GA and Haralson, GA in the Atlanta, GA (BTA024). EXHIBIT E Based upon and subject to the foregoing, Cadwalader, Wickersham & Taft is of the opinion that: 1. Each of the Transaction Documents has been duly authorized, executed and delivered by the Company and each of the Guarantors. 2. Each of the Exchange and Registration Rights Agreement and the Indenture constitutes a legal, valid and binding agreement of the Company and each of the Guarantors, enforceable against the Company and each of the Guarantors in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to or affecting creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), except that the enforcement of rights with respect to indemnification and contribution obligations may be limited by applicable law or considerations of public policy. 3. The Notes have been duly authorized and executed by the Company and, when the Notes have been duly authenticated and delivered by the Trustee in the manner contemplated in the Indenture and paid for by the Initial Purchasers pursuant to the Purchase Agreement, the Notes will be legal, valid and binding obligations of the Company, as issuer, and each of the Guarantors, as guarantors, enforceable against the Company, as issuer, and each of the Guarantors, as guarantors, in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to creditors' rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity), and will be validly issued and outstanding and entitled to the benefits provided by the Indenture. 4. The Indenture conforms in all material respects with the requirements of the Trust Indenture Act and the rules and regulations of the Securities and Exchange Commission applicable to an indenture which is qualified thereunder. 5. Assuming (a) the accuracy as to factual matters of the representations and warranties in the Purchase Agreement and (b) compliance with the terms and provisions of the Indenture and the Purchase Agreement, in each case, by the Company, each of the Guarantors and the Initial Purchasers, as applicable, it is not necessary in connection with the offer, issuance and sale of the Notes by the Company to the Initial Purchasers or the offer, resale and delivery by the Initial Purchasers to the purchasers of the Notes from the Initial Purchasers under the circumstances contemplated by the Indenture and the Purchase Agreement to 2 qualify the Indenture under the Trust Indenture Act of 1939, as amended, or to register the Notes under the Securities Act of 1933, as amended. 6. Neither Tritel, Inc., the Company nor any of the Company's subsidiaries is, or immediately after the sale of the Notes and the application of the proceeds from such same (as described in the Offering Memorandum under the caption "Use of Proceeds") will be, an "investment company" or a company "controlled by" an investment company within the meaning of the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules and regulations ---------------------- of the Securities and Exchange Commission thereunder, without taking account of any exemption under the Investment Company Act arising out of the numbers of holders of the Company's securities. Neither Tritel, Inc., the Company nor any of the Company's subsidiaries is a "holding company" or a "subsidiary company" of a holding company or its "affiliate" within the meaning of the Public Utility Holding Company Act of 1935, as amended. 7. Neither the consummation of the transactions contemplated by the Purchase Agreement, nor the sale, issuance, execution or delivery of the Notes, will violate Regulation T, U or X of the Board of Governors of the Federal Reserve System. 8. The statements in the Offering Memorandum under the headings "Description of the Notes" and "Exchange and Registration Rights Agreement", insofar as such statements relate to statements of law or draw legal conclusions, fairly summarize the information called for with respect to such legal matters, and insofar as such statements describe the Notes, the Indenture, the Purchase Agreement and the Exchange and Registration Rights Agreement, such documents and instruments conform in all material respects to their description in the Offering Memorandum, subject to the qualification that such summaries are inherently incomplete descriptions of complex statutes, regulations and documents. 9. The statements in the Offering Memorandum under the heading "Certain U.S. Federal Tax Considerations," insofar as such statements relate to statements of law or regulations or draw legal conclusions, have been reviewed by us and fairly summarize the matters described under such heading. 10. To our knowledge, there is no legal or governmental action, investigation or proceeding pending or threatened against the Company or any of the Guarantors (a) asserting the invalidity of the Transaction Documents or the Notes or (b) seeking to prevent the issuance of the Notes or the consummation of any of the transactions provided for in the Transaction Documents, or (c) which would materially and adversely affect the ability of the Company or any of the Guarantors to perform its obligations under, or the validity or enforceability of, the Transaction Documents or the Notes. For purposes of the opinion set forth in 3 this paragraph, we have not regarded any legal or governmental actions, investigations or proceedings to be "threatened" unless the potential litigant or Governmental Authority has communicated in writing to the Company or any of the Guarantors a present intention to initiate such actions, investigations or proceedings against the Company. 11. The issuance and sale by the Company of the Notes to the Initial Purchasers pursuant to the Purchase Agreement, the compliance by the Company and each of the Guarantors with the provisions of the Transaction Documents, and the consummation by the Company and each of the Guarantors of the transactions therein contemplated (a) do not require any Governmental Approval to be obtained on the part of the Company or the Guarantors, as applicable, except those that may be required under state securities or blue sky laws and such other approvals that have been obtained and, to our knowledge, are in effect, (b) do not result in a violation of any provision of the certificate of incorporation or bylaws of the Company or the Guarantors or any Applicable Laws applicable to the Company or the Guarantors, and (c) do not breach or result in a violation of, or default under, (i) the Indenture relating to the 12 3/4% Senior Subordinated Discount Notes due 2009, or the TeleCorp PCS Stockholders' Agreement, or (ii) any judgment, decree or order known to us which is applicable to the Company and, pursuant to any Applicable Laws, is issued by any Governmental Authority having jurisdiction over the Company or the Guarantors or their properties. As used herein, the terms "Applicable Laws" shall mean those laws, rules and --------------- regulations of the State of New York and of the United States of America which, in our experience, are normally applicable to transactions of the type contemplated by the Transaction Documents. The term "Governmental Authorities" ------------------------ means executive, legislative, judicial, administrative or regulatory bodies of the State of New York or the United States of America. The term "Governmental ------------ Approval" means any consent, approval, license, authorization or validation of, - -------- or filing, recording or registration with, any Governmental Authority pursuant to Applicable Laws. EXHIBIT F Based upon the foregoing, and subject to the qualifications set forth herein, James H. Neeld, IV, general counsel to the Company, is of the opinion that: 1. The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware, is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of property or conduct of business, as certified by the Company, requires such qualification, and has all corporate power and authority necessary to own or hold its properties and to conduct its business in which it is engaged (except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a Material Adverse Effect). 2. Each of the Guarantors has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware, is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or leasing of property or conduct of business, as certified by each of the Guarantors, requires such qualification, and has all corporate power and authority necessary to own or hold its properties and to conduct its business in which it is engaged (except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a Material Adverse Effect). 3. The Company and each of the Guarantors have the corporate power and authority to execute and deliver each of the Transaction Documents to which they are a party and to perform their respective obligations thereunder; and all corporate action required to be taken for the due and proper authorization, execution and delivery of each of the Transaction Documents and the consummation of the transactions contemplated thereby have been duly and validly taken. 4. Each of the Reviewed Agreements described in the Offering Memorandum conform in all material respects to the description thereof contained in the Offering Memorandum, and, to my knowledge, do not differ in any material respect from the descriptions thereof contained in the Offering Memorandum. 5. The execution, delivery and performance by the Company and each of the Guarantors of each of the Transaction Documents to which each is a party, the issuance, authentication, sale and delivery of the Notes and compliance by the Company and each of the Guarantors with the terms thereof and the consummation of the transactions contemplated by the Transaction Documents will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of Tritel, Inc., the 2 Company or any of the Company's subsidiaries pursuant to any Reviewed Agreement, or, to my knowledge, any other material indenture, mortgage, deed of trust, loan agreement or any other agreement or instrument to which Tritel, Inc., the Company or any of the Company's subsidiaries is a party or to which assets of Tritel, Inc., the Company or any of the Company's subsidiaries is subject. 6. To my knowledge, neither Tritel, Inc., the Company nor any of the Company's subsidiaries is (a) in violation of its charter or by-laws, or (b) in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default by Tritel, Inc., the Company or any subsidiary of the Company, in the due performance or observance of any term, covenant or condition contained in any Reviewed Agreement. 7. To my knowledge, except as set forth in the Offering Documents, there are no pending actions or suits or judicial, arbitral, rulemaking, administrative or other proceedings to which Tritel, Inc., the Company or any of the Company's subsidiaries is a party or of which any property or assets of Tritel, Inc., the Company or any of the Company's subsidiaries is the subject which (a) singularly or in the aggregate, if determined adversely to Tritel, Inc., the Company or any of the Company's subsidiaries, could reasonably be expected to have a Material Adverse Effect. 3 REVIEWED AGREEMENTS 1. Network Membership License Agreement, dated as of 7, 1999, January between Tritel, Inc. and AT&T. 2. Intercarrier Roamer Service Agreement dated January 7, 1999, with AT&T Wireless Services and several of its affiliates. 3. Roaming Administrative Service Agreement dated as of January 7, 1999, between AT&T Wireless Services and Tritel. 4. Long Distance Agreement dated as of January 7, 1999, as amended. 5. Operating Agreement of Affiliate License Co., LLC dated April 16, 1999, among TeleCorp Wireless, Triton and Tritel Communications. 6. Amended and Restated Agreement dated April 16, 1999, by and among TeleCorp Communications, Triton PCS, Tritel Communications and Affiliate License Co. LLC. 7. Network Membership License Agreement dated January 7, 1999, by and between AT&T Corp. and Tritel, Inc. 8. ALLTEL Put and Call Agreement dated on October 20, 2000, between AT&T Wireless Services and Tritel, Inc., includes push down to Tritel License -Alabama, Inc. 9. ALLTEL Asset Purchase Agreement dated October 23, 2000, between ALLTEL Communications and Tritel, Inc. 10. License Acquisition Agreement dated as of December 11, 2000 between ABC Wireless and Tritel Holding Corp. 11. License Acquisition Agreement dated October 27, 2000, with Panther Wireless and Tritel License-Florida, Inc. and Tritel License-Georgia. 12. Assignment and Assumption Agreement dated January 11, 2001, between Panther Wireless to Meriwether Communications. 13. Senior Credit Facility dated as of March 31, 1999, with Tritel, Inc., Toronto Dominion (Texas), Inc. and lenders, includes Revolver, Term Loan A and Term Loan B, as amended. EXHIBIT G Based on the foregoing, and subject to the assumptions, qualifications and exceptions contained herein, it is Wiley, Rein & Fielding's opinion that: 1. AirCom holds the FCC broadband Personal Communications Service ("PCS") licenses described in Exhibit I.A, attached hereto (the "AirCom ----------- Licenses"). To our knowledge, each of the AirCom Licenses is in full force and effect. The AirCom Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the AirCom Licenses, subject to the terms and conditions of the respective AirCom Licenses and the Communications Laws. 2. DigiCall holds the FCC broadband PCS licenses described in Exhibit ------- I.B, attached hereto (the "DigiCall Licenses"). To our knowledge, each --- of the DigiCall Licenses is in full force and effect. The DigiCall Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the DigiCall Licenses, subject to the terms and conditions of the respective DigiCall Licenses and the Communications Laws. 3. DigiCom holds the FCC broadband PCS licenses described in Exhibit I.C, ----------- attached hereto (the "DigiCom Licenses"). To our knowledge, each of the DigiCom Licenses is in full force and effect. The DigiCom Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the DigiCom Licenses, subject to the terms and conditions of the respective DigiCom Licenses and the Communications Laws. 4. QuinCom holds attached hereto the FCC broadband PCS licenses described in Exhibit I.D (the "QuinCom Licenses"). To our knowledge, each of the ----------- QuinCom Licenses is in full force and effect. The QuinCom Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the QuinCom Licenses, subject to the terms and conditions of the respective QuinCom Licenses and the Communications Laws. 5. T-AL holds the FCC broadband PCS licenses described in Exhibit I.E ----------- attached hereto (the "T-AL Licenses"). To our knowledge, each of the T-AL Licenses is in full force and effect. The T-AL Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the T-AL Licenses, subject to the terms and conditions of the respective T-AL Licenses and the Communications Laws. 2 6. ClearCall holds the FCC broadband PCS licenses described in Exhibit I. --------- F, (the "ClearCall Licenses"). To our knowledge, each of I.F, the - attached hereto ClearCall Licenses is in full force and effect. The ClearCall Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the ClearCall Licenses, subject to the terms and conditions of the respective ClearCall Licenses and the Communications Laws. 7. ClearWave holds the FCC broadband PCS licenses described in Exhibit ------- I.G, attached hereto (the "ClearWave Licenses"). To our knowledge, --- each of the ClearWave Licenses is in full force and effect. The ClearWave Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the ClearWave Licenses, subject to the terms and conditions of the respective ClearWave Licenses and the Communications Laws. 8. DigiNet holds the FCC broadband PCS licenses described in Exhibit I.A, ----------- attached hereto (the "DigiNet Licenses"). To our knowledge, each of the DigiNet Licenses is in full force and effect. The DigiNet Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the DigiNet Licenses, subject to the terms and conditions of the respective DigiNet Licenses and the Communications Laws. 9. Global holds the FCC broadband PCS licenses described in Exhibit I.A, ----------- attached hereto (the "Global Licenses"). To our knowledge, each of the Global Licenses is in full force and effect. The Global Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the Global Licenses, subject to the terms and conditions of the respective Global Licenses and the Communications Laws. 10. NexCom holds the FCC broadband PCS licenses described in Exhibit I.A, ----------- attached hereto (the "NexCom Licenses" and, together with the AirCom Licenses, DigiCall Licenses, the DigiCom Licenses, QuinCom Licenses, T-AL Licenses, ClearCall License, ClearWave License, DigiNet Licenses, and Global Licenses, the "FCC Licenses"). To our knowledge, each of the NexCom Licenses is in full force and effect. The NexCom Licenses provide FCC authorization to construct and operate a PCS network in the respective markets designated in the NexCom Licenses, subject to the terms and conditions of the respective NexCom Licenses and the Communications Laws. 11. To our knowledge, except for those affecting the industry generally and those disclosed in Exhibit II, there are no proceedings pending or threatened in writing under the Communications Laws against the Company, the Tritel License Subsidiaries, or the FCC Licenses by or before the FCC which seek the 3 revocation, non-renewal, or material adverse modification of any of the FCC Licenses or the rights thereunder. 12. The statements in the Offering Memorandum under the headings "Risk Factors--Risks Relating to Regulatory Matters" and "Business-- Government Regulation" insofar as they constitute summaries of the Communications Laws are accurate in all material respects. The statements in the Offering Memorandum under the heading "Business-- Legal Proceedings--High Plains" insofar as they constitute summaries of the Court of Appeals proceeding are accurate in all material respects. 13. The execution and delivery by the Company of the Agreement and the issuance by the Company of the securities as described in the Agreement and pursuant to the Agreement does not constitute a violation by the Company of the Communications Laws assuming that, in connection therewith: (i) no individual or entity will acquire an attributable interest (as defined by the FCC) in the Company, or in the Tritel Licensee Subsidiaries that violates the Communications Laws; (ii) not more than 25% of the capital stock of the Company, or the Tritel Licensee Subsidiaries will be owned by alien individuals or entities, or representatives thereof; and (iii) that AirCom, DigiCom, DigiCall, QuinCom, and T-AL continue to meet the requirements for "entrepreneurial" status under Section 24.709 and 24.720(b) of the Commission's Rules, 47 C.F.R. (S)(S) 24.709, 24.720. As used herein, the term "full force and effect" means that to our knowledge based upon our above-described review of certain FCC public files: (a) the orders issuing the FCC Licenses have become effective; (b) no stay of effectiveness of such orders has been issued by the FCC; and (c) the FCC Licenses have not been invalidated by any subsequent published FCC action. EXHIBIT I
A. AirCom PCS, Inc. ---------------------------------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz ---------------------------------------------------------------------------------------------------- KNLF457 Montgomery, AL BTA305 C 15 ---------------------------------------------------------------------------------------------------- KNLF604 Anniston, AL BTA017 C 15 ---------------------------------------------------------------------------------------------------- KNLF605 Birmingham, AL BTA044 C 15 ---------------------------------------------------------------------------------------------------- KNLF606 Decatur, AL BTA108 C 15 ---------------------------------------------------------------------------------------------------- KNLF607 Gadsden, AL BTA158 C 15 ---------------------------------------------------------------------------------------------------- KNLF608 Huntsville, AL BTA198 C 15 ---------------------------------------------------------------------------------------------------- KNLF609 Tuscaloosa, AL BTA450 C 15 ---------------------------------------------------------------------------------------------------- B. DigiCall, Inc. ---------------------------------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz ---------------------------------------------------------------------------------------------------- KNLG908 Biloxi, MS BTA042 F 10 ---------------------------------------------------------------------------------------------------- KNLG918 Hattiesburg, MS BTA186 F 10 ---------------------------------------------------------------------------------------------------- KNLG922 Laurel, MS BTA246 E 10 ---------------------------------------------------------------------------------------------------- KNLG925 McComb-Brookhaven, MS BTA269 F 10 ---------------------------------------------------------------------------------------------------- C. DigiCom, Inc. ---------------------------------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz ---------------------------------------------------------------------------------------------------- KNLG909 Bowing Green-Glasgow, KY BTA052 F 10 ---------------------------------------------------------------------------------------------------- KNLG923 Louisville, KY BTA263 F 10 ---------------------------------------------------------------------------------------------------- D. QuinCom, Inc. ---------------------------------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz ---------------------------------------------------------------------------------------------------- KNLG912 Dothan-Enterprise, AL BTA115 F 10 ---------------------------------------------------------------------------------------------------- KNLG914 Florence, AL BTA146 F 10 ---------------------------------------------------------------------------------------------------- KNLG927 Mobile, AL BTA302 F 10 ---------------------------------------------------------------------------------------------------- KNLG928 Montgomery, AL BTA305 F 10 ---------------------------------------------------------------------------------------------------- KNLG933 Selma, AL BTA415 F 10 ----------------------------------------------------------------------------------------------------
E. Tritel License-Alabama, Inc. ---------------------------------------------------------------------------------------------------- Call Sign BTA Name BTA No. Blk MHz ---------------------------------------------------------------------------------------------------- KNLG288 Birmingham, AL BTA044 D 10 ---------------------------------------------------------------------------------------------------- KNLG350 Tuscaloosa, AL BTA450 D 10 ---------------------------------------------------------------------------------------------------- F. ClearCall, Inc. ---------------------------------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ---------------------------------------------------------------------------------------------------- WPOI258 Knoxville MTA044 A 20 1 ---------------------------------------------------------------------------------------------------- G. ClearWave, Inc. ---------------------------------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ---------------------------------------------------------------------------------------------------- WPOI257 Memphis-Jackson MTA028 B 20 2 ---------------------------------------------------------------------------------------------------- H. DigiNet PCS, Inc. ---------------------------------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ---------------------------------------------------------------------------------------------------- WPOI256 Nashville MTA043 B 20 3 ---------------------------------------------------------------------------------------------------- I. Global PCS, Inc. ---------------------------------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ---------------------------------------------------------------------------------------------------- WPOI255 Louisville-Lexington-Evansville MTA026 A 20 4 ---------------------------------------------------------------------------------------------------- NexCom, Inc. ---------------------------------------------------------------------------------------------------- Call Sign MTA Name MTA No. Blk MHz Notes ---------------------------------------------------------------------------------------------------- WPOI259 Atlanta MTA011 A 20 5 ----------------------------------------------------------------------------------------------------
Notes: 1. Geographic partition of the Knoxville MTA (MT A044) consisting only of the BTA of Knoxville, TN (BT A232). 2. Geographic partition of the Memphis-Jackson MTA (MT A028) consisting only of the BTAs of Columbus-Starkville, MS (BTA094); Greenville-Greenwood, MS (BTA175); Jackson, MS (BTA210); Meridian, MS (BTA292); Natchez, MS (BTA315); Tupelo-Corinth, MS (BTA449); Vicksburg, MS (BTA455); and, the county of Montgomery, MS in the Memphis, MS BTA (BTA290 ). 3. Geographic partition of the Nashville MTA (MTA043) consisting only of the BTAs of Clarksville, TN-Hopkinsville, KY (BTA0 83); Cookeville, TN (BTA 096); and Nashville, TN (BTA 314). 4. Geographic partition of the Louisville-Lexington-Evansville MTA (M TA02 6) consisting only of the BTAs of Bowling Green-Glasgow, KY (BTA052); Corbin, KY (BTA098); Lexington, KY (BTA252); Louisville, KY (BTA263 ); Madisonville, KY (BTA27 3); Owensboro, KY (B TA338); and Somerset, KY (BTA42 3). 4. Geographic partition of the Atlanta MTA (MTA 011) consisting only of the BTAs of Chattanooga, TN (BTA 076); Cleveland, TN (BTA 085); Dalton, GA (BT A102); La Grange, GA (B TA237); Ope lika-Auburn, AL (BTA334); Rome, GA (BT A384); and, the counties of Carroll, GA and Haralson, GA in the Atlanta, GA (BTA024 ). EXHIBIT II PROCEEDINGS 1. High Plains Wireless, L.P. v. Federal Communications Commission, No. 00- 1292 (D.C. Cir. filed June 30, 2000). Nineteen of the FCC licenses held by Company subsidiaries, eight of which the Company is contractually obligated to sell to a third party, were originally awarded to Mercury PCS II, LLC ("Mercury") as a result of the FCC's D, E, and F Block PCS auction. Mercury's original application for these authorizations was contested by High Plains Wireless, L.P. ("High Plains"), a competing bidder in that auction, which alleged that Mercury violated the FCC's rules by engaging in reflexive bidding. Although the FCC originally proposed to fine Mercury $650,000 for this violation, the FCC ultimately rescinded its forfeiture based upon its determination that Mercury lacked notice that reflexive bidding was prohibited conduct. During the course of the FCC proceedings regarding Mercury's bidding activities, High Plains also asserted that Mercury violated the FCC's ex parte regulations and demonstrated a lack of candor in responding to the FCC's inquires. This appeal seeks review of FCC decisions: (i) granting certain licenses to Mercury and eliminating conditions on other previously granted licenses and (ii) finding in favor of Mercury on the ex parte and candor issues. The Company has intervened in the appeal and filed a motion arguing for dismissal of High Plains appeal on jurisdictional and procedural grounds. EXHIBIT H KPMG Comfort Letter EX-10.3.3 8 0008.txt SECOND AMENDMENT TO AMENDED & RESTATED LOAN AGMT Exhibit 10.3.3 EXECUTION COPY SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT THIS SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT (this "Agreement") dated as of the 31st day of October, 2000 (the "Agreement --------- --------- Date"), by and among Tritel PCS, Inc. (f/k/a Tritel Holding Corp.), a Delaware - ---- corporation (the "Borrower"), Tritel, Inc., a Delaware corporation (the -------- "Parent"), the Lenders (as defined in the Loan Agreement defined below), and ------ Toronto Dominion (Texas), Inc., as administrative agent (the "Administrative -------------- Agent"). - ----- W I T N E S S E T H: ------------------- WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to that certain Amended and Restated Loan Agreement dated as of March 31, 1999, as amended by that certain First Amendment thereto dated as of April 21, 1999 (as so amended, the "Loan Agreement"); -------------- WHEREAS, the Borrower has requested that the Lenders, and the Lenders have agreed to, subject to the terms hereof, amend the Loan Agreement as more fully set forth herein; and WHEREAS, the Borrower has requested that the Lenders, and the Lenders have agreed to, subject to the terms hereof, consent to the mergers (collectively, the "TeleCorp/Tritel Merger") contemplated by that certain Agreement and Plan ---------------------- of Reorganization and Contribution dated as of February 28, 2000, as amended (as so amended, the "Merger Agreement") among the Parent, TeleCorp PCS, Inc. and ---------------- AT&T Wireless Services, Inc., as more fully set forth herein; NOW, THEREFORE, in consideration of the premises set forth above, the covenants and agreements hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that all capitalized terms used and not defined herein shall have the meanings ascribed thereto in the Loan Agreement, and further agree as follows: 1. Amendment to Section 1.1. ------------------------ (a) Section 1.1, Definitions, of the Loan Agreement, is hereby amended ----------- by deleting each of the definitions of "Change of Control Event", "Network License Agreement", "Roaming Agreement" and "Stockholders Agreement" in its entirety and by substituting in lieu thereof the following: "`Change of Control Event' shall mean the occurrence or existence of ----------------------- any of the following: (a) (i) prior to the TeleCorp/Tritel Merger Effective Date, any sale or other disposition by AT&T or TWR Cellular, Inc. of any shares of Capital Stock of the Parent prior to January 7, 2002, such that after giving effect thereto AT&T and TWR Cellular, Inc., collectively, shall fail to own at least fifteen percent (15%) of the Capital Stock of the Parent, other than any such sale or other disposition to an Affiliated Successor and (ii) on and after the TeleCorp/Tritel Merger Effective Date, any sale or other disposition by AT&T or TWR Cellular, Inc. of any shares of Capital Stock of Holdings prior to January 7, 2002, such that after giving effect thereto AT&T and TWR Cellular, Inc., collectively, shall fail to own at least fifteen percent (15%) of the Capital Stock of Holdings, other than any such sale or other disposition to an Affiliated Successor; (b) (i) prior to the TeleCorp/Tritel Merger Effective Date, the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) other than the Parent, Persons owning Capital Stock of the Parent on January 7, 1999 or any Affiliated Successor, of Capital Stock representing more than twenty percent (20%) of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of either the Borrower or the Parent and (ii) on and after the TeleCorp/Tritel Merger Effective Date, the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) other than Holdings, Persons owning Capital Stock of Holdings on the TeleCorp/Tritel Merger Effective Date or any Affiliated Successor, of Capital Stock representing more than twenty percent (20%) of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of Holdings; (c) (i) prior to the TeleCorp/Tritel Merger Effective Date, occupation of a majority of the seats (other than vacant seats) on the board of directors of either the Parent or the Borrower, by Persons who were not (x) nominated by the board of directors of the Parent (in the case of the Parent's board) or the Borrower (in the case of the Borrower's board), (y) appointed by directors so nominated, or (z) in the case of the Parent, appointed by shareholders of the Parent who are or were shareholders (or an Affiliated Successor of any such shareholder) of the Parent on January 7, 1999, and (ii) on and after the TeleCorp/Tritel Merger Effective Date, occupation of a majority of the seats (other than vacant seats) on the board of directors of any of Holdings, the Parent or the Borrower, by Persons who were not (X) nominated by the board of directors of Holdings (in the case of Holdings' board) or the Parent (in the case of the Parent's board) or the Borrower (in the case of the Borrower's board), (Y) appointed by directors so nominated, or (Z) in the case of Holdings, appointed by shareholders of Holdings who are or were shareholders (or an Affiliated Successor of any such shareholder) of Holdings on the TeleCorp/Tritel Merger Effective Date; or (d) (i) prior to the TeleCorp/Tritel Merger Effective Date, the acquisition of direct or indirect control of the Borrower or the Parent by any Person (and its Affiliated Successors) owning Capital Stock of the Parent on January 7, 1999 and (ii) on and after the TeleCorp/Tritel Merger Effective Date, the acquisition of direct or indirect control of Holdings, the Parent or the Borrower by any Person (and its Affiliated Successors) owning Capital Stock of Holdings on the TeleCorp/Tritel Merger Effective Date. Notwithstanding the foregoing, none of the following shall constitute a "Change of Control ----------------- Event": (A) (1) prior to the TeleCorp/Tritel Merger Effective Date, the ----- sale by AT&T or TWR Cellular, Inc. of all or any of its Capital Stock of the Parent subsequent to January 7, 2002 and (2) on and after the TeleCorp/Tritel Merger Effective Date, the sale by AT&T or TWR Cellular, Inc. of all or any of its Capital Stock of Holdings subsequent to January 7, 2002; (B) (1) prior to the TeleCorp/Tritel Merger Effective Date, the public 2 sale by the Parent of newly issued Capital Stock in a public offering and (2) on and after the TeleCorp/Tritel Merger Effective Date, the public sale by Holdings of newly issued Capital Stock in a public offering; and (C) (1) prior to the TeleCorp/Tritel Merger Effective Date, the dilution of AT&T's and TWR Cellular, Inc.'s collective percentage of Capital Stock of the Parent as a result of an issuance of Capital Stock by the Parent and (2) on and after the TeleCorp/Tritel Merger Effective Date, the dilution of AT&T's and TWR Cellular, Inc.'s collective percentage of Capital Stock of Holdings as a result of an issuance of Capital Stock by the Holdings. `Network License Agreement' shall mean (i) prior to the ------------------------- TeleCorp/Tritel Merger, the Network Membership License Agreement, dated the date hereof, by and between AT&T Corp. and the Parent and (ii) from and after the TeleCorp/Tritel Merger, the Network License Agreement by and between AT&T Wireless Services Inc. and Holdings, the Parent and/or the Borrower substantially in the form attached as Exhibit K-1 to the Merger Agreement. `Roaming Agreement' shall mean (i) prior to the TeleCorp/Tritel ----------------- Merger, the Intercarrier Roamer Service Agreement by and between AT&T Wireless Services, Inc. and the Borrower in substantially the form attached as Exhibit F to the Securities Purchase Agreement and (ii) from and after the TeleCorp/Tritel Merger, the Intercarrier Roamer Service Agreement by and between AT&T Wireless Services Inc. and Holdings, the Parent and/or the Borrower substantially in the form attached as Exhibit K-2 to the Merger Agreement. `Stockholders' Agreement' shall mean (i) prior to the TeleCorp/Tritel ----------------------- Merger, the Stockholders' Agreement by and among AT&T Wireless Services, Inc., the Parent, the Cash Equity Investors (as defined therein) and the Management Stockholders (as defined therein), as stockholders, dated as of January 7, 1999 and (ii) from and after the TeleCorp/Tritel Merger, the Stockholders' Agreement by and among Holdings and the Stockholders named therein dated the TeleCorp/Tritel Merger Effective Date." (b) Section 1.1, Definitions, of the Loan Agreement is hereby amended ----------- by adding the following new definitions in their appropriate alphabetical order: "`Holdings' shall mean TeleCorp-Tritel Holding Company, a Delaware -------- corporation to be renamed TeleCorp PCS, Inc. `Merger Agreement' shall mean that certain Agreement and Plan of ---------------- Reorganization and Contribution among TeleCorp PCS, Inc., Tritel, Inc. and AT&T Wireless Services, Inc. dated as of February 28, 2000, as amended. `TeleCorp/Tritel Merger' shall mean the mergers contemplated under the ---------------------- Merger Agreement. `TeleCorp/Tritel Merger Effective Date' shall mean the effective date ------------------------------------- of the TeleCorp/Tritel Merger pursuant to the Merger Agreement." 3 2. Amendment to Section 4.1. Section 4.1(z), Parent Assets, of the Loan ------------------------ ------------- Agreement, is hereby amended by deleting such paragraph in its entirety and substituting in lieu thereof the following: "(z) Parent Assets. The Parent has no assets other than the Capital ------------- Stock of the Borrower, investments in the Borrower and/or the Borrower's Subsidiaries permitted hereunder, rights under the Securities Purchase Agreement, rights under the Stockholders Agreement, the Bid Equity Commitments, so long as the proceeds of such Bid Equity Commitments are disposed of in accordance with Section 5.17(b) hereof and such other assets as are necessary in connection with the administration of, and the conduct of its business by, the Parent." 3. Amendments to Article 5. ----------------------- (a) Amendment to Section 5.17. Section 5.17(b), Business of the ------------------------- --------------- Parent; Immediate Contributions to the Borrower, of the Loan Agreement, is - ----------------------------------------------- hereby amended by deleting such paragraph in its entirety and by substituting in lieu thereof the following: "(b) The Parent shall immediately (i) contribute to the Borrower upon receipt (A) any capital contributions and (B) net proceeds from the issuance of any Indebtedness (excluding Subordinated Debt and, from and after the TeleCorp/Tritel Merger Effective Date, any Indebtedness of the Parent permitted under Section 7.1(m)) and (ii) lend to the Borrower (x) the net proceeds of any Subordinated Debt, which loan shall be subordinate to the Obligations hereunder on terms reasonably satisfactory to the Required Lenders and (y) on and after the TeleCorp/Tritel Merger Effective Date, the net proceeds of any Indebtedness of the Parent permitted under Section 7.1(m), which loan shall be subordinate to the Obligations on terms reasonably satisfactory to the Administrative Agent and which loan shall have terms no less advantageous to the Lenders than those of any loan under subsection (x) of this Section 5.17(b)(ii)." (b) Amendment to Section 5.20. Section 5.20, The Bid Equity ------------------------- -------------- Commitments, is hereby amended by deleting each reference to "$7,500,000" - ----------- contained therein and by substituting in lieu thereof "$7,550,000". 4. Amendment to Section 6.4. Section 6.4, Copies of Other Reports, of ------------------------ ----------------------- the Loan Agreement, is hereby amended by deleting clause (g) in its entirety and by substituting in lieu thereof the following: "(g) Intentionally omitted." 5. Amendments to Article 7. ----------------------- (a) Section 7.1, Indebtedness of the Parent, the Borrower and the ------------------------------------------------ Borrower's Subsidiaries, of the Loan Agreement, is hereby amended by (i) - ----------------------- deleting the reference to "$250,000,000" in clause (g) thereof and substituting in lieu thereof "$750,000,000"; (ii) deleting the word "and" after clause (k) thereof; (iii) deleting the period at the end of clause (l) thereof 4 and substituting in lieu thereof "; and"; and (iv) adding at the end thereof a new clause (m) to read as follows: "(m) from and after the TeleCorp/Tritel Merger Effective Date, subordinated Indebtedness of the Parent to Holdings, provided that (i) -------- such Indebtedness shall be subordinated to all the Obligations and evidenced by a promissory note containing subordination provisions reasonably satisfactory to the Administrative Agent and shall require no payments earlier than five years from the date of issuance thereof and (ii) the aggregate amount of any payments required under such Indebtedness shall not exceed the amount of any Excess Cash Flow not required to be applied to prepay the Loans pursuant to Section 2.7(b)(iv)." (b) Amendment to Section 7.4. Section 7.4(a), Liquidation, Merger or ------------------------ ---------------------- Disposition of Assets, of the Loan Agreement is hereby amended by (i) deleting - --------------------- the word "or" before clause (vi) thereof; (ii) deleting the period at the end of clause (iv) and substituting in lieu thereof "; or," and (iii) adding at the end thereof a new clause (v) to read as follows: "(v) sale of any or all of licenses acquired from Digital PCS, Inc. respecting Florida and Georgia to Panther Wireless, LLC or other designee of AT&T Wireless Services, Inc.; provided, that the total -------- ---- consideration for such sale(s) shall not exceed $20,000,000 in the aggregate." (c) Amendment to Section 7.6. Section 7.6, Investments and ------------------------ --------------- Acquisitions, of the Loan Agreement, is hereby amended (i) by adding at the end - ------------ of the first parenthetical thereof the following "and additional spectrum and related assets under the Borrower's existing footprint"; and (ii) by deleting each reference to "$7,500,000" contained in paragraph (e) thereof and by substituting in lieu thereof "$7,550,000". (d) Amendment to Section 7.7. Section 7.7, Limitations on ------------------------ -------------- Distributions, of the Loan Agreement, is hereby amended by deleting such Section - ------------- in its entirety and by substituting in lieu thereof the following: "Section 7.7 Limitation on Distributions. The Parent and the --------------------------- Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, make any Restricted Payment or Restricted Purchase; provided, however, that such Restricted Payments or Restricted -------- ------- Purchases may be made if (a) the Total Leverage Ratio is less than 5.00 to 1.00, (b) the Borrower has made all repayments from Excess Cash Flow required under Section 2.7(b)(iv) hereof, and (c) no Default or Event of Default exists, both before and after giving effect to such Restricted Payments or Restricted Purchases. Notwithstanding any of the foregoing, so long as no Default (or Event of Default in case of clause (v) below) has occurred and is continuing both before and after giving effect to the following Restricted Payments or Restricted Purchases, the Parent, the Borrower and its Subsidiaries shall be permitted to make Restricted Payments or Restricted Purchases (i) to the Parent, and on and after the TeleCorp/Tritel Merger Effective Date, Holdings, as applicable, to pay administrative and other similar costs and 5 franchise and other similar taxes required to be paid by the Parent, and on and after the TeleCorp/Tritel Merger Effective Date, Holdings, as applicable, in each case in an aggregate amount not to exceed $1,000,000 per fiscal year, (ii) to fund, as and when due, payments of regularly scheduled interest and principal in respect of any Indebtedness incurred by the Parent that is permitted under Section 7.1 hereof, other than payments in respect of the Subordinated Debt prohibited by the subordination provisions thereof, (iii) to Parent, and, on and after the TeleCorp/Tritel Merger Effective Date, to Holdings, as applicable, in an amount sufficient to enable Parent, or Holdings, as applicable, to make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Parent, the Borrower or the Borrower's Subsidiaries, in an aggregate amount not to exceed $1,000,000 per fiscal year, (iv) on and after the TeleCorp/Tritel Merger Effective Date, to Holdings and its Subsidiaries to pay management, consulting or similar fees, or any interest thereon, on account of any cost sharing or similar arrangements, provided that such fees and interest -------- ---- shall be no greater than those that would be payable in a third party arm's-length transaction, (v) on and after the TeleCorp/Tritel Merger Effective Date, with respect to its Capital Stock to fund the obligations of the Parent or Holdings to repurchase, redeem, acquire or retire for value, or make other payments of interest in respect of, any Capital Stock of the Parent or Holdings held or previously held by any member or former member of the management of the Borrower and its Subsidiaries pursuant to any management equity subscription agreement, stock option agreement, restricted stock agreement, put agreement or other similar arrangements, provided that the aggregate amount of such -------- ---- Restricted Payments shall not exceed $10,000,000 in any fiscal year of the Borrower, provided further that up to an aggregate of $20,000,000 -------- ------- of unused amounts of permitted Restricted Payments during one or more fiscal years may be carried forward to one or more future fiscal years and (vi) on and after the TeleCorp/Tritel Merger Effective Date, by the Borrower to the Parent in an aggregate amount not to exceed $10,000,000 to fund the repurchase by the Parent of the shares of voting preference shares of the Parent held by E.B. Martin in connection with the TeleCorp/Tritel Merger. In addition, notwithstanding any of the foregoing, from and after the TeleCorp/Tritel Merger Effective Date, the Parent shall be permitted to make Restricted Payments and Restricted Purchases to Holdings (and the Borrower and its Subsidiaries shall be permitted to make Restricted Payments and Restricted Purchases to the Parent to fund such Restricted Payments and Restricted Purchases by the Parent to Holdings) in an aggregate amount not to exceed the lesser of (i) the aggregate amount contributed by Holdings to the Parent as capital or lent by Holdings to the Parent (and by the Parent to the Borrower or any of its Subsidiaries) and (ii) an amount not in excess of Excess Cash Flow, provided the prepayments required by Section 2.7(b)(iv) hereof have previously been made." (e) Amendment to Section 7.13. Section 7.13 of the Loan Agreement, ------------------------- Maximum Capital Expenditures, is hereby amended by deleting such Section in its - ---------------------------- entirety and substituting in lieu thereof the following: 6 "Section 7.13 Maximum Capital Expenditures. (a) As of each fiscal ---------------------------- quarter end set forth below, and (b) at the time of any Advance hereunder which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit Capital Expenditures (excluding assets purchased with the proceeds of obsolete, worn out or no longer useful assets as permitted by Section 7.4(a) hereof and, on and after the TeleCorp/Tritel Merger Effective Date, excluding assets purchased with the proceeds of any capital contributed to the Parent by Holdings or any loans made to the Parent by Holdings permitted hereunder and contributed by the Parent to the Borrower as capital or otherwise lent by the Parent to the Borrower) for the Borrower and its Subsidiaries to exceed in any period: Period Total Capital Expenditures - ------ -------------------------- The Agreement Date through December 31, 1999 $334,000,000 From January 1, 2000 through December 31, 2000 $411,000,000 From January 1, 2001 through December 31, 2001 $ 91,000,000 From January 1, 2002 through December 31, 2002 $ 15,000,000 From January 1, 2003 through December 31, 2003 $ 15,000,000 From January 1, 2004 through December 31, 2004 $ 15,000,000 From January 1, 2005 through December 31, 2005 $ 15,000,000 From January 1, 2006 through December 31, 2006 $ 15,000,000 From January 1, 2007 through December 31, 2007 $ 15,000,000 ; provided that any permitted amount which is not spent in any period -------- specified above (excluding any amount carried forward from the immediately preceding period permitted to be spent during such period) may be carried forward to the immediately subsequent period, and may be spent in addition to the otherwise applicable limitation for such period; provided further -------- ------- that for purposes of calculating the amount of any carry-forward amount for any period under this Section 7.13, any amount carried forward from the preceding period shall be deemed to be the first amount spent during the current period; provided, further, on and after the TeleCorp/Tritel Merger -------- ------- Effective Date, that in addition to the amounts otherwise permitted under this Section 7.13, the Borrower and its Subsidiaries may make additional Capital Expenditures in an aggregate amount not to exceed the product of (x) $10.00 multiplied by (y) the number of aggregate POPs located within ------------- the network for the purposes of constructing voice, data, video and/or other media communication systems using new technology pursuant to a business plan and during periods approved of in advance in writing by the Required Lenders." 6. Other Amendments. On and after the TeleCorp/Tritel Merger Effective ---------------- Date, all references to the "Management Agreement" are deemed deleted. 7. Consent to the TeleCorp/Tritel Merger and Waiver. ------------------------------------------------ (a) Consent. Subject to the terms and conditions hereof, ------- notwithstanding any provisions of the Loan Documents, the undersigned Lenders hereby consent to the terms and conditions of the Merger Agreement and the other documents contemplated thereby and to the 7 consummation of the TeleCorp/Tritel Merger and the transactions contemplated thereby pursuant to such terms and conditions, including, without limitation, the transactions described on Schedule 1 hereto. The Lenders hereby consent to the waiver by the parties to the TeleCorp/Tritel Merger of receipt of a final order issued by the FCC prior to the consummation of the TeleCorp/Tritel Merger. On or prior to the consummation of the TeleCorp/Tritel Merger, the Borrower and the Parent shall provide to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, (i) certification to the Administrative Agent and the Lenders of the Borrower's and the Parent's compliance with Sections 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14 and 7.15 of the Loan Agreement, after giving effect to the TeleCorp/Tritel Merger; (ii) certification to the Administrative Agent and the Lenders that a Default does not exist under the Loan Agreement and will not be caused by the TeleCorp/Tritel Merger, after giving effect to this Agreement; (iii) evidence reasonably satisfactory to the Administrative Agent of the consummation of the TeleCorp/Tritel Merger on substantially the terms and conditions set forth in the Merger Agreement (except as provided in the second sentence of this Section 7(a)); (iv) receipt by the Administrative Agent and the Lenders of opinions of corporate and special FCC counsel to the Parent and the Borrower, opining as to the enforceability, validity and binding nature of the Loan Agreement and other Loan Documents, after giving effect to the TeleCorp/Tritel Merger; and (v) receipt by the Administrative Agent and the Lenders of confirmation by the Parent, the Borrower and any Subsidiaries of the Borrower of each of their Obligations under the Security Documents after giving effect to the TeleCorp/Tritel Merger. (b) Waivers. (i) Notwithstanding any provision of the Loan Agreement ------- (including, without limitation, Sections 5.20 and 7.6 of the Loan Agreement), the undersigned Lenders hereby waive any Default or Event of Default that may have resulted from Bid Equity Commitments of the Parent and the Borrower in the aggregate amount of $7,550,000 and (ii) notwithstanding any provision of the Loan Agreement (including, without limitation, Sections 7.6 and 7.18 of the Loan Agreement), the undersigned Lenders hereby waive any Default or Event of Default that may have arisen from the Parent advancing in excess of $2,500,000 in the aggregate principal amount at any time outstanding to the Mercury entities in connection with the liquidity facility described in the third item on Schedule 5 ---------- to the Loan Agreement. 8. No Other Amendment or Waiver. Notwithstanding the agreement of the ---------------------------- Lenders to the terms and provisions of this Agreement, the Borrower and the Parent acknowledge and expressly agree that this Agreement is limited to the extent expressly set forth herein and shall not constitute a modification of the Loan Agreement or any other Loan Documents or a course of dealing at variance with the terms of the Loan Agreement or any other Loan Documents (other than as expressly set forth above) so as to require further notice by the Administrative Agent or the Lenders, or any of them, of its or their intent to require strict adherence to the terms of the Loan Agreement and the other Loan Documents in the future. All of the terms, conditions, provisions and covenants of the Loan Agreement and the other Loan Documents shall remain unaltered and in full force and effect except as expressly modified by this Agreement. The Loan Agreement and each other Loan Document shall be deemed modified hereby solely to the extent necessary to effect the waivers and amendments contemplated hereby. 9. Representations and Warranties. The Borrower and the Parent hereby ------------------------------ represent and warrant in favor of the Administrative Agent and each Lender as follows: 8 (a) The Borrower and the Parent each has the corporate power and authority (i) to enter into this Agreement and (ii) to do all other acts and things as are required or contemplated hereunder to be done, observed and performed by them; (b) This Agreement has been duly authorized and validly executed and delivered by one or more Authorized Signatories of the Borrower and the Parent and constitutes the legal, valid and binding obligation of the Borrower and the Parent, enforceable against each of them in accordance with its terms, subject to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law and (ii) applicable bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower and the Parent); (c) The execution and delivery of this Agreement and the performance by the Borrower and the Parent under the Loan Agreement and the other Loan Documents to which each is a party, as amended hereby, do not and will not require the consent or approval of any regulatory authority or governmental authority or agency having jurisdiction over the Parent, the Borrower or any of its Subsidiaries which has not already been obtained, nor is in contravention of or in conflict with the articles of incorporation, by-laws or partnership agreements of the Parent, the Borrower or any of its Subsidiaries, or any provision of any statute, judgment, order, or material indenture, instrument, agreement, or undertaking to which the Parent, the Borrower or any of its Subsidiaries is a party or by which any of their respective assets or properties is or may become bound; and (d) The representations and warranties contained in Section 4.1 of the Loan Agreement and contained in the other Loan Documents remain true and correct as of the date hereof, both before and after giving effect to this Agreement, except to the extent previously fulfilled in accordance with the terms of the Loan Agreement or such other Loan Document, as applicable, or to the extent relating specifically to the Agreement Date. No Default now exists or will be caused hereby. 10. Conditions Precedent. The effectiveness of this Agreement is subject -------------------- to the receipt by the Administrative Agent of counterparts hereof executed by the Required Lenders, the Borrower and the Parent. 11. Counterparts. This Agreement may be executed in any number of ------------ counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute one and the same instrument. 12. Loan Documents. Each reference in the Loan Agreement or any other -------------- Loan Document to the term "Loan Agreement" shall hereafter mean and refer to the Loan Agreement as amended hereby and as the same may hereafter be amended. 13. Governing Law. This Agreement shall be construed in accordance with ------------- and governed by the internal laws of the State of New York, applicable to agreements made and to be performed in New York. 9 14. Effective Date. Upon satisfaction of the conditions precedent -------------- referred to in Section 10 hereof, the provisions of this Agreement shall (except with respect to the consent to the TeleCorp/Tritel Merger pursuant to Section 7(a) hereof) be effective as of the Agreement Date, provided, that the consent -------- to the TeleCorp/Tritel Merger shall be effective on the date of receipt of the documents described in Section 7(a) hereof by the Administrative Agent. 15. Severability. Any provision of this Agreement which is prohibited or ------------ unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 10 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused it to be executed under seal by their duly authorized officers, all as of the day and year first above written. BORROWER: TRITEL PCS, INC., a Delaware corporation By: /s/ E.B. Martin, Jr. ----------------------------------- Name: E.B. Martin, Jr. --------------------------------- Title: Executive Vice President/CFO -------------------------------- PARENT: TRITEL, INC., a Delaware corporation By: /s/ E.B. Martin, Jr. ----------------------------------- Name: E.B. Martin, Jr. --------------------------------- Title: Executive Vice President/CFO -------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 1 ADMINISTRATIVE AGENT AND LENDER: TORONTO DOMINION (TEXAS), INC., as Administrative Agent and as a Lender By: /s/ Jeffery R. Lents ------------------------------------ Name: Jeffery R. Lents ---------------------------------- Title: Vice President --------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 2 BARCLAYS BANK PLC, as Lender By: /s/ Timothy C. Harrington ---------------------------------- Name: Timothy C. Harrington ---------------------------- Title: Director --------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 3 BANK OF AMERICA, N.A., as Lender By: /s/ Roselyn Drake --------------------------------- Name: Roselyn Drake --------------------------- Title: Managing Director -------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 4 ABN AMRO BANK N.V., as a Lender By: /s/ Alice Griffiths ---------------------------------- Name: Alice Griffiths ---------------------------- Title: Vice President --------------------------- By: /s/ Shilpa Parandekar ---------------------------------- Name: Shilpa Parandekar ---------------------------- Title: Assistant Vice President --------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 5 BANK OF MONTREAL, as a Lender By: /s/ S. Valia --------------------------------- Name: S. Valia --------------------------- Title: Managing Director -------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 6 THE BANK OF NEW YORK, as a Lender By: /s/ Gerry Granovsky ----------------------------------- Name: Gerry Granovsky ----------------------------- Title: Vice President ---------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 7 THE BANK OF NOVA SCOTIA, as a Lender By: /s/ Ian A. Hodgart ------------------------------------ Name: Ian A. Hodgart ------------------------------ Title: Authorized Signatory ----------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 8 THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a Lender By: /s/ Michael Deadder ------------------------------------- Name: Michael Deadder ------------------------------- Title: Vice President ------------------------------ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 9 CIBC INC., as a Lender By: /s/ M. Beth Miller --------------------------------------- Name: M. Beth Miller --------------------------------- Title: Authorized Signatory -------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 10 THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Lender By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 11 CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By:/s/ John P. Judge ---------------------------------------------------- Name: John P. Judge ----------------------------------------------- Title: Vice President ---------------------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 12 CYPRESSTREE INSTITUTIONAL FUND, LLC, as a Lender By: CypressTree Investment Management Company, Inc., its Managing Member By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ NORTH AMERICAN SENIOR FLOATING RATE FUND, as a Lender By: Cypress Tree Investment Management Company, Inc., as Portfolio Manager By:_________________________________________________ Name:____________________________________________ Title:___________________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 13 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By: /s/ John Fleseler ---------------------------------------------------- Name: John Fleseler ----------------------------------------------- Title: Senior Vice President ---------------------------------------------- By: /s/ Brian Schneider ---------------------------------------------------- Name: Brian Schneider ----------------------------------------------- Title: Assistant Vice President ---------------------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 14 EATON VANCE SENIOR INCOME TRUST, as a Lender By: Eaton Vance Management, as Investment Advisor By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ SENIOR DEBT PORTFOLIO, as a Lender By: Boston Management and Research, as Investment Advisor By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 15 ELC (CAYMAN) LTD. CDO SERIES 1999-1, as a Lender By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ APEX (IDM) CDO I LTD., as a Lender By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 16 FIRST UNION NATIONAL BANK, as a Lender By: /s/ Keith Northern ---------------------------------------------------- Name: Keith Northern ----------------------------------------------- Title: Director/SVP ---------------------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 17 FLOATING RATE PORTFOLIO, as a Lender By: INVESCO Senior Secured Management, Inc. as attorney in fact By: /s/ Kathleen A. Lenarcic ---------------------------------------------------- Name: Kathleen A. Lenarcic ----------------------------------------------- Title: Authorized Signatory ---------------------------------------------- AVALON CAPITAL LTD. 2, as a Lender By: INVESCO Senior Secured Management, Inc. as Portfolio Advisor By: /s/ Kathleen A. Lenarcic ---------------------------------------------------- Name: Kathleen A. Lenarcic ----------------------------------------------- Title: Authorized Signatory ---------------------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 18 FORTIS CAPITAL CORP., as a Lender By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 19 FRANKLIN FLOATING RATE TRUST, as a Lender By:____________________________________________________ Name:_______________________________________________ Title:______________________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 20 HELLER FINANCIAL, INC., as a Lender By: /s/ K. Craig Gallenhugh --------------------------------------- Name: K. Craig Gallenhugh --------------------------------- Title: Senior Vice President --------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 21 KZH CYPRESSTREE-1 LLC, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 22 MERITA BANK PLC, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ By:_______________________________________ Name:__________________________________ Title:_________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 23 MERRILL LYNCH SENIOR FLOATING RATE FUND, INC., as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ MERRILL LYNCH PRIME RATE PORTFOLIO, as a Lender By: Merrill Lynch Asset Management, L.P., as Investment Advisor By: Name:__________________________________ Title:_________________________________ MERRILL LYNCH GLOBAL INVESTMENT SERIES: INCOME STRATEGIES PORTFOLIO, as a Lender By: Merrill Lynch Asset Management, L.P., as Investment Advisor By:_______________________________________ Name:__________________________________ Title:_________________________________ MERRILL LYNCH SENIOR FLOATING RATE FUND II, INC., as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 24 DEBT STRATEGIES FUND II, INC., as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ DEBT STRATEGIES FUND III, INC., as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 25 METROPOLITAN LIFE INSURANCE COMPANY, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 26 NATIONAL WESTMINSTER BANK PLC, as a Lender By: NatWest Capital Markets Limited, its Agent By: Greenwich Capital Markets, Inc., its Agent By: /s/ Harry Paschalidis ------------------------------------------- Name: Harry Paschalidis -------------------------------------- Title: Assistant Vice President ------------------------------------- AMMC CDO I, LIMITED, as a Lender By: American Money Management Corp., as Collateral Manager By: /s/ David P. Meyer ------------------------------------------- Name: David P. Meyer -------------------------------------- Title: Vice President ------------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 27 PARIBAS CAPITAL FUNDING LLC, as a Lender By:_____________________________________ Name:________________________________ Title:_______________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 28 PNC BANK NATIONAL ASSOCIATION, as a Lender By: /s/ Keith R. White --------------------------------------- Name: Keith R. White ----------------------------------- Title: Vice President ---------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 29 ROYAL BANK OF CANADA, as a Lender By:________________________________ Name:___________________________ Title:__________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 30 SOCIETE GENERALE, as a Lender By:_______________________________ Name:__________________________ Title:_________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 31 STEIN ROE & FARNHAM, INCORPORATED, as Agent for KEYPORT LIFE INSURANCE COMPANY, as a Lender By: /s/ James R. Fellows ----------------------------------------- Name: James R. Fellows ------------------------------------ Title: Sr. Vice President and Portfolio ----------------------------------- Manager SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 32 VAN KAMPEN PRIME RATE INCOME TRUST, as a Lender By: /s/ Darvin D. Pierce -------------------------------------- Name: Darvin D. Pierce --------------------------------- Title: Vice President -------------------------------- SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 33 VARIABLE INSURANCE PRODUCTS II: ASSET MANAGER PORTFOLIO, as a Lender By:___________________________________ Name:______________________________ Title:_____________________________ VARIABLE INSURANCE PRODUCTS II: ASSET MANAGER: GROWTH PORTFOLIO, as a Lender By:___________________________________ Name:______________________________ Title:_____________________________ FIDELITY ADVISOR SERIES II: FIDELITY ADVISTOR FLOATING RATE HIGH FUND, as a Lender By:____________________________________ Name:_______________________________ Title:______________________________ SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 34 SCHEDULE 1 ---------- SUMMARY OF MERGER TRANSACTIONS TeleCorp PCS, Inc. ("TeleCorp") formed a new company, TeleCorp-Tritel Holding Company, with two subsidiaries, TTHC First Merger Sub, Inc. ("First Merger Sub") and TTHC Second Merger Sub, Inc. ("Second Merger Sub"). At the time the merger is completed: . First Merger Sub will be merged into TeleCorp, TeleCorp will be the surviving corporation and TeleCorp will change its name to TeleCorp Wireless, Inc; . Second Merger Sub will be merged into Tritel, Inc. ("Tritel"), Tritel will be the surviving corporation and Tritel's Certificate of Incorporation and By-Lays will be amended and restated in their entirety to read as is set forth for the Second Merger Sub (the "Second Merger"); . TeleCorp and Tritel stockholders will become stockholders of Holding Company through the conversion of their respective capital stock for Holding Company capital stock; and . Holding Company will change its name to TeleCorp PCS, Inc. As a result, TeleCorp and Tritel will each become a wholly owned subsidiary of Holding Company. EX-10.3.4 9 0009.txt THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGMT Exhibit 10.3.4 EXECUTION COPY THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT (this "Amendment") is made as of this 9th day of January, 2001 by and among --------- TRITEL PCS, INC., a Delaware corporation (the "Borrower"), TRITEL, INC., a -------- Delaware corporation (the "Parent"), the Lenders (as defined in the Loan ------ Agreement defined below) and Toronto Dominion (Texas), Inc. (the "Administrative -------------- Agent"), as administrative agent for the Lenders. - ----- W I T N E S S E T H: -------------------- WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent are all parties to that certain Amended and Restated Loan Agreement dated as of March 31, 1999 as amended by that certain First Amendment thereto dated as of April 21, 1999 and that certain Second Amendment thereto dated as of October 31, 2000 (the "Loan Agreement"); and -------------- WHEREAS, the Borrower desires to issue indebtedness, which may be (a) subordinated indebtedness incurred pursuant to Section 7.1(g) of the Loan Agreement or (b) unsecured indebtedness of the Borrower (in either event, the "Additional Debt"); and --------------- WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders, and the Administrative Agent and the Lenders have agreed, subject to the terms hereof, to amend the Loan Agreement and to consent to the terms of the Additional Debt, in each case, as provided herein; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree that all capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed thereto in the Loan Agreement and further agree as follows: 1. Amendments to Article 1, Definitions, of the Loan Agreement. Section ----------------------------------------------------------- 1.1, Defined Terms, of the Loan Agreement is hereby amended by deleting each of ------------- the definitions of "Annualized Operating Cash Flow" and "License Subs" in its entirety and by substituting, in lieu thereof, the following: "'Annualized Operating Cash Flow' shall mean the product of (a) ------------------------------ Operating Cash Flow for the most recently completed two (2) fiscal quarter period (or if the calculation date is the last day of a fiscal quarter, then the two (2) fiscal quarter period ending on such date) times (b) two ----- (2); provided, however, that for all calculation dates for the period -------- ------- beginning December 31, 2002 through March 30, 2003, "Annualized Operating Cash Flow" shall mean the product of (i) Operating Cash Flow for the fiscal quarter ended December 31, 2002 times (ii) four (4); provided, further, ----- -------- ------- that for the purposes of calculating compliance with Section 7.16 hereunder on December 31, 2003, "Annualized Operating Cash Flow" shall mean the product of (a) the sum of Operating Cash Flow for the fiscal quarters ended September 30, 2003 and December 31, 2003 times (b) two (2)." ----- "'License Subs' shall mean, collectively, Tritel A/B Holding Corp., ------------ Tritel C/F Holding Corp., NexCom, Inc., Clearcall, Inc., Global PCS, Inc., Clearwave, Inc., DigiNet PCS, Inc., DigiCom, Inc., DigiCall, Inc., Tritel License-Alabama, Inc., Tritel License-Florida, Inc. and Tritel License- Georgia, Inc., each a Delaware corporation, and AirCom PCS, Inc. and QuinCom, Inc., each an Alabama corporation, and any other wholly-owned Subsidiary of the Borrower designated as a License Sub by notice to the Administrative Agent, in each case, the Capital Stock of which is pledged to the Administrative Agent pursuant to a Borrower's Pledge Agreement or a Subsidiary Pledge Agreement, as appropriate; and 'License Sub' shall mean ----------- any one of the foregoing License Subs." 2. Amendments to Article 7, Negative Covenants, of the Loan Agreement. ------------------------------------------------------------------ (a) Amendment to Section 7.1. Section 7.1 of the Loan Agreement, ------------------------ Indebtedness of the Parent, the Borrower and the Borrower's Subsidiaries, is - ------------------------------------------------------------------------ hereby amended by deleting the word "and" at the end of Section 7.1(l), deleting the "." at the end of Section 7.1(m) and substituting in lieu thereof the following: "; and (n) Indebtedness of the Borrower not to exceed $50,000,000 in the aggregate outstanding at any time, provided that such Indebtedness is (i) unsecured, (ii) in favor of vendors of equipment useful to the Borrower's and its Subsidiaries' businesses, and (iii) subordinated to the Obligations on terms and conditions satisfactory to the Administrative Agent." (b) Amendment to Section 7.13. Section 7.13 of the Loan Agreement, ------------------------- Maximum Capital Expenditures, is hereby amended by deleting such Section in its - ---------------------------- entirety and substituting in lieu thereof the following: "Section 7.13 Maximum Capital Expenditures. (a) As of each fiscal ---------------------------- quarter end set forth below, and (b) at the time of any Advance hereunder which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit Capital Expenditures (excluding assets purchased with the proceeds of obsolete, worn out or no longer useful assets as permitted by Section 7.4(a) hereof and, on and after the TeleCorp/Tritel Merger Effective Date, excluding assets purchased with the proceeds of any capital contributed to the Parent by Holdings or any loans made to the Parent by Holdings permitted hereunder and -2- contributed by the Parent to the Borrower as capital or otherwise lent by the Parent to the Borrower) for the Borrower and its Subsidiaries to exceed in any period:
Period Total Capital Expenditures ------ -------------------------- From January 1, 2000 through December 31, 2000 $411,000,000 From January 1, 2001 through December 31, 2001 $175,000,000 From January 1, 2002 through December 31, 2002 $ 75,000,000 From January 1, 2003 through December 31, 2003 $ 50,000,000 From January 1, 2004 through December 31, 2004 $ 50,000,000 From January 1, 2005 through December 31, 2005 $ 50,000,000 From January 1, 2006 through December 31, 2006 $ 50,000,000 From January 1, 2007 through December 31, 2007 $ 50,000,000
; provided that any permitted amount which is not spent in any period -------- specified above (excluding any amount carried forward from the immediately preceding period permitted to be spent during such period) may be carried forward to the immediately subsequent period, and may be spent in addition to the otherwise applicable limitation for such period; provided further -------- ------- that for purposes of calculating the amount of any carry-forward amount for any period under this Section 7.13, any amount carried forward from the preceding period shall be deemed to be the first amount spent during the current period; provided, further, that on and after the TeleCorp/Tritel -------- ------- Merger Effective Date, that in addition to the amounts otherwise permitted under this Section 7.13, the Borrower and its Subsidiaries may make additional Capital Expenditures in an aggregate amount not to exceed the product of (x) $10.00 multiplied by (y) the number of aggregate POPs located ------------- within the network for the purposes of constructing voice, data, video and/or other media communication systems using new technology pursuant to a business plan and during periods approved of in advance in writing by the Required Lenders." (c) Amendment to Section 7.14. Section 7.14 of the Loan Agreement, ------------------------- Total Leverage Ratio, is hereby amended by deleting such Section in its entirety - -------------------- and substituting in lieu thereof the following: "Section 7.14 Total Leverage Ratio. (a) As of the end of any -------------------- calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, in each case, on and after December 31, 2002, the Borrower shall not permit the Total Leverage Ratio to exceed the ratios set forth below during the periods indicated: -3- Period Ratio ------ ----- December 31, 2002 12.50:1 January 1, 2003 through March 31, 2003 12.00:1 April 1, 2003 through June 30, 2003 9.00:1 July 1, 2003 through December 31, 2003 7.00:1 January 1, 2004 and thereafter 5.00:1" (d) Amendment to Section 7.15. Section 7.15 of the Loan Agreement, ------------------------- Senior Leverage Ratio, is hereby amended by deleting such Section in its - --------------------- entirety and substituting in lieu thereof the following: "Section 7.15 Senior Leverage Ratio. (a) As of the end of any --------------------- calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, in each case, on and after December 31, 2002, the Borrower shall not permit the Senior Leverage Ratio to exceed the ratios set forth below during the periods indicated: Period Ratio ------ ----- December 31, 2002 10.00:1 January 1, 2003 through March 31, 2003 9.00:1 April 1, 2003 through June 30, 2003 6.00:1 July 1, 2003 through December 31, 2003 5.00:1 January 1, 2004 and thereafter 4.00:1" -4- (e) Amendment to Section 7.16. Section 7.16 of the Loan Agreement, ------------------------- Fixed Charges Coverage Ratio, is hereby amended by deleting such Section in its - ---------------------------- entirety and substituting in lieu thereof the following: "Section 7.16 Fixed Charges Coverage Ratio. (a) As of the end of any ---------------------------- calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the Fixed Charges Coverage Ratio to be less than the ratios set forth below for the periods indicated: Period Ratio ------ ----- December 31, 2003 through March 31, 2004 1.00:1 April 1, 2004 and thereafter 1.10:1" (f) Amendment to Section 7.17. Section 7.17 of the Loan Agreement, ------------------------- Interest Coverage, is hereby amended by deleting such Section in its entirety - ----------------- and substituting in lieu thereof the following: "Section 7.17 Interest Coverage Ratio. (a) As of the end of any ----------------------- calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the Interest Coverage Ratio to be less than the ratios set forth below for the periods indicated: Period Ratio ------ ----- January 1, 2003 through September 30, 2003 1.25:1 October 1, 2003 through September 30, 2004 1.50:1 October 1, 2004 and thereafter 2.00:1" 3. Consent to Terms of Additional Debt. Subject to the terms and ----------------------------------- conditions hereof, and notwithstanding any provisions of the Loan Agreement, the Lenders hereby consent to the terms of the Additional Debt set forth in the description of notes attached hereto as Exhibit A and made a part hereof (or on --------- terms substantially as set forth in the description of notes attached hereto as Exhibit A and in no event materially less favorable to the interests of the - --------- Lenders than the terms set forth in such description of notes). On or prior to the issuance of such Additional -5- Debt, the Borrower and the Parent shall provide to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, (a) certification to the Lenders (i) of the Borrower's and the Parent's compliance with Sections 7.8 through and including 7.17 of the Loan Agreement both before and after giving effect to the issuance of the Additional Debt, (ii) that neither a Default or an Event of Default exists or will be caused by the issuance of the Additional Debt, (iii) that the aggregate initial public offering price or purchase price of such Additional Debt when added to Subordinated Debt previously issued pursuant to Section 7.1(g) does not exceed $750,000,000.00 in the aggregate, and (iv) that the proceeds of such Additional Debt will be used by the Borrower solely to fund the transaction costs related to such Additional Debt, the build-out of the Borrower's Cellular System and working capital needs and other general corporate purposes of the Borrower and its Subsidiaries related to such build-out, (b) pro forma projections after giving effect to such Additional Debt, and (c) evidence that the documentation evidencing such Additional Debt shall be on the terms set forth in the description of notes attached hereto as Exhibit A (or on terms substantially as set forth in the --------- description of notes attached hereto as Exhibit A and in no event materially --------- less favorable to the interests of the Lenders than are the terms set forth in such description of notes). If the Additional Debt is expressly subordinated to the Obligations, the Additional Debt shall be "Subordinated Debt" for all purposes under the Loan Agreement and the other Loan Documents. Notwithstanding anything herein or in the Loan Agreement to the contrary, (a) the aggregate initial public offering price or purchase price of the Additional Debt shall be applied to reduce the limitation on Subordinated Debt set forth in Section 7.1(g) of the Loan Agreement, (b) for purposes of Section 7.7 of the Loan Agreement and for all other purposes under the Loan Agreement such Additional Debt shall be deemed to be Indebtedness permitted by Section 7.1 of the Loan Agreement, and (c) such Additional Debt shall not be counted as part of the Indebtedness permitted under Section 7.1(j) of the Loan Agreement. 4. No Other Amendment or Waiver. Notwithstanding the agreement of the ---------------------------- Lenders to the terms and provisions of this Amendment, the Borrower and the Parent acknowledge and expressly agree that this Amendment is limited to the extent expressly set forth herein and shall not constitute a modification of the Loan Agreement or any other Loan Documents or a course of dealing at variance with the terms of the Loan Agreement or any other Loan Documents (other than as expressly set forth above) so as to require further notice by the Administrative Agent or the Lenders, or any of them, of its or their intent to require strict adherence to the terms of the Loan Agreement and the other Loan Documents in the future. All of the terms, conditions, provisions and covenants of the Loan Agreement and the other Loan Documents shall remain unaltered and in full force and effect. 5. Representations and Warranties. Each of the Borrower and the Parent ------------------------------ hereby represents and warrants to and in favor of the Administrative Agent and the Lenders as follows: (a) each representation and warranty set forth in Article 4 of the Loan Agreement is hereby restated and affirmed as true and correct in all material respects as of the date hereof after giving effect to this Amendment, except to the extent previously fulfilled in accordance with the terms of the Loan Agreement or to the extent relating specifically to the Agreement Date (or date prior thereto) or otherwise inapplicable; -6- (b) each of the Borrower and the Parent has the corporate power and authority (i) to enter into this Amendment and (ii) to do all acts and things as are required or contemplated hereunder to be done, observed and performed by it; (c) this Amendment has been duly authorized, validly executed and delivered by one or more Authorized Signatories of each of the Borrower and the Parent, and this Amendment and the Loan Agreement, as amended hereby, constitute the legal, valid and binding obligations of each of the Borrower and the Parent, enforceable against each of the Borrower and the Parent in accordance with their respective terms, subject, as to enforcement of remedies, to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower or the Parent); and (d) the execution and delivery of this Amendment and performance by each of the Borrower and the Parent under the Loan Agreement, as amended hereby, does not and will not require the consent or approval of any regulatory authority or governmental authority or agency having jurisdiction over the Borrower and/or the Parent which has not already been obtained, nor be in contravention of or in conflict with the certificate of incorporation or by-laws of either of the Borrower and the Parent, or any provision of any statute, judgment, order, indenture, instrument, agreement, or undertaking, to which the Borrower and/or the Parent is party or by which the Borrower's and/or the Parent's respective assets or properties are bound. 6. Conditions Precedent to Effectiveness of Amendment. The effectiveness -------------------------------------------------- of this Amendment is subject to: (a) the execution and delivery of counterparts of this Amendment by the Borrower, the Parent, the Administrative Agent and the Required Lenders; (b) all of the representations and warranties of each of the Borrower and the Parent under Section 5 hereof, which are made as of the date hereof, being true and correct in all material respects; (c) receipt by the Administrative Agent, on behalf of the Lenders executing and delivering this Amendment on or prior to 5 p.m. (New York time) on Tuesday, January 9, 2001, of an amendment fee in the amount of 0.125% of the sum of (i) the aggregate outstanding Loans (other than the outstanding Revolving Loans) of such Lenders and (ii) the Revolving Loan Commitments of such Lenders (such sum, the "Amendment Fee"), which Amendment Fee shall be fully earned when ------------- due and non-refundable when paid; and -7- (d) receipt of any other documents or instruments that the Administrative Agent, the Lenders, or any of them, may reasonably request, certified by an officer of each of the Borrower and the Parent if so requested. 7. Additional Condition Precedent for Amendment to Section 7.13. In ------------------------------------------------------------ addition to the satisfaction of the Conditions Precedent set forth in Section 6 hereof, the amendment to Section 7.13 of the Loan Agreement set forth in Section 2(a) hereof shall be effective only if the Administrative Agent has received a certificate of the Borrower in form and substance satisfactory to the Administrative Agent setting forth evidence that the gross proceeds of such Additional Debt will be no less than $200,000,000. 8. Counterparts. This Amendment may be executed in multiple ------------ counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 9. Loan Documents. Each reference in the Loan Agreement or any other -------------- Loan Document to the term "Loan Agreement" shall hereafter mean and refer to the Loan Agreement as amended hereby and as the same may hereafter be amended. 10. Governing Law. This Amendment shall be construed in accordance with ------------- and governed by the internal laws of the State of New York applicable to agreements made and to be performed in New York. 11. Effective Date. Upon satisfaction of the conditions precedent -------------- referred to in Section 6 above, this Amendment shall be effective as of the date first above written (except for Section 2(a) hereof, which shall be effective on the date that the conditions precedent referred to in Section 6 above and of the additional condition precedent referred to in Section 7 are satisfied). [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -8- IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused it to be executed under seal by their duly authorized officers, all as of the day and year first above written. BORROWER: TRITEL PCS, INC., a Delaware corporation By:__________________________________________ Name:_____________________________________ Title:____________________________________ PARENT: TRITEL, INC., a Delaware corporation By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 1 ADMINISTRATIVE AGENT AND LENDERS: TORONTO DOMINION (TEXAS), INC., as Administrative Agent and as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 2 ABN AMRO BANK N.V., as a Lender By: _____________________________________ Name:________________________________ Title:_______________________________ By: _____________________________________ Name:________________________________ Title:_______________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 3 AMMC CDO I, LIMITED, as a Lender By: American Money Management Corp., as Collateral Manager By: ______________________________________ Name:_________________________________ Title:________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 4 APEX (IDM) CDO I LTD., as a Lender By: ___________________________________________ Name:______________________________________ Title:_____________________________________ ELC (CAYMAN) LTD. CDO SERIES 1999-1, as a Lender By: ____________________________________________ Name:_______________________________________ Title:______________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 5 AVALON CAPITAL LTD. 2, as a Lender By: INVESCO Senior Secured Management, Inc. as attorney in fact By: ____________________________________________ Name:________________________________________ Title:_______________________________________ FLOATING RATE PORTFOLIO, as a Lender By: INVESCO Senior Secured Management, Inc. as attorney in fact By: ________________________________________________ Name:____________________________________________ Title:___________________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 6 BANK OF AMERICA, N.A., as a Lender By: ________________________________________________ Name:___________________________________________ Title:__________________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 7 BANK OF MONTREAL, as a Lender By: ________________________________________________ Name:____________________________________________ Title:___________________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 8 THE BANK OF NEW YORK, as a Lender By: _____________________________________________ Name:________________________________________ Title:_______________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 9 THE BANK OF NOVA SCOTIA, as a Lender By:_______________________________________________ Name:_________________________________________ Title:________________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 10 THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a Lender By: __________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 11 BARCLAYS BANK PLC, as a Lender By: _____________________________________________ Name:________________________________________ Title:_______________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 12 CIBC INC., as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 13 THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 14 CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 15 CYPRESSTREE INSTITUTIONAL FUND, LLC, as a Lender By: CypressTree Investment Management Company, Inc., its Managing Member By:__________________________________________ Name:_____________________________________ Title:____________________________________ NORTH AMERICAN SENIOR FLOATING RATE FUND, as a Lender By: Cypress Tree Investment Management Company, Inc., as Portfolio Manager By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 16 DEBT STRATEGIES FUND, INC., as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ MASTER SENIOR FLOATING RATE TRUST, as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ MERRILL LYNCH GLOBAL INVESTMENT SERIES: INCOME STRATEGIES PORTFOLIO, as a Lender By: Merrill Lynch Asset Management, L.P., as Investment Advisor By:__________________________________________ Name:_____________________________________ Title:____________________________________ MERRILL LYNCH PRIME RATE PORTFOLIO, as a Lender By: Merrill Lynch Asset Management, L.P., as Investment Advisor By:__________________________________________ Name:_____________________________________ Title:____________________________________ MERRILL LYNCH SENIOR FLOATING RATE FUND, INC., as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 17 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 18 EATON VANCE SENIOR INCOME TRUST, as a Lender By: Eaton Vance Management, as Investment Advisor By:__________________________________________ Name:_____________________________________ Title:____________________________________ SENIOR DEBT PORTFOLIO, as a Lender By: Boston Management and Research, as Investment Advisor By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 19 FIRST UNION NATIONAL BANK, as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 20 FORTIS CAPITAL CORP., as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 21 FRANKLIN FLOATING RATE TRUST, as a Lender By:__________________________________________ Name:_____________________________________ Title:____________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND CONSENT Signature Page 22 HELLER FINANCIAL, INC., as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 23 KZH CYPRESSTREE-1 LLC, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 24 MERITA BANK PLC, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 25 METROPOLITAN LIFE INSURANCE COMPANY, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 26 NATIONAL WESTMINSTER BANK PLC, as a Lender By: NatWest Capital Markets Limited, its Agent By: Greenwich Capital Markets, Inc., its Agent By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 27 PARIBAS CAPITAL FUNDING LLC, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 28 PNC BANK NATIONAL ASSOCIATION, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 29 ROYAL BANK OF CANADA, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 30 SOCIETE GENERALE, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 31 STEIN ROE & FARNHAM, INCORPORATED, as Agent for KEYPORT LIFE INSURANCE COMPANY, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 32 VAN KAMPEN PRIME RATE INCOME TRUST, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 33 VARIABLE INSURANCE PRODUCTS II: ASSET MANAGER PORTFOLIO, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ VARIABLE INSURANCE PRODUCTS II: ASSET MANAGER: GROWTH PORTFOLIO, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ FIDELITY ADVISOR SERIES II: FIDELITY ADVISOR FLOATING RATE HIGH FUND, as a Lender By:_______________________________________ Name:__________________________________ Title:_________________________________ THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND CONSENT Signature Page 34 EX-10.4 10 0010.txt SOLICITATION AGENCY AGREEMENT DATED 01-11-2001 Exhibit 10.4 EXECUTION COPY SALOMON SMITH BARNEY INC. 390 GREENWICH STREET NEW YORK, NEW YORK 10013 LEHMAN BROTHERS INC. THREE WORLD FINANCIAL CENTER NEW YORK, NEW YORK 10285 January 11, 2001 Tritel PCS, Inc. 1010 North Glebe Road Arlington, Virginia 22201 Attention: Thomas H. Sullivan Tritel PCS, Inc. Consent Solicitation Ladies and Gentlemen: Tritel PCS, Inc. (the "Company") has advised Salomon Smith Barney Inc. ("SSBI") and Lehman Brothers Inc. ("Lehman Brothers"), that the Company desires to appoint SSBI and Lehman Brothers, on the terms set forth in this Engagement Letter, to act as joint solicitation agents (each of SSBI and Lehman Brothers, a "Solicitation Agent" and, together, the "Solicitation Agents") in connection with the solicitation of consents from the holders of Tritel PCS's 12-3/4% Senior Subordinated Discount Notes due 2009 (the "Notes") to an amendment (the "Proposed Amendment") to Section 4.09 of the Indenture dated as of May 11, 1999 (the "Indenture"), as amended, among the Company, Tritel, Inc., Tritel Communications, Inc., Tritel Finance, Inc. (collectively, the "Guarantors") and The Bank of New York, as trustee (the "Trustee"). The Company intends to effect the Proposed Amendment if it receives without revocation the consents of the holders of record of a majority of the outstanding Accreted Value (as defined in the Indenture) of the Notes (such consents, the "Requisite Consents"). The Proposed Amendment, if effected, will be contained in a supplement to the Indenture (the "Supplemental Indenture") executed by the Company, the Guarantors and the Trustee. The solicitation of consents to the Proposed Amendment to the Indenture is herein referred to as the "Consent Solicitation". The holders of the Notes are herein referred to as the "Holders". Accordingly, the parties hereto agree as follows: 1. Engagement of the Solicitation Agents. (a) The Company hereby appoints SSBI and Lehman Brothers as Solicitation Agents and authorizes SSBI and Lehman Brothers to act as such in connection with the Consent Solicitation. As a Solicitation Agent, each of SSBI and Lehman Brothers agrees, severally and not jointly, in accordance with its respective customary practices, to perform those services in connection with the Consent Solicitation as are customarily performed by investment banking firms in connection with consent solicitations. 2 (b) The Company expressly acknowledges that all opinions and advice (written or oral) given by the Solicitation Agents to the Company in connection with their engagement are intended solely for the benefit and use of the Company (including its management, directors and attorneys) in considering the Consent Solicitation, and the Company agrees that no such opinion or advice shall be used for any other purpose or reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose, nor shall any public references to SSBI or Lehman Brothers be made by the Company (or such persons), without the prior written consent of SSBI or Lehman Brothers, as applicable, which consent shall not be unreasonably withheld. 2. No Liability for Acts of Dealers, Banks and Trust Companies. Neither SSBI nor Lehman Brothers shall have any liability (in tort, contract or otherwise) to the Company or any other person for any act or omission on the part of another Solicitation Agent, any broker or dealer in securities ("Dealer") (other than SSBI or Lehman Brothers, as applicable) or any bank or trust company or any other person (other than SSBI or Lehman Brothers, as applicable), and neither SSBI nor Lehman Brothers, as applicable, shall be liable for their respective acts or omissions in performing their obligations as the Solicitation Agents hereunder, except to the extent expressly set forth in Annex I hereto. In soliciting or obtaining consents, neither the Company nor any Dealer, bank or trust company shall be deemed to be acting as an agent of the Solicitation Agents or the agent of the Company, and no Solicitation Agent shall be deemed the agent of the Company, another Solicitation Agent, any Dealer, bank or trust company or any other person. The Company acknowledges and agrees that, the Solicitation Agents shall act as independent contractors, and any of their duties arising out of their engagement pursuant to this Engagement Letter shall be owed solely to the Company. 3. The Consent Solicitation Material. (a) The Company agrees to furnish the Solicitation Agents as soon as practicable on or following the date hereof with as many copies as they may reasonably request of the form of consent, waiver and letter agreement, the letter to the Holders and any related materials to be used by the Company in connection with the Consent Solicitation (collectively, as amended or supplemented from time to time, the "Consent Solicitation Material"). (b) Prior to and during the period of the Consent Solicitation, the Company will inform the Solicitation Agents promptly after it receives notice or becomes aware of the happening of any event, or the discovery of any fact, which would require the making of any change in any Consent Solicitation Material or would affect in any material respect the truth or completeness of any representation or warranty contained in this Engagement Letter if such representation or warranty were being made immediately after the happening of such event or discovery of such fact. Any such change shall be promptly made to such Consent Solicitation Material. (c) The Company represents that the Consent Solicitation Material has been or will be approved by, and is the sole responsibility of, the Company (except for information describing the Solicitation Agents) and the Company authorizes the Solicitation Agents to use the Consent Solicitation Material in connection with the Consent Solicitation. 4. Withdrawal. If the Company (a) uses or permits the use of any Consent Solicitation Material (i) which has not been submitted to a Solicitation Agent for its comments or (b) shall have breached any of its representations, warranties, agreements or covenants herein, then, in either case, each Solicitation Agent shall be entitled to withdraw as a 3 Solicitation Agent in connection with the Consent Solicitation without any liability or penalty whatsoever for such withdrawal and without loss of any right to indemnification or contribution provided in Annex I hereto or right to the payment of all expenses payable hereunder which have accrued to the date of such withdrawal. If a Solicitation Agent shall withdraw pursuant to the foregoing, the other Solicitation Agent shall have the right, but not the obligation, exercisable in its sole discretion, to continue as a Solicitation Agent hereunder, in which event this Agreement shall remain in full force and effect with respect to such other Solicitation Agent and all amounts payable hereunder accruing after the date of such Solicitation Agent's withdrawal shall be payable solely to such other Solicitation Agent. 5. No Solicitation Agent Fee. The Solicitation Agents are not entitled to compensation for their services hereunder. 6. Payment of Fees and Expenses. The Company agrees to pay the (i) fees and disbursements of its counsel, (ii) all fees and expenses relating to the preparation, filing, printing, mailing and publishing of all Consent Solicitation Material, (iii) all advertising charges in connection with the Consent Solicitation, (iv) all customary mailing and handling fees and expenses of Dealers, banks and trust companies in forwarding the Consent Solicitation Material to their customers, (v) all other fees and expenses in connection with the Consent Solicitation, (vi) all of the reasonable fees and disbursements of the Solicitation Agents' counsel and (vii) all of the Solicitation Agents' travel and other out-of-pocket expenses incurred in connection with or arising out of the Consent Solicitation. 7. Securityholder Lists. The Company shall provide the Solicitation Agents with copies of the Company's records showing the names and addresses of, and principal amounts of Notes held by, all the Holders for purposes of the Consent Solicitation and will use its reasonable best efforts to cause the Solicitation Agents to be advised from day-to-day during the period of the Consent Solicitation as to any transfers of Notes. 8. Representations, Warranties and Covenants of the Company and the Guarantors. The Company and the Guarantors, jointly and severally, represent, warrant and covenant to the Solicitation Agents that: (a) Each of the Company, the Guarantors and each of their corporate subsidiaries, whether directly or indirectly owned, is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is chartered or organized and is duly qualified to transact business and is in good standing in each jurisdiction wherein it owns, leases or operates property or conducts business, except to the extent that the failure to be so qualified or to be in good standing does not have a material adverse effect on the Company, the Guarantors and their subsidiaries taken as a whole. (b) All necessary corporate and stockholder action has been duly taken by the Company and the Guarantors to authorize the Consent Solicitation, to authorize the execution, delivery and performance of this Engagement Letter and the Supplemental Indentures and all other actions contemplated by this Engagement Letter and the Consent Solicitation, and no other corporate or stockholder proceedings are necessary to authorize any such actions. This Engagement Letter has been duly authorized, executed and delivered by the Company and the Guarantors and is a legal, valid and binding agreement of each of the Company and the Guarantors, enforceable against the Company and the Guarantors, 4 respectively, in accordance with its terms, except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally and except for the application of general principles of equity and public policy. (c) Each of the Consent Solicitation, the delivery of the Consent Solicitation Material and the execution, delivery and performance of, and the consummation of the transactions contemplated by, this Engagement Letter does comply and will comply with all applicable requirements of law, including, without limitation, the Securities and Exchange Act of 1934 (the "Exchange Act") and the rules and regulations promulgated thereunder, and other applicable regulations of the Securities and Exchange Commission or any other Federal, state, local or foreign governmental or regulatory agency, authority or instrumentality, and no consent, authorization, approval, order, exemption or other action of or filing with any such agency, authority or instrumentality is required in connection with any of the Consent Solicitation, the delivery of the Consent Solicitation Material and the execution, delivery and performance of, and the consummation of the transactions contemplated by, this Engagement Letter. (d) None of the Consent Solicitation, assuming receipt of the Requisite Consents, the execution, delivery and performance of the Supplemental Indentures, or the execution, delivery and performance of, or the consummation of the transactions contemplated by, this Engagement Letter do or will conflict with, result in a breach or violation of, or constitute a default under, (i) any law or the certificate of incorporation or the bylaws of any of the Company, the Guarantors or any of their respective subsidiaries or (ii) the terms of any indenture, mortgage, note or other agreement or instrument to which any of the Company, the Guarantors or any of their respective subsidiaries is a party or bound or subject or to which any of their respective properties or assets is bound or subject or (iii) any judgment, order or decree applicable to any of the Company, the Guarantors or any of their respective subsidiaries of any court, regulatory body, administrative agency, governmental body or arbitrator having jurisdiction over the Company or any of its subsidiaries. (e) No restraining order has been issued against the Company or proceeding, litigation or investigation initiated or, to the best knowledge of the Company after due inquiry, threatened against the Company (and no development in any pending litigation against the Company has occurred) with respect to any of the Consent Solicitation, the execution, delivery and performance of the Supplemental Indentures, or the execution, delivery and performance of, or the consummation of the transactions contemplated by, this Engagement Letter. (f) The Company is not, nor is it directly or indirectly controlled by, or acting on behalf of any person which is, (i) an "investment company" within the meaning of the Investment Company Act of 1940 and the rules and regulations promulgated thereunder or (ii) a "holding company" within the meaning of, or subject to regulation under, the Public Utility Holding Company Act of 1935 and the rules and regulations promulgated thereunder. (g) On or promptly following the date the Requisite Consents are received, the Company and the Guarantors will cause the Supplemental Indenture to be executed and delivered by the Company, the Guarantors and the Trustee. Assuming valid execution by the Trustee, the Supplemental Indentures will constitute valid and binding obligations of the Company, 5 except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally and except for the application of general principles of equity. (h) Each of the representations and warranties set forth in clauses (a) through (f) of this Section 8 will be true and complete on and as of the date hereof and the date the Consent Solicitation is completed. 9. Conditions to the Solicitation Agents' Obligations. The Solicitation Agents' obligations hereunder shall at all times be subject to the following conditions (it being understood that each Solicitation Agent may determine in its sole discretion whether such conditions have been satisfied and may exercise any rights or remedies with respect thereto without regard to whether the other Solicitation Agent has exercised its rights or remedies): (a) All representations, warranties and other statements of the Company contained herein are now, and at all times during the term of the Consent Solicitation shall be, true and correct in all material respects, and the Company and each of the Guarantors at all times shall have performed in all material respects all of their respective obligations hereunder theretofore to be performed or satisfied. (b) No stop order, restraining order or denial of an application for approval shall have been issued and no litigation shall have been commenced or threatened with respect to the Consent Solicitation or this Engagement Letter, and no development in any pending litigation with respect to the Consent Solicitation or this Engagement Letter shall have occurred by or before any agency, court or other governmental body of any jurisdiction which a Solicitation Agent believes in good faith makes it inadvisable for such Solicitation Agent to continue to act hereunder. 10. Additional Covenants of the Company. (a) Prior to and during the term of the Consent Solicitation, the Company will advise the Solicitation Agents promptly of (i) the occurrence of any event, or the discovery of any fact, which could cause the Company to fail to commence or withdraw or terminate the Consent Solicitation, (ii) any proposal or requirement to amend or supplement any Consent Solicitation Material, (iii) any extension, termination, completion or expiration of the Consent Solicitation, (iv) any communication from the Securities and Exchange Commission relating to the Consent Solicitation or any of the Consent Solicitation Material, including any order suspending or preventing the use thereof, (v) any other material developments in connection with the Consent Solicitation and (vi) any other information relating to the Consent Solicitation which the Solicitation Agents may from time to time reasonably request. (b) The Company will comply with the Securities Act of 1933 (the "Securities Act"), the Exchange Act, the Trust Indenture Act of 1939 (the "Trust Indenture Act"), and the applicable rules and regulations promulgated thereunder, as well as all applicable stock exchange regulations, in connection with the Consent Solicitation Material and the Consent Solicitation. If any event shall occur or condition exist as a result of which it is necessary to amend or supplement any Consent Solicitation Material in order that such Consent Solicitation Material will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time they are delivered to a Holder, not misleading or if it shall be necessary at any such time to amend or supplement the Consent Solicitation 6 Material in order to comply with the requirements of the Securities Act, the Exchange Act or the Trust Indenture Act, the Company will promptly prepare such amendment or supplement as may be necessary to correct such untrue statement or omission or to make the Consent Solicitation Material comply with such requirements. The Company will disseminate, as required, any and all necessary amendments and supplements to the Consent Solicitation Material and the other documents to be distributed to the Holders in connection with the Consent Solicitation and will promptly furnish to the Solicitation Agents true and accurate copies of each such amendment or supplement prior to the distribution thereof. 11. Termination; Full Force and Effect. This Engagement Letter shall terminate upon the date of termination or withdrawal of the Consent Solicitation. The indemnity and contribution agreements contained in Annex I hereto, the fee and expense reimbursement agreements contained in Section 6 and the representations, warranties, covenants and agreements of the Company and the Guarantors set forth in this Engagement Letter shall remain operative and in full force and effect regardless of (i) any failure to commence, or the withdrawal, termination or consummation of, the Consent Solicitation or the termination or assignment of this Engagement Letter, (ii) any investigation made by or on behalf of any indemnified party, (iii) any termination of a Solicitation Agent's appointment hereunder pursuant to Section 4, this Section 11 or otherwise and (iv) the completion of a Solicitation Agent's services hereunder. 12. Miscellaneous. In the event any one or more of the provisions contained in this Engagement Letter should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). This Engagement Letter may be executed in any number of separate counterparts, and all the said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart by facsimile transmission shall be effective as delivery of a manually signed counterpart. This Engagement Letter constitutes the entire agreement between the parties hereto with respect to the subject matter hereof. This Engagement Letter, including any right to indemnity or contribution hereunder, shall inure to the benefit of and be binding upon the Company, the Solicitation Agents and the other indemnified parties, and each of the Company's, the Solicitation Agents' and their respective successors and assigns. Except to the extent provided in Annex I hereto, nothing in this Engagement Letter is intended, or shall be construed, to give to any other person or entity any right hereunder or by virtue hereof. 13. APPLICABLE LAW. THIS ENGAGEMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW. 15. Notices. All notices and other communications required or permitted to be given under this Engagement Letter shall be in writing and shall be deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or by facsimile transmission, subsequently confirmed in writing as aforesaid, to the parties hereto as follows: 7 (a) If to the Solicitation Agents: Salomon Smith Barney 390 Greenwich Street New York, NY 10013 Attention: General Counsel Fax: (212) 783-2274 Confirm: (212) 783-7000 and Lehman Brothers Inc. Three World Financial Center 200 Vessey Street New York, NY 10285 Attention: Fax: Confirm: with a copy to: Cravath, Swaine & Moore 825 Eighth Avenue New York, NY 10019 Attention: William P. Rogers, Jr. Fax: (212) 474-3700 Confirm: (212) 474-1000 (b) If to the Company and/or the Guarantors: Tritel PCS, Inc. 1010 North Glebe Road Arlington, Virginia 22201 Fax: (703) 236-1376 Confirm: (703) 236-1122 Attention: Thomas H. Sullivan With a copy to: Cadwalader, Wickersham & Taft 100 Maiden Lane New York, New York 10022 Fax: (212) 504-6666 Confirm: (212) 504-6000 Attention: Brian Hoffmann Please indicate your acceptance of the provisions hereof by signing the enclosed copy of this Engagement Letter. 8 If you elect to deliver this Engagement Letter by telecopier, please arrange for the executed original to follow by next-day courier. Very truly yours, SALOMON SMITH BARNEY INC., by /s/ Michael S. Zicari ________________________ Name: Michael S. Zicari Title: Director LEHMAN BROTHERS INC., by /s/ Steven G. Delaney ________________________ Name: Steven G. Delaney Title: Managing Director ACCEPTED AND AGREED on January 11, 2001: TRITEL PCS, INC., by /s/ Thomas H. Sullivan ___________________________________ Name: Thomas H. Sullivan Title: Executive Vice President and Chief Financial Officer ACCEPTED AND AGREED on January 11, 2001: TRITEL, INC., by /s/ Thomas H. Sullivan ___________________________________ Name: Thomas H. Sullivan Title: Executive Vice President and Chief Financial Officer ACCEPTED AND AGREED on January 11, 2001: TRITEL COMMUNICATIONS, INC., by /s/ Thomas H. Sullivan ___________________________________ Name: Thomas H. Sullivan Title: Executive Vice President and Chief Financial Officer 9 ACCEPTED AND AGREED on January __, 2001: TRITEL FINANCE, INC., by________________________ Name: Title: CONFIDENTIAL ANNEX I January 11, 2001 to the Engagement Letter Tritel PCS, Inc. Indemnification All capitalized terms used herein but not defined herein shall have the meanings provided in the Engagement Letter to which this Annex I is attached (the "Engagement Letter"). 1. The Company and the Guarantors, jointly and severally, agree to indemnify and hold harmless you, your directors, officers, employees and agents and each person who controls you within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, or other expenses reasonably incurred in connection with investigating or defending any such loss, claim, damage, liability or action, and each such indemnified party shall have no liability to the Company or its parents, owners, creditors or security holders for any loss, claim, damage or liability or other expense, (a) arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any Consent Solicitation Material, or any omission or alleged omission to state in any Consent Solicitation Material a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading or (ii) any withdrawal, termination or cancelation by the Company of, or failure by the Company to make or consummate, the Consent Solicitation according to its terms or (iii) any breach or alleged breach by the Company or any of the Guarantors of any representation or warranty or failure to comply with any of the agreements contained in the Engagement Letter or (iv) any other action or failure to act by the Company, its employees or other agents or by you at the Company's request or with the Company's consent or (b) otherwise arising out of, relating to or in connection with or alleged to arise out of, relate to or be in connection with the Consent Solicitation or the Proposed Amendment or your role as a Solicitation Agent on or after the date hereof in connection with either thereof, whether the event allegedly giving rise to such claim shall have occurred prior to the commencement of, during the period of, or subsequent to the consummation of, the Consent Solicitation, and, in each case, agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that neither of the Company nor any of the Guarantors shall be liable to the extent that any such loss, claim, damage or liability arises out of or is based upon (1) in the case of clause (a)(i), any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by you or on your behalf specifically for inclusion therein or (2) in the case of clauses (a)(iv) and (b), that is determined to have resulted primarily from your bad faith, willful misconduct or gross negligence. This indemnity agreement will be in addition to any liability which the Company and the Guarantors may otherwise have. 2. Promptly after receipt by an indemnified party under this Annex I of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying parties under this Annex I, notify the indemnifying parties in writing of the commencement thereof; but the failure so to notify the indemnifying parties (i) will not relieve it from liability under the first paragraph of this Annex I unless and to the extent it did not otherwise learn of such action and such failure results in prejudice to the indemnifying parties of rights and defenses and (ii) will not, in any event, relieve the indemnifying parties from any obligations to any indemnified party other than the indemnification obligation provided in the first paragraph of this Annex I. The indemnifying parties shall be entitled to appoint counsel of the indemnifying parties' 2 choice at the indemnifying parties' expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying parties shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying parties' election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ one firm or separate counsel (plus local counsel), and the indemnifying parties shall bear the reasonable fees, costs and expenses of such separate counsel, if (i) the use of counsel chosen by the indemnifying parties to represent the indemnified party would present such counsel with a conflict of interest, (ii) the indemnifying parties shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iii) the indemnifying parties shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying parties. An indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. 3. If the indemnity provided for in the foregoing paragraphs of this Annex I is judicially determined to be unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or expenses referred to therein, then you, the Company and the Guarantors, in lieu of indemnifying such indemnified party, agrees that the Company and the Guarantors shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors on the one hand and by you on the other from the Consent Solicitation or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing clause (i), but also the relative fault of the Company and the Guarantors on the one hand and of you on the other in connection with the statements, actions or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company and the Guarantors on the one hand and by you on the other shall be determined taking into account that you are not receiving a fee for acting as a Solicitation Agent. The relative fault of the Company and the Guarantors on the one hand and of you on the other (i) in the case of an untrue or alleged untrue statement of a material fact or an omission or alleged omission to state a material fact, shall be determined by reference to, among other things, whether such statement or omission relates to information supplied by the Company or by you and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission and (ii) in the case of any other action or omission, shall be determined by reference to, among other things, whether such action or omission was taken or omitted to be taken by the Company or by you and the parties' relative intent, knowledge, access to information and opportunity to prevent such action or omission. The obligations of the Solicitation Agents to contribute hereunder are several and not joint and no Solicitation Agent (together with its indemnified persons) shall be obligated to contribute an amount in excess of the benefits it received hereunder. 3 4. The Company, the Guarantors and you agree that it would not be just and equitable if contribution pursuant to this Annex I were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. For purposes of this Annex I, each person who controls you and each of your directors, officers, employees and agents shall have the same rights to contribution as you, subject in each case to the applicable terms and conditions set forth above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. EX-10.6.2 11 0011.txt AMD. NO.1 TO AT&T WIRELESS SERVICE NETWORK AGMT Exhibit 10.6.2 AMENDMENT NO.1 TO AT&T WIRELESS SERVICES NETWORK MEMBERSHIP LICENSE AGREEMENT THIS AMENDMENT NO. 1 TO THE NETWORK MEMBERSHIP LICENSE AGREEMENT ("Amendment") dated as of November 13, 2000, by and between AT&T Corp., a New York corporation, with offices located at 32 Avenue of the Americas, New York, New York 10013, for itself and its affiliated companies, including AT&T Wireless Services, Inc. (collectively "Licensor"), and Tritel, Inc., a Delaware corporation, with offices located at 1111 Capitol Street, Suite 500, Jackson, Mississippi 39201 ("Licensee"). Certain capitalized terms used herein and not otherwise defined have the meaning assigned to such term in the License Agreement referred to below. WHEREAS, Licensor and Licensee are parties to that certain Network Membership License Agreement, dated as of January 7, 1999, as amended, modified or supplemented (the "License Agreement"), pursuant to which Licensor agreed to license and allow Licensee to use the Licensed Marks in the Licensed Territory on the terms set forth in the License Agreement; WHEREAS, Licensee has entered into an Agreement and Plan of Reorganization and Contribution with TeleCorp PCS, Inc. and AT&T Wireless Services, Inc., dated as of February 28, 2000, as amended (the "Merger Agreement"), pursuant to which, among other things, Licensee agreed to extend the term of the License Agreement; and WHEREAS, upon consummation of the Contribution (as defined in the Merger Agreement), Licensee and Licensor desire, that the License Agreement be amended to extend the term of the License Agreement and make other conforming changes on the terms and conditions set forth in this Amendment. NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. "Stockholder's Agreement." All references in the License Agreement to the ------------------------ "Stockholder's Agreement" are hereby amended to refer to that certain Stockholder's Agreement, dated as of November 13, 2000 by and among Licensee, an Affiliate of Licensor and certain other stockholders of Licensee, as the same may be amended, modified or supplemented in accordance with the terms thereof. 2. Amendment to Term. Section 11.1(a) of the License Agreement is hereby ----------------- amended by deleting the first sentence thereof in its entirety and inserting the following sentence in replacement therefor: "This Agreement shall commence on the date hereof and shall be in effect for a term ending July 17, 2005, unless terminated earlier pursuant to this Section 11." 3. Effectiveness of Amendment. This Amendment shall become effective only -------------------------- upon the consummation of the Contribution (as defined in the Merger Agreement). 4. Severability of Provisions. Any provision of this Amendment which is -------------------------- prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 5. Agreement to Remain in Full Force and Effect. This Amendment shall be -------------------------------------------- deemed to be an amendment to the License Agreement. All references to the License Agreement in any other agreements or documents shall on and after the date hereof be deemed to refer to the License Agreement as amended hereby. Except as amended hereby, the License Agreement shall remain in full force and effect and is hereby ratified, adopted and confirmed in all respects. 6. Heading. The headings in this Amendment are inserted for convenience and ------- identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Amendment or any provision thereof. 7. Counterparts. This Amendment may be executed in counterparts, each of ------------ which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8. Applicable Law; Jurisdiction. The construction, performance and ---------------------------- interpretation of this Agreement shall be governed by the U.S. Trademark Act, 15 U.S.C. 1051 et seq., and the internal, substantive laws of the State of New York, without regard to its principles of conflicts of law; provided that if the foregoing laws should be modified during the term hereof in such a way as to adversely affect the original intent of the parties, the parties will negotiate in good faith to amend this Amendment to effectuate their original intent as closely as possible. [signature page follows] Executed as of the date first written above. AT&T CORP. By /s/ Steven Garfinkel ------------------------------------- Name: Steven Garfinkel ---------------------------------- Its: Assistant Secretary ----------------------------------- TRITEL, INC. By /s/ Thomas H. Sullivan ------------------------------------- Name: Thomas H. Sullivan ---------------------------------- Its: Executive Vice President - Chief Financial Officer & Treasurer ----------------------------------- EX-10.7.2 12 0012.txt AMD. NO.1 TO INTERCARRIER ROAMER SERVICE AGMT Exhibit 10.7.2 AMENDMENT NO. 1 TO INTERCARRIER ROAMER SERVICE AGREEMENT AMENDMENT NO. 1 TO INTERCARRIER ROAMER SERVICE AGREEMENT ("Amendment") dated as of November 13, 2000, by and between AT&T Wireless Services, Inc., on behalf of itself and its Affiliates listed on Schedule 1 to the IRSA (as hereinafter defined) (individually and collectively, "AT&T"), and Tritel, Inc., on behalf of itself and its Affiliates listed on Schedule 2 to the IRSA (individually and collectively, the "Company"). Certain capitalized terms used herein and not otherwise defined have the meaning assigned to such term in the IRSA. WHEREAS, AT&T and the Company are party to that certain Intercarrier Roamer Service Agreement, dated as of January 7, 1999, as amended (the "IRSA"), pursuant to which each of AT&T Wireless Services, Inc. ("AT&T Wireless") and the Company made arrangements to facilitate the provision of voice and voice-related mobile wireless radio telephone service to the customers of the other Party, while such customers are using the wireless radio telephone facilities of such Party, and set forth certain roaming charges in respect thereof; and WHEREAS, the Company has entered into an Agreement and Plan of Reorganization and Contribution with TeleCorp PCS, Inc. ("TeleCorp") and AT&T, dated as of February 28, 2000, as amended (the "Merger Agreement") pursuant to which, among other things, AT&T Wireless has agreed to amend and update the terms of the IRSA. NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Schedule 1. Schedule 1 to the IRSA is hereby deleted in its entirety ---------- and replaced with Schedule 1 attached hereto. 2. Severability of Provisions. Any provision of this Amendment which is -------------------------- prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 3. Agreement to Remain in Full Force and Effect. This Amendment shall -------------------------------------------- be deemed to be an amendment to the IRSA. All references to the IRSA in any other agreements or documents shall on and after the date hereof be deemed to refer to the IRSA as amended hereby. Except as amended hereby, the IRSA shall remain in full force and effect and is hereby ratified, adopted and confirmed in all respects. 4. Effectiveness of Amendment. This Amendment shall become effective -------------------------- only upon the consummation of the Contribution (as defined in the Merger Agreement). 5. Heading. The headings in this Amendment are inserted for convenience ------- and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Amendment or any provision thereof. 6. Counterparts. This Amendment may be executed in counterparts, each ------------ of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 7. Governing Law. This Amendment shall be construed in accordance with ------------- the laws of the State of Washington without reference to the choice of law principles, except as subject to the United States Arbitration Act and the Federal Communications Act, each as amended. [signature page follows] Executed as of the date first written above. AT&T WIRELESS SERVICES, INC. By /s/ Joseph Stumpf ----------------------------------- Name: Joseph Stumpf -------------------------------- Its: Vice President - Acquisitions and ---------------------------------- Development TRITEL, INC. By /s/ Thomas H. Sullivan ------------------------------------ Name: Thomas H. Sullivan --------------------------------- Its: Executive Vice President - Chief ---------------------------------- Financial Officer and Treasurer SCHEDULE 1 AT&T Wireless Services, Inc. and its Affiliates ----------------------------------------------- EX-10.8.1 13 0013.txt ROAMING ADMINISTRATION SERVICES AGMT 01-07-1999 Exhibit 10.8.1 ROAMING ADMINISTRATION SERVICE AGREEMENT ROAMING ADMINISTRATION SERVICE AGREEMENT ("Agreement") made this 7th day of January, 1999, by and between AT&T Wireless Services, Inc. ("AWS"), a Delaware corporation, with its principal place of business at 5000 Carillon Point, Kirkland, WA 98033, and Tritel Inc. ("Tritel"), a Delaware corporation, with its principal place of business at 1080 River Oaks Drive, Suite B-100, Jackson, Mississippi 39208. Recitals -------- WHEREAS, Tritel would like to receive certain benefits under Intercarrier Roaming Services Agreements between AWS and other providers of wireless telecommunications service, and AWS would like Tritel to receive such benefits under the terms and conditions of this Agreement: WHEREAS, AWS provides Roamer Administration Services to owners and operators of wireless telecommunications systems; WHEREAS, Tritel owns and operates wireless telecommunications system (s) identified on Exhibit A and would like to receive Roamer Administration Services from AWS; and WHEREAS, AWS would like to provide Tritel with Roamer Administration Services subject to the terms and conditions of this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the parties hereby agree as follows: Definitions As used herein, the following terms shall have the following meanings: AS means the Administrative Services as more fully described in Exhibit B. CIBER means Cellular Intercarrier Billing Exchange Record as more fully described in the CIBER Standard. CIBER Standard means the publication prepared by CIBERNET Corporation, a wholly-owned subsidiary of the Cellular Telecommunications Industry Association, as a service to the wireless communications industry. Unless specifically provided otherwise in this Agreement, all words and phrases defined in the CIBER Standard shall have the meaning herein that they have therein. Claims means any claims, liabilities, damages, costs and expenses (including reasonable attorneys' fees) asserted by a third party against a party to this Agreement. CMRS or Service means Commercial Mobile Radio Service. EDS PCC means EDS Personal Communications Corporation. EDS PCC Agreement means that certain Interoperator Agreement dated January 3, 1997, between AWS and EDS PCC for certain services, as that Agreement may be amended, extended or renegotiated from time to time. ESN means the Electronic Serial Number that is encoded in a wireless telephone set by the manufacturer and which is broadcast by such telephone. Expenses means those costs and expenses related to providing the Roaming Administration Services set forth in Exhibit C, as may be amended from time to time by AWS. Fees means those fees for Roaming Administration Services set forth in Exhibit C, as may be amended from time to time by AWS. Incollect Obligations means those obligations of Tritel to AWS and Other Wireless Carriers that arise from Roaming by Tritel's subscribers on other wireless systems. These Incollect Obligations accrue separate for each of AWS and each Other Wireless Carrier. Intercarrier Roaming Services Agreement means an agreement entered into by two providers of CMRS under which each carrier agrees to provide Service to the subscribers of the other carrier and which sets forth other terms and conditions of the provision of such Service, including but not limited to price, payment or settlement, and fraud liability terms, as the agreement may be amended, extended or renegotiated from time to time. ISS means Intercarrier Settlement Services as more fully described in Exhibit B. MIN means the ten-digit Mobile Identification Number which is assigned by a Home Carrier to each of its registered customers. -2- NACN means the North American Cellular Network, Inc. and the SS7 signaling network owned and operated by the North American Cellular Network, Inc. NPA/NXX combinations means the six-digit numerical combinations assigned by regulatory authorities to identify the area code and telephone number prefix for Service. NSS means Net Settlement Services as more fully described in Exhibit B. Other Wireless Carriers means facilities-based providers of CMRS with whom AWS has entered an Intercarrier Roaming Services Agreement and which are listed on Exhibit A-1. Outcollect Obligations means obligations owed to Tritel by AWS and Other Wireless Carriers arising from Roaming by the subscribers of these companies on the TRITEL System. These Outcollect Obligations accrue separately for each of AWS and each Other Wireless Carrier. PRV means Positive Roamer Verification services as more fully described in Exhibit B. Roamer means a customer of a wireless carrier who seeks Service within a geographic area served by another wireless carrier. Roaming Administrative Services means the services described in Exhibit B, including AS, FV, ISS, NSS, PRV and XLI, together with the services that may be provided in connection with the access to the Intercarrier Roaming Services Agreements entered into between AWS and Other Wireless Carriers. Serving Carrier means a Party who provides Service for registered customers of another Party while such customers are in the geographic area where the Serving Carrier, directly or through subsidiaries, provides Service. Settlement Period shall mean each one-month period of time commencing at 12:01 a.m. Pacific Standard Time on the sixteenth day of a given calendar month and ending at 12:00 midnight on the fifteenth day of the immediately following calendar month. XLI means a certain type of PRV service as more fully described in Exhibit B. TRITEL System means the wireless telecommunications system(s) owned and operated by Tritel as identified on Exhibit A. -3- Agreement 1. Access to Intercarrier Roaming Services Agreements. During the term -------------------------------------------------- of this Agreement, AWS will make available to Tritel the benefits of the Intercarrier Roaming Services Agreements between AWS and Other Wireless Carriers listed on Exhibit A-1, subject to the consent of such Other Wireless Carriers and subject to Tritel being a member in good standing of the NACN. Tritel will permit the subscribers of such Other Wireless Carriers to use the facilities of Tritel under the terms and conditions of the applicable Intercarrier Roaming Services Agreements. AWS may amend Exhibit A-1 by adding Other Wireless Carriers who have agreed to extend an Intercarrier Roaming Services Agreement to Tritel or by deleting Other Wireless Carriers who have either revoked the consent to extend an Intercarrier Roaming Services Agreement to Tritel or with whom the Intercarrier Roaming Services Agreement has terminated or expired. 1.1 AWS Authority. Tritel agrees that AWS has full authority to ------------- negotiate terms, amendments of and addenda to the Intercarrier Roaming Services Agreements, administer the Intercarrier Roaming Services Agreements and settle disputes under the Intercarrier Roaming Services Agreements on behalf of Tritel and that Tritel will be bound by and comply with such terms, amendments, addenda, administrative decisions and settlements. 1.2 Separate Liability. Tritel is liable for all of its obligations ------------------ under each Intercarrier Roaming Services Agreement in which it participates, including but not limited to payment obligations, preferred roaming status and fraud liability obligations. AWS will make available a copy of applicable Intercarrier Roaming Services Agreements upon request by Tritel. 1.3 Effect of Intercarrier Roaming Services Agreements. Each -------------------------------------------------- Intercarrier Roaming Services Agreement, as may be amended with respect to Tritel under section 1.1 above, supplies the terms and conditions of roaming services with respect to each Other Wireless Carrier. AWS maintains full control to continue or to terminate or let expire any Intercarrier Roaming Services Agreement. AWS will use commercially reasonable efforts to give Tritel written notice 30 days in advance (or as promptly as reasonably practicable) prior to ---------- any such termination or expiration. Nothing in this Agreement obligates AWS to enter into or to continue any Intercarrier Roaming Services Agreement with any Other Wireless Carrier. 1.4 Fraud Control Tritel shall take reasonable actions to control ------------- fraudulent Roamer usage when acting as a Serving Carrier to be consistent with the Intercarrier Roaming Services Agreements, including without limitation using SS-7 connections through the NACN which perform call validation functions. -4- 1.5 Allocation of Roamer Revenues and Roamer Expenses. AWS will ------------------------------------------------- treat Tritel as an affiliate of AWS for administrative purposes in collecting and paying amounts owed to Tritel and owed by Tritel under the applicable Intercarrier Roaming Services Agreement. Tritel acknowledges and agrees that amounts owed to Tritel from Other Wireless Carriers will be collected by AWS, intermingled with other funds owed to AWS and then distributed to Tritel based upon the amounts owed to Tritel for Roamer usage by subscribers of the Other Wireless Carriers. Tritel further acknowledges and agrees that AWS will make payments for Tritel to Other Wireless Carriers based on the reports of Roamer usage by subscribers of Tritel on the systems of the Other Wireless Carriers. AWS will recover these amounts through the NSS functions described in Exhibit B. 2. Roaming Administration Services. During the term of this Agreement, ------------------------------- AWS hereby agrees to make available Roaming Administration Services to Tritel, subject to the terms of this Agreement. The Roaming Administration Services are set forth in Exhibit B, which may be amended by AWS from time to time upon 30 days' written notice to Tritel. 2.1 Effect of EDS PCC Agreement. Tritel acknowledges that AWS --------------------------- receives certain of the Roaming Administration Services under the EDS PCC Agreement. In the event the EDS PCC Agreement terminates or expires, AWS' obligations to provide Roaming Administration Services will cease. AWS will give Tritel 30 days' prior notice of any cessation of Roaming Administration Services under this section 2.1. Nothing in this Agreement obligates AWS to extend, continue or enter into a new EDS PCC Agreement. Tritel agrees to comply with reasonable requests made by AWS in order to comply with and administer the EDS PCC Agreement. 2.2 Rates for Service. Tritel shall pay AWS Fees and Expenses for ----------------- the Roamer Administration Services as set forth on Exhibit C attached hereto. AWS may modify the Fees and Expenses set forth in Exhibit C upon thirty (30) days prior written notice to Tritel. Amounts owed each month for Fees and Expenses will be included as amounts owed to AWS in the NSS function described in Exhibit B. 3. Taxes. Unless Tritel provides a certificate of exemption or other ----- evidence acceptable to appropriate taxing authorities, Tritel shall pay any applicable federal, state or local sales, use, public utility, gross receipts or other taxes, fees or charges imposed on AWS as a result of (a) the roaming services received by Tritel under the Intercarrier Roaming Services Agreements and (b) providing the Roaming Administration Services to Tritel. Such taxes will be included in bills when imposed or required by law and shall be paid by Tritel in accordance with this Agreement. -5- 4. Payment of Net Amounts. ---------------------- 4.1 Amounts Owed to AWS. Tritel will pay AWS in full any amounts ------------------- owed to AWS after the NSS procedure described in Exhibit B has occurred, including amounts owed to AWS or Other Wireless Carriers, on or before the fifteenth day of the month immediately following the close of a Settlement Period, provided Tritel has received the bill for such amounts at least five (5) business days prior to such payment date. If Tritel receives the bill later than such time, Tritel shall pay the bill within ten (10) days of its receipt by Tritel. Payments will be submitted to: AT&T Wireless Services, Inc., 5000 Carillon Point, Kirkland, WA 98033, Attn: Billing and Intercarrier Settlement Services. 4.2 Amounts Owed to Tritel. AWS will pay Tritel in full any ----------------------- undisputed amounts owed to Tritel after the NSS procedure described in Exhibit B has occurred on or before the fifteenth day of the month immediately following the close of a Settlement Period. Payments will be submitted to: Tritel Communications, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: Revenue Director 4.3 Time Tritel acknowledges and understands that, AWS will pay ---- Other Wireless Carriers for Tritel's subscribers' roaming usage prior to receiving payment from Tritel. Accordingly, Tritel acknowledges and agrees that time is of the essence and will make timely payments to AWS of all amounts set forth in each bill after the NSS procedures described in Exhibit B have occurred. Tritel is strictly liable to make timely payments hereunder, and such liability is not relieved by any dispute that Tritel may have with AWS, Other Wireless Carriers or any other third party. 4.4 Late Payment. If either party fails to make any payment to the ------------ other party when due hereunder, interest shall be paid, from the date due until paid in full, at a rate of 1.5% per month or portion thereof. In no event shall interest hereunder accrue at a rate that is in excess of the maximum rate permitted by applicable law. 5. Compatibility with AWS Systems. AWS will establish and, from time to ------------------------------ time, enhance the systems that provide information used in performing functions related to either the EDS PCC Agreement or Intercarrier Roaming Services Agreements, including, but not limited to, enhancements to billing systems. Tritel will maintain compatibility with these systems and system enhancements, including but not limited to the CIBER format for billing records. Tritel will be responsible for the costs and expenses it incurs in maintaining this compatibility. -6- 6. Indemnification. Tritel will defend, indemnify and hold AWS, its --------------- parent, subsidiaries and affiliates, and the officers, directors, employees and representatives of each of them harmless from and against any Claims arising from or made in connection with (a) any access or use (or inability to access or use) of roaming Service by Tritel or any subscriber of Tritel, on the system of AWS or any Other Wireless Carrier, (b) any access or use (or inability to access or use) of roaming Service on Tritel's wireless system by AWS or an Other Wireless Carrier or a subscriber of AWS or an Other Wireless Carrier, (c) any information provided by Tritel to AWS, including without limitation any rate information and suspected fraud information, (d) any unlawful, negligent or otherwise wrongful act or failure to act of Tritel or its representatives, (e) a breach by Tritel of any provision of this Agreement, or (f) a breach by Tritel of any obligation to or agreement with its subscribers. 7. Limitation of Liability. ----------------------- 7.1 AWS SHALL NOT BE RESPONSIBLE TO TRITEL FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH AWS' PERFORMANCE UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, ANY DAMAGE TO OR LOSS OF REVENUES, BUSINESS OR GOODWILL. FURTHER, TRITEL ACKNOWLEDGES THAT IN PERFORMING ITS OBLIGATIONS HEREUNDER AWS WILL RELY UPON INFORMATION AND REPORTS PROVIDED TO AWS BY THIRD PARTIES. TRITEL AGREES THAT AWS MAY RELY UPON SUCH INFORMATION IN PERFORMING ITS OBLIGATIONS HEREUNDER, AND AWS SHALL NOT BE RESPONSIBLE OR LIABLE FOR THE ACCURACY OF ANY INFORMATION IT RECEIVES FROM THIRD PARTIES IN PERFORMING ITS OBLIGATIONS UNDER THIS AGREEMENT. IN NO EVENT WILL AWS' LIABILITY TO TRITEL, IN THE AGGREGATE, EXCEED THE AMOUNT PAID IN FEES BY TRITEL UNDER THIS AGREEMENT DURING THE FIRST TWELVE-MONTH PERIOD OF THE TERM OF THIS AGREEMENT. THIS SECTION 7.1 WILL SURVIVE THE TERMINATION OR EXPIRATION OF THIS AGREEMENT. 7.2 Neither of the parties will be liable for nonperformance or defective or late performance of any of its obligations under this Agreement to the extent and for such periods of time as such nonperformance, defective performance is due to reasons outside such party's control, including, without limitation, acts of God, war, acts (including failure to act) of any governmental authority, riots, revolutions, fire, floods, explosions, sabotage, nuclear incidents lightning, weather, earthquakes, storms sinkholes, epidemics, strikes or delays of suppliers, subcontractors, Other Wireless Carriers or EDS PCC. Neither party shall be required to settle any labor dispute in any manner which is deemed by that party to be less than totally advantageous, in that party's sole discretion. -7- 8. Confidentiality. --------------- 8.1 Each of the parties hereto hereby covenants and agrees that, during the term of this Agreement and thereafter, neither it, nor any of its employees, agents, officers or directors, will at any time make use of, divulge or disclose to any person, firm or corporation any trade secrets or confidential or proprietary information about the other party, its business, financial condition, operations or otherwise (including, without limitation, any information concerning the other party's subscribers, their names, addresses, or telephone numbers, the terms and conditions of each Intercarrier Roaming Services Agreement and its amendments and addenda), whatever the source of such confidential or proprietary information. Specifically, and without limitation, Tritel acknowledges that all operational user's guides, manuals, computer application programs, written procedures or other systems documentation furnished to it by AWS is the sole property and proprietary information of AWS. This confidentiality agreement shall not apply to information which is in the public domain through no act of the party desiring to disclose. Information contained in documents shall be considered confidential or proprietary if it relates to information described above or the content and context of the information is indicative of a desire to maintain confidentiality, whether or not the document is specifically marked "confidential" or "proprietary". 8.2 Each party agrees that such confidential or proprietary information concerning the other party shall only be divulged or disclosed to its employees who have a valid business reason to know such information and then only to the extent required for the performance of such employee's duties. 8.3 Nothing herein shall restrict the right of any party to disclose confidential or proprietary information which is ordered to be disclosed pursuant to judicial or other lawful governmental action, but only to the extent so ordered, or as otherwise required by applicable law or regulation. If either party is served with process to obtain any confidential or proprietary information or subscriber records of the other party, that party shall immediately notify the other party and permit the other party to conduct the defense against disclosure. 8.4 Upon termination of this Agreement, each party shall, upon written request of the other party, return to the other all confidential and proprietary information concerning the other which exists in written or electronic form. 8.5 Each of the parties acknowledges and confirms that any failure on its part to adhere strictly to the terms and conditions of this paragraph is likely to cause substantial and irreparable injury to the other party. Accordingly, each party confirms and agrees that, in addition to all other remedies to which the other party may be entitled under this Agreement or at law or in equity, the other party shall be entitled to specific performance and other equitable relief, including temporary relief. -8- 9. Term and Termination -------------------- 9.1 This Agreement shall run for an initial term of two years, commencing on the date of this Agreement. It shall automatically renew for additional successive terms of one year each, unless either party gives the other party written notice of its intent not to renew at least ninety (90) days prior to the termination of the then-current term. 9.2 Either party may terminate this Agreement (except for any obligations which survive termination) for any of the following reasons: 9.2.1 Upon material breach of the other party which is not cured or for which cure is not reasonably commenced within 30 days after notice of claimed breach; 9.2.2 Immediately by either party, after reasonable prior notice, if the other party's operations materially and unreasonably interfere with its operations and such interference is not eliminated within 10 days; 9.2.3 By AWS with respect to any Intercarrier Roaming Services Agreement or the EDS PCC Agreement in the event the applicable agreement expires or terminates. The current EDS PCC Agreement expires on March 31, 2000, with respect to settlement services and on June 30, 1999, with respect to call validation services. 9.2.4 By AWS immediately in the event that Tritel is no longer a member in good standing with the NACN. 9.2.5 By AWS with respect to the Roaming Administration Services as set forth in Section 2.1 above. 9.3 Either party may terminate this Agreement for any reason or for no reason upon one hundred eighty (180) days prior written notice to the other party. 10. Events Upon Termination. Upon termination of this Agreement for ----------------------- whatever reason, each party shall immediately (or upon final accounting) pay all amounts owing to the other parties hereunder, whether due or to become due. 11. Representations and Warranties of Tritel. Tritel hereby represents ---------------------------------------- and warrants to AWS the following: 11.1 It is duly organized and validly existing under the laws of the jurisdiction of is organization. 11.2 It has full power and authority to execute and perform this Agreement. -9- 11.3 The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on its part and is binding and enforceable against it. 11.4 It is and for the term of this Agreement will remain qualified to hold a wireless operating license for the areas listed on Schedule A pursuant to the rules and regulations of the Federal Communications Commission any state authority with jurisdiction over the areas identified on Schedule A. 12. Notices and Other Communications. -------------------------------- 12.1 All notices required hereunder shall be in writing and shall be deemed to have been duly delivered effective upon receipt if personally delivered, or upon mailing if mailed by prepaid overnight express service, addressed to the following: If to AWS: AT&T Wireless Services, Inc. Carrier Relations 5000 Carillon Point Kirkland, WA 98033 Attn: Eric Baxter With a copy to: AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, WA 98033 Attn: Legal Department. If to Tritel Tritel Communications, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: Revenue Director 12.2 For purposes of communication in order to administer this Agreement effectively, the parties designate the following contact persons for the subject matters set forth for them below. Either party may change the information with respect to its designated contacts under this Section 12.2 upon oral or written notice to the other party. -10- Tritel Customer Care Contact Name: Judy Varney Tel: 601-936-4140 Fax: 601-936-6045 TRITEL Roaming Services Contact Name: Cheryl McCullouch Tel: 601-936-4140 Fax: 601-936-7752 AWS Roamer Admin/Carrier Updates Name: David Mansisidor 16221 NE 72nd Way Redmond, WA 98052 -11- AWS Finance/Accounting Contact Name: Ingrid Onstad 16221 NE 72nd Way Redmond, WA 98052 AWS Partnership Roaming Services Contact Name: Karla Essig 16221 NE 72nd Way Redmond, WA 98052 Tel: 425-580-8316 Fax: 425-580-8390 13. Miscellaneous Provisions ------------------------ 13.1 Attorneys' Fees and Costs. In the event of any action at law or ------------------------- in equity concerning the enforcement or interpretation of the terms of this Agreement, the prevailing party shall be entitled to reimbursement for reasonable attorneys' fees, costs, and necessary disbursements in addition to any other relief to which it may show itself to be entitled. 13.2 No Joint Venture. Nothing in this Agreement is intended, or ---------------- shall be construed, to create a joint venture, partnership or other common business entity as among AWS and Tritel. Neither of the parties shall have the authority to accept legal process on behalf of the other party. Nothing herein gives Tritel or AWS claim to the subscribers of the other or to revenues of the other derived from its respective system. Both parties shall be solely responsible for the operation of its systems or businesses, including but not limited to payment of wages, benefits, taxes for employees and sales or income taxes. 13.3 Governmental Approval. The performance of any obligations of any --------------------- party hereunder, or the exercise of any rights hereunder by any party hereto that may require FCC or other governmental authority approval, shall be subject to obtaining such approval. Both parties agree to take no action under this Agreement which may place the other party in non-compliance with known and applicable government regulations. 13.4 Governing Law. This Agreement shall be construed under and in -------------- accordance with the Laws of the State of Washington. -12- 13.5 Assignment. This Agreement and the duties and obligations ---------- hereunder may not be assigned by either party without the express written consent of the other party and an agreement by the assignee to be fully bound by the terms and conditions hereof; provided, however, that such consent will not be unreasonably withheld; and, provided further, that AWS may assign its rights and obligations to an affiliate without obtaining the consent of Tritel. Tritel acknowledges that AWS may subcontract any or all of its duties under this Agreement to a third party. 13.6 No Third-Party Beneficiary. This Agreement is not intended, nor -------------------------- shall it be construed, to create or convert any right in or upon any person or entity not a party to this Agreement, unless specifically set forth in this Agreement. 13.7 Parties Bound. This Agreement shall be binding upon and inure to ------------- the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and assigns where permitted by this Agreement. 13.8 Severability. In case any one or more of the provisions ------------ contained in this Agreement shall for any reason be held by any arbitration tribunal or court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision thereof, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions were deleted, and replaced with enforceable provisions, which as nearly as possible, give effect to the intent of such invalid, illegal or unenforceable provisions. 13.9 Entire Agreement. This Agreement constitutes the sole and only ---------------- agreement of the parties with respect to the services described herein and supersedes any prior understanding or written or oral agreements between the parties respecting the within subject matter. In the event another form or invoice is used for provision of the services and such form or invoice contains terms or conditions different from those set forth herein, the parties agree that the language of this Agreement shall control. 13.10 Section Headings. The headings of the several sections and ---------------- paragraphs of this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. 13.11 No Waiver. Either party's failure at any time to enforce any of --------- the provisions of this Agreement or any right with respect thereto, or to exercise any option herein provided, will in no way be construed to be a waiver of such provisions, rights or options or in any way to affect the validity of this Agreement. The exercise by either party of any rights or options herein shall not preclude or prejudice the exercising thereafter of the same or other rights under this Agreement. -13- 13.12 Dispute Resolution ------------------ 13.12.1 All claims and disputes relating in any way to the performance, interpretation, validity, or breach of this Agreement, including but not limited to a claim based on or arising from an alleged tort, shall be resolved as provided in this Section 13.12. It is the intent of the parties that any disagreements be resolved amicably to the greatest extent possible. 13.12.2 If a disagreement cannot be resolved by the representatives of the parties with day-to-day responsibility for this Agreement, such matter shall be referred to an executive officer of each of the parties. The executive officers shall conduct face-to-face negotiations at a neutral location or such other location as shall be mutually agreed upon. If these representatives are unable to resolve the dispute within ten business days after either party requests the involvement of the executive officers, then either party may, but is not required to, refer the matter to mediation or arbitration, as applicable in accordance with this Section 13.12. 13.12.3 In any case where the amount claimed or at issue is Five Hundred Thousand Dollars ($500,000.00) or more and the parties are unsuccessful in resolving the disagreement, the parties agree to submit the disagreement to non-binding mediation upon written notification by either party. The parties shall mutually select an independent mediator experienced in telecommunications system disputes. The specific format for the mediation shall be left to the discretion of the mediator. If mediation does not result in resolution of the disagreement within thirty days of the initial request for mediation, then either party may, but is not required to, refer the matter to arbitration. 13.12.4 Any disagreement not finally resolved in accordance with the foregoing provisions of this Section 13.12 shall, upon written notice by either party to the other, be resolved by final and binding arbitration. Subject to this Section, such arbitration shall be conducted through, and in accordance with the rules of, JAMS/Endispute. A single neutral arbitrator shall decide all disputes. Each party shall bear its own expenses with respect to the arbitration, except that the costs of arbitration proceeding itself, including the fees and expenses of the arbitrator, shall be shared equally by the parties. The arbitration shall take place in a neutral location selected by the arbitrator. The arbitrator may permit discovery to the full extent permitted by the Federal Rules of Civil Procedure or to such lesser extent as the arbitrator determines is reasonable. The arbitrator shall be bound by and strictly enforce the terms of this Agreement. The arbitrator shall make a good faith effort to apply applicable law, but an arbitration decision and award shall not be subject to review because of errors of law. The arbitrator shall have the sole authority to resolve issues of the arbitrability of any disagreement, including the applicability or running of any applicable statute of limitation. The arbitrator shall not have power to award damages in connection with any dispute in excess of actual compensatory damages nor to award punitive damages nor any damages that -14- are excluded under this Agreement and each party irrevocably waives any claim thereto. The award of any arbitration shall be final, conclusive and binding on the Parties. Judgment on the award may be entered in any court having jurisdiction over the Party against which the award was made. Nothing contained in this Section 13.12 shall be deemed to prevent either party from seeking any interim equitable relief, such as a preliminary injunction or temporary restraining order, pending the results of the arbitration. The United States Arbitration Act and federal arbitration law shall govern the interpretation, enforcement, and proceedings pursuant to the arbitration clause in this Agreement. 13.12.5 No action or arbitration, regardless of form, may be brought by either party more than two (2) years from the date of the event which gave rise to such action. -15- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written. AWS: AT&T Wireless Services, Inc. By ___________________________________ Its __________________________________ Tritel: Tritel, Inc By ___________________________________ Its __________________________________ EXHIBIT A TRITEL System Ex. A-1 EXHIBIT A-1 Other Wireless Carriers CARRIER SHORT NAME - ------------------ 360 DEGREES COMM. AAT RSA COMPANY AIR TOUCH CELLULAR AIRTOUCH GREAT LAKES ALLEGAN CELLULAR ALLTEL AMAR. CELL TEL AMERICAN RURAL CELLULAR AMERITECH APPALACHIAN CELLULAR ARCTIC SLOPE CELLULAR ATLANTIC CELLULAR AWS BAKERSFIELD BAY AREA BELLSOUTH CELLULAR BELLSOUTH MOBILITY BLACKWATER CELLULAR BLUE MOUNTAIN CELLULAR BOSTON CELL ONE C-1 COLUMBUS C-1 EAST CENTRAL ILLINOIS C-1 FINGER LAKES C-1 FREDERICK C-1 GREAT LAKES OF IOWA C-1 HONOLULU C-1 LAKE CHARLES C-1 NE COLORADO C-1 S. WI & N. IL C-1 SENATOBIA C-1 SW FLORIDA C-1 WASH/BALT CAL-ONE CELLULAR CANTEL CCPR CELLULAR 2000/MN CELLULAR ONE - FRONTIER Ex. A-1-1 CHICAGO CELL 1 CITIZENS MOHAVE CELL COASTEL COMMUNICATIONS COMCAST CELLULAR COMMNET CELLULAR INC CONTEL/GTE DCS OF KS/MO DOBSON CELLULAR EASTERBROOKE CELLULAR ENID CELLULAR GAIA, INC GTE MOBILNET HIGHLAND CELLULAR HLD CELLULAR HOUSTON CELL. KAPLAN TELEPHONE KINI L.A.CELLULAR LAKE HURON CELLULAR MERCURY CELLULAR MERCURY COMMUNICATIONS METACOMM CELLULAR MISSISSIPPI 34 CELLULAR NEW VECTOR NEW YORK / SWB NEW YORK/ SWB NEW YORK/SWB PACE COMMUNICATIONS PALMER WIRELESS PETROCOM PRICELLULAR PRIME CELL-TX#9 SANTA CRUZ CELL. SNET CELLULAR SWB SYGNET COMM INC. SYRACUSE/UTICA U.S. CELLULAR UNION TELEPHONE UNITEL INC. VALLEY TELECOMMUNICATIONS VANGUARD W. ALABAMA CELLULAR Ex. A-1-2 WESTEL WESTERN WIRELESS Ex. A.1-3 EXHIBIT B Roaming Administration Services 1. Administration Services (AS) ---------------------------- The AS will include various services that AWS will perform to manage Tritel's roaming program. 1.1 Reports and Bills. Each month during the term of this Agreement, ----------------- within a reasonable period of time after receipt by AWS of information regarding the Roamer activity during the prior Settlement Period, AWS shall provide Tritel with a report summarizing Roamer activity during the prior Settlement Period. 1.2 Exchange of Information. AWS shall provide Other Wireless Carriers ----------------------- and the North American Cellular Network with information (including, without limitation, NPA/NXX and number range combinations) provided to AWS by Tritel pursuant to the Intercarrier Roamer Services Agreement between AWS and Tritel that will enable Tritel's subscribers to roam in the markets owned by Other Wireless Carriers. Further, AWS shall provide Tritel with information (including, without limitation, NPA/NXX combinations and MINs) provided to AWS by Other Wireless Carriers and the NACN pursuant to roaming agreements that will enable the subscribers of Other Wireless Carriers to roam in the wireless systems identified on Exhibit A-1. 1.3 Outcollect Table Maintenance. In the event that Tritel uses CONVERGYS ----------------------------- as its billing vendor, AWS will for a monthly fee maintain the Macro/Cell tables necessary to bill subscribers of AWS and Other Wireless Carriers for use of the Tritel network. Specifically, AWS agrees to maintain the Roamer Outcollect Maintenance (070101) and Roamer Surcharge Maintenance (070102) tables including bi-weekly updates of new NPA/NXX information, maintenance required by changes to rate agreements and corrections identified through the course of AWS' regular operations work. 1.4 Fraud Brownout Notifications. AWS agrees to serve as the request ---------------------------- processor and single point of contact between Tritel, on the one hand, and AWS and Other Wireless Carriers, on the other hand, for the exchange of suspected fraudulent use notifications and NPA/NXX pull and reload requests related to fraudulent use of Tritel NPA/NXX's on the networks of AWS and Other Wireless Carriers and the NPA/NXX's of AWS and Other Wireless Carriers on the network of Tritel. AWS will receive and forward all requests on a daily (Monday - Friday) basis to the appropriate party for action. In addition, AWS agrees to maintain and distribute as requested historical data regarding fraud pull and reload request data. Fraud brownout data will be archived for a period of twelve months from the request date. Ex. B-1 1.5 Rate Monitoring AWS will monitor roaming rates charged to Tritel and --------------- roaming rates charged by Tritel. If an incorrect roaming rate is charged by Tritel to an Other Wireless Carrier and the Other Wireless Carrier invoices AWS for amounts charged in excess of the amounts that should have been charged under the applicable Intercarrier Roaming Services Agreement, AWS shall refund all amounts in excess of the contract rate back to the Other Wireless Carrier within forty five days of notification by the Other Wireless Carrier and Tritel will reimburse AWS for these amounts in the NSS process. If an incorrect roaming rate is charged to Tritel by an Other Wireless Carrier so that the amounts charged in a month are more than $200 over the amounts that should have been charged under the applicable Intercarrier Roaming Services Agreement, AWS will invoice the Other Wireless Carrier for all amounts in excess of the contract rate greater than $200. AWS will include any amounts received from Other Wireless Carriers in Tritel's account in the NSS process. AWS shall not be responsible for any amounts undercharged by AWS on behalf of Tritel to any Other Wireless Carrier. 2. Full Visibility (FV) Services ----------------------------- FV services are an adjunct to validation service. FV provides a mechanism for receiving transaction information on all call attempts made by a Roamer who subscribers to a carrier using validation services while roaming on a market serviced by the GTE TSI network for validation. The FV services include the following features: 2.1 When a subscriber from a carrier using validation services is roaming in an area served by GTE for validation is found negative in GTE's negative file, GTE sends a visibility notification message which can then be used to report the activity. When a subscriber from a carrier using validation services is roaming in an area served by GTE for validation, and is not found in the GTE negative file, but has a valid status in their industry file, GTE will send a visibility notification message which can then be used to report the activity. 2.2 Additional options for updating visibility settings by NPA/NXX ranges or by System Identification ("SID") or Billing Identification ("BID") are available. 2.3 Home carrier enabling/disabling option by NPA/NX range or by SID/BID within a 45-day period. 2.4 Availability of cloning activity reports for Roamers on systems using GTE and validation services. 3. Intercarrier Settlement Services (ISS) -------------------------------------- With ISS, AWS will instruct EDS PCC to edit Tritel's roaming records to verify the billable status of these records. These edits will be performed in accordance with the then Ex. B-2 current CIBER standards. AWS will also provide certain standard reports in connection with these edits. 3.1 Edits. The records will be edited against the CIBERNET standards, ----- using a 60-day standard for the Call Age Edit. Any records which do not satisfy these standards (noted below) will be returned to the serving carrier. 3.1.1 Negative File Edit 3.1.2 CIBER Edit 3.1.3 NPA/NXX Edit - Proper Routing of Call 3.1.4 Call Age Edit 3.1.5 Out-of-Sequence Batch Edits 3.1.6 Duplicate Call Edit 3.1.7 Roamer Agreement Edit 3.1.8 Out of Balance Message Edit 3.1.9 Invalid Record Type per terms of Roamer Agreement Edit 3.1.10 Incorrect agreed upon rate Edit 3.1.11 Additional edits per CIBER standard Table 3 3.2 Negative File Suppression Management. Management of the clearinghouse ------------------------------------ negative file suppression edit will be performed by AWS and will be made in accordance with current Intercarrier Roaming Services Agreements. 3.3 Reports. The Financial Reports as defined in Section 6.1 reflect ------- activity within a settlement cycle. Each report is produced at the end of each settlement cycle (the 16/th/ through the 15/th/ of the calendar month). Bi- weekly reports from the 1/st/ through the 15/th/ and the 16/th/ through the end of the month. 3.3.1 Incollect Reports which summarize the amounts owed by Tritel for Roamer calls to each of AWS and each Other Wireless Carrier. 3.3.2 Outcollect Reports which summarize the amounts owed to Tritel for Roamer calls from each of AWS and each Other Wireless Carrier. 4. Net Settlement Services (NSS) ----------------------------- 4.1 Clearinghouse Functions. AWS shall provide Roamer clearinghouse ----------------------- functions for Tritel, such that Tritel's Incollect Obligations are netted against Tritel's Outcollect Obligations for AWS and each Other Wireless Carrier. To the extent that the net Incollect Obligations, Fees and Expenses exceed the net Outcollect Obligations with respect to AWS or with respect to any Other Wireless Carrier, Tritel shall pay such net Incollect Obligations, Fees and Expenses to AWS. To the extent that net Outcollect Obligations exceed net Ex. B-3 Incollect Obligations, Fees and Expenses with respect to AWS or any Other Wireless Carrier, AWS shall pay such net Outcollect Obligations to Tritel as described in Section 4.2 of this Agreement. 4.2 Fraud Settlement Functions. AWS will invoice Other Wireless Carriers -------------------------- for Roamer fraud, under the terms of any Intercarrier Roaming Services Agreements in place with Other Wireless Carriers. AWS will provide invoices to Tritel for Roamer fraud incurred by Other Wireless Carriers and make payments to Other Wireless Carriers for these invoices and add such amounts in the monthly NSS process. Information to be included in any invoice to AWS or an Other Wireless Carrier must be in the format required by AWS, as that format may change from time to time. This information must be submitted to AWS within forty five days of the call record at issue in order to permit AWS to invoice Other Wireless Carriers. 5. Positive Roamer Verification (PRV) - Optional Service ----------------------------------------------------- The PRV service will provide Tritel with the ability to validate the billing status of Roamers from Other Wireless Carriers not connected with Tritel through the NACN or other network of carriers. This verification will be accomplished through comparison of the Roamer's MIN and ESN combination with a database designed to identify potential fraudulent use. This information can be used by Tritel to deny service to callers when roaming in the TRITEL System. 6. AWS Monthly Standard Reporting Package -------------------------------------- 6.1 Financial Reports. These reports will be generated by the AWS ----------------- Financial Accounting group and will be provided to Tritel on a monthly basis. The reports are: Invoice of Roamer Accounting RIMS Reports RIMS Financial G/L information Miscellaneous payment and receipts. 6.2 Roamer Administration Reports. These reports will be generated by AWS ----------------------------- Roamer Operations and sent bi-weekly to Tritel. The reports are: Technical Data Coversheet NPA/NXX Change Technical Data Report 1900 NPA/NXX Change Incollect and Outcollect Status Billing Change New PCS Build/Billing Change NACN Change NACN Market Master NACN Master NACN Market Change NACN Switch Change AWS New Build PCS Switch change NACN Switch Master OTMS Billing Report Ex. B-4 Full Non-NACN Markets NPA/NXX OTMS Billing Exception Reports 7. Point of Contact for Industry Issues. ------------------------------------ AWS, through its Vendor Management team, will consult with Tritel on issues related to vendor user groups, the wireless industry on roaming issues, and standards development on roaming issues. 8. Telephone Support. ----------------- 8.1 Telephone Support. ----------------- AWS will be available for one teleconference per month, lasting no more than one hour, to review the services provided by AWS under this Agreement during the prior Settlement Period. In the event that Tritel uses more than one hour per month of telephone support time, AWS may either (a) cease telephone support at any time after the hour has been used or (b) charge Tritel $100.00 per hour for the telephone support time used in excess of one hour during the month. AWS acknowledges and agrees that the one hour limitation does not apply to telephone support in the ordinary course of business in performing the services described in Section 1.2, 1.3, 1.4, or 3.2 of this Exhibit B. Ex. B-5 EXHIBIT C Fees and Expenses Service Fee - ------- --- PRV Transaction Fee (optional) $0.21 per unique ESN validation per each calendar day. XLI Transaction Fee (optional) $0.16 per unique ESN validation per each calendar day. $1,000.00 per SID/BID minimum (waived if transaction charges are greater than or equal to $1,000.00). FULL VISABILITY (optional) $0.025/transaction $500.00 for first SID/BID using FV $50.00 for additional SID/BIDs using FV. $500.00 Installation - one time charge. ISS $0.015 per outcollect record $0.015 per incollect record Monthly minimum: Up to 100K records monthly: $2,000.00 per SID/BID flat fee and no record fee. Greater than 100K records monthly: $1,000.00 per SID/BID plus record fee for records above 100K. Monthly minimum shall not exceed $20,000.00 per month in 1999. OUTCOLLECT TABLE MAINTENANCE $50.00 per SID/BID per month $1,000.00 SID/BID set up fee. CLEARINGHOUSE SET UP FEE $1,000.00 per SID/BID SS7 CONNECTION FEE $3,500.00 per Tritel switch/HLR (non-NACN) ROAM AGREEMENT $25,000.00 SET UP FEE Ex. C-1 CIBERNET Fees $.005 per outcollect dollar owed to Tritel Special Processing and Reports As agreed by the parties in writing Clearinghouse Financial Reports (optional) $50.00 per market per report. (EDS paper reports) Reports via diskette $100.00 per month (one set of reports per Month). Tritel will also pay all postage, handling, overnight mail fees, and any other fees incurred by AWS as the result of complying with special requests from Tritel for services and reports not described in this Agreement or for special modifications to any service or report. AWS may modify the fees outlined above with 30 days' prior written notice. Ex. C-2 EX-10.8.2 14 0014.txt AMD. NO.1 TO ROAMING ADMINISTRATION SERVICES AGMT Exhibit 10.8.2 AMENDMENT NO. 1 TO ROAMING ADMINISTRATION SERVICE AGREEMENT AMENDMENT NO. 1 TO ROAMING ADMINISTRATION SERVICE AGREEMENT ("Amendment") made this 13th day of November, 2000, by and between AT&T Wireless Services, Inc. ("AWS"), a Delaware corporation, with its principal place of business at 7277 164th Avenue NE, Redmond, Washington 98052, and Tritel, Inc. ("Tritel"), a Delaware corporation, with its principal place of business at 1010 N. Glebe Road, Arlington, Virginia 22201. Certain capitalized terms used herein and not otherwise defined have the meaning assigned to such term in the Roaming Agreement (defined below). WHEREAS, AWS and Tritel are party to that certain Roaming Administration Services Agreement, dated as of January 7, 1999 (the "Roaming Agreement"), pursuant to which Tritel receives certain benefits under Intercarrier Roaming Services Agreements between AWS and other providers of wireless telecommunications service; and WHEREAS, Tritel has entered into an Agreement and Plan of Reorganization and Contribution with TeleCorp PCS, Inc. and AWS, dated as of February 28, 2000, as amended (the "Merger Agreement") pursuant to which, among other things, AWS has agreed to amend the Roaming Agreement. NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Amendment to "Other Wireless Carrier's Exhibit." Exhibit A-1 to the ---------------------------------------------- Roaming Agreement is hereby deleted in its entirety and replaced with Exhibit A-1 attached hereto. 2. Severability of Provisions. Any provision of this Amendment which is -------------------------- prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. 3. Agreement to Remain in Full Force and Effect. This Amendment shall be -------------------------------------------- deemed to be an amendment to the Roaming Agreement. All references to the Roaming Agreement in any other agreements or documents shall on and after the date hereof be deemed to refer to the Roaming Agreement as amended hereby. Except as amended hereby, the Roaming Agreement shall remain in full force and effect and is hereby ratified, adopted and confirmed in all respects. 4. Effectiveness of Amendment. This Amendment shall become effective only -------------------------- upon the consummation of the Contribution (as defined in the Merger Agreement). 5. Heading. The headings in this Amendment are inserted for convenience ------- and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Amendment or any provision thereof. 6. Counterparts. This Amendment may be executed in counterparts, each of ------------ which shall be deemed an original, but all of which together shall constitute one and the same instrument. 7. Governing Law. This Amendment shall be construed in accordance with ------------- the laws of the State of Washington without reference to the choice of law principles, except as subject to the United States Arbitration Act and the Federal Communications Act, each as amended. [signature page follows] Executed as of the date first written above. AT&T WIRELESS SERVICES, INC. By /s/ Joseph Stumpf ---------------------------------- Name: Joseph Stumpf ------------------------------ Its: Vice President - Acquisitions & Development ------------------------------- TRITEL, INC. By /s/ Thomas H. Sullivan ---------------------------------- Name: Thomas H. Sullivan ------------------------------ Its: Executive Vice President - Chief Financial Officer & Treasurer ------------------------------- EXHIBIT A-1 Other Wireless Carriers Effective 10/30/00 CARRIER_NAME ABIATAR SA ADVANTAGE SYSTEMS AERIAL COMMUNICATIONS AIRCELL AIRTOUCH CELLULAR NEW VECTOR AIRTOUCH GREAT LAKES KINI FRONTIER CELL OF ALABAMA ALLTEL AMERICAN CELLULAR WIRELESS AMERICAN MOBILE SATELLITE AMERITECH APPALACHIAN CELLULAR ARCTIC SLOPE CELLULAR AT&T WIRELESS SVCS ATL-BRAZIL ATT MOBILITY AWZ CELLULAR BAJA CELLULAR BELL ATLANTIC MOBILE BELL MOBILITY CELLULAR BELLSOUTH CELLULAR BELLSOUTH MOBILITY CELLULAR ONE OF INDIANAPOLIS TELCEL VENEZUELA BELLSOUTH INTERNATIONAL BELLSOUTH ECUADOR BSC PANAMA BCP TELECOMMUNICATIONS BELLSOUTH CHILE BELLSOUTH NICARAGUA BERMUDA DIGITAL BLUEGRASS CELLULAR BRAZOS CELLULAR BTC MOBILITY C-1 COLUMBIA TN C-1 EAST CENTRAL ILLINOIS C-1 GREAT LAKES OF IOWA C-1 MUSTANG C-1 NE COLORADO C-1 SW FLORIDA CABLE & WIRELESS-CARIBBEAN CABLE AND WIRELESS HKT CABLE AND WIRELESS-JAMAICA CAL-NORTH CELLULAR CANTEL CAROLINA WEST CC CELLULAR CCPR CEDETEL CELCARIBE S.A. CELLCOM CELLCOM ISRAEL CELLULAR CONNECTION CELLULAR MOBILE SYSTEMS CELLULAR ONE AMARILLO CELLULAR SOUTH CELLULAR THREE CELLULAR XL ASSOC, L.P. CELLULINK CELUMOVIL S.A. ALLEGAN CELLULAR CENTENNIAL CELLULAR CORP CENTRAL WIRELESS CENTURYTEL CFW CELLULAR CHARITON VALLEY WIRELESS CIS CITIZENS MOHAVE CELL CJD CELLULAR COASTEL COMMUNICATIONS COCELCO COMCAST CELLULAR COMCEL COMMNET CELLULAR INC CORDOVA WIRELESS CORRCOMM CROSS COUNTRY CELLULAR CTC STARTEL CTE PERSONAL EL SALVADOR CTI MOVIL-ARGENTINA DIGITAL CELLULAR - TX C-1 DOBSON SANTA CRUZ CELL. DCS OF KS/MO C-1 NW OKLAHOMA DOBSON CELLULAR C-1 FREDERICK SYGNET COMM INC. DOUGLAS TELECOMMUNICATIONS EXPRESS TELECOM-PHILLIPINES FARMERS CELLULAR FIRST CELLULAR OF S. ILLINOIS FIVE STAR WIRELESS GAIA, INC GOLDEN STATE CELLULAR GSN GTE MOVILNET GTE WIN 4 GTE WIRELESS GUAM TELEPHONE AUTHORITY HARGRAY WIRELESS HAWAIIAN WIRELESS HIGHLAND CELLULAR HOUSTON CELL. ILLINOIS VALLEY CELLULAR INDUS IUSACELL KENTUCKY CELLULAR LARSEN CELLULAR LEACO MACTEL CELLULAR SYSTEM MAINE CELLULAR METACOMM CELLULAR MID-MISSOURI CELLULAR MID-SOUTH CELLULAR MID-TEX CELLULAR MIDWEST WIRELESS MINIPHONE MINNESOTA SOUTHERN WIRELESS MOBIKOM MOBILETEL MOCELL MOVICOM MOVITEL NORTHWEST MISSOURI CELLULAR NYNEX OCCEL OKLAHOMA W. CELLULAR PACE COMMUNICATIONS PC MANAGEMENT, INC. PETROCOM PINE CELLULAR PIONEER/ENID CELLULAR PLATEAU WIRELESS POKA LAMBRO TELECOMMUNICATIONS PORTATEL POWERTEL PRICE COMMUNICATIONS PRIMECO PTSI CELLULAR INTERCEL PUBLIC SERVICE PUERTO RICO CELLULAR QUEBEC TELEPHONE CELL QUICK CALL CELLULAR RADIOFONE RAMCELL OF OREGON RFB CELLULAR RCC HOLDINGS INC RURAL CELLULAR SAGE BRUSH CELLULAR SE INDIANA CELLULAR SETEL SINGTEL MOBILE SMITH BAGLEY SOUTH CAROLINA CELLULAR SPRINT PCS STAR CELLULAR STERLING CELLULAR SUSSEX CELLULAR CHICAGO CELL 1 SNET CELLULAR NEW YORK/SWB SWB SYRACUSE/UTICA BOSTON CELL ONE C-1 WASH/BALT TELCEL TEL-CELL--ST MARTIN TELE2000 TELECEL BOLIVIA TELECEL PARAGUAY TELECOM MOBILE TELECOM PERSONAL S.A. TELEFONICA DE EL SALVADOR TELEFONICA DEL PERU TELEMOVIL EL SALVADOR TELESP - BRAZIL TELET- BRAZIL TEXAS CELLULAR TRITON U.S. CELLULAR U.S. UNWIRED UBET WIRELESS UNIFON-ARGENTINA UNION TELEPHONE UNITEL INC. UNKNOWN CARRIER US WEST PCS USA TEL VALLEY TELECOMMUNICATIONS VIRGINIA 10 LP VIRGINIA CELLULAR VITELCOM WEST CENTRAL WIRELESS VOICESTREAM WIRELESS AMERICAN RURAL CELLULAR WESTERN WIRELESS WESTEX CELL WIRELESSNORTH PCS X-CELL CELLULAR XIT CELLULAR YORKVILLE TELEPHONE EX-10.30 15 0015.txt LICENSE ACQUISITION AGREEMENT, DATED 10-27-2000 Exhibit 10.30 ================================================================================ LICENSE ACQUISITION AGREEMENT among TRITEL LICENSE-FLORIDA, INC., TRITEL LICENSE-GEORGIA, INC. and PANTHER WIRELESS, L.L.C. Dated as of October 20, 2000 ================================================================================ TABLE OF CONTENTS -----------------
Page ---- ARTICLE I - DEFINITIONS.................................................... 1 ARTICLE II - PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION; CERTAIN RESTRICTIONS ON TRANSFER............... 4 2.1 Purchase and Sale of Licenses......................... 4 2.2 Payment of Consideration............................... 4 2.3 Assumption of Indebtedness............................ 4 ARTICLE III - CLOSING...................................................... 4 3.1 Time and Place of Closing............................. 4 3.2 Closing Actions and Deliveries........................ 5 3.3 Payment of Transfer Taxes............................. 5 ARTICLE IV - REPRESENTATIONS AND WARRANTIES................................ 6 ARTICLE V - COVENANTS...................................................... 8 5.1 Consummation of Transactions.......................... 8 5.2 Confidentiality....................................... 9 5.3 Certain Covenants..................................... 10 ARTICLE VI - CLOSING CONDITIONS............................................ 10 6.1 Conditions to Obligations of All Parties.............. 12 6.2 Conditions to Obligations of the Company.............. 12 6.3 Conditions to the Obligations of Tritel............... 13 ARTICLE VII - SURVIVAL AND INDEMNIFICATION................................. 14 7.1 Survival.............................................. 14 7.2 Indemnification by Tritel............................. 14 7.3 Indemnification by the Company........................ 15 7.4 Procedures............................................ 15 ARTICLE VIII - TERMINATION................................................. 16 8.1 Termination........................................... 16 8.2 Effect of Termination................................. 16 ARTICLE IX - MISCELLANEOUS PROVISIONS...................................... 17 9.1 Amendment and Modification............................ 17 9.2 Waiver of Compliance; Consents........................ 17
-i- 9.3 Notices............................................. 17 9.4 Parties in Interest; Assignment..................... 18 9.5 Applicable Law...................................... 18 9.6 Counterparts........................................ 18 9.7 Interpretation...................................... 18 9.8 Entire Agreement.................................... 18 9.9 Publicity........................................... 19 9.10 Specific Performance................................ 19 9.11 Remedies Cumulative................................. 19
-ii- TABLE OF CONTENTS ----------------- (continued)
Page ---- Schedules Schedule I -- Florida Licenses Schedule II -- Georgia Licenses Schedule 4.6 -- Consents and FCC Proceedings Schedule 4.7 -- Litigation Schedule 4.10 -- Seller FCC Proceedings Exhibits Exhibit A -- Form of Opinion of FCC Counsel to Sellers Exhibit B -- Form of Opinion of Counsel to Sellers Exhibit C -- Form of Opinion of Counsel to the Company
-iii- LICENSE ACQUISITION AGREEMENT ----------------------------- LICENSE ACQUISITION AGREEMENT, dated as of October 27, 2000, among Tritel License-Florida, Inc., a Delaware corporation ("Tritel-Florida"), -------------- Tritel License-Georgia, Inc., a Delaware corporation ("Tritel-Georgia"; together -------------- with Tritel-Florida, the "Sellers"), and Panther Wireless, L.L.C., a Delaware ------- limited liability company (the "Company"). ------- WHEREAS, each of Tritel-Florida and Tritel-Georgia holds the personal communications services ("PCS") licenses described on Schedules I (the --- "Florida Licenses") and II (the "Georgia Licenses"), respectively (the Florida ---------------- ---------------- Licenses and the Georgia Licenses, together, the "Tritel Licenses"); --------------- WHEREAS, Sellers wish to sell to the Company, and the Company wishes to acquire from Sellers, the Tritel Licenses, all on the terms and subject to the conditions herein set forth; NOW, THEREFORE, in consideration of the promises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, the parties agree as follows: ARTICLE I DEFINITIONS ----------- As used herein, the following terms have the following meanings (unless indicated otherwise, all Section and Article references are to Sections and Articles in this Agreement, and all Schedule and Exhibit references are to Schedules and Exhibits to this Agreement): "Affiliate" means, with respect to any Person, any other --------- Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with that Person. For purposes of this definition, "control" (including the terms "controlling" and ------- ----------- "controlled") means the power to direct or cause the direction of the management ---------- and policies of a Person, directly or indirectly, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. "Claim" has the meaning set forth in Section 7.4. ----- "Closing" has the meaning set forth in Section 3.1. ------- "Closing Date" has the meaning set forth in Section 3.1. ------------ "Company" has the meaning set forth in the preamble. ------- "Confidential Information" means any and all information ------------------------ regarding the business, finances, operations, products, services and customers of the Person specified and its Affiliates, in written or oral form or in any other medium. "Consents" means all consents and approvals of Governmental -------- Authorities or other third parties necessary to authorize, approve or permit the parties hereto to consummate the transactions contemplated hereby and for the Company to operate its business after the Closing Date as currently contemplated. "FCC" means the Federal Communications Commission or similar --- regulatory authority established in replacement thereof. "FCC Debt" means the indebtedness of each of Tritel-Florida -------- and Tritel-Georgia to the USDT as of the Closing Date in respect of the Florida Licenses and the Georgia Licenses, respectively. "FCC Law" means the Communications Act of 1934, as amended, ------- including as amended by the Telecommunications Act of 1996, and the rules, regulations and policies promulgated thereunder. "Final Order" has the meaning set forth in Section 6.1(b). ----------- "Florida Licenses" has the meaning set forth in the first ---------------- recital. "Georgia Licenses" has the meaning set forth in the first ---------------- recital. "Governmental Authority" means a Federal, state or local ---------------------- court, legislature, governmental agency (including, without limitation, the United States Department of Justice), commission or regulatory or administrative authority or instrumentality. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements ------- Act of 1976, as amended, and the rules and regulations promulgated thereunder. "Indemnified Party" has the meaning set forth in Section 7.4. ----------------- "Indemnifying Party" has the meaning set forth in Section 7.4. ------------------ "Law" means applicable common law and any statute, ordinance, --- code or other law, rule, permit, permit condition, regulation, order, decree, technical or other standard, requirement or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority. -2- "License" means a license, permit, certificate of authority, ------- waiver, approval, certificate of public convenience and necessity, registration or other authorization, consent or clearance to construct or operate a facility, including any emissions, discharges or releases therefrom, or to transact an activity or business, to construct a tower or to use an asset or process, in each case issued or granted by a Governmental Authority. "Lien" means, with respect to any asset, any mortgage, lien, ---- pledge, charge, security interest, right of first refusal or right of others therein, or encumbrance of any nature whatsoever in respect of such asset. "Losses" has the meaning set forth in Section 7.2. ------ "Material Adverse Effect" means a material adverse effect on ----------------------- the business, financial condition, assets, liabilities or results of operations or prospects of the Person specified. "New York Courts" has the meaning set forth in Section 9.5. --------------- "PCS" has the meaning set forth in the first recital. --- "Person" means an individual, corporation, partnership, ------ limited liability company, association, joint stock company, Governmental Authority, business trust, unincorporated organization, or other legal entity. "Representatives" has the meaning set forth in Section 5.2(a). --------------- "Section 7.2 Indemnified Party" has the meaning set forth in ----------------------------- Section 7.2. "Section 7.3 Indemnified Party" has the meaning set forth in ----------------------------- Section 7.3. "Securities Act" means the Securities Act of 1933, as amended. -------------- "Solvent" means, when used with respect to any Person, that at ------- the time of determination: (a) the fair market value of its assets is in excess of the total amount of its liabilities (including, without limitation, contingent liabilities), (b) the present fair saleable value of its assets is greater than its probable liability for its existing debts as such debts become absolute and mature, (c) it is then able and expects to be able to pay its indebtedness (including without limitation, contingent indebtedness and other commitments) as they mature, and (d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. "Subsidiary" shall mean, with respect to any Person, a ---------- corporation or other entity of which 50% or more of the voting power or the voting equity securities or equity interest is owned, directly or indirectly, by such Person. -3- "Tritel-Florida" has the meaning set forth in the preamble. -------------- "Tritel-Georgia" has the meaning set forth in the preamble. -------------- "Tritel Licenses" has the meaning set forth in the first --------------- recital. "Tritel License Transfer" has the meaning set forth in Section ----------------------- 3.2(a). "USDT" means the United States Department of the Treasury. ---- ARTICLE II PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION ------------------------------------------------------- 2.1 Purchase and Sale of Licenses. Upon the terms and ----------------------------- subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, each of Tritel- Florida and Tritel-Georgia shall sell, transfer, assign, convey and deliver to the Company, free and clear of all Liens (other than Liens of the USDT securing certain indebtedness to be assumed by the Company pursuant to Section 2.3), and the Company agrees to purchase, acquire and accept from each of Tritel-Florida and Tritel-Georgia, the Florida Licenses and the Georgia Licenses, respectively. 2.2 Payment of Consideration. At the Closing, the Company ------------------------ agrees to pay to Sellers in consideration for the Tritel Licenses, the amount equal to 110% of the sum of (i) the aggregate amount payable to the FCC in respect of each Tritel License, as set forth on Schedules I and II hereof, minus (ii) the FCC Debt, plus (iii) the aggregate amount of interest actually paid to the USDT by Sellers or Digital PCS, LLC prior to the Closing Date in respect of the FCC Debt (the "Purchase Price"). The Purchase Price shall be payable on the -------------- Closing Date by wire transfer of immediately available funds to an account designated by Sellers in a written notice given to the Company on or prior to the Closing Date, such Purchase Price to be allocated between the Sellers on or prior to the Closing Date. 2.3 Assumption of Indebtedness. On and as of the Closing -------------------------- Date, the Company shall accept and assume the FCC Debt. ARTICLE III CLOSING ------- -4- 3.1 Time and Place of Closing. Upon the terms and subject ------------------------- to the conditions hereof, the closing of the transactions contemplated hereby (the "Closing") shall take place at the offices of Friedman Kaplan & Seiler LLP, ------- 875 Third Avenue, New York, New York 10022 on the fifth business day following the date of receipt of the last Consent required by subsections (a) through (c) of Section 6.1, or at such other place and/or time and/or on such other date as the parties may agree or as may be necessary to permit the fulfillment or waiver of the conditions set forth in Article VI (the "Closing Date"). ------------ 3.2 Closing Actions and Deliveries. Upon the terms and ------------------------------ subject to the satisfaction or waiver by the appropriate party, if applicable, of the conditions set forth in Article VI, to effect the purchase and sale of the Tritel Licenses, the parties shall on the Closing Date take the following actions: (a) Assignment of Licenses. Each of Tritel-Florida and ---------------------- Tritel-Georgia shall execute and deliver to the Company, one or more instruments of assignment, in form and substance satisfactory to the FCC and reasonably satisfactory to the Company, sufficient to assign the Florida Licenses and the Georgia Licenses, as the case may be, to the Company (such assignments being herein collectively referred to as the "Tritel License Transfer"). ----------------------- (b) Payment of Purchase Price. The Company shall pay the ------------------------- Purchase Price of the Tritel Licenses to Sellers in accordance with Section 2.2. (c) Assumption of Indebtedness. The Company shall execute -------------------------- and deliver to each Seller an instrument of assumption, in form and substance satisfactory to the FCC and reasonably satisfactory to such Seller, in respect of the FCC Debt to be assumed by the Company pursuant to Section 2.3. (d) Other Deliveries. The parties shall execute and deliver ---------------- or cause to be executed and delivered all other documents, instruments, opinions and certificates contemplated by this Agreement to be delivered at the Closing or necessary and appropriate in order to consummate the transactions contemplated hereby on the Closing Date. 3.3 Payment of Transfer Taxes. The Company shall pay or ------------------------- cause to be paid at the Closing or, if due thereafter, promptly when due, all gross receipts taxes, gains taxes (including, without limitation, real property gains tax or other similar taxes), transfer taxes, sales taxes, stamp taxes, and any other taxes, but excluding any Federal, State or local income taxes payable in connection with the transfer of the Tritel Licenses. ARTICLE IV REPRESENTATIONS AND WARRANTIES ------------------------------ -5- Each Seller (as to itself) and the Company represent and warrant to each other that: 4.1 Organization and Standing. It is a corporation or ------------------------- limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. It is duly qualified to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary other than any such jurisdiction in which the failure to be so qualified would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby or its ability to perform its obligations under this Agreement. 4.2 Power and Authority. It has the requisite power and ------------------- authority to execute, deliver and perform this Agreement and each other instrument, document, certificate and agreement required or contemplated to be executed, delivered and performed by it hereunder and thereunder to which it is or will be a party. 4.3 Due Authorization. The execution and delivery of this ----------------- Agreement by it and the consummation of the transactions contemplated hereby have been duly and validly authorized by its Board of Directors (or equivalent body) and no other proceedings on its part which have not been taken (including, without limitation, approval of its stockholders, partners or members) are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. 4.4 Enforceability. This Agreement has been duly executed -------------- and delivered by it and constitutes its valid and binding obligation enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. 4.5 No Breach. After giving effect to the transactions --------- contemplated hereby, it is not in breach of any obligation under this Agreement. 4.6 Consents; No Conflicts. Neither the execution, delivery ---------------------- and performance by it of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or violation of, any provision of its organizational documents; (b) subject to obtaining the Consents set forth on Schedule 4.6, constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under (i) any Law or License or (ii) any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets; or (c) require any Consent (other than those set forth on Schedule 4.6 or the approval of its board of -6- directors, general partner, stockholders or similar constituent bodies, as the case may be (which approvals have been obtained)), except in each case, where such breach, violation, default, Lien, right, or the failure to obtain or give such Consent would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby. To its knowledge, except as set forth on Schedule 4.6, there is no fact relating to it or its Affiliates that would be reasonably expected to prevent it from consummating the transactions contemplated hereby or disqualify the Company from obtaining the Consents (including without limitation, FCC Consent) required in order to consummate the Tritel License Transfer. 4.7 Litigation. Except as set forth on Schedule 4.7, there ---------- is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the transactions contemplated hereby or to fulfill its obligations under this Agreement, which seeks to prevent or challenge the transactions contemplated hereby, or which seeks to have an adverse effect on the Company. 4.8 FCC Compliance. It complies with all eligibility rules -------------- issued by the FCC to hold broadband PCS licenses, including without limitation the rules on holding designated entity licenses, the FCC rules on foreign ownership and the CMRS spectrum cap. 4.9 Brokers. It has not employed any broker, finder or ------- investment banker or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated hereby. 4.10 Each of Tritel-Florida, with respect (where applicable) to the Florida Licenses, and Tritel-Georgia, with respect (where applicable) to the Georgia Licenses, represents and warrants to the Company that: (a) Tritel Licenses. It is the authorized legal holder, --------------- free and clear of any Liens (other than Liens securing the FCC Debt), of such Licenses, true and correct copies of which are attached to Schedules I and II hereto, as applicable. Such Licenses are, and on the Closing Date will be, valid and in full force and effect. Except as set forth on Schedule 4.10 and for proceedings affecting the PCS or wireless communications services industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to its knowledge, threatened against it or such Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of such Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ such Licenses in the Company's business after the Closing Date or seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any of such Licenses. Such Licenses are not subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law. -7- (b) Tritel Debt; Solvency. Each item of FCC Debt being --------------------- assumed by the Company shall be such Seller's bona fide obligation. Such Seller is Solvent after giving effect to the consummation of the transactions contemplated hereby. (c) Transferability. Neither the execution, delivery and --------------- performance by such Seller of this Agreement nor the assumption by the Company of the FCC Debt will (a) constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon such Seller or any of the FCC Debt; or (b) require any Consent (other than those set forth on Schedule 4.6) or the approval of such Seller's board of directors (which approval has been obtained). ARTICLE V COVENANTS --------- 5.1 Consummation of Transactions. Each party shall use all ---------------------------- commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable and consistent with applicable law to carry out all of their respective obligations under this Agreement to consummate the transactions contemplated hereby, which efforts shall include, without limitation, the following: (a) The parties shall use all commercially reasonable efforts to cause the Closing to occur and the transactions contemplated hereby to be consummated in accordance with the terms hereof, and, without limiting the generality of the foregoing, to obtain all necessary Consents including, without limitation, the approval of this Agreement and the transactions contemplated hereby by all Governmental Authorities and agencies, including the FCC, and make all filings with and to give all notices to third parties which may be necessary or reasonably required in order for the parties to consummate the transactions contemplated hereby; provided that Sellers shall not make any filings with the FCC regarding the Tritel Licenses without the prior review and approval of the Company. (b) Each party shall furnish to the other parties all information concerning such party and its Affiliates reasonably required for inclusion in any application or filing to be made by either Seller or the Company or any other party in connection with the transactions contemplated hereby or otherwise to determine compliance with applicable FCC Rules. 5.2 Confidentiality. --------------- (a) Each party shall, and shall cause each of its Affiliates, and its and their respective shareholders, members, managers, directors, officers, employees and agents -8- (collectively, "Representatives") to, keep secret and retain in strictest --------------- confidence any and all Confidential Information relating to any other party that it receives in connection with the negotiation or performance of this Agreement, and shall not disclose such Confidential Information, and shall cause its Representatives not to disclose such Confidential Information, to anyone except the receiving party's Affiliates and Representatives and any other Person that agrees in writing to keep in confidence all Confidential Information in accordance with the terms of this Section 5.2. Until the Closing, each party agrees to use Confidential Information received from another party only (i) to evaluate its interest in pursuing the transactions contemplated hereby and (ii) to pursue such transactions contemplated hereby, but not for any other purpose. All Confidential Information furnished pursuant to this Agreement shall be returned promptly to the party to whom it belongs upon request by such party. (b) The obligations set forth in Section 5.2(a) shall be inoperative with respect to Confidential Information that (i) is or becomes generally available to the public other than as a result of disclosure by the receiving party or its Representatives, (ii) was available to the receiving party on a non-confidential basis prior to its disclosure to the receiving party, or (iii) becomes available to the receiving party on a non-confidential basis from a source other than the providing party or its agents, provided that such source is not known by the receiving party to be bound by a confidentiality agreement with the providing party or the providing party's agents. (c) To the fullest extent permitted by law, if a party or any of its Affiliates or Representatives breaches, or threatens to commit a breach of, this Section 5.2, the party whose Confidential Information shall be disclosed, or threatened to be disclosed, shall have the right and remedy to have this Section 5.2 specifically enforced by any court having jurisdiction, it being acknowledged and agreed that money damages will not provide an adequate remedy to such party. Nothing in this Section 5.2 shall be construed to limit the right of any party to collect money damages in the event of breach of this Section 5.2. (d) Anything else in this Agreement notwithstanding, each party shall have the right to disclose any information, including Confidential Information of the other party or such other party's Affiliates, in any filing with any regulatory agency, court or other authority or any disclosure to a trustee of public debt of a party to the extent that the disclosing party determines in good faith that it is required by Law, regulation or the terms of such debt to do so, provided that any such disclosure shall be as limited in scope as possible and shall be made only after giving the other party as much notice as practicable of such required disclosure and an opportunity to contest such disclosure if possible. 5.3 Certain Covenants. From and after the execution and delivery of ----------------- this Agreement to and including the Closing Date, each Seller shall: (a) Comply in all material respects with all applicable Laws, including all such Laws relating to the Tritel Licenses or their use; -9- (b) Use commercially reasonable efforts to maintain the Florida Licenses and the Georgia Licenses, as applicable, in full force and effect; (c) Not (i) sell, transfer, assign or dispose of, or offer to, or enter into any agreement, arrangement or understanding to, sell, transfer, assign or dispose of any of the Florida Licenses or Georgia Licenses, as applicable, or any interest therein, or negotiate therefor, or (ii) create, incur or suffer to exist any Lien of any nature whatsoever relating to any of the Florida Licenses or Georgia Licenses, as applicable, or any interest therein (other than Liens securing the FCC Debt to be assumed by the Company pursuant to Section 2.3). Without limiting the foregoing, neither Seller shall incur any material obligation or liability, absolute or contingent, relating to or affecting the Florida Licenses or Georgia Licenses, as applicable, or their use; (d) Give written notice to the Company promptly upon the commencement of, or upon obtaining knowledge of any facts that would give rise to a threat of, any claim, action or proceeding commenced against or relating to (i) it, its properties or assets, including the Florida Licenses or Georgia Licenses, as applicable, or their use, and which could have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby, or (ii) the Florida Licenses or Georgia Licenses, as applicable, or their use; (e) Promptly after obtaining knowledge of the occurrence of, or the impending or threatened occurrence of, any event which could cause or constitute a material breach of any of its warranties, representations, covenants or agreements contained in this Agreement, give notice in writing of such event, or occurrence or impending or threatened event or occurrence, to the other parties and use commercially reasonable efforts to prevent or to promptly remedy such breach; and (f) Cause the other parties to be advised promptly in writing of (i) any event, condition or state of facts known to it, which has had or could have a Material Adverse Effect on it, or materially adversely affect the Florida Licenses or Georgia Licenses, as applicable, or their use or the transactions contemplated hereby (other than proceedings affecting the PCS or wireless communications services industry generally), or (ii) any claim, action or proceeding which seeks to enjoin the consummation of the transactions contemplated hereby. 5.4 Covenants of the Company. From and after the execution of this ------------------------ Agreement to and including the Closing Date, the Company shall: (a) Give written notice to the Sellers promptly upon the commencement of, or upon obtaining knowledge of any facts that would give rise to a threat of, any claim, action or proceeding commenced against or relating to it, its properties or assets and which could have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby; (b) Promptly after obtaining knowledge of the occurrence of, or the impending or threatened occurrence of, any event which could cause or constitute a material breach of any of -10- its warranties, representations, covenants or agreements contained in this Agreement, give notice in writing of such event, or occurrence or impending or threatened event or occurrence, to the other parties and use commercially reasonable efforts to prevent or to promptly remedy such breach; (c) Cause the other parties to be advised promptly in writing of (i) any event, condition or state of facts known to it, which has had or could have a Material Adverse Effect on it or the transactions contemplated hereby (other than proceedings affecting the PCS or wireless communications services industry generally), or (ii) any claim, action or proceeding which seeks to enjoin the consummation of the transactions contemplated hereby; and (d) Not take any action which would cause it to become ineligible under applicable FCC Laws to hold the Tritel Licenses as of the Closing Date. 5.5 Unjust Enrichment. To the extent that any unjust enrichment ----------------- penalties are assessed against either Seller as a result of the Tritel License Transfer, the Company shall assume all of such Seller's obligations and liabilities related to such penalty. ARTICLE VI CLOSING CONDITIONS ------------------ 6.1 Conditions to Obligations of All Parties. The obligation of each ---------------------------------------- of the parties to consummate the transactions contemplated hereby to occur at the Closing shall be conditioned on the following, unless waived by each of the parties: (a) Any applicable waiting period under the HSR Act shall have expired or been terminated. (b) The Consent of the FCC to the Tritel License Transfer shall have been obtained pursuant to a Final Order, free of any conditions materially adverse to the Company or either Seller, other than those applicable to the PCS or wireless communications services industry generally. For the purposes of this paragraph, "Final Order" means an action or decision that has been granted by ----------- the FCC as to which (i) no request for a stay or similar request is pending, no stay is in effect, the action or decision has not been vacated, reversed, set aside, annulled or suspended and any deadline for filing such request that may be designated by statute or regulation has passed, (ii) no petition for rehearing or reconsideration or application for review is pending and the time for the filing of any such petition or application has passed, (iii) the FCC does not have the action or decision under reconsideration on its own motion and the time within which it may effect such reconsideration has passed and (iv) no appeal is pending including other administrative or judicial review, or in effect and any deadline for filing any such appeal that may be designated by statute or rule has passed. -11- (c) All Consents by any Governmental Authority (other than the Consents referred to in paragraphs (a) and (b) above) required to permit the consummation of the transactions contemplated hereby, the failure to obtain or make which would be reasonably expected to have a Material Adverse Effect on any party or to materially adversely affect the transactions contemplated hereby or any party's ability to perform its obligations under this Agreement shall have been obtained or made. (d) No preliminary or permanent injunction or other order, decree or ruling issued by a Governmental Authority, nor any statute, rule, regulation or executive order promulgated or enacted by any Governmental Authority, shall be in effect that would (i) impose material limitations on the ability of any party to consummate the transactions contemplated hereby or prohibit such consummation, or (ii) impair in any material respect the operation of the Company. 6.2 Conditions to Obligations of the Company. The obligation of the ---------------------------------------- Company to consummate the transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions by each of the other parties, unless waived by the Company: (a) The representations and warranties of each Seller contained herein shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time, except for inaccuracies in respect of the representations and warranties set forth in Section 4.7 and the third sentence of Section 4.10(a) (disregarding any qualifications as to materiality contained therein) that in the aggregate would not be reasonably expected to have a Material Adverse Effect on either Seller or its ability to perform its obligations under this Agreement or to materially adversely affect the transactions contemplated hereby. (b) Each Seller shall have performed in all material respects all agreements contained herein required to be performed by it at or before the Closing. (c) An officer of each Seller shall have delivered to the Company a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to it. (d) Sellers shall have furnished the Company with opinions of counsel, each dated the Closing Date, in substantially the forms of Exhibits A and B. (e) All corporate and other proceedings of each Seller in connection with the Tritel License Transfer and the other transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to the -12- Company, and each Seller shall have delivered to the Company such receipts, documents, instruments and certificates, in form and substance reasonably satisfactory to the Company, which the Company shall have reasonably requested. 6.3 Conditions to the Obligations of Sellers. The obligation of ---------------------------------------- Sellers to consummate the transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions, unless waived by Sellers: (a) The representations and warranties of the Company contained herein shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time. (b) The Company shall have performed in all material respects all agreements contained herein required to be performed by it at or before the Closing. (c) An officer of the Company shall have delivered to Sellers a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to the Company. (d) The Company shall have furnished Sellers with an opinion of counsel, dated the Closing Date, in substantially the form of Exhibit C. (e) All corporate and other proceedings of the Company in connection with the Tritel License Transfer and the other transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to Sellers, and the Company shall have delivered to Sellers such receipts, documents, instruments and certificates, in form and substance reasonably satisfactory to Sellers, which Sellers shall have reasonably requested. ARTICLE VII SURVIVAL AND INDEMNIFICATION ---------------------------- -13- 7.1 Survival. The representations and warranties made in this -------- Agreement shall survive the Closing until the second anniversary thereof and shall thereupon expire together with any right to indemnification in respect thereof (except to the extent a written notice asserting a claim for breach of any such representation or warranty and describing such claim in reasonable detail shall have been given prior to such date to the party which made such representation or warranty). The covenants and agreements contained herein to be performed or complied with prior to the Closing shall expire at the Closing. The covenants and agreements contained in this Agreement to be performed or complied with after the Closing shall survive the Closing. After the Closing, the sole and exclusive remedy of the parties for any breach or inaccuracy of any representation or warranty contained in this Agreement, or any other claim (whether or not alleging a breach of this Agreement) that arises out of the facts and circumstances constituting such breach or inaccuracy, shall be the indemnity provided in this Article VII. 7.2 Indemnification by Seller. Each Seller, jointly and severally, ------------------------- shall indemnify and hold harmless the Company and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.2 Indemnified Party"), ----------------------------- against all liabilities and expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees) (collectively, "Losses") incurred by him or it in connection with the ------ investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.2 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of either Seller contained in this Agreement (except, any of the matters referred to on Schedule 4.7 or 4.10) being untrue in any material respect as of the date on which it was made, or (b) any material default by either Seller or any of its Affiliates in the performance of their respective obligations under this Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.2 Indemnified Party or its Affiliates. Further, each Seller hereby assigns to the Company its rights to indemnification under Section 7.2(ii) of that certain License Purchase Agreement, dated as of May 20, 1999, between Tritel, Inc. and Digital PCS, LLC. 7.3 Indemnification by the Company. The Company shall indemnify and ------------------------------ hold harmless each Seller and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.3 Indemnified Party"), against all Losses incurred by ----------------------------- him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.3 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of the Company contained in this Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by the Company or any of its Affiliates in the performance of their respective obligations under this Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.3 Indemnified Party or its Affiliates. -14- 7.4 Procedures. ---------- (a) The terms of this Section 7.4 shall apply to any claim (a "Claim") for indemnification under the terms of Sections 7.2 or 7.3. The Section ----- 7.2 Indemnified Party or Section 7.3 Indemnified Party (each, an "Indemnified ----------- Party"), as the case may be, shall give prompt written notice of such Claim to - ----- the indemnifying party (the "Indemnifying Party") under the applicable Section, ------------------ which party may assume the defense thereof, provided that any delay or failure to so notify the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is materially prejudiced by reason of such delay or failure. The Indemnified Party shall have the right to approve any counsel selected by the Indemnifying Party and to approve the terms of any proposed settlement, such approval not to be unreasonably delayed or withheld (unless such settlement provides only, as to the Indemnified Party, the payment of money damages actually paid by the Indemnifying Party and a complete release of the Indemnified Party in respect of the claim in question). Notwithstanding any of the foregoing to the contrary, the provisions of this Article VII shall not be construed so as to provide for the indemnification of any Indemnified Party for any liability to the extent (but only to the extent) that such indemnification would be in violation of applicable law or that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Article VII to the fullest extent permitted by law. (b) In the event that the Indemnifying Party undertakes the defense of any Claim, the Indemnifying Party will keep the Indemnified Party advised as to all material developments in connection with such Claim, including, but not limited to, promptly furnishing the Indemnified Party with copies of all material documents filed or served in connection therewith. (c) In the event that the Indemnifying Party fails to assume the defense of any Claim within ten business days after receiving written notice thereof, the Indemnified Party shall have the right, subject to the Indemnifying Party's right to assume the defense pursuant to the provisions of this Article VII, to undertake the defense, compromise or settlement of such Claim for the account of the Indemnifying Party. Unless and until the Indemnified Party assumes the defense of any Claim, the Indemnifying Party shall advance to the Indemnified Party any of its reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any such action or proceeding. Each Indemnified Party shall agree in writing prior to any such advancement that, in the event he or it receives any such advance, such Indemnified Party shall reimburse the Indemnifying Party for such fees, costs and expenses to the extent that it shall be determined that he or it was not entitled to indemnification under this Article VII. (d) In no event shall an Indemnifying Party be required to pay in connection with any Claim for more than one firm of counsel (and local counsel) for each of the following groups of Indemnified Parties: (i) Sellers, their Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; and (ii) the -15- Company and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them. ARTICLE VIII TERMINATION ----------- 8.1 Termination. This Agreement may be terminated, and the ----------- transactions contemplated hereby abandoned, without further obligation of any party, except as set forth herein, at any time prior to the Closing Date: (a) by mutual written consent of the parties; (b) by any party by written notice to the other parties, if the Closing shall not have occurred on or before the date that is two years after the date hereof, provided that the party electing to exercise such right is not otherwise in breach of its obligations under this Agreement; or (c) by any party by written notice to the other parties, if the consummation of the transactions contemplated hereby shall be prohibited by a final, non-appealable order, decree or injunction of a court of competent jurisdiction. 8.2 Effect of Termination. (a) In the event of a termination of this --------------------- Agreement, no party hereto shall have any liability or further obligation to any other party to this Agreement, except as set forth in paragraph (b) below, and except that nothing herein will relieve any party from liability for any breach by such party of this Agreement. (a) In the event of a termination of this Agreement pursuant to Section 8.1, all provisions of this Agreement shall terminate, except Section 5.2 and Articles VII and IX. (b) Whether or not the Closing occurs, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. ARTICLE IX MISCELLANEOUS PROVISIONS ------------------------ 9.1 Amendment and Modification. This Agreement may be amended, -------------------------- modified or supplemented only by written agreement of each of the parties. 9.2 Waiver of Compliance; Consents. Any failure of any of the ------------------------------ parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party -16- or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirement for a waiver of compliance as set forth in this Section 9.2. 9.3 Notices. All notices or other communications hereunder shall be ------- in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, or by registered or certified mail (return receipt requested), postage prepaid, with an acknowledgment of receipt signed by the addressee or an authorized representative thereof, addressed as follows (or to such other address for a party as shall be specified by like notice; provided that notice of a change of address shall be effective only upon receipt thereof): If to either Seller: c/o Tritel, Inc. Attention: James H. Neeld, IV, Esq. 111 E. Capitol Street, Suite 500 Jackson, Mississippi 39201 Fax No.: (601) 914-8285 With a copy to: Young, Williams, Henderson & Fuselier, P.A. Attention: Wes Daughdrill 2000 Deposit Guaranty Plaza P.O. Box 23059 Jackson, Mississippi 39225-3059 Fax: (601)-355-6136 If to the Company: Panther, L.L.C. Attention: Thomas H. Sullivan 1010 N. Glebe Road, Suite 800 Arlington, Virginia 22201 Fax No.: (703) 236-1136 With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. Attention: Alicia M..V. Wyman One Financial Center Boston, Massachusetts 02111 Fax No.: (617) 542-2241 9.4 Parties in Interest; Assignment. This Agreement is binding upon ------------------------------- and is solely for the benefit of the parties hereto and their respective permitted successors, legal representatives and permitted assigns. -17- 9.5 Applicable Law. This Agreement shall be governed by and -------------- construed in accordance with the laws of the State of New York without giving effect to the conflicts of law principles thereof. The parties hereto hereby irrevocably and unconditionally consent to submit to the non-exclusive jurisdiction of the courts of the State of New York and of the United States of America located in the County of New York, New York (the "New York Courts") for --------------- any litigation arising out of or relating to this Agreement and the transactions contemplated hereby, waive any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 9.6 Counterparts. This Agreement may be executed in two or more ------------ counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 9.7 Interpretation. The article and section headings contained in -------------- this Agreement are for convenience of reference only, are not part of the agreement of the parties and shall not affect in any way the meaning or interpretation of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the antecedent Person or Person may require. 9.8 Entire Agreement. This Agreement, including the exhibits and ---------------- schedules hereto and the certificates and instruments delivered pursuant to the terms of this Agreement, embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated hereby. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such transactions contemplated hereby. 9.9 Publicity. So long as this Agreement is in effect, the parties --------- agree to consult with each other in issuing any press release or otherwise making any public statement with respect to the transactions contemplated hereby, and no party shall issue any press release or make any such public statement prior to such consultation, except as may be required by Law. No press release or other public statement by the parties hereto shall disclose any of the financial terms of the transactions contemplated hereby without the prior consent of the other parties, except as may be required by Law. A breach of the provisions of this Section 9.9 by a party shall not give rise to any right to terminate this Agreement. 9.10 Specific Performance. The parties hereto agree that irreparable -------------------- damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any New York Courts. -18- 9.11 Remedies Cumulative. All rights, powers and remedies provided ------------------- under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. -19- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. PANTHER WIRELESS, L.L.C. By: /s/ Thomas H. Sullivan ----------------------------- Name: Thomas H. Sullivan Title: President TRITEL LICENSE-FLORIDA, INC. By: /s/ William M. Mounger, II ----------------------------- Name: William M. Mounger, II Title: Chairman, CEO TRITEL LICENSE-GEORGIA, INC. By: /s/ William M. Mounger, II ----------------------------- Name: William M. Mounger, II Title: Chairman, CEO -20- SCHEDULE I Florida Licenses ---------------- -1- SCHEDULE II Georgia Licenses ---------------- -1- SCHEDULE 4.6 Seller Consents --------------- Company Consents ---------------- -2- SCHEDULE 4.7 Seller Litigation ----------------- Company Litigation ------------------ -1- SCHEDULE 4.10 Seller FCC Proceedings ---------------------- -1- EX-10.34 16 0016.txt SEPARATION AGREEMENT, EFFECTIVE AS OF 01-06-2001 Exhibit 10.34 SEPARATION AGREEMENT -------------------- It is hereby agreed by and between William S. Arnett ("Arnett") and Tritel, Inc. and TeleCorp PCS, Inc. (collectively "Tritel") in this Separation Agreement ("the Agreement"), for good and sufficient consideration, as more fully described below, that: 1. Employment Status Arnett's employment with Tritel shall cease or ceased on December 15, 2000 (the "Termination Date"). Arnett's salary and benefits likewise will cease or ceased as of the Termination Date, including any entitlement he had or might have had under any Tritel provided benefit programs, except as required by federal or state law. 2. Consideration a. Tritel will pay Arnett an amount equal to twice his current annual salary of Two Hundred Twenty Five Thousand Dollars ($225,000), for a total of Four Hundred Fifty Thousand Dollars ($450,000) in approximately equal installments over a period of twenty four months following the Termination Date in accordance with Tritel's normal payroll practices and beginning on the next regularly scheduled payday which is at least seven days after the expiration of the recision period set forth below. All amounts set forth in this Section 2 are subject to applicable federal and local withholding, payroll and other taxes (if any). b. On December 29, 2000, Tritel will pay Arnett for all accrued but unused vacation, if any, as of December 15, 2000, less federal, state and local withholding, payroll and other taxes. c. On the Effective Date (as defined in Paragraph 9), Tritel shall pay Arnett a bonus for fiscal year 2000 in the amount of One Hundred Twelve Thousand and Five Hundred Dollars ($112,500). d. Arnett will be permitted to continue his medical and dental insurance after the Termination Date pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The COBRA qualifying event shall be deemed to have occurred on the Termination Date, and, should Arnett properly elect such coverage, Tritel will pay Arnett's COBRA premiums with respect to the period of coverage from the Termination Date for a period of eighteen (18) months or until Arnett becomes eligible for group medical and dental insurance through another employer, whichever period is shorter. Arnett will notify Tritel immediately should he become eligible as aforesaid. e. Pursuant to the terms of that certain Amended and Restated Employment Agreement dated as of June 1, 2000, all of the Restricted Shares which Arnett holds in TeleCorp PCS, Inc. have vested. Arnett shall have ninety (90) days from the Termination Date to exercise any of his vested options in TeleCorp PCS, Inc. stock. f. Effective on the Effective Date, Arnett's outstanding loan from Tritel, in the principal amount of $50,000, plus all accrued interest thereon, if any, shall be forgiven. g. Arnett shall be permitted to retain the SunCom mobile telephone provided to him by Tritel. Tritel for a period of twelve months from the Effective Date shall provide Arnett with, and shall not charge him for, the best rate plan offered for such telephone by Tritel in the market in which his current residence is located, provided, however, that Arnett shall be responsible for all roaming and other charges beyond those covered by the basic rate for the aforesaid plan. 3. Proprietary Information Arnett acknowledges that, in order for him to perform his duties properly as an employee of Tritel, Tritel entrusted him with certain trade secrets and confidential business information (the "Confidential Information"). The Confidential Information includes, but is not limited to, financial information, business plans, manuals, courtesy parking passes, diskettes, intangible information stored on diskettes, business or marketing plans, reports, projections, software programs and data compiled with the use of those programs, tangible copies of trade secrets and confidential information, and any and all other information or property previously or currently held or used by Arnett that is or was related to Arnett's employment with Tritel. Arnett hereby acknowledges that the development and acquisition of such Confidential Information is the result of great effort and expense by Tritel and that the Confidential Information is critical to the success and survival of Tritel. Arnett hereby agrees to immediately deliver to Tritel all Confidential Information in his possession, custody or control, and other property prepared on behalf of Tritel or purchased with Tritel funds. Arnett agrees that in the event he discovers any other Tritel materials or Confidential Information in his possession after the date of the execution of this Agreement he will immediately return such materials to Tritel. The obligations set forth in this Section 3 shall be in addition to, and not in place of, any obligations relating to trade secrets or confidentiality which Arnett has to Tritel pursuant to any contract or statutory or common law. 4. Property of Tritel Arnett shall immediately return all property of Tritel of any nature whatsoever to Tritel. 5. Release -2- In exchange for the amounts described in Section 2 and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Arnett and his representatives, agents, estate, successors and assigns, absolutely and unconditionally hereby release and forever discharge Tritel (which shall for purposes of this Section 5 be defined to include without limitation Tritel, its parents and/or any of its subsidiaries, affiliates, their respective successors, assigns, shareholders/stockholders, officers, directors, representatives, attorneys, employees and/or agents in both their individual and official capacities) from any and all actions or causes of action, suits, claims, complaints, obligations, contracts, liabilities, agreements, promises, debts and damages, whether existing or contingent, known or unknown, accrued or unaccrued, of any type whatsoever, and without limiting the generality of the foregoing, for any claims which arise out of Arnett's employment with Tritel. This release is intended by Arnett to be all-encompassing and to act as a full and total release of all claims known or unknown that Arnett may have or has had against Tritel, including, but not limited to, (a) claims under any federal or state law, statute or regulation dealing with either employment discrimination, including both federal and state laws or regulations concerning discrimination on the basis of age, race, color, religion, creed, sex, sexual preference, national origin, handicap status or status as a disabled veteran, (b) any contract whether oral or written, express or implied; (c) any claims to an equity interest in Tritel (either directly or through any other person or entity), and/or (d) at common law; provided, however, that this release shall not apply to any claims regarding a breach of this Agreement or any claims arising out of acts or omissions occurring after the Effective Date. Also without limiting the generality of the foregoing, the amounts set forth in Section 2 shall be complete and unconditional payment, settlement, satisfaction and accord with respect to all obligations and liabilities of Tritel to Arnett, and with respect to all claims, causes of action and damages that could be asserted by Arnett against Tritel for any reason, including, without limitation, anything arising out of Arnett's employment with and termination of employment with Tritel, including, without limitation, all claims for wages, back wages, salary, vacation pay, draws, commissions, bonuses, compensation, professional expenses, severance pay, stock rights or stock options, any equity interest in Tritel (either directly or through any other person or entity), attorney's fees, compensatory damages, special damages, reliance damages, punitive damages, treble damages, consequential damages, exemplary damages, emotional distress damages, or other costs or sums; provided, however, that this release shall not apply to any claims regarding a breach of this Agreement or any claims arising out of acts or omissions occurring after the Effective Date. 6. Non-Disparagement and Confidentiality Arnett agrees not to make any negative or adverse remarks whatsoever concerning Tritel, including, but not limited to, negative remarks concerning Tritel's operations, marketing strategies, management, affairs, financial conditions. Arnett shall not divulge or publish, intentionally, any information whatsoever regarding the fact of, substance, terms or existence of this Agreement and/or any discussions or negotiations relating to this -3- Agreement to any person or organization. Tritel shall direct its directors, executive officers and vice president of human resources not to make any negative or adverse remarks whatsoever concerning Arnett or his employment with Tritel; provided however, the foregoing shall not in any way limit Tritel's ---------------- ability to communicate with third parties, in its ordinary course of business, whether through its directors, executive officers and vice president of human resources or otherwise, regarding Tritel, including but not limited to Tritel's business and financial performance, and its management generally (without specific reference to Arnett). Any disclosure of the terms, negotiations, or fact of this Agreement by Arnett shall be deemed a violation of this Agreement and, in addition to relieving it of any further obligations under this Agreement and the return from Arnett of all payment made to or on his behalf hereunder, shall entitle Tritel to all damages it proves as a result of such breach and reasonable attorney's fees and costs. This provision is not intended to interfere with nor to prevent Arnett's legal obligation to fully and completely respond to a subpoena or otherwise comply with any legal obligation to divulge information relating to this Agreement, provided, however, that Arnett shall give Tritel immediate written notice of any such requirement. This Agreement also shall not prohibit the disclosure of any amounts paid or to be paid as a result of this Agreement to Arnett's accountants, bookkeepers, attorneys, or tax consultants, provided such parties agree to maintain the confidentiality of the provisions of this Agreement, nor shall it prohibit Arnett from taking any legal action necessary to enforce this Agreement or exercise any rights hereunder. 7. Representations, Amendments, and Governing Law a. Except as expressly set forth herein, this Agreement represents the complete and sole understanding between the parties and supersedes any and all other Agreements and understandings whether oral or written, provided, however, that Arnett's obligations under Section 6 of that certain Amended and Restated Employment Agreement by and between Arnett and Tritel, Inc., dated as of June 1, 2000, shall remain in full force and effect. b. This Agreement may not be modified, altered or rescinded except upon written consent of Tritel and Arnett. If any provision of this Agreement, or part thereof, is held invalid, void or voidable as against the public policy or otherwise, the invalidity shall not affect other provisions, and parts thereof, of this Agreement as the same are declared to be severable. c. The validity, interpretation and performance of this Agreement shall be construed and interpreted according to the laws of the Commonwealth of Virginia. d. In entering into this Agreement, Arnett does not rely on any representation, promise or inducement made by Tritel or its officers, directors, employees, representatives or attorneys in both their individual and official capacity with the exception of the consideration described in this document. 8. Time to Accept, Rescission and Other Matters. -4- It is Tritel's desire and intent to make certain that Arnett fully understands the provisions and effects of this letter. To that end, Arnett has been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing the terms of this letter. Consistent with the provisions of OWBPA, Tritel is providing Arnett with twenty-one (21) days in which to consider and accept the terms of this Agreement by signing below and returning it to Steven Howerton, TeleCorp Communications, Inc., Suite 800, 1010 N. Glebe Road, Arlington, VA 22201. Delivery shall be deemed complete as of the date of the postmark of such mailing or on receipt by personal delivery. In addition, Arnett may rescind his assent to this Agreement within seven (7) days after he signs it. To be effective, such notice of rescission must be hand delivered or postmarked within the seven (7) day period and sent by certified mail, return receipt requested, to Steven Howerton, TeleCorp Communications, Inc., Suite 800, 1010 N. Glebe Road, Arlington, VA 22201. 9. Effective Date This Agreement shall be effective as the eighth (8th) day following the date on which it is executed by Arnett (the "Effective Date"). IN WITNESS WHEREOF, the undersigned have executed this Agreement on the dates shown below. Date: December 29, 2000 /s/ William S. Arnett ------------------- ------------------------------- William S. Arnett TRITEL, INC. Date: December 29, 2000 BY: /s/ Thomas H. Sullivan ------------------- --------------------------- ITS:___________________________ TELECORP PCS, INC. BY: /s/ Thomas H. Sullivan --------------------------- ITS: __________________________ -5- EX-10.35 17 0017.txt LETTER AGREEMENT, DATED 10-20-2000 Exhibit 10.35 October 20, 2000 AT&T Wireless Services, Inc. 7277-164/th/ Avenue NE Redmond, WA 98052 Attention: Joseph E. Stumpf Re: Birmingham/Tuscaloosa 10 MHz Licenses ------------------------------------- Dear Joe: As you know, we are purchasing a 10 MHz PCS license for the Birmingham, Alabama BTA and a 10 MHz PCS license for the Tuscaloosa, Alabama BTA (such licenses collectively hereinafter, the "Licenses"), along with related infrastructure and related assets (the "Excluded Assets"), all from Alltel Corporation. In connection with such purchase, we hereby agree as follows: (1) For a period of eighteen (18) months after the closing of the purchase of the Licenses by us from Alltel, we will have the right, by providing written notice within such eighteen (18) month period to AT&T Wireless Services, Inc. ("AWS"), to cause AWS to purchase the Licenses from us for cash in the amount of Fifty Million Dollars ($50,000,000.00) (the "Put Right"). AWS agrees that upon any such notice exercising the Put Right, within ten business days, AWS will close such purchase and sale at which AWS will purchase the Licenses from us, excluding the Excluded Assets, by wire transfer of Fifty Million Dollars ($50,000,000.00) in immediately available funds, and we will execute and deliver to AWS a bill of sale, assignment and assumption agreement transferring and assigning to AWS all of our right, title and interest in the Licenses and all obligations and duties attendant thereto, all of which obligations and duties will be assumed by AWS. (2) For a period of eighteen (18) months after the closing of the purchase of the licenses by us from Alltel, and subject to our right to elect not to accept the exercise of such a Call Right as specified below, AWS will have the right, by providing written notice to us within such eighteen (18) month period, to cause us to sell the Licenses to AWS for cash in the amount of Fifty Million Dollars ($50,000,000.00) (the "Call Right"). We agree that upon any such notice, we will provide a responsive notice to AWS within ten (10) business days electing either to accept the exercise of such Call Right and close the purchase and sale of the Licenses or rather electing to terminate all Put Rights and Call Rights herein, whereupon this letter agreement will become null and void and we shall retain the Licenses. At the closing of a purchase and sale under this paragraph, we will sell to AWS the Licenses, excluding the Excluded Assets, by delivery of a bill of sale, assignment and assumption agreement against payment of Fifty Million Dollars ($50,000,000.00), all in the same manner as provided for in the previous paragraph. Notwithstanding the foregoing, in the event that there is an acquisition by a competitor of AWS of all of the voting preference common stock of Tritel, Inc. in a transaction not approved by AWS, other than the transaction presently pending with TeleCorp PCS, Inc., or after the closing of such transaction, of the holding company being established in such transaction (a "Change of Control"), then our right to elect not to accept the exercise of AWS's Call Right shall be suspended during the period commencing with the signing of a definitive agreement for such Change of Control, and shall be reinstated if such Change of Control does not close or shall expire upon the closing of such Change of Control; provided that AWS's Call Right shall be suspended at any time that our right to elect not to accept the exercise of such Call Right is suspended pursuant to the foregoing provision. (3) The closing of the purchase and sale of the licenses under either of the foregoing paragraphs (1) or (2) shall be delayed only as long as necessary to obtain any necessary regulatory approvals under the Hart Scott Rodino Antitrust Improvements Act of 1976 and the Communications Act of 1934, as amended by the Telecommunications Act of 1996, and the rules and regulations thereunder, provided that in the case of any necessary FCC approval, the closing shall be within ten business days of the initial FCC approval without awaiting a final order. Each party agrees to use its best efforts to obtain any such necessary regulatory approvals and to comply with all requests for information and documentation in connection therewith. (4) We may terminate this letter agreement at any time prior to a Change of Control by written notice from us to AWS, which termination will be effective upon such notice; provided that our right to terminate shall be suspended during the period commencing with the signing of a definitive agreement for such Change of Control, and shall be reinstated if such Change of Control does not close or shall expire upon the closing of such Change of Control. (5) Each party will execute and deliver such further documents and take such further actions as the other party may reasonably request consistent with the provisions hereof in order to effect the intent and purposes of this letter agreement. (6) All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given or make (i) upon delivery if delivered personally (by courier service or otherwise) or (ii) upon confirmation of dispatch if sent by facsimile transmission (which confirmation shall be sufficient if shown by evidence produced by the facsimile machine used for such transmission), in each case to the applicable addresses set forth below (or such other address as the recipient may specify in accordance with this Paragraph): If to us, Tritel, Inc. 111 E. Capitol Street Suite 500 Jackson, Mississippi 39201 Attention: William M. Mounger, II Fax: (601) 914-8020 With a necessary copy to: Telecorp PCS, Inc. 2 1010 N. Glebe Road Suite 800 Arlington, Virginia 22201 Attention: Thomas H. Sullivan Fax: (703) 236-1376 If to AWS, at: AT&T Wireless Services, Inc. 7277 - 164/th/ Avenue NE Redmond, WA 98052 Attention: Joseph E. Stumpf Fax: (425) 580-8405 (7) This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia, without regard to principles of conflicts of law. (8) This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument. (9) AWS acknowledges and agrees that we are relying on AWS's compliance with this letter agreement in closing the purchase of the Licenses and Excluded Assets from Alltel. Please sign below and return a copy to the undersigned to indicate your agreement with the foregoing. Sincerely, TRITEL, INC. By: William M. Mounger, II ---------------------- William M. Mounger, II, Chairman Accepted and Agreed: AT&T Wireless Services, Inc. By: Joseph E. Stumpf ------------------ Joseph E. Stumpf Vice President 3 EX-10.36 18 0018.txt ASSIGNMENT OF AGREEMENT, DATED AS OF 01-05-2001 Exhibit 10.36 ASSIGNMENT OF AGREEMENT THIS ASSIGNMENT OF AGREEMENT, made and entered into as of the 5TH day of January, 2001, by and among Tritel, Inc., a Delaware corporation ("Tritel") and Tritel License - Alabama, Inc., a Delaware corporation ("Tritel-Alabama"). W I T N E S S E T H : WHEREAS, Tritel has purchased certain PCS licenses (the "ALLTEL Licenses") from ALLTEL Communications, Inc., pursuant to the terms of that certain Asset Purchase Agreement, dated as of October 23, 2000 (the "APA"); WHEREAS, prior to entering into the APA, Tritel entered into a letter agreement with AT&T Wireless Services, Inc., dated October 20, 2000 (the "Letter Agreement"), pursuant to which AT&T agreed that Tritel would have the right for eighteen (18) months following the purchase of the ALLTEL Licenses to cause AWS to purchase the ALLTEL Licenses from Tritel and that, subject to certain restrictions, during that same period, AWS would have the right to cause Tritel to sell the ALLTEL Licenses to AWS; WHEREAS, Tritel has transferred the ALLTEL Licenses to Tritel-Alabama; and WHEREAS, Tritel wishes to assign its rights and obligations under the Letter Agreement to Tritel-Alabama, the entity holding the ALLTEL Licenses, and AWS has consented to such assignment. NOW, THEREFORE, in consideration of the mutual agreements contained and other valuable and good consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. Assignment of Lease: Effective as of 12:01 a.m. on the date hereof, ------------------- (the "Assignment Date") Tritel does hereby assign, transfer and convey to Tritel-Alabama all of Tritel's right, title and interest in and to the Letter Agreement. Tritel-Alabama accepts, assumes and agrees to be bound by and perform all covenants, conditions, obligations and duties of Tritel under the Letter Agreement. 2. Notices Effective on the Assignment Date: As of the Assignment Date, ---------------------------------------- all notices required under the Letter Agreement to be given to Tritel shall be sent to Tritel-Alabama at: Tritel License-Alabama, Inc. c/o Tritel Communications, Inc. 111 E. Capitol Street, Suite 500 Jackson, Mississippi 39201 Attn: James H. Neeld, IV Fax: (601) 914-8020 With a copy to TeleCorp Communications, Inc. 1010 North Glebe Road, Suite 800 Arlington, VA 22201 Attn: Thomas H. Sullivan Fax: (703) 236-1376 3. This Assignment shall be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia, without regard to principles of conflicts of law. 4. This Assignment may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument. TRITEL, INC. By: /s/ Thomas H. Sullivan -------------------------- Name: Title: TRITEL LICENSE - ALABAMA, INC. By: /s/ Thomas H. Sullivan -------------------------- Name: Title: AT&T Wireless Services, Inc. hereby consents to Tritel's assignment of its rights and obligations under the Letter Agreement to Tritel-Alabama. AT&T WIRELESS SERVICES, INC. By: /s/ Joseph Stumpf -------------------------- Its:____________________ 2 EX-12 19 0019.txt STATEMENT RE COMPUTATION OF RATIOS Exhibit 12 Tritel, Inc. Computation of Ratio of Earnings to Fixed Charges (In Thousands of Dollars)
Nine Months Ended Years ended December 31, September 30, ---------------------------------------------------- ----------------------- 1995 1996 1997 1998 1999 1999 2000 ------- --------- --------- --------- ---------- ---------- ----------- Earnings: Pretax income (loss) from continuing operations $ (120) $ (1,461) $ (3,154) $ (8,331) $(275,897) $ (42,394) $ (257,614) Fixed charges, net of capitalized interest - - 1 833 29,600 15,519 52,799 ------ -------- -------- -------- --------- --------- ---------- Earnings (120) (1,461) (3,153) (7,498) (246,297) (26,875) (204,815) ====== ======== ======== ======== ========= ========= ========== Fixed charges Interest expense and financing cost - - - 722 27,200 14,268 47,260 Capitalized interest and discount 20 3,358 7,214 10,545 23,685 14,592 6,109 Interest factor on rental expense - - 1 111 2,400 1,251 5,539 ------ -------- -------- -------- --------- --------- ---------- Fixed charges 20 3,358 7,215 11,378 53,285 30,111 58,908 ====== ======== ======== ======== ========= ========= ========== Deficiency of earnings to fixed charges $ 140 $ 4,819 $ 10,368 $ 18,876 $ 299,582 $ 56,986 $ 263,723 ====== ======== ======== ======== ========= ========= ==========
EX-21 20 0020.txt SUBSIDIARIES OF TRITEL, INC. EXHIBIT 21 Tritel PCS, Inc. Subsidiaries* ----------------------------- ---------------------------------------------------------------------------- Subsidiary State of Formation ---------------------------------------------------------------------------- Tritel Communications, Inc. DE ---------------------------------------------------------------------------- Tritel Finance, Inc. DE ---------------------------------------------------------------------------- Tritel C/F Holding Corp. DE ---------------------------------------------------------------------------- Tritel A/B Holding Corp. DE ---------------------------------------------------------------------------- NexCom, Inc. DE ---------------------------------------------------------------------------- ClearCall, Inc. DE ---------------------------------------------------------------------------- Global PCS, Inc. DE ---------------------------------------------------------------------------- ClearWave, Inc. DE ---------------------------------------------------------------------------- DigiNet PCS, Inc. DE ---------------------------------------------------------------------------- Tritel License - Alabama, Inc. DE ---------------------------------------------------------------------------- AirCom PCS, Inc. AL ---------------------------------------------------------------------------- QuinCom, Inc. AL ---------------------------------------------------------------------------- DigiCom, Inc. DE ---------------------------------------------------------------------------- DigiCall, Inc. DE ---------------------------------------------------------------------------- Tritel License -- Florida, Inc. DE ---------------------------------------------------------------------------- Tritel License -- Georgia, Inc. DE ---------------------------------------------------------------------------- _____________________ * Tritel PCS, Inc. is the only subsidiary of Tritel, Inc. EX-23.1 21 0021.txt CONSENT OF KPMG LLP EXHIBIT 23.1 Independent Auditors' Consent The Board of Directors Tritel, Inc.: We consent to the use of our report dated February 18, 2000, related to the consolidated financial statements of Tritel, Inc. as of December 31, 1998 and 1999 and for each of the years in the three-year period ended December 31, 1999 included herein and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG LLP Jackson, Mississippi February 14, 2001 EX-25 22 0022.txt STATEMENT OF ELIGIBILITY OF TRUSTEE ON FORM T-1 Exhibit 25 SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ____________________________________ FORM T-1 STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ____________________________________ FIRSTAR BANK, N.A. (Exact name of Trustee as specified in its charter) A National Banking Association 41-0122055 (State of incorporation if not (IRS Employer Identification No.) a national bank) 101 East Fifth Street Corporate Trust Department St. Paul, Minnesota 55101 (Address of principal executive offices) (Zip Code) FIRSTAR BANK, N.A. 101 East Fifth Street St. Paul, Minnesota 55101 (651) 229-2600 (Exact name, address and telephone number of agent for service) ___________________________________ TRITEL PCS, INC. TRITEL, INC. TRITEL COMMUNICATIONS, INC. TRITEL FINANCE, INC. Delaware 64-0896438 Delaware 64-0896417 Delaware 64-0896042 Delaware 64-0896439 (State of incorporation or other (IRS Employer Identification No.) jurisdiction) 1010 N. Glebe Road Suite 800 Arlington, Virginia 22201 (Address of principal executive offices) (Zip Code) _________________ 10-3/8% Senior Subordinated Notes due 2011 (Title of Indenture Securities) Item 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. Comptroller of the Currency Treasury Department Washington, DC Federal Deposit Insurance Corporation Washington, DC The Board of Governors of the Federal Reserve System Washington, DC (b) The Trustee is authorized to exercise corporate trust powers. GENERAL Item 2. Affiliations with Obligor and Underwriters. If the obligor or any ------------------------------------------ underwriter for the obligor is an affiliate of the Trustee, describe each such affiliation. None See Note following Item 16. Items 3-15 are not applicable because to the best of the Trustee's knowledge the --------------------------------------------------------------------- obligor is not in default under any Indenture for which the Trustee acts as - --------------------------------------------------------------------------- Trustee. - ------- Item 16. List of Exhibits. Listed below are all the exhibits filed as a part ---------------- of this statement of eligibility and qualification. Exhibits 1-4 and 7 are incorporated by reference from filing 333-48849. Exhibit 1. Copy of Articles of Association of the trustee now in effect. Exhibit 2. a. A copy of the certificate of the Comptroller of Currency dated June 1, 1965, authorizing Firstar Bank of Minnesota, N. A. to act as fiduciary. b. A copy of the certificate of authority of the trustee to commence business issued June 9, 1903, by the Comptroller of the Currency to Firstar Bank of Minnesota, N.A. Exhibit 3. A copy of the authorization of the trustee to exercise corporate trust powers issued by the Federal Reserve Board. Exhibit 4. Copy of the By-Laws of the trustee as now in effect. Exhibit 5. Copy of each Indenture referred to in Item 4. Exhibit 6. The consent of the trustee required by Section 321(b) of the Act. Exhibit 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. NOTE The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligor within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligor, or affiliates, are based upon information furnished to the Trustee by the obligor. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the Trustee, a national banking association organized and existing under the laws of the United States, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the City of Saint Paul and State of Minnesota on the 7th day of February, 2001. FIRSTAR BANK, N.A., (Seal) By /s/ Frank P. Leslie III ------------------------------------- Name: Frank P. Leslie III Title: Vice President EXHIBIT 6 CONSENT In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, Firstar Bank of Minnesota, N.A., hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor. Dated: February 7, 2001 FIRSTAR BANK, N.A., By /S/ Frank P. Leslie III ------------------------------------- Name: Frank P. Leslie III Title: Vice President EX-99.1 23 0023.txt FORM OF LETTER OF TRANSMITTAL Exhibit 99.1 Letter of Transmittal For Tender of 10 3/8% Senior Subordinated Notes Due 2011 of Tritel PCS, Inc. Pursuant to the Prospectus dated [ ], 2001 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [ ], 2001, UNLESS EXTENDED. TENDERED SECURITIES MAY BE WITHDRAWN AT ANY TIME ON OR PRIOR TO THE EXPIRATION DATE OF THE EXCHANGE OFFER. The Exchange Agent for the Exchange Offer is: Firstar Bank, N.A. By Hand, Mail, Overnight Mail or Courier: Firstar Bank, N.A. Corporate Trust Department 101 East Fifth Street St. Paul, Minnesota 55101 Fax: 651-229-6415 Confirm by Telephone: 651-229-2600 (Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand delivery or by overnight delivery services) Delivery of this Letter of Transmittal to an address other than as set forth above or transmission of this Letter of Transmittal via facsimile to a number other than as set forth above will not constitute a valid delivery. The instructions accompanying this Letter of Transmittal should be read carefully before this Letter of Transmittal is completed. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. Capitalized terms used but not defined herein shall have the same meaning given to them in the Prospectus referred to below. The undersigned acknowledges that he or she has received and reviewed the Prospectus dated [ ], 2001 (the "Prospectus"), of Tritel PCS, Inc. (the "Issuer"), and this Letter of Transmittal (the "Letter of Transmittal") which together constitute the Issuer's offer (the "Exchange Offer") to exchange an aggregate principal amount of up to $450,000,000 of its 10 3/8% Senior Subordinated Notes Due 2011 (the "Exchange Notes"), for a like principal amount of the Issuer's issued and outstanding 10 3/8% Senior Subordinated Notes Due 2011 (the "Unregistered Notes"). 1 The term "Expiration Date" shall mean 5:00 p.m., New York City time, on [ ], 2001, unless the Issuer, in its reasonable discretion, extends the Exchange Offer. The Issuer reserves the right, at any time or from time to time, at its reasonable discretion, to extend the period of time during which the Exchange Offer is open, in which event the term "Expiration Date" shall mean the time and date when the Exchange Offer as so extended shall expire. During any such extension, all Unregistered Notes previously tendered will remain subject to the Exchange Offer and may be accepted for exchange by the Issuer. Any Unregistered Notes not accepted for exchange for any reason will be returned without expense to the tendering holder thereof as promptly as practicable after the expiration or termination of the Exchange Offer. The Issuer expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Unregistered Notes not theretofore accepted for exchange, upon the failure to be satisfied of any of the conditions to the Exchange Offer specified in the Prospectus under the section entitled "The Exchange Offer--Conditions to the Exchange Offer". The Issuer will notify the holders of the Unregistered Notes of any extension of the Exchange Offer by oral or written notice (which may be by means of a press release or other public announcement) no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. The Issuer reserves the right, in its reasonable discretion, (i) to delay accepting any Unregistered Notes, or, if any of the conditions set forth under "--Conditions to Exchange Offer" shall not have been satisfied, to terminate the Exchange Offer, by giving oral or written notice of such delay or termination to the Exchange Agent, or (ii) to amend the terms of the Exchange Offer in any manner. Interest will accrue on the Exchange Notes at the same rate and upon the same terms as the Unregistered Notes. The Exchange Offer is not conditioned upon any minimum principal amount of Unregistered Notes being tendered for exchange. However, the Exchange Offer is subject to certain conditions. Please see the Prospectus under the section entitled "The Exchange Offer--Conditions to the Exchange Offer". The Exchange Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Unregistered Notes in any jurisdiction in which the making or acceptance of the Exchange Offer would not be in compliance with the laws of such jurisdiction. This Letter of Transmittal is to be completed by a holder of Unregistered Notes either if certificates are to be forwarded herewith or if a tender of certificates for Unregistered Notes, if available, is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in "The Exchange Offer--Procedures for Tendering" section of the Prospectus. Holders of Unregistered Notes whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Unregistered Notes into the Exchange Agent's account at the Book-Entry Transfer Facility (a "Book-Entry Confirmation") and deliver all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, may tender their Unregistered Notes according to the guaranteed delivery procedures set forth in the Prospectus under the section entitled "The Exchange Offer-- Guaranteed Delivery Procedures". Holders who wish to tender their Unregistered Notes must complete this Letter of Transmittal in its entirety. 2 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING THE BOX ENTITLED "DESCRIPTION OF UNREGISTERED NOTES" BELOW. List below the Unregistered Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and principal amount of Unregistered Notes should be listed on a separate signed schedule affixed hereto. DESCRIPTION OF UNREGISTERED NOTES (see instructions 2, 3 and 8) - ------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Old Note(s) Tendered (Please fill in if blank) (Attach additional signed list if necessary) - ------------------------------------------------------------------------------------ Principal Amount of Unregistered Notes Aggregate Principal Tendered(2) (must be Amount of Unregistered in denominations of Certificate Notes Represented by $1,000 or integral Number(s)(1) Certificate(s) multiples thereof) -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- -------------------------------------------- Total - ------------------------------------------------------------------------------------
(1) Certificate numbers not required if Unregistered Notes are being tendered by book-entry transfer. (2) Unless otherwise indicated, a holder will be deemed to have tendered all of the Unregistered Notes represented in the Aggregate Principal Amount of Unregistered Notes Represented by Certificate(s) column. [_] CHECK HERE IF TENDERED UNREGISTERED NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK- ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: _____________________________________________ Account Number: ____________________________________________________________ Transaction Code Number: ___________________________________________________ [_] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED UNREGISTERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name(s) of Registered Holder(s): ___________________________________________ Window Ticket Number (if any): _____________________________________________ Date of Execution of Notice of Guaranteed Delivery: ________________________ Name of Institution which Guaranteed Delivery: _____________________________ 3 If Guaranteed Delivery is to be made by Book-Entry Transfer: Name of Tendering Institution: _____________________________________________ Account Number: ____________________________________________________________ Transaction Code Number: ___________________________________________________ [_] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED UNREGISTERED NOTES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER SET FORTH ABOVE. [_] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE UNREGISTERED NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ______________________________________________________________________ Address: ___________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. Ladies and Gentlemen: Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to the Issuer the aggregate principal amount of Unregistered Notes indicated above. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Subject to, and effective upon, the acceptance for exchange of the Unregistered Notes tendered hereby, the undersigned hereby sells, assigns and transfers to or upon the order of the Issuer all right, title and interest in and to such Unregistered Notes as are being tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Issuer in connection with the Exchange Offer) with respect to the tendered Unregistered Notes with full power of substitution to (i) deliver certificates for such Unregistered Notes to the Issuer and deliver all accompanying evidences of transfer and authenticity to or upon the order of the Issuer, (ii) present such Unregistered Notes for transfer on the books of the Issuer and (iii) receive for the account of the Issuer all benefits and otherwise exercise all rights of the beneficial ownership of such Unregistered Notes, all in accordance with the terms of the Exchange Offer. The power of attorney granted in this paragraph shall be deemed to be irrevocable and coupled with an interest. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Unregistered Notes tendered hereby and that the Issuer will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by the Issuer. The undersigned hereby further represents that (i) any Exchange Notes acquired in exchange for Unregistered Notes tendered hereby will have been acquired in the ordinary course of business of the person receiving such Exchange Notes, whether or not such person is the undersigned, (ii) neither the holder nor any such other person has an arrangement or understanding with any person to participate in the distribution of such Exchange Notes, and (iii) neither the holder nor any such other person is an "affiliate", as described in Rule 405 under the Securities Act of 1933, as amended (the "Securities Act"), of the Issuer. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of the Exchange Notes. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Unregistered Notes, it represents that the Unregistered Notes to be exchanged for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such Exchange Notes acquired pursuant to the Exchange Offer; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned understands that any person participating in the Exchange Offer with the intention or purpose of distributing Exchange Notes received in exchange for the Unregistered Notes, including a broker-dealer that acquired the Unregistered Notes directly from us, but not as a result of market-making activities or other trading activities, must comply with the registration and prospectus delivery requirements of the Securities Act, in connection with a secondary resale of the Exchange Notes acquired by such person. The undersigned will, upon request, execute and deliver any additional documents deemed by the Exchange Agent or the Issuer to be necessary or desirable to complete the exchange, assignment, transfer and sale of the Unregistered Notes tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in the instructions contained in this Letter of Transmittal. 5 For the purposes of the Exchange Offer, the Issuer shall be deemed to have accepted validly tendered Unregistered Notes when, as and if the Issuer has given oral or written notice thereof to the Exchange Agent. If any tendered Unregistered Notes are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Unregistered Notes will be returned (or, in the case of Unregistered Notes tendered by book-entry transfer through the Book-Entry Transfer Facility, will be credited to an account maintained at the Book-Entry Transfer Facility), without expense, to the undersigned at the address shown below or at a different address as may be indicated herein under the "Special Delivery Instructions" promptly after the Expiration Date. The undersigned understands that tenders of Unregistered Notes pursuant to the procedures described under the section entitled "The Exchange Offer-- Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Issuer upon the terms and subject to the conditions of the Exchange Offer. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, please deliver the Exchange Notes (and, if applicable, substitute certificates representing Unregistered Notes for any Unregistered Notes not exchanged) in the name(s) of the undersigned or, in the case of a book-entry delivery of Unregistered Notes, please credit the account indicated above maintained at the Book-Entry Transfer Facility. Similarly, unless otherwise indicated under the box entitled "Special Delivery Instructions" below, please send the Exchange Notes (and, if applicable, substitute certificates representing Unregistered Notes for any Unregistered Notes not exchanged) to the undersigned at the address shown above in the box entitled "Description of Unregistered Notes". In the event that both "Special Issuance Instructions" and "Special Delivery Instructions" are completed, please issue the certificates representing the Exchange Notes issued in exchange for the Unregistered Notes accepted for exchange in the name(s) of, and return any certificates for Unregistered Notes not tendered or not exchanged to, the person(s) indicated in such boxes. The undersigned understands that the Issuer has no obligation pursuant to the "Special Issuance Instructions" and "Special Delivery Instructions" to transfer any Unregistered Notes from the name of the registered holder(s) thereof if the Issuer does not accept for exchange any of the Unregistered Notes so tendered. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX ABOVE. The undersigned, by completing the box entitled "Description of Unregistered Notes" above and signing this Letter of Transmittal, will be deemed to have tendered the Unregistered Notes as set forth in such box above. 6 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX BELOW. PLEASE SIGN HERE (To be completed by all tendering holders) (Complete accompanying Substitute Form W-9) I hereby tender the Unregistered Notes described above in the box entitled "Description of Unregistered Notes" pursuant to the terms of the Exchange Offer. ___________________________________________ ____________________________________ , 2001 ___________________________________________ ____________________________________ , 2001 ___________________________________________ ____________________________________ , 2001 Signature(s) of Owner(s) Date
If a holder is tendering any Unregistered Notes, this Letter of Transmittal must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Unregistered Notes or on a security position listing or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 4. Name(s): ____________________________ (please type or print) Capacity: ___________________________ Address: ____________________________ _________________________________ (include zip code) SIGNATURE GUARANTEE (If required by Instructions 1 and 4) Signature(s) guaranteed by an Eligible Institution: _____________________________________ (authorized signature) _____________________________________ (title) _____________________________________ (name of firm) _____________________________________ (area code and telephone number) Dated: ____________________, 2001 7 SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 4 and 5) (See Instructions 1, 4 and 5) To be completed ONLY if To be completed ONLY if certificates for the Unregistered certificates for the Unregistered Notes that are not exchanged and/or Notes that are not exchanged and/or the Exchange Notes are to be issued the Exchange Notes are to be sent in the name of and sent to someone to someone other than the person(s) other than the person(s) whose whose signature(s) appear(s) on signature(s) appear(s) on this this Letter of Transmittal above or Letter of Transmittal above, or if to such person or persons at an Unregistered Notes delivered by address other than shown in the box book-entry transfer which are not entitled "Description of accepted for exchange are to be Unregistered Notes" on this Letter returned by credit to an account of Transmittal above. maintained at the Book-Entry Transfer Facility other than the account indicated above. Mail Exchange Notes and/or Unregistered Notes to: Name: ______________________________ (please type or print) Issue Exchange Notes and/or Unregistered Notes to: Address: ___________________________ Name: ______________________________ (please type or print) _______________________________ _______________________________ (include zip code) (please type or print) Address: ___________________________ _______________________________ (include zip code) _______________________________ Employer Identification or Social Security Number (Complete Substitute Form W-9) Credit unexchanged Unregistered Notes delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below: ____________________________________ (Book-Entry Transfer Facility account number, if applicable) THIS LETTER OF TRANSMITTAL MUST BE USED TO FORWARD, AND MUST ACCOMPANY, ALL CERTIFICATES FOR UNREGISTERED NOTES TENDERED PURSUANT TO THE EXCHANGE OFFER. 8 INSTRUCTIONS Forming Part of the Terms and Conditions of the Exchange Offer 1. Delivery of this Letter of Transmittal and Certificates. This Letter of Transmittal is to be completed by holders of Unregistered Notes if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering" section of the Prospectus. Certificates for all physically tendered Unregistered Notes, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or a copy hereof) and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at the address set forth herein on or prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Unregistered Notes tendered hereby must be in denominations of $1,000 of principal amount at maturity or integral multiples thereof. The method of delivery of this Letter of Transmittal, the Unregistered Notes and all other required documents is at the election and risk of the tendering holders, but the delivery will be deemed made only when actually received or confirmed by the Exchange Agent. If Unregistered Notes are sent by mail, it is suggested that the mailing be made sufficiently in advance of the Expiration Date to permit delivery to the Exchange Agent prior to the Expiration Date. No Letter of Transmittal or Unregistered Notes should be sent to the Issuer. Holders who wish to tender their Unregistered Notes and (i) whose Unregistered Notes are not immediately available, (ii) cannot deliver their Unregistered Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date, or (iii) who cannot comply with the procedures for book-entry tender on a timely basis must tender their Unregistered Notes according to the guaranteed delivery procedures set forth in the Prospectus. Pursuant to such procedures: (x) such tender must be made through an Eligible Institution (as defined below); (y) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by telegram, telex, fax transmission, or mail or hand delivery) setting forth the name and address of the holder, the certificate number(s) of the Unregistered Notes to be tendered (except in the case of book-entry tenders) and the principal amount of Unregistered Notes to be tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange ("NYSE") trading days after the Expiration Date, this Letter of Transmittal (or a copy hereof) together with the certificate(s) representing the Unregistered Notes (except in the case of book-entry tender(s)) and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (z) such properly completed and executed Letter of Transmittal (or a copy thereof), as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all tendered Unregistered Notes in proper form for transfer or a Book-Entry Confirmation with respect to such Unregistered Notes, must be received by the Exchange Agent within three NYSE trading days after the Expiration Date, all as provided in the Prospectus under the section entitled "The Exchange Offer--Guaranteed Delivery Procedures." Any holder who wishes to tender its Unregistered Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to the Expiration Date. As used in this Letter of Transmittal, "Eligible Institution" shall mean a firm which is a member of a registered national securities exchange or a member of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States. All questions as to the validity, eligibility (including time of receipt), acceptance and withdrawal of tendered Unregistered Notes will be determined by the Issuer in its reasonable discretion, which determination will be final and binding. The Issuer reserves the absolute right to reject any and all Unregistered Notes not properly tendered or any Unregistered Notes, the Issuer's acceptance of which would, in the opinion of counsel for the Issuer, be unlawful. The Issuer also reserves the right to waive any defects, irregularities or conditions of tender as to particular Unregistered Notes. The Issuer's interpretation of the terms and conditions of the Exchange Offer (including the instructions contained in this Letter of Transmittal) shall be final and binding on 9 all parties. Unless waived, any defects or irregularities in connection with tenders of Unregistered Notes must be cured within such time as the Issuer shall determine. Neither the Issuer, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Unregistered Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Unregistered Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Unregistered Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in this Letter of Transmittal, as soon as practicable following the Expiration Date. See the section entitled "The Exchange Offer" in the Prospectus. 2. Tender by Holder. Only a registered holder of Unregistered Notes may tender such Unregistered Notes in the Exchange Offer. Any beneficial owner whose Unregistered Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct such registered holder to tender on behalf of such beneficial owner. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing this Letter of Transmittal and delivering such owner's Unregistered Notes, either make appropriate arrangements to register ownership of the Unregistered Notes in such owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. 3. Partial Tenders and Withdrawals. Tenders of Unregistered Notes will be accepted only in denominations of $1,000 of principal amount at maturity and integral multiples thereof. If less than all of the Unregistered Notes represented by a certificate or owned by a holder are to be tendered, the tendering holder(s) should fill in the aggregate principal amount at maturity of Unregistered Notes to be tendered in the box entitled "Description of Unregistered Notes". A reissued certificate representing the balance of non- tendered Unregistered Notes will be sent to such tendering holder (except in the case of book-entry tenders), unless otherwise provided in the appropriate box on this Letter of Transmittal, promptly after the Expiration Date. All of the Unregistered Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Any holder who has tendered Unregistered Notes may withdraw the tender by delivering written notice of withdrawal to the Exchange Agent prior to the Expiration Date. For a withdrawal to be effective, a written notice of withdrawal must be received by the Exchange Agent at its address set forth on the first page of this Letter of Transmittal. Any such notice of withdrawal must (i) specify the name of the person having deposited the Unregistered Notes to be withdrawn (the "Depositor"), (ii) identify the Unregistered Notes to be withdrawn (including the certificate number or numbers and principal amount of such Unregistered Notes (except in the case of book-entry tenders)), (iii) be signed by the holder in the same manner as the original signature on this Letter of Transmittal by which such Unregistered Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee (as defined in the Prospectus) register the transfer of such Unregistered Notes into the name of the person withdrawing the tender, and (iv) specify the name in which any such Unregistered Notes are to be registered, if different from that of the Depositor. If Unregistered Notes have been delivered or otherwise identified to the Exchange Agent, the name of the registered holder and the certificate numbers of the particular Unregistered Notes withdrawn must also be furnished to the Exchange Agent as aforesaid prior to the physical release of the withdrawn Unregistered Notes. If the Unregistered Notes have been tendered pursuant to the procedures for book- entry tender set forth in the Prospectus, a notice of withdrawal must specify, in lieu of certificate numbers, the name and account number at the Book-Entry Transfer Facility to be credited with the withdrawn Unregistered Notes. Unregistered Notes properly withdrawn will thereafter be deemed not validly tendered for purposes of the Exchange Offer; provided, however, that withdrawn Unregistered Notes may be tendered by again following one of the procedures in the section of the Prospectus entitled "The Exchange Offer--Procedures for 10 Tendering" at any time prior to the Expiration Date. All questions as to the validity, form and eligibility (including time of receipt) of notice of withdrawal will be determined by the Issuer, whose determinations will be final and binding on all parties. Neither the Issuer, the Exchange Agent nor any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. See the section entitled "The Exchange Offer-- Withdrawal Rights" in the Prospectus. 4. Signatures on this Letter of Transmittal; Bond Powers and Endorsements; Guarantee of Signature. If this Letter of Transmittal is signed by the registered holder of the Unregistered Notes tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates (if applicable) without any change whatsoever. If any tendered Unregistered Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Unregistered Notes are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates. When this Letter of Transmittal is signed by the registered holder(s) of the Unregistered Notes specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the Exchange Notes are to be issued, or any untendered Unregistered Notes are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. If this Letter of Transmittal is signed by a person other than the registered holder(s) of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificate(s). If this Letter of Transmittal or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Issuer, proper evidence satisfactory to the Issuer of their authority to so act must be submitted. Endorsements on certificates for Unregistered Notes or signatures on bond powers required by this Instruction 4 must be guaranteed by an Eligible Institution. Signatures on this Letter of Transmittal need not be guaranteed by an Eligible Institution, provided the Unregistered Notes are tendered: (i) by a registered holder of such Unregistered Notes (which term, for purposes of the Exchange Offer, includes any participant in the Book-Entry Transfer Facility system whose name appears on a security position listing as the holder of such Unregistered Notes) who has not completed the box entitled "Special Issuance Instructions" on this Letter of Transmittal; or (ii) for the account of an Eligible Institution. 5. Special Issuance and Delivery Instructions. Tendering holders of Unregistered Notes should indicate in the applicable box the name and address in and to which Exchange Notes issued pursuant to the Exchange Offer and/or substitute certificates evidencing Unregistered Notes not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named must also be indicated. Holders tendering Unregistered Notes by book-entry transfer may request that Unregistered Notes not exchanged be credited to such account maintained at the Book-Entry Transfer Facility as such holder may designate hereon. If no such instructions are given, such Unregistered Notes not exchanged will be returned to the name or address of the person signing this Letter of Transmittal. 11 6. Transfer Taxes. The Issuer will pay all transfer taxes, if any, applicable to the transfer of Unregistered Notes to it or its order pursuant to the Exchange Offer. If, however, Exchange Notes and/or substitute Unregistered Notes not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Unregistered Notes tendered hereby, or if tendered Unregistered Notes are registered in the name of any person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the exchange of Unregistered Notes pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder of the Unregistered Notes or any other persons) will be payable by the registered tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such registered tendering holder. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the Unregistered Notes specified in this Letter of Transmittal. 7. Waiver of Conditions. Subject to the terms and conditions set forth in the Prospectus, the Issuer reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus. 8. No Conditional Tenders. No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Unregistered Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of their Unregistered Notes for exchange. Neither the Issuer nor any other person is obligated to give notice of defects or irregularities in any tender, nor shall any of them incur any liability for failure to give any such notice. 9. Mutilated, Lost, Stolen or Destroyed Unregistered Notes. Any holder whose Unregistered Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 10. Requests for Assistance or Additional Copies. Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent, at the address indicated on the first page of this Letter of Transmittal or by telephone at (651) 229-2600. IMPORTANT TAX INFORMATION Under U.S. federal income tax laws, a registered holder of Unregistered Notes or Exchange Notes is required to provide the Trustee (as payor) with such holder's correct Taxpayer Identification Number ("TIN") (or the TIN of any other payee) on Substitute Form W-9 below or otherwise establish a basis for exemption from backup withholding. If such holder is an individual, the TIN is his or her social security number. If the Trustee is not provided with the correct TIN, a $50 penalty may be imposed by the Internal Revenue Service ("IRS"), and the Trustee may be required to withhold 31% of payments made to such holder with respect to Unregistered Notes or Exchange Notes. Certain holders (including, among others, all corporations and certain foreign individuals and entities) are not subject to these backup withholding and reporting requirements. Exempt holders should indicate their exempt status on Substitute Form W-9. A foreign individual or entity may qualify as an exempt recipient by submitting to the Trustee a properly completed IRS Form W-8 or Form W-8BEN, signed under penalties of perjury, attesting to that holder's exempt status. A Form W-8 can be obtained from the Trustee. See the enclosed "Guidelines for Certification of Taxpayer Identification Number On Substitute Form W-9" for additional instructions. 12 If backup withholding applies, the Trustee is required to withhold 31% of any payments made to the holder or other payee. Backup withholding is not an additional U.S. federal income tax. Rather, the U.S. federal income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. Purpose of Substitute Form W-9. To prevent backup withholding on payments made with respect to Unregistered Notes or Exchange Notes, the holder is required to provide the Trustee with: (i) the holder's correct TIN by completing the form below, certifying that the TIN provided on Substitute Form W-9 is correct (or that such holder is awaiting a TIN) and that (A) such holder is exempt from backup withholding, (B) the holder has not been notified by the IRS that the holder is subject to backup withholding as a result of failure to report all interest or dividends or (C) the IRS has notified the holder that the holder is no longer subject to backup withholding and (ii) if applicable, an adequate basis for exemption. If the Unregistered or Exchange Notes are held in more than one name or are not held in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number On Substitute Form W-9" for additional guidance on which number to report. If the tendering holder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, such holder should write "Awaiting TIN" in the space provided for the TIN in Part I, mark the box in "Part II--Awaiting TIN" and sign and date the Substitute Form W-9. If "Awaiting TIN" is written in Part I, the box in "Part II--Awaiting TIN" has been marked and the Trustee is provided with a TIN within 60 days of a timely submitted Substitute Form W-9, the Trustee will refund any amount withheld to the holder. 13 TO BE COMPLETED BY ALL TENDERING HOLDERS (See "Important Tax Information" above) PAYER'S NAME: FIRSTAR BANK, N.A. SUBSTITUTE Part I--PLEASE PROVIDE YOUR Form W-9 TIN IN THE BOX AT RIGHT AND ----------------------- CERTIFY BY SIGNING AND Social Security Number Department of the DATING BELOW. Treasury Internal OR ____________________ Revenue Service Employer Identification Number Payer's Request for (if awaiting TIN, write Taxpayer "Awaiting TIN" on the Identification line above and place a Number (TIN) mark in the box next to "Part II--Awaiting TIN") - ------------------------------------------------------------------------------- CERTIFICATION--UNDER PENALTIES OF PERJURY, I CERTIFY THAT: (1) The number shown on this form is my correct Taxpayer Identification Number or I am waiting for a TIN to be issued to me; and (2) I am not subject to backup withholding because (i) I am exempt from backup withholding, (ii) I have not been notified by the IRS that I am subject to backup withholding as a result of failure to report all interest or dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding. Part II--Awaiting TIN [_] Certification Instructions--You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are no longer subject to backup withholding, do not cross out item (2). Signature _______________________________________ Date ____________________ Payer's Request for Taxpayer Identification Number (TIN) Please fill out your name and address below: ----------------------------------------------------------------------------- Name ----------------------------------------------------------------------------- Address (Number and street) ----------------------------------------------------------------------------- City, State and Zip Code 14 NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU UNDER THE UNREGISTERED NOTES OR THE EXCHANGE NOTES. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART II OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number to the payer by the time of payment, 31% of all reportable payments made to me will be withheld until I provide a number and that, if I do not provide my taxpayer identification number within 60 days, such retained amounts shall be remitted to the IRS as backup withholding. Signature ___________________________________________ Date __________________ IMPORTANT: This Letter of Transmittal or a copy hereof (together with the Certificates for Unregistered Notes (if applicable)) and any and all other required document(s) must be received by the Exchange Agent prior to the Expiration Date. 15 EX-99.2 24 0024.txt FORM OF NOTICE OF GUARANTEED DELIVERY Exhibit 99.2 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 10 3/8% SENIOR SUBORDINATED NOTES DUE 2011 OF Tritel PCS, Inc. Pursuant to the Prospectus dated [ ], 2001 This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to tender Unregistered Notes (as defined below) pursuant to the Exchange Offer (as defined below) described in the Prospectus dated [ ], 2001 (as the same may be amended or supplemented from time to time, the "Prospectus") of Tritel PCS, Inc., a Delaware corporation (the "Company"), if (i) certificates for the outstanding 10 3/8% Senior Subordinated Notes due 2011 (the "Unregistered Notes") of the Company are not immediately available, (ii) time will not permit the Unregistered Notes, the Letter of Transmittal and all other required documents to be delivered to Firstar Bank, N.A. (the "Exchange Agent") prior to 5:00 p.m., New York City time, on [ ], 2001 or such later date and time to which the Exchange Offer may be extended (the "Expiration Date"), or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be delivered by hand or sent by facsimile transmission or mail to the Exchange Agent, and must be received by the Exchange Agent prior to the Expiration Date. See "The Exchange Offer--Procedures for Tendering" in the Prospectus. Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus. The Exchange Agent for the Exchange Offer is: Firstar Bank, N.A. By Hand, Mail, Overnight Mail or Courier Firstar Bank, N.A. Corporate Trust Department 101 East Fifth Street St. Paul, Minnesota 55101 Telephone: 651-229-2600 Fax: 651-229-6415 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. YOU SHOULD READ THE INSTRUCTIONS ACCOMPANYING THE LETTER OF TRANSMITTAL CAREFULLY BEFORE YOU COMPLETE THIS NOTICE OF GUARANTEED DELIVERY. This Notice of Guaranteed Delivery is not to be used to guarantee signatures. If a signature on a Letter of Transmittal is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. Ladies and Gentlemen: The undersigned acknowledges receipt of the Prospectus and the related Letter of Transmittal which describes the Company's offer (the "Exchange Offer") to exchange $1,000 in principal amount of new 10 3/8% Senior Subordinated Notes due 2011 (the "Exchange Notes") for each $1,000 in principal amount of Unregistered Notes. The undersigned hereby tenders to the Company upon the terms and subject to the conditions set forth in the Prospectus and the related Letter of Transmittal, the aggregate principal amount of Unregistered Notes indicated below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures". The undersigned understands that no withdrawal of a tender of Unregistered Notes may be made on or after the Expiration Date. The undersigned understands that for a withdrawal of a tender of Unregistered Notes to be effective, a written notice of withdrawal that complies with the requirements of the Exchange Offer must be timely received by the Exchange Agent at one of its addresses specified on the cover of this Notice of Guaranteed Delivery prior to the Expiration Date. The undersigned understands that the exchange of Unregistered Notes for Exchange Notes pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of (1) such Unregistered Notes (or book-entry confirmation of the transfer of such Unregistered Notes) into the Exchange Agent's account at The Depository Trust Company ("DTC") and (2) a Letter of Transmittal (or facsimile thereof) with respect to such Unregistered Notes, properly completed and duly executed, with any required signature guarantees, this Notice of Guaranteed Delivery and any other documents required by the Letter of Transmittal or, in lieu thereof, a message from DTC stating that the tendering holder has expressly acknowledged receipt of, and agreement to be bound by and held accountable under, the Letter of Transmittal. All authority conferred or agreed to be conferred by this Notice of Guaranteed Delivery shall not be affected by, and shall survive, the death or incapacity of the undersigned, and every obligation of the undersigned under this Notice of Guaranteed Delivery shall be binding on the heirs, executors, administrators, trustees in bankruptcy, personal and legal representatives, successors and assigns of the undersigned. Name(s) of Registered Holder(s): _______________________________________________ (Please Print or Type) Signature(s): __________________________________________________________________ Address(es): ___________________________________________________________________ Area Code(s) and Telephone Number(s): __________________________________________ If Unregistered Notes will be delivered by book-entry transferat DTC, insert Depository Account Number: ____________________________________________________ Date: __________________________________________________________________________ Certificate Number(s)* Principal Account of Unregistered Notes Tendered** _____________________________________ _____________________________________ _____________________________________ _____________________________________ _____________________________________ _____________________________________ * Need not be completed if the Unregistered Notes being tendered are in book- entry form. ** Must be in integral multiples of $1,000 principal amount. 2 This Notice of Guaranteed Delivery must be signed by the registered holder(s) of Unregistered Notes exactly as its (their) name(s) appear on certificates for Unregistered Notes or on a security position listing as the owner of Unregistered Notes, or by person(s) authorized to become registered holder(s) by endorsements and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must provide the following information. Name(s): _______________________________________________________________________ Signature(s): __________________________________________________________________ Address(es): ___________________________________________________________________ DO NOT SEND UNREGISTERED NOTES WITH THIS FORM. UNREGISTERED NOTES SHOULD BE SENT TO THE EXCHANGE AGENT TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL. GUARANTEE OF DELIVERY (NOT TO BE USED FOR SIGNATURE GUARANTEE): The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., a commercial bank or trust company having an office or a correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby (1) represents that each holder of Unregistered Notes on whose behalf this tender is being made "own(s)" the Unregistered Notes covered hereby within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (2) represents that such tender of Unregistered Notes complies with Rule 14e-4 of the Exchange Act and (3) guarantees that the undersigned will deliver to the Exchange Agent the certificates representing the Unregistered Notes being tendered hereby for exchange pursuant to the Exchange Offer in proper form for transfer (or a confirmation of book-entry transfer of such Unregistered Notes into the Exchange Agent's account at the book-entry transfer facility of DTC) with delivery of a properly completed and duly executed letter of transmittal (or facsimile thereof), with any required signature guarantees, or in lieu of a Letter of Transmittal a message from DTC stating that the tendering holder had expressly acknowledged receipt of, and agreement to be bound by and held accountable under, the Letter of Transmittal, and any other required documents, all within three New York Stock Exchange trading days after the date of execution of the Notice of Guaranteed Delivery. Name of Firm: _______________________ _____________________________________ Authorized Signature Address: ____________________________ Name: _______________________________ Please Print or Type _____________________________________ Title: ______________________________ Zip Code Telephone No. _______________________ Dated: ______________________________ The institution that completes the Notice of Guaranteed Delivery (a) must deliver the same to the Exchange Agent at its address set forth above by hand or transmit the same by facsimile or mail, on or prior to the Expiration Date, and (b) must deliver the certificates representing any Unregistered Notes (or a confirmation of book-entry transfer of such Unregistered Notes into the Exchange Agent's account at DTC), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof) or a message from DTC stating that the tendering holder has expressly acknowledged receipt of, and agreement to be bound by and held accountable under, the Letter of Transmittal in lieu thereof), with any required signature guarantees and any other documents required by the Letter of Transmittal to the Exchange Agent within the time period shown herein. Failure to do so could result in a financial loss to such institution. 4 -----END PRIVACY-ENHANCED MESSAGE-----