-----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, KxQc8mA4MEGmzdLP9UJrKRcmpqgs4EAMoGVQ8JaauzZG1niX/ZTfWZjbH6jJaoXx 3MRs+7q/RNuqrW1R3M6pow== 0000950136-99-000938.txt : 19990712 0000950136-99-000938.hdr.sgml : 19990712 ACCESSION NUMBER: 0000950136-99-000938 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 17 FILED AS OF DATE: 19990708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRITEL PCS INC CENTRAL INDEX KEY: 0001088384 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 640896438 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-82509 FILM NUMBER: 99661133 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: [] IRS NUMBER: 640896417 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-82509-01 FILM NUMBER: 99661134 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 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: 333-82509-02 FILM NUMBER: 99661135 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: 333-82509-03 FILM NUMBER: 99661136 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 REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 8, 1999 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------- TRITEL PCS, INC. DELAWARE 4812 64-0896438 TRITEL, INC. DELAWARE 4812 64-0896417 TRITEL COMMUNICATIONS, INC. DELAWARE 4812 64-0896042 TRITEL FINANCE, INC. DELAWARE 4812 64-0896439 (Exact Name of Registrant (State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer as Specified in its Charter) Incorporation or Organization) Classification Code Number) Identification No.)
--------------- 1080 RIVER OAKS DRIVE, SUITE B-100, JACKSON, MISSISSIPPI 39208 ATTENTION: CORPORATE SECRETARY (601) 936-4140 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) --------------- JAMES H. NEELD, IV, ESQ. TRITEL PCS, INC. 1080 RIVER OAKS DRIVE, SUITE B-100 JACKSON, MISSISSIPPI 39208 (601) 914-8000 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE) --------------- COPIES OF COMMUNICATIONS TO: MICHAEL A. KING, ESQ. BROWN & WOOD LLP ONE WORLD TRADE CENTER NEW YORK, NEW YORK 10048 (212) 839-5300 --------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE. 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 - --------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------- AMOUNT PROPOSED PROPOSED AMOUNT OF TITLE OF EACH CLASS OF SECURITIES TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE REGISTRATION TO BE REGISTERED REGISTERED(1) PRICE PER UNIT OFFERING PRICE FEE - ------------------------------------------------------------------------------------------------------------------------- 12.75% Senior Subordinated Discount Notes due 2009 $372,000,000 53.828% $200,239,971(2) $55,667 - ------------------------------------------------------------------------------------------------------------------------- Guarantees of 12.75% Senior Subordinated Discount Notes due 2009 -- -- -- (3) - -------------------------------------------------------------------------------------------------------------------------
(1) The "Amount to be registered" with respect to the 12.75% Senior Subordinated Discount Notes due 2009 represents the aggregate principal amount at maturity of such notes. (2) Represents gross proceeds from the initial private offering of the 12.75% Senior Subordinated Discount Notes due 2009 by Tritel PCS, Inc. The net proceeds from the private offering were approximately $191 million after deducting the Initial Purchasers' discounts and estimated transaction fees payable by Tritel PCS, Inc. (3) Pursuant to Rule 457(n), no separate registration fee is payable with respect to the guarantees. --------------- The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants 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 this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. - -------------------------------------------------------------------------------- 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 JULY 8, 1999 PROSPECTUS [GRAPHIC OMITTED] TRITEL PCS, INC. Offer to Exchange its 12 3/4% Senior Subordinated Discount Notes Due 2009 which have been registered under the Securities Act of 1933 for any and all of its Outstanding 12 3/4% Senior Subordinated Discount Notes Due 2009 TERMS OF THE EXCHANGE OFFER o The exchange offer expires at 5:00 p.m., New York City time, on , 1999, unless we extended it. o All outstanding Notes that are validly tendered and not withdrawn will be exchanged. o Tenders of outstanding Notes may be withdrawn at any time prior to the expiration of the exchange offer. The Notes are eligible for trading in The Portal Market, a subsidiary of the Nasdaq Market, Inc. YOUR TENDERING OF OUTSTANDING NOTES FOR NEW NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DISCUSSION OF MATTERS THAT PARTICIPANTS IN THE EXCHANGE OFFER SHOULD CONSIDER. --------------------- We are not making an offer to exchange Notes in any jurisdiction where the offer is not permitted. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense. This prospectus and the related letter of transmittal contain important information. We urge you to read this prospectus and the related letter of transmittal carefully before deciding whether to tender outstanding Notes pursuant to the exchange offer. THE DATE OF THIS PROSPECTUS IS , 1999. [INSIDE FRONT COVER] [MAP OF TRITEL'S, TRITON'S, TELECORP'S AND AT&T'S AND OTHER ROAMING PARTNER'S NETWORKS] TABLE OF CONTENTS
PAGE ----- Prospectus Summary ............................. 1 Risk Factors ................................... 13 Organization of Tritel and Tritel PCS .......... 26 Information Regarding Forward-Looking Statements .................................. 27 Where You Can Find More Information ............ 27 Use of Proceeds ................................ 28 Capitalization ................................. 29 Selected Consolidated Financial Data ........... 30 Management's Discussion and Analysis ........... 32 Business ....................................... 38 Government Regulation .......................... 59 Joint Venture Agreements with AT&T Wireless .................................... 71
PAGE ----- Management ..................................... 80 Certain Relationships and Related Transactions ................................ 87 Principal Stockholders ......................... 91 Description of Certain Indebtedness ............ 93 The Exchange Offer ............................. 96 Description of the Notes ....................... 107 Description of Capital Stock ................... 144 Certain Federal Income Tax Considerations .............................. 148 Plan of Distribution ........................... 153 Legal Matters .................................. 153 Independent Auditors ........................... 153 Index to Financial Statements .................. F-1
--------------------- The information contained in this prospectus was obtained from us and other sources believed by us to be reliable, but no assurance can be given as to the accuracy or completeness of such information. This prospectus summarizes certain documents and other information and we refer you to them for a more complete understanding of what we discuss in this prospectus. In making an investment decision, you must rely on your own examination of us and the terms of the offering, including the merits and risks involved. We are not making any representation to any note holder regarding the legality of an investment in the Notes by such purchaser under any legal investment or similar laws or regulations. The contents of this prospectus are not to be construed as legal, business or tax advice. You should consult your own attorney, business advisor and tax advisor for legal, business or tax advice. All inquiries relating to this prospectus and this offering should be directed to the Initial Purchasers. You may obtain additional information from the Initial Purchasers or us. Market data used throughout this prospectus is based on the good faith estimates of management, which estimates are based upon their review of internal surveys, independent industry publications and other publicly available information. Although we believe that these sources are reliable, the accuracy and completeness of this information is not guaranteed and has not been independently verified. This prospectus mentions "Digital OneRate(SM)," a registered service mark of AT&T Corp. - ---------- * The map on the opposite page is not intended to be an exact representation of each provider's wireless service area. i PROSPECTUS SUMMARY The following summary highlights information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you. You should read the entire prospectus carefully. The words "Tritel PCS," "we," "us" and "our" refer to Tritel PCS, Inc., its predecessors and all of its consolidated subsidiaries, except where it is clear from the context that the term means only Tritel PCS, Inc. The word "Tritel" refers to our parent, Tritel, Inc., its predecessors and all of its consolidated subsidiaries, except where it is clear from the context that the term means only Tritel, Inc. The term "POPs" refers to the estimate of the 1998 population of a geographic area as set forth in the 1999 Cellular/PCS POP Book published by Paul Kagan Associates, Inc., a wireless telecommunications consulting firm. TRITEL PCS We are a member of the AT&T Wireless Network and intend to become a leading provider of wireless personal communication services, or PCS, in the south-central United States. In May 1998, we entered into a joint venture with AT&T Wireless PCS, Inc., a wholly owned subsidiary of AT&T Corp., to become its exclusive provider of mobile wireless PCS services, using the AT&T brand and logo with equal emphasis to our own, in virtually all of a contiguous area covering approximately 14.0 million POPs in Alabama, Georgia, Kentucky, Mississippi and Tennessee. We believe that a substantial majority of our markets are located in geographic areas that have demographic characteristics well-suited for offering PCS services, including strong population growth, favorable population density and commuting patterns, and an expanding business environment. We and Tritel were organized by a management team, whose members have constructed and operated cellular networks successfully in 17 markets, many of which are located in our PCS markets. We believe our alliance with AT&T Wireless will provide us with numerous strategic advantages, including the following: o We will co-brand our services with the AT&T brand and logo, which we believe to be among the most respected and recognized in the world o We will be the exclusive provider of mobile wireless PCS services using the AT&T brand and logo, with equal emphasis to our own, for almost all of our licensed area o We are a member of the AT&T Wireless Network of digital and analog systems operated by AT&T Wireless, its joint venture partners, including us, and third parties, which, when combined with AT&T Wireless's third-party roaming agreements, covers 96% of the U.S. population and will allow our customers to access mobile wireless services almost anywhere in the United States o We expect to benefit from the nationwide advertising and promotional activities of AT&T Wireless o We expect to benefit from AT&T's sales efforts by providing PCS services to those AT&T long distance and other customers within our markets seeking wireless services as part of their service package o We expect to benefit from AT&T Wireless-related discounts on various products and services including handsets and infrastructure equipment Our joint venture with AT&T Wireless is part of AT&T Wireless's strategy to expand its digital wireless coverage in the United States. AT&T Wireless operates the largest digital wireless network in North America. In forming this joint venture, AT&T Wireless contributed licenses covering approximately 9.1 million of our 14.0 million total licensed POPs. In exchange for its licenses and the other benefits to us from the joint venture, AT&T Wireless received 17.09% of our fully diluted common equity interest, with a stated value of $137.1 million. Our predecessors, Airwave 1 Communications, LLC and Digital PCS, LLC, each of which was organized by one or more of the founding members of our senior management, contributed PCS licenses covering 6.6 million licensed POPs. These contributed POPs include 1.7 million POPs that overlap with those contributed by AT&T Wireless, resulting in our holding PCS licenses covering a total of 14.0 million POPs. In exchange for their licenses and $14.2 million of cash, Airwave Communications and Digital PCS received a total of $32.4 million of Tritel's equity. In addition, Tritel has raised $149.2 million of cash equity from institutional equity investors, $99.4 million of which has already been funded and $49.8 million of which is committed to be funded under the investors' irrevocable and unconditional commitments on September 30, 1999. In addition, Central Alabama Partnership LP, an unrelated party, contributed to us 475,000 overlapping POPs in Montgomery, Alabama in exchange for $2.6 million of equity. We have also entered into an agreement with two other AT&T Wireless affiliates, Triton PCS, Inc. and TeleCorp PCS, Inc., to operate with those affiliates under a common regional brand name, SunCom, throughout an area covering approximately 43 million POPs primarily in the south-central and southeastern United States. We believe this arrangement will allow us to establish a strong regional brand name within our markets and to achieve advertising and marketing cost savings. We intend to commence commercial PCS service in the third quarter of 1999 and to provide coverage to approximately 80% of our POPs by the end of 2001. We expect to offer PCS services in our major population and business centers as follows:
EXPECTED MARKET LAUNCH DATE 1998 POPS - ------------------ ------------------ ---------- Nashville, TN 4th Quarter 1999 1,675,700 Louisville, KY 4th Quarter 1999 1,448,400 Birmingham, AL 2nd Quarter 2000 1,297,800 Knoxville, TN 4th Quarter 1999 1,074,000 Lexington, KY 4th Quarter 1999 893,400 Jackson, MS 3rd Quarter 1999 657,800 Mobile, AL 2nd Quarter 2000 653,900
We intend to offer customers affordable, reliable and high-quality mobile wireless communications services with advanced features. Specific features and services initially available to our customers will include superior voice quality, a handset battery life that is significantly longer than that available on existing analog cellular systems, greater call privacy than that available on existing analog cellular systems, short messaging, voice mail, message waiting indicator, caller ID and single number service. As the market for wireless communications services continues to develop, we expect to offer our customers more digital features as they become commercially available. To make our service offerings operational with those of AT&T Wireless, our network will employ IS-136 Time Division Multiple Access, or TDMA, technology. We believe that this technology will allow us to provide our customers with excellent voice quality, reduced dropped calls and virtually nationwide roaming over the AT&T Wireless Network. In connection with the use of this technology, we will offer customers tri-mode handsets, which can pass or "hand-off" calls from our IS-136 TDMA network to analog or TDMA-based digital cellular networks. OUR STRATEGIC ALLIANCES AT&T Wireless. AT&T Wireless is one of the largest providers of wireless telecommunications services, with over 9.7 million total wireless subscribers worldwide, including 5.1 million digital PCS subscribers worldwide, as of December 31, 1998. As part of its strategy to expand its digital wireless coverage in the United States, AT&T Wireless has focused on building out selected markets within its national coverage by entering into four joint venture arrangements, including its arrangements with us. The licenses contributed by AT&T Wireless provide for our right to use 20 MHz of authorized frequencies in the geographic areas covered by those licenses. 2 SunCom. We believe that the SunCom brand will be a strong complement to our AT&T Wireless affiliation. SunCom will be a regional brand alliance covering approximately 43 million POPs primarily in a geographic area from New Orleans, Louisiana to Richmond, Virginia. All three SunCom affiliates have entered into roaming agreements, either directly or through AT&T Wireless, that will allow each other's customers to roam throughout the SunCom markets. Triton PCS and TeleCorp PCS have agreed to use tri-mode handsets with the IS-136 TDMA technology and have agreed to adhere to the same AT&T Wireless quality standards that apply to us, which should help ensure that our customers will receive the same high quality PCS services throughout the markets operated by the SunCom brand alliance. BUSINESS STRATEGY We expect to take advantage of our affiliation with AT&T Wireless, the SunCom brand alliance and our management's local market expertise in offering our PCS services. In particular, we plan to pursue the following business strategies: Leverage the Benefits of Our AT&T Wireless Affiliation. We will aggressively market our affiliation with AT&T Wireless and the AT&T Wireless Network in order to distinguish ourselves from other wireless service providers in our markets. We intend to take advantage of all of the strategic benefits of being an AT&T Wireless affiliate, including our right to co-brand with the AT&T brand and logo, our role as the exclusive provider of mobile PCS services for AT&T Wireless within our markets, except for 790,000 mostly rural POPs in Kentucky, our ability to offer our customers immediate, virtually nationwide roaming on the AT&T Wireless Network, our ability to "piggyback" on the efforts of the AT&T sales force that offers long distance and other AT&T services in our markets and our expectation that we will benefit from AT&T Wireless-related discounts on purchases of various products and services including handsets and infrastructure equipment. Distribute through Company Stores. Our distribution strategy will focus principally on direct distribution through company-owned retail stores. In conjunction with the markets being launched in 1999 and 2000, we currently plan to open 54 company stores to service those markets. We also plan to employ a direct sales force to target small to medium-sized businesses. Enhance Brand Awareness through the SunCom Brand Alliance. We intend to promote the SunCom brand through joint marketing efforts with our SunCom affiliates. The overlapping media markets of the affiliates should allow them to advertise effectively on a regional basis. At the same time, we will also engage in our own independent marketing efforts under the SunCom brand, including stand-alone media campaigns. Thus, we believe we will have the flexibility to be a part of a regional brand alliance and also market more heavily in our home markets according to our schedule for launching our PCS services. Emphasize Advantages of PCS Technology. We will seek to distinguish our PCS services from those of our analog cellular competitors by emphasizing our features and benefits, including superior voice quality, longer battery life, more secure calls, short text and numeric messages, voice mail, message waiting indicator, caller ID and single number service. Capitalize on Management Expertise and Local Market Presence. Our management has had extensive experience in successfully building out and managing wireless telephone markets. Several key members of our management team have experience managing and operating competitive wireless markets within our footprint, and we intend to leverage this experience in order to create strong ties with subscribers and their communities. NETWORK BUILDOUT We expect to launch commercial operations in five of our seven most populous markets in 1999 and in each of the major population centers in our licensed areas by the end of the second quarter of 3 2000. We expect to offer service to approximately 80% of our licensed POPs by the end of 2001. We are initially focusing on the concentrated population and business centers and interstate highways. Thereafter, we intend to build out cities with fewer than 375,000 POPs and will continue to build out interstate and state highways. We plan to launch service only after comprehensive and reliable coverage can be maintained within a particular market. We have entered into an equipment purchase agreement with Ericsson Inc. under which they will supply us with radio base stations, switches and other PCS transmission equipment and services for our PCS network. We have also entered into a contract with Bechtel Corporation to provide for overall project management of the design, site acquisition, installation and testing of our PCS transmission system. We have arrangements with two engineering firms, Galaxy Personal Communication Services, Inc. and Wireless Facilities, Inc., to perform the initial radiofrequency, or RF, design for the network. We have completed the initial RF design for all markets that we expect to launch in 1999 and a majority has been completed for the markets that we expect to launch in 2000. We also have arrangements with two firms, Spectrasite Communications and GeoTrans Wireless, 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. 4 FINANCING PLAN AND USE OF PROCEEDS Management estimates that our projected capital requirements from inception through year-end 2001, when our network is expected to be substantially complete and we expect to generate positive cash flow, will be approximately $1.0 billion. These requirements include capital expenditures related to the acquisition of our PCS licenses, the buildout of our network, customer acquisition costs, operating losses incurred through the buildout phase and until we expect to become cash flow positive, debt service and closing costs. We believe that the proceeds from the Senior Subordinated Discount Notes, together with the financing made available to us by the FCC, the availability under our $550 million bank credit facility and the equity investments we have received or that have been committed to us, will provide us with sufficient funds to build out our planned network to cover 80% of our licensed POPs. SOURCES AND USES THROUGH 2001 The following table highlights our projected sources and uses of capital from inception through December 31, 2001(a):
AMOUNT (DOLLARS IN MILLIONS) ---------------------- SOURCES: Bank facility (b) ....................... $ 462.3 Notes offered hereby .................... 200.2 Government financing (c) ................ 47.5 Cash equity (d) ......................... 163.4 Non-cash equity (e) ..................... 157.9 --------- Total sources .......................... $ 1,031.3 ========= USES: Acquisition of PCS licenses (f) ......... $ 192.9 Capital expenditures .................... 529.9 Cash interest and fees (g) .............. 134.4 Working capital (h) ..................... 174.1 --------- Total uses ............................. $ 1,031.3 =========
- ---------- (a) See "Risk Factors -- We May Require Additional Funding" for a discussion of the circumstances under which we may need additional financing. (b) Our bank facility provides up to $550.0 million of term loan and revolving credit financing, subject to certain conditions. As of March 31, 1999, we had borrowed $200.0 million under the facility. Based upon $462.3 million in total expected drawings for our buildout, and assuming that we comply with certain leverage ratios and to achieve certain buildout and subscriber milestones, we expect to have undrawn availability of $87.7 million. See "Description of Certain Indebtedness -- Bank Facility." (c) Represents amounts incurred by us to acquire the C- and F-Block FCC licenses. See "Description of Certain Indebtedness -- Government Debt." (d) Represents total cash equity of $163.4 million received by us or committed to us in exchange for Series C Preferred Stock. See "Description of Capital Stock." Several institutional equity investors, as well as Airwave Communications and Digital PCS, purchased an aggregate of $163.4 million of Series C Preferred Stock of Tritel. Of this amount, $113.6 million was funded on January 7, 1999 and the remaining $49.8 million is due to be funded, under the institutional investors' irrevocable and unconditional commitments, on September 30, 1999. See "Principal Stockholders." 5 (e) Non-cash equity consists of (1) preferred stock issued to AT&T Wireless in exchange for the licenses it contributed and for entering into exclusivity, license and roaming agreements and (2) preferred stock issued to Airwave Communications, Digital PCS and Central Alabama Partnership in exchange for their PCS licenses and other assets contributed to us, valued as follows:
AMOUNT ----------------------- (DOLLARS IN THOUSANDS) Series A Preferred issued to AT&T Wireless ......... $ 90,668 Series D Preferred issued to AT&T Wireless ......... 46,374 -------- Total to AT&T Wireless ............................ 137,042 Airwave Communications ............................. 14,427 Digital PCS ........................................ 3,835 Central Alabama Partnership ........................ 2,602 -------- Total ............................................. $157,906 ========
The AT&T Wireless licenses and agreements were assigned an independent appraised value:
AMOUNT ----------------------- (DOLLARS IN THOUSANDS) AT&T Wireless licenses appraised value ......... $ 97,880 AT&T Wireless agreements: (i) Exclusivity ................................. 19,000 License ..................................... 12,000 Roaming ..................................... 10,000 -------- Total (ii) .......................................... $138,880 ========
(i) Included in intangible assets. See "Joint Venture Agreements with AT&T Wireless." (ii) AT&T Wireless received preferred stock with a stated value of $137.1 million. The $1.8 million excess of the value of the licenses and agreements we received over the stock value is included as an adjustment to fair value of the preferred stock. Additionally, we recorded an adjustment to fair value of the preferred stock for the estimated deferred income tax liability we assumed with the transfer of the licenses and agreements. This income tax liability, which arises from the fair values of these assets exceeding their tax basis, was not considered by the appraiser in determining the gross appraised values of the licenses and agreements. For financial reporting purposes, the shares issued to Airwave Communications and Digital PCS are carried at $17.4 million as a result of the requirement for carryover basis under accounting rules. (f) Represents (1) the value of the PCS licenses contributed by AT&T Wireless and the agreements entered into with AT&T Wireless and (2) the value of PCS licenses contributed by Airwave Communications, Digital PCS and Central Alabama Partnership. (g) Represents (1) cash interest payments on our debt to the FCC related to our C-Block and F-Block licenses, (2) cash interest payments and fee payments on our bank facility and (3) costs of issuance of the Notes offered hereby. (h) Includes operating cash flow losses and working capital requirements. 6 TRITEL CORPORATE STRUCTURE -------------------------------- TRITEL, INC. Holding Company Issuer of Equity and Guarantor of Senior Bank Debt and High Yield Debt -------------------------------- -------------------------------- TRITEL PCS, INC. Holding Company Issuer of Senior Bank Debt and High Yield Debt -------------------------------- - ----------------- ------------------ --------------------- ------------------- TRITEL TRITEL TRITEL TRITEL A/B HOLDING CORP. C/F HOLDING CORP. COMMUNICATIONS, INC. FINANCE, INC. Holding Company Holding Company Operating Company Equipment Leasing and Financing Guarantor of Senior Guarantor of Senior Guarantor of Guarantor of Bank Debt and High Bank Debt and High Senior Bank Debt Senior Bank Debt Yield Debt Yield Debt - ----------------- ------------------ --------------------- ------------------- - --------------------- ----------------------- Five License Four License Subsidiaries Subsidiaries Hold FCC A- and Hold FCC C- and B-Block Licenses F-Block Licenses Issuers of FCC Debt Guarantors of Senior and Guarantors of Bank Debt Senior Bank Debt - --------------------- ----------------------- Prior to January 7, 1999, the operations of Tritel PCS were conducted through Airwave Communications (formerly Mercury PCS, LLC) and Digital PCS (formerly Mercury PCS II, LLC). We are a Delaware corporation. Our principal executive offices are located at 1080 River Oaks Drive, Suite B-100, Jackson, Mississippi 39208, and our telephone number is (601) 914-8000. 7 SUMMARY OF THE EXCHANGE OFFER Registration Rights Agreement................... You have the right to exchange your Notes for registered Notes with substantially identical terms. This exchange offer is intended to satisfy these rights. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your Notes. The Exchange Offer.......... We are offering to exchange $1,000 principal amount of Tritel PCS's 12 3/4% Senior Subordinated Discount Notes due 2009 which have been registered under the Securities Act for each $1,000 principal amount at maturity of Tritel PCS's outstanding 12 3/4% Senior Subordinated Discount Notes due 2009 which were issued in May 1999 in a private offering. In order to be exchanged, an outstanding note must be properly tendered and accepted. We will exchange all Notes validly tendered and not validly withdrawn. As of this date there is $372,000,000 aggregate principal amount at maturity of Notes outstanding. We will issue registered Notes on or promptly after the expiration of the exchange offer. Resales..................... We believe that the registered Notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act provided that: o you acquire the registered Notes issued in the exchange offer in the ordinary course of your business; o you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the registered Notes issued to you in the exchange offer; and o you are not an "affiliate," as defined under Rule 405 of the Securities Act, of Tritel PCS. If our belief is inaccurate and you transfer any registered Note issued to you in the exchange offer without delivering a prospectus meeting the requirements of the Securities Act or without an exemption of your registered Notes from such requirements, you may incur liability under the Securities Act. We do not assume or indemnify you against such liability. Each broker-dealer that issued registered Notes for its own account in exchange for outstanding Notes which were acquired by such broker-dealer 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 in connection with any resale of the registered Notes. A broker-dealer may use this prospectus for an offer to resell, resale or other retransfer of the registered Notes issued to it in the exchange offer. Record Date................. We mailed this prospectus and the related exchange offer documents to registered holders of outstanding Notes on , 1999. 8 Expiration Date.............. The exchange offer will expire at 5:00 p.m., New York City time, , 1999, unless we decide to extend the expiration date. Conditions to the Exchange Offer.............. We may terminate or amend the exchange offer if: o any legal proceeding, government action or other adverse development materially impairs our ability to complete the exchange offer; o any Securities and Exchange Commission rule, regulation or interpretation materially impairs the exchange offer; or o we have not obtained any necessary governmental approvals with respect to the exchange offer. We may waive any or all of these conditions. At this time, there are no adverse proceedings, actions or developments pending or, to our knowledge, threatened and no governmental approvals are necessary to complete the exchange offer. Procedures for Tendering Outstanding Notes.......... Each holder of outstanding Notes wishing to accept the exchange offer must: o complete, sign and date the accompanying letter of transmittal, or a facsimile thereof; or o arrange for The Depository Trust Company to transmit certain required information to the exchange agent in connection with a book-entry transfer. You must mail or otherwise deliver such documentation and your outstanding Notes to The Bank of New York, as exchange agent, at the address set forth under "The Exchange Offer--Exchange Agent." By tendering your outstanding Notes in this manner, you will be representing, among other things, that: o you are acquiring the registered Notes pursuant to the exchange offer in the ordinary course of your business; o you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the registered Notes issued to you in the exchange offer; and o you are not an affiliate of Tritel PCS. Untendered Outstanding Notes....................... If you are eligible to participate in the exchange offer and you do not tender your outstanding Notes, you will not have any further registration or exchange rights and your outstanding Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such outstanding Notes could be adversely affected. 9 Special Procedures for Beneficial Owners.......... If you beneficially own outstanding Notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding Notes in the exchange offer, you should contact such registered holder promptly and instruct it to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal for the exchange offer and delivering your outstanding Notes, either arrange to have your outstanding Notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. Guaranteed Delivery Procedures.................. If you wish to tender your outstanding Notes and time will not permit your required documents to reach the exchange agent by the expiration date of the exchange offer, or you cannot complete the procedure for book-entry transfer on time or you cannot deliver certificates for your outstanding Notes on time, you may tender your outstanding Notes pursuant to the procedures described in this prospectus under the heading "The Exchange Offer--Guaranteed Delivery Procedures." Withdrawal Rights........... You may withdraw the tender of your outstanding Notes at any time prior to 5:00 p.m., New York City time, on , 1999. Certain U.S. Federal Tax Considerations............ The exchange of Notes will not be a taxable event for United States federal income tax purposes. Use of Proceeds............. We will not receive any proceeds from the issuance of registered Notes pursuant to the exchange offer. We will pay all our expenses incident to the exchange offer. Exchange Agent.............. The Bank of New York is serving as the exchange agent in connection with the exchange offer. SUMMARY OF TERMS OF THE REGISTERED NOTES The form and terms of the registered Notes are the same as the form and terms of the outstanding Notes except that the registered Notes will be registered under the Securities Act and, therefore, will not bear legends restricting their transfer and will not be entitled to registration under the Securities Act. In this regard, we use the term "Notes" when describing provisions that govern or otherwise pertain to both the outstanding Notes and the registered Notes. The registered Notes will evidence the same debt as the outstanding Notes, and the same indenture will govern both the registered Notes and the outstanding Notes. Issuer...................... Tritel PCS, Inc. Notes Offered............... $372,000,000 aggregate principal amount at maturity of 12 3/4% Senior Subordinated Discount Notes due 2009. 10 Maturity Date............... May 15, 2009. Yield and Interest.......... 12 3/4% per annum, compounded on a semi-annual basis, calculated from May 11, 1999. Cash interest will not accrue prior to May 15, 2004. Thereafter, cash interest on the Notes will accrue at the rate of 12 3/4% per year and will be payable semi-annually on May 15 and November 15 of each year, commencing November 15, 2004. Original Issue Discount..... The Notes were issued at a substantial discount from their principal amount at maturity. Consequently, you will generally be required to include amounts in your gross income for federal income tax purposes before your receipt of the cash payments attributable to that income. See "Certain Federal Income Tax Considerations--Original Issue Discount." Optional Redemption......... We can redeem the Notes, in whole or in part, on or after May 15, 2004, at the redemption prices set forth in this prospectus, plus accrued and unpaid interest. In addition, before May 15, 2002, we can redeem up to 35% of the aggregate principal amount at maturity of the Notes, with the proceeds of one or more equity offerings, at 112.75% of their accreted value on the redemption date, if at least 65% of the aggregate principal amount at maturity of the Notes remains outstanding. Parent and Subsidiary Guarantees....... Our parent company, Tritel, Inc., and two of our subsidiaries will guarantee the Notes on a senior subordinated basis. All of our future subsidiaries, other than subsidiaries solely engaged in the business of holding PCS licenses, or holding the stock of these subsidiaries, will also be required to guarantee the Notes. If we fail to make payments on the Notes, the guarantors must make them instead. Our license subsidiaries will not guarantee the Notes. Our parent company and each of our subsidiaries have guaranteed our obligations under our bank facility on a senior basis. We, our parent company and all of our subsidiaries have pledged substantially all of our assets, except our PCS licenses, to secure our obligations under our bank facility. See "Risk Factors--Federal and State Statutes Allow Courts, Under Specific Circumstances, to Void the Subsidiary Guarantees of the Notes." Change of Control........... Upon the occurrence of certain change of control events, you may require us to repurchase all or a portion of your Notes at 101% of the principal amount thereof, plus accrued and unpaid interest. Ranking..................... The Notes: o are unsecured obligations of Tritel PCS; 11 o are senior in right of payment to existing and future obligations expressly subordinated in right of payment to the Notes; and o rank junior to all existing and future senior debt. The guarantees: o are unsecured obligations of the guarantors; o rank junior to all existing and future senior debt of the guarantors; and Because our license subsidiaries will not guarantee the Notes, the Notes will be structurally subordinated to all liabilities of these subsidiaries, including trade payables. As of March 31, 1999, after giving effect to the offering of the Notes, you would have been effectively subordinated to $47.5 million face amount of indebtedness of our subsidiaries. See "Risk Factors--Your Right to Receive Payments on the Notes and Guarantees is Junior to Payments on Senior Indebtedness and to Our Secured Obligations." Basic Indenture Covenants... The indenture governing the Notes contains covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: o incur additional indebtedness; o pay dividends, repurchase our capital stock, make investments or make other restricted payments; o sell or exchange assets; o engage in transactions with affiliates; o issue or sell capital stock of restricted subsidiaries; o in the case of our restricted subsidiaries, guarantee indebtedness; o create liens securing indebtedness that is pari passu with or subordinated to the Notes or the subsidiary guarantees; o in the case of our restricted subsidiaries, agree to certain payment restrictions; or o engage in certain sale and leaseback transactions or merge, consolidate or transfer all or substantially all our assets and the assets of our subsidiaries on a consolidated basis. These covenants are subject to important exceptions and qualifications. See "Description of the Notes--Certain Covenants." 12 RISK FACTORS Before tendering original Notes, you should carefully read and think about all of the information contained in this prospectus, especially the following risk factors: WE HAVE NOT YET STARTED OPERATIONS AND WE MAY NOT BE PROFITABLE AFTER WE DO We are at an early stage of development and have no meaningful historical financial information for you to evaluate. We will incur significant expenses before generating revenues, and we expect to have significant operating losses in our initial stages of operations. We expect to grow rapidly while we develop and construct our PCS network and build our customer base. We expect this growth to cause significant strain on our financial resources and result in operating losses and negative cash flows from operating activities at least until the end of 2001. We have not begun commercial PCS operations and, therefore, have no revenues to fund expenditures. We have made cumulative cash expenditures through March 31, 1999 of $66.8 million, primarily for license acquisition costs. We cannot be certain of the timing and extent of revenue receipts and expense disbursements. Also, we cannot be certain that we will achieve or sustain profitability or positive cash flow from operating activities in the future. If we do not achieve profitability or positive cash flow in a timely manner and then sustain it, we may not be able to meet our working capital or debt service requirements, including our obligations in respect of the Notes. See "Management's Discussion and Analysis" and "-- Potential Additional Funding Requirements." Our future operating results over both the short and long term are uncertain because of several factors, some of which are outside of our control. These factors include: o the significant cost of building our PCS network, o the cost and availability of PCS infrastructure and subscriber equipment, including tri-mode handsets, o possible delays in introducing our services, o fluctuating market demand and prices for our services, o pricing strategies for competitive services, o new offerings of competitive services, o changes in federal, state and local legislation and regulations, o the potential allocation by the FCC of additional PCS licenses or other wireless licenses in our markets, o technological changes, and o general economic conditions. WE WILL REQUIRE SUBSTANTIAL CAPITAL AND WILL HAVE A HIGHLY LEVERAGED CAPITAL STRUCTURE It will take substantial funds to complete the buildout of our PCS network and to market and distribute our PCS products and services. We estimate that our capital requirements, which include capital expenditures, the cost of acquiring licenses, working capital, debt service requirements and anticipated operating losses, will total approximately $1.0 billion for the period from our inception through the end of 2001. This estimate assumes substantial completion of the network buildout to cover 80% of our licensed POPs by the end of 2001. We have expended approximately $66.8 million of these funds as of March 31, 1999. 13 We are highly leveraged. As of March 31, 1999, after giving effect to the offering of the Senior Subordinated Discount Notes, we would have had $441.4 million of total indebtedness outstanding, including debt owed to the FCC, which was carried on our books at $41.2 million as of March 31, 1999 and was incurred in connection with the acquisition of our C- and F-Block licenses, $200.0 million outstanding under our bank facility and $200.2 million of the Senior Subordinated Discount Notes being offered. This indebtedness would have represented approximately 66.8% of our total capitalization at that date. At that date, we also had $68.7 million of Series A 10% redeemable convertible preferred stock outstanding, which has not been included in stockholders' equity in our financial statements. Our large amount of indebtedness could significantly impact our business for the following reasons: o It limits our ability to obtain additional financing, if we need it, to complete our network buildout, to cover our cash flow deficit or for working capital, other capital expenditures, debt service requirements or other purposes. o Even though the Notes will not pay cash interest for five years, we will need to dedicate a substantial portion of our operating cash flow to fund interest expense on our bank facility and other indebtedness, thereby reducing funds available for our network buildout, operations or other purposes. o We are vulnerable to interest rate fluctuations because a significant portion of our debt is at variable interest rates. Currently, all $200.0 million outstanding under our $550 million bank facility is at a variable interest rate; however, we are required to fix the interest rate of 50% of all indebtedness and intend to fix the interest rate of at least 50% of the outstanding balance of our bank facility by June 29, 1999 through hedging. o It limits our ability to compete with competitors who are not as highly leveraged. o It limits our ability to react to changing market conditions, changes in our industry and economic downturns. Our ability to pay interest on the Senior Subordinated Discount Notes beginning in 2004 and to satisfy our other debt obligations will depend upon our future operating performance. Prevailing economic conditions and financial, business and other factors, many of which are beyond our control, will affect our ability to make these payments. If, in the future, we cannot generate sufficient cash flow from operations to make scheduled payments on the Senior Subordinated Discount Notes or to meet our other obligations, we will need to refinance our indebtedness, obtain additional financing or sell assets. We cannot be certain that our business will generate cash flow, or that we will be able to obtain funding sufficient to satisfy our debt service requirements. WE MAY REQUIRE ADDITIONAL FUNDING Our actual capital needs may be greater than we currently anticipate. Moreover, we may not generate enough cash flow to fund our operations in the absence of other funding sources. We may require additional funding if certain developments occur, including if: o the costs of the buildout of our PCS network are greater than anticipated, o the acquisition costs of subscribers is higher than expected, o other operating costs exceed management's estimates, o we take advantage of license or market acquisition opportunities, including those that may arise through future FCC auctions, o the level of our revenues from subscribers is lower than anticipated, or o the number of subscribers is greater than anticipated, leading to greater than anticipated handset costs and other subscriber acquisition and operating costs. 14 In addition, we would require substantial additional funding if AT&T Wireless does not exercise its option to purchase PCS licenses covering approximately 2.0 million POPs in Florida and southern Georgia and we then determine that we will buildout these markets ourself. See "-- We Would Require Significant Additional Capital If We Were to Acquire and Buildout Additional Licenses," below. We have no revenues at this point. Sources of future financing may include equipment vendors, bank financing and the public or private debt and equity markets. Additional required financing may be unavailable to us or it may not be available on terms acceptable to us and consistent with any limitation under our outstanding indebtedness or FCC regulations. If we are unable to obtain such financing it could result in the delay or reduction of our development and construction plans and could result in our failure to meet certain FCC buildout requirements and our debt service obligations. See "-- Network Buildout and Operational Risks." WE WOULD REQUIRE SIGNIFICANT ADDITIONAL CAPITAL IF WE WERE TO ACQUIRE AND BUILD OUT ADDITIONAL LICENSES We have exercised an option to purchase from one of our predecessors, Digital PCS, PCS licenses covering approximately 2.0 million POPs in Florida and southern Georgia for approximately $15.0 million, which consisted of (1) $3.0 million of Tritel's Series C Preferred Stock and (2) the assumption of $12.0 million of FCC debt. Upon our exercise of the option, we granted to AT&T Wireless two options to purchase these licenses, one of which covers the Fort Walton and Pensacola, Florida POPs and the other the remaining POPs in Florida and southern Georgia. These options expire on November 20, 1999 and April 20, 2000, respectively, unless extended. Should AT&T Wireless fail to exercise these options, we then may either sell the licenses to a third party or seek to build out the markets. To do the latter would require additional capital, probably consisting of both debt and equity, of at least $110 million for additional capital expenditures and to cover operating cash flow losses and working capital requirements. It would also increase the scope of our planning, buildout and operations significantly and would increase the strain on our management, personnel, financial and other resources. WE DEPEND ON OUR RELATIONSHIP WITH AT&T WIRELESS Our business strategy depends on our relationship with AT&T Wireless. We are depending on co-branding, roaming and service relationships with them under our joint venture agreements with them, that are central to our business plan. The AT&T Wireless agreements create an organizational and operational structure that defines the relationship between AT&T Wireless and us. Because of our dependence on this relationship, it is important for you to understand that there are circumstances in which AT&T Wireless can terminate our right to use their brand name, as well as other important rights under the joint venture agreements, if we violate the terms of the joint venture agreements or if certain other events occur. The AT&T Wireless agreements contain provisions that allow AT&T Wireless to terminate our license to use the AT&T brand name, designation as a member of the AT&T Wireless Network, or use of other AT&T service marks if we fail to meet AT&T Wireless's quality standards, violate the terms of the license or otherwise breach one of the AT&T Wireless agreements. AT&T Wireless has also retained the right to terminate its relationship with us in the event of a "Disqualifying Transaction," as defined in the section headed "Joint Venture Agreements With AT&T Wireless," which is in essence, a major financial transaction involving AT&T Corp. and another entity that owns FCC mobile wireless licenses covering at least 25% of our POPs. The exercise by AT&T Wireless of any of these rights, or other rights described in the AT&T Wireless agreements, could significantly and materially affect our operations, future prospects and results of operations. DUE TO OUR RELATIONSHIP WITH AT&T WIRELESS, A POSSIBLE CONFLICT OF INTEREST MAY DEVELOP Our interests and those of AT&T Wireless may conflict, and there can be no assurance that any conflict will be resolved in our favor. Under a stockholders' agreement, AT&T Wireless has the right to designate two of the thirteen directors on our Board and approve the selection of three other 15 director nominees. AT&T Wireless owes no duty to us except to the extent expressly set forth in the joint venture agreements. Officers and directors generally do not have fiduciary duties to holders of debt securities such as the Notes. See "Joint Venture Agreements with AT&T Wireless." WE FACE INTENSE COMPETITION FROM OTHER PCS AND CELLULAR PROVIDERS AND FROM OTHER TECHNOLOGIES There are two established cellular providers in each of our markets. These providers have significant infrastructure in place, often at low historical cost, have been operational for many years, have substantial existing subscriber bases and have substantially greater capital resources than we do. In addition, in most of our markets, there are at least three PCS providers currently offering commercial service or likely to begin offering service before we will. We will 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 Communications and its affiliates in our markets. We will also be competing with resellers of wireless services. We expect competition in the wireless telecommunications industry to be dynamic and intense as a result of the entrance of new competition and the development and deployment of new technologies, products and services. Principal PCS and cellular competitors in our markets are BellSouth Telecommunications and its BellSouth Mobility subsidiary, Powertel, Inc., GTE Corporation, Sprint Spectrum, L.P., Century Telephone Enterprises, Inc., PrimeCo Personal Communications, L.P. and ALLTEL. We consider our primary competitors to be BellSouth and Powertel. BellSouth currently provides analog cellular service in markets that substantially overlap our markets. It has also deployed digital cellular systems in these markets, in most cases using IS-136 TDMA technology, with voice quality and features comparable to the voice quality and features we will offer. Powertel operates PCS systems in markets that overlap nearly all of our markets, using the GSM digital technology standard. GTE, our other principal cellular competitor, has begun to upgrade its network to provide digital cellular service. FCC rules permit the partitioning and disaggregation of broadband PCS licenses to serve smaller service areas, which could allow other new wireless telecommunications providers to enter our markets. It is also possible for an A-, B- or C-Block PCS license holder to subdivide its 30 MHz license into several smaller components, such as 20 MHz and 10 MHz portions. If such an apportionment did occur, we could face additional PCS competition in certain of our markets. 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 utilities, and cable and wireless cable operators seeking to offer communications services by leveraging their existing infrastructure. Additionally, continuing technological advances in telecommunications, the availability of more spectrum and FCC policies that encourage the development of new spectrum-based technologies make it impossible to accurately predict the extent of future competition. The viability of our PCS business will depend upon, among other things, our ability to compete, especially with respect to price, reliability, quality of service and availability of voice and data features. In addition, our ability to maintain the pricing of our services may be limited by competition, including the entry of new service providers in our markets. WE DEPEND ON EQUIPMENT AND SERVICE VENDORS TO BUILD OUT OUR PCS NETWORK Our future financial condition depends on our ability to build out rapidly and then operate a commercial PCS network in our markets. To do so effectively will require the timely delivery of infrastructure equipment for use in our cell sites and switching offices, as well as handsets. There is considerable demand for PCS infrastructure equipment that may result in substantial backlogs of orders and long lead times for delivery of certain types of equipment. Although we have entered into an exclusive equipment supply agreement with Ericsson for the purchase of at least $300.0 million of certain equipment and services related to the buildout of our PCS system over a five-year period, we cannot be certain that we will receive this equipment in the quantities that are needed to complete the buildout in our markets. If we do not receive this equipment on time, then we will be unable to begin 16 our PCS operations on schedule. Due to our exclusive arrangements with Ericsson, our ability to adhere to our buildout schedule will depend significantly on the ability of Ericsson to deliver its equipment in a timely fashion. We cannot be certain that Ericsson or any other vendor will be able to provide us with the equipment to build out our markets in a timely and cost-effective manner. The termination of the Ericsson agreement or the failure of any of the vendors to perform under any supply agreement would adversely affect our ability to begin operations as planned. In addition to equipment vendors, we depend on our service vendors for radiofrequency engineering services, site acquisition services and build-to-suit site construction services. If any of these service vendors fail to perform on schedule, we may not be able to begin our PCS operations on schedule. Upon receiving infrastructure equipment from our vendors, our engineers will integrate that equipment into our PCS network. Although we believe that we will be able to deploy the equipment successfully, we cannot be certain that we will be able to do so or that we will receive the necessary support from our vendors to complete the construction of our PCS network in a timely manner. Any delays in establishing our PCS network would adversely affect our operating results. We anticipate that our subscribers will access wireless services in our markets and throughout the AT&T Wireless Network by using tri-mode handsets. Two companies worldwide, Ericsson and Nokia Corporation, currently manufacture and supply IS-136 TDMA tri-mode handsets. Other manufacturers are expected to supply tri-mode handsets by the end of 1999. If our vendors fail to supply these handsets when expected, we will be required to delay our launch of service or offer our customers handsets without tri-mode capabilities. Without tri-mode handsets, our customers will not be able to roam on both analog cellular and digital cellular systems. While we believe we will be able to purchase tri-mode handsets in sufficient quantity to launch our service as planned, we may be unable to obtain such handsets from our vendors in the quantities or at the prices we expect. In that event, our service, our business and our operating results could be adversely affected. WE MUST RELOCATE EXISTING MICROWAVE LICENSEES TO OPERATE OUR PCS NETWORK Prior to the FCC's auction of PCS licenses in the 1850-1970 MHz frequency bandwidths, these frequencies were used by various fixed microwave operators. Similar to other PCS operators, we will be required to relocate these existing licensees that operate fixed microwave systems within our markets. The FCC has established procedures for PCS licensees to relocate these existing microwave paths, generally at the PCS licensee's expense. The FCC has provided for a period in which PCS licensees may negotiate with existing microwave licensees for relocating the microwave licensees. If agreements between the parties are not reached, the FCC will mandate relocation. To secure a sufficient amount of unencumbered spectrum to operate our PCS network efficiently, we will need to negotiate agreements for the relocation of approximately 200 existing microwave licensees in our markets and pay for their relocation. We may also be required to contribute to the costs of relocation under agreements reached by other PCS licensees if the relocation benefits our license areas. To date, we have reached an agreement with only approximately 120 of these licensees. Including cost sharing for relocations performed by other PCS licensees and cost sharing reimbursements by other PCS licenses paid to us, we expect to spend a total of approximately $25 million for microwave relocation. We plan to complete the microwave relocation for all 1999 launch cities by August 1999 and we do not expect any delays to our scheduled service launches. However, where relocation is necessary to permit operation of our PCS network, any delay in relocating those licensees may adversely affect our ability to commence timely commercial operation of our PCS network. We cannot be certain that we will successfully reach timely agreements with the existing microwave licensees or that any such agreements will be on favorable terms. Depending on the terms of these agreements, our ability to operate our PCS network profitably may be adversely affected. WE MAY BE UNABLE TO BUILD OUT OUR PCS NETWORK OR PROVIDE PCS SERVICE IN CERTAIN OF OUR MARKETS If we are unable to implement our construction plan, we may also be unable to provide, or may be delayed in providing, PCS service in certain of our markets. To construct our PCS network, we 17 must first complete the design of the network, acquire, purchase and install equipment, test the network and relocate or otherwise accommodate microwave users currently using the spectrum. Construction of our PCS network will also depend, to a significant degree, on our ability to lease or acquire sites for the location of our transmission equipment. In areas where we are unable to co-locate our transmission equipment on existing facilities, we will need to negotiate lease or acquisition agreements, which may involve competitors as counterparties, and in many cases, we will be required to obtain zoning variances and other governmental approvals or permits. In addition, due to concern over radiofrequency emissions and tower appearance, local governments, including one city within our markets, Decatur, Alabama, affecting approximately five cell sites, have instituted moratoria on further construction of antenna sites until the respective health, safety and historic preservation aspects of this matter are studied further. Accordingly, we may be unable to construct our PCS network in any particular market in accordance with our current construction plan and schedule. As a result, our growth may be limited, our market entry may be delayed and the costs of building out new markets may increase. Any one of these factors would be likely to adversely affect our future operating performance in such markets. THE FUTURE PROSPECTS OF THE PCS INDUSTRY REMAIN UNCERTAIN PCS systems have limited operating history in the United States, and it is not yet clear whether these systems will operate profitably. In addition, the potential demand for PCS in our markets and competitive pricing pressures cannot be estimated with any degree of certainty. As a result, the future prospects of the PCS industry, including our prospects, remain uncertain. In addition, the wireless telecommunications industry is experiencing significant technological changes, as evidenced by the increasing pace of digital installations in existing analog cellular systems, evolving industry standards, ongoing improvements in the capacity and quality of digital technology, shorter development cycles for new products and enhancements, and changes in consumer requirements and preferences. To remain competitive, we must develop or gain access to new technologies in order to increase product performance and functionality and to increase cost-effectiveness. Given the emerging nature of the PCS industry, alternative technological and service advancements could materialize in the future and prove viable, which could render the technology employed by us, such as IS-136 TDMA, obsolete. The development of alternative technologies could have a material adverse effect on our business and operating results. OUR DIGITAL PCS TECHNOLOGY IS NOT COMPATIBLE WITH ALL OTHER PCS TECHNOLOGY AND MAY NOT GAIN CUSTOMER ACCEPTANCE When the FCC first licensed analog cellular systems in the United States, there was one technological standard in North America -- the Advanced Mobile Phone System. Today, three standards are being used by PCS providers in the United States: IS-136 TDMA, CDMA and GSM. Although all three standards are digital transmission technologies and thus share certain basic characteristics and contrasts to analog transmission technology, they are not compatible or interchangeable with each other. We have chosen IS-136 TDMA as our digital technology standard to ensure compatibility with systems constructed by AT&T Wireless. Because we and AT&T Wireless, and its affiliates, will use IS-136 TDMA technology, and because through our roaming agreement with AT&T Wireless our subscribers will be able to roam into areas serviced by AT&T Wireless, including AT&T Wireless's cellular markets, we will be entitled to receive roaming revenue from AT&T Wireless subscribers who roam into our markets. In order for our PCS subscribers to roam in other markets where no PCS licensee utilizes the IS-136 TDMA standard, our subscribers 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 subscribers or achieve positive cash flow as planned. 18 PrimeCo and Sprint PCS will compete in certain of our markets and both have deployed CDMA technology. It is anticipated that CDMA-based PCS providers will own licenses covering virtually all of the United States population. Other PCS providers, including Powertel, have deployed GSM technology in many of our markets. GSM is the prevalent standard in Europe. It is possible that in the future a digital transmission technology other than IS-136 TDMA may gain acceptance in the United States sufficient to affect adversely the resources currently devoted by vendors to improving IS-136 digital cellular technology. Any differences that may from time to time exist between the technology deployed by the other wireless telecommunications service providers, such as CDMA, GSM or other transmission technology standards that may be developed in the future, may affect customer acceptance of the services we offer. If subsequent to our deployment of IS-136 TDMA, consumers perceive that another technology has marketplace advantages over IS-136 TDMA, we could experience competitive disadvantage or be forced to implement that technology at substantially increased cost. WE EXPECT TO HAVE INCREASED OPERATING COSTS DUE TO THIRD-PARTY FRAUD As do most companies in the wireless industry, we will likely 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. USE OF WIRELESS HANDSETS MAY POSE HEALTH AND SAFETY RISKS Media reports have suggested that, and studies are currently being undertaken to determine whether, radiofrequency 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. It is possible that the findings of these studies will adversely affect our business or will lead to government regulations that will adversely affect our business. Concerns over radiofrequency emissions may discourage the use of wireless communications devices, such as PCS handsets, which could adversely affect our business. In addition, the FCC requires that certain transmitters, facilities, operations, and mobile and portable transmitting devices used in PCS handsets meet specific radiofrequency emission standards. Compliance with any new restrictions could materially increase our costs. Concerns about radiofrequency emissions may affect our ability to obtain licenses from government entities necessary to construct microwave sites in certain locations. Measures that would require "hands free" use of mobile phones while operating motor vehicles have been proposed or are being considered in legislatures in Connecticut, Hawaii, Illinois, Maryland, New York and Ohio, among other states. Although no state has enacted a law barring the use of mobile phones, California requires rental cars with mobile phones to include written operating instructions concerning safe use, Florida permits mobile phone use as long as the motorist has one ear free to hear surrounding sound and Massachusetts allows mobile phone use as long as it does not interfere with the safe operation of the vehicle and as long as the motorist keeps one hand on the steering wheel at all times. We cannot predict the success of the proposed laws concerning "hands free" car phone use or the effect on usage of mobile phones as a result of the publicity surrounding the consideration or passage of such laws. In addition, more restrictive measures or measures aimed at wireless services companies as opposed to users may be proposed or passed in state legislatures in the future. The proliferation of such legislation could materially adversely affect us. OUR BUSINESS STRATEGY DEPENDS ON OUR MANAGEMENT'S EXPERTISE Our performance is substantially dependent on the performance of our key management personnel. We rely on our management's experience in building out and managing wireless systems. We also rely on our key management's experience in managing and operating wireless markets within our footprint. The loss of the services of any of our key managers could adversely affect on our ability to implement our business strategy and on our results of operations. 19 WE DEPEND ON FCC LICENSES Our principal assets are PCS licenses issued by the FCC. The FCC has imposed certain requirements on its licensees, including PCS operators. For example, PCS licenses may be revoked by the FCC at any time for cause, including failure to comply with the terms of the licenses, a violation of FCC regulations, failure to continue to qualify for the licenses, malfeasance or other misconduct. The loss of any license, or an action that threatens the loss of any license, would have a material adverse effect on our business and our operating results. We have no reason, however, to believe that any of our licenses will be revoked or will not be renewed. See "Business -- Legal Proceedings." C- and F-Block License Requirements. The FCC imposed certain additional restrictions on its C- and F-Block licenses. Participants in the C- and F-Block auctions, including our predeccessors, Airwave Communications and Digital PCS, which contributed our C- and F-Block licenses to us, were subject to certain requirements to qualify as an "entrepreneur," as defined by the FCC. In addition, because Airwave Communications and Digital PCS qualified as "small businesses," as defined by the FCC at the time of the C-Block auction and "very small businesses," as defined by the FCC at the time of the F-Block auction, they received substantial bidding credits and became entitled to pay a large portion of the net purchase price for their licenses over a ten-year period at special interest rates and terms, including making payments of interest only for a period of time. With respect to the C- and F-Block licenses, we believe that Airwave Communications and Digital PCS satisfied the FCC's eligibility requirements for those licenses. We intend to maintain diligently our qualification for those licenses. We have structured our debt and equity offerings, including certain restrictions on ownership and transfer, in a manner intended to ensure compliance with the applicable FCC rules. We have relied on representations of our investors to determine our compliance with the FCC's rules applicable to C-Block and F-Block licenses. We cannot be certain, however, that our investors or we will continue to satisfy these requirements during the term of any PCS license granted to our license subsidiaries or that we will be able to implement successfully divestiture or other mechanisms included in our Restated Certificate of Incorporation that are designed to ensure compliance with FCC rules. If we do not comply with FCC rules, the FCC could fine us, revoke our PCS licenses or require a restructuring of our equity. Any of these events could adversely affect our business and financing. During the first five years after the grant of a C- or F-Block license, we can only transfer the license to another "entrepreneur" eligible to own C- or F-Block licenses. If we transfer a license during years six through ten of the initial license term to a company that does not qualify as an "entrepreneur," the sale is subject to full repayment of bidding credits and immediate payment of the outstanding balance of the government installment payment debt as a condition of transfer. A transfer to a company that qualifies for a lower level of auction preferences will be subject to partial repayment of bidding credits and a change in installment payment terms as a condition of transfer. In addition, if we wish to make any change in ownership structure during the initial license term involving our de facto or de jure control, other than pro forma changes, we must seek FCC approval and we may be subject to the FCC unjust enrichment penalties if we transfer to an entity that does not qualify for the same level of preferences as us. Network Buildout Requirements. All PCS licenses, including those contributed to us by AT&T Wireless, Airwave Communications and Digital PCS, are subject to the FCC's buildout requirements. We have developed a buildout plan that meets all FCC requirements. However, we may be unable to meet our buildout schedule. If there are delays in implementing our network buildout, the FCC could reassess our authorized service area or, in extreme cases, it may revoke our licenses or impose fines. In addition, each of the A-, B- and C-Block licenses contributed to us is subject to an FCC requirement that we construct network facilities that offer coverage to at least one-third of the population in the markets covered by such license within five years following the grant of the applicable license and to at least two-thirds of the population within ten years following the grant. With respect to the E- and F-Block licenses, network facilities must be constructed that offer coverage to at least one quarter of the population in each market covered by a license within five years 20 following the grant of the applicable license, or we must make a showing of substantial service in the licensed area. For our A- and B-Block licenses, the five-year period will expire in March 2000; for our C-Block licenses, the five-year period will expire in March 2001, and for our E- and F-Block licenses, the five-year period will expire on various dates in 2002. If we fail to comply with these requirements, the FCC could reclaim those portions of our market area that are not being served, or in extreme cases, it could revoke the related licenses or impose fines on us. Therefore, delays in constructing our PCS network could have a material adverse effect on our business and our operating results. Foreign Ownership Limitations. The FCC prohibits more than 20% of any licensee's equity being owned of record or voted by non-United States citizens or their representatives, a foreign government or its representative, or any corporation organized under the laws of a foreign country. In addition, the FCC may revoke PCS licenses or require an ownership restructuring if a licensee is directly or indirectly controlled by another entity with more than 25% of its equity owned of record or voted by foreign interests. 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. We believe that we do not have foreign ownership in excess of applicable limits. However, if our foreign ownership were to exceed the then-applicable limits in the future, the FCC could revoke our PCS licenses or order an ownership restructuring. Our Restated Certificate of Incorporation enables us to require holders of our stock to divest themselves of the stock if their acquisition results in a violation of such limitation. While the FCC has indicated that such a provision is an acceptable means of limiting foreign ownership, we cannot be certain that this provision would prevent the FCC from taking action with respect to the licenses. In January 1996, the United States, by its representative to the World Trade Organization ("WTO"), entered into an agreement with 69 other countries around the world that, among other things, increased the permitted level of foreign ownership in U.S. common carrier licenses. The agreement has been ratified by the United States and the other signatories as of February 5, 1998. Under the WTO agreement, the United States has agreed to permit, upon prior FCC consent, indirect foreign ownership of up to 100% of a licensed company. Entities wishing to exceed the 25% indirect ownership threshold will now be accorded a strong presumption that foreign investment by other WTO member countries would serve the public interest. The FCC will review applications to exceed the 25% benchmark on a streamlined processing schedule. Direct foreign ownership will continue to be limited to 20%. As the FCC's rules implementing the WTO treaty are new and untested, it is uncertain as to how the rules will be interpreted. See "Government Regulation -- Foreign Ownership Limitations." WE FACE BROAD AND EVOLVING GOVERNMENT REGULATION The licensing, construction, operation, sale and interconnection arrangements of wireless telecommunications systems are regulated to varying degrees by the FCC, 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 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 any new regulations. It is possible that the FCC, 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 our 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 FCC and state authorities will involve numerous changes in established rules and policies that could adversely affect our business. The government financing for C- and F-Block licenses is evidenced by an FCC installment payment plan note and a security agreement for each license we acquired in the C- and F-Block 21 auctions. Terms and conditions of the FCC notes have not yet been definitively interpreted, including, among other things, matters involving collateral and the assignability of PCS licenses. CONTROL GROUP REQUIREMENTS MAY ADVERSELY AFFECT OUR BUSINESS To retain the C- and F-Block licenses and the favorable government financing granted to us, we must maintain our status as an "entrepreneur" and "small business" or "very small business" (the "Designated Entity Status"). To maintain all of the benefits of our Designated Entity Status, our control group and qualifying investors must retain certain minimum stock ownership and control of our voting stock, as well as legal and actual control of us for ten years from the date of grant of our C- and F-Block PCS licenses. The FCC 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 and voting control, the FCC may still inquire to determine whether actual control exists. WE HAVE SUBSTANTIAL DEBT OBLIGATIONS TO THE U.S. GOVERNMENT Because the government financing incurred in connection with the acquisition of our C- and F-Block licenses bears interest at a below-market rate, our obligations under this government financing will be recorded in our financial statements in accordance with generally accepted accounting principles at its estimated fair market value of $41.2 million as of March 31, 1999, based on an estimated fair market borrowing rate of 10%. However, if the government financing was declared immediately due and payable after a default, the amount payable would be $47.5 million plus accrued interest of $1.2 million as of March 31, 1999. On July 31, 1998, we were required to begin quarterly installment payments for interest on our C- and F-Block license debt. We will be required to make quarterly installment payments for principal on our F-Block license debt beginning January 31, 2000, and on our C-Block license debt beginning January 31, 2003. If we default on the government financing or otherwise violate FCC regulations, the FCC could take a variety of actions, including: (a) requiring immediate repayment of all amounts due under the government financing or repayment of amounts relating to our receipt of bidding credits totaling $18.0 million, (b) revoking some or all of our licenses and fining us an amount equal to the difference between the price at which we acquired the licenses and the amount of the winning bid at their re-auction, plus an additional penalty of 3% of the lesser of the subsequent winning bid and our bid amount. It is possible that we will default on the government financing and, if we do, the FCC could take any of these actions. If the FCC were to do so, we could default on our obligations to our other creditors, including our bank lenders and you. See "-- We Will Require Substantial Capital and Will Have a Highly Leveraged Capital Structure" and "-- We Depend on FCC Licenses." We believe we have taken steps to comply with and prevent violation of these regulatory requirements, but it is possible that our ownership and control structure will be challenged. If any challenges are successful, we could be required to restructure or recapitalize, and possibly forfeit our C- and F-Block PCS licenses. If we fail to maintain our Designated Entity Status, we may face less favorable payment schedules or the acceleration of payments due under the government financing, or our licenses may be revoked. The inability of non-control group stockholders to gain control of Tritel could negatively impact our ability to attract additional capital. This control requirement may also discourage certain transactions involving an actual or potential change of control of Tritel. FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID THE SUBSIDIARY GUARANTEES OF 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 beginning in 2004. Our operating subsidiary, Tritel Communications, Inc., and our finance subsidiary, Tritel Finance, Inc., will guarantee our obligations under the Notes and all of our future subsidiaries, other than subsidiaries whose primary business is to 22 hold PCS licenses and subsidiaries owning those subsidiaries, may 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: o the debt under the subsidiary guarantee was incurred with actual intent to hinder, delay or defraud creditors, or o the subsidiary guarantor did not receive fair consideration or reasonably equivalent value for its subsidiary guarantee and the subsidiary guarantor: o was insolvent or rendered insolvent because of its subsidiary guarantee, o was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital, or o 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. YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES AND GUARANTEES IS JUNIOR TO PAYMENTS ON SENIOR INDEBTEDNESS AND TO OUR SECURED OBLIGATIONS The Notes will be subordinated to all our present and future senior debt and the parent and subsidiary guarantees will be subordinated to all present and future senior debt of the guarantors. The Notes will not be secured by any of our assets. Our obligations under our bank facility are guaranteed by our parent and all of our subsidiaries and are secured by substantially all of our assets and the assets of our parent and our subsidiaries other than our PCS licenses. Certain of our PCS licenses are subject to liens securing our debt to the FCC. If we were to become insolvent or were to be liquidated, or if the banks were to accelerate our payments under our bank facility, our assets would be available to pay obligations on the Notes only after all payments had been made on our secured and other senior debt. Similarly, if any guarantor were to become insolvent or were to be liquidated, its assets would be available to pay obligations on the Notes only after all payments had been made on its secured and senior debt. In any such event, we cannot assure you that sufficient assets would remain to make any payments on the Notes. Not all of our subsidiaries will guarantee the Notes. In the event of a bankruptcy, liquidation, dissolution, reorganization or similar proceeding with respect to any of these subsidiaries, the assets of these non-guarantor subsidiaries will be available to pay obligations on the Notes only after all outstanding liabilities, including trade payables, of these subsidiaries have been paid in full. As of March 31, 1999, the total liabilities of these subsidiaries would have been approximately $47.5 million (book value $41.2 million), consisting of debt owed to the FCC related to our licenses and excluding their guarantees of our bank facility and intercompany amounts owed to us. 23 A SIGNIFICANT PORTION OF OUR ASSETS ARE INTANGIBLE Our assets consist primarily of intangible assets, principally FCC 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 upon our liquidation, the value of these assets may not be sufficient to satisfy our obligations. We had a net tangible book value deficit of $244.6 million attributable to Tritel's common stock as of March 31, 1999. YEAR 2000 ISSUES COULD CAUSE INTERRUPTION OR FAILURE OF OUR COMPUTER SYSTEMS We use a significant number of computer systems and software programs in our operations, including applications used in support of our PCS network equipment and various administrative functions. Although we believe that our computer systems and software applications contain source code that is able to interpret appropriately dates after December 31, 1999, our failure to make or obtain necessary modifications to our systems and software could result in systems interruptions or failures that could have a material adverse effect on our business. We do not anticipate that we will incur material expenses to make our systems Year 2000 compliant. However, unanticipated costs necessary to avoid potential systems interruptions could exceed our present expectations and consequently have a material adverse effect on our business. In addition, if our key equipment and service providers fail to make their respective computer systems and software programs Year 2000 compliant, then such failure could have a material adverse effect on our business. See "Management's Discussion and Analysis -- Year 2000." YOU MAY HAVE TO INCLUDE INTEREST IN YOUR TAXABLE INCOME BEFORE YOU RECEIVE CASH PAYMENTS The Notes will be issued at a substantial discount from their principal amount at maturity. Consequently, you will generally be required to include amounts in your gross income for federal income tax purposes before you receive the cash payments attributable to that income. See "Certain Federal Income Tax Considerations." In the event of our bankruptcy, your claim may be limited to the issue price, as determined by the bankruptcy court, plus the accrued portion of the original issue discount at the date of the bankruptcy filing. To the extent that the federal bankruptcy laws differ from the Internal Revenue Code in determining the method of amortization of original issue discount, you may realize taxable gain or loss upon payment of your claim in bankruptcy. WE ARE NOT OBLIGATED TO NOTIFY YOU OF UNTIMELY OR DEFECTIVE TENDERS OF OUTSTANDING NOTES. We will issue registered Notes pursuant to this exchange offer only after a timely receipt of your outstanding Notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, if you want to tender your outstanding Notes, please allow sufficient time to ensure timely delivery. We are under no duty to give notification of defects or irregularities with respect to the tenders of outstanding Notes for exchange. NO PRIOR MARKET FOR THE NOTES--YOU CANNOT BE SURE THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE NOTES. The outstanding Notes were not registered under the Securities Act nor under the securities laws of any state and may not be resold unless they are subsequently registered or an exemption from the registration requirements of the Securities Act and applicable state securities laws is available. The registered Notes will be registered under the Securities Act, but will constitute a new issue of securities with no established trading market, and there can be no assurance as to: o the liquidity of any such market that may develop; o the ability of registered note holders to sell their Notes; or o the price at which the registered note holders would be able to sell their Notes. 24 If such a market were to exist, the registered Notes may trade at higher or lower prices than their principal amount or purchase price, depending on many factors, including prevailing interest rates, the market for similar debentures and the financial performance of Tritel PCS. The Notes are designated for trading among qualified institutional buyers in The PortalSM Market. We understand that certain of the Initial Purchasers presently intend to make a market in the Notes. However, they are not obligated to do so, and any market-making activity with respect to the Notes may be discontinued at any time without notice. In addition, such market-making activity will be subject to the limits imposed by the Securities Act and the Securities Exchange Act of 1934, and may be limited during the exchange offer or the pendency of an applicable shelf registration statement. There can be no assurance that an active trading market will exist for the Notes or that such trading market will be liquid. Notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer, continue to be subject to the existing restrictions upon transfer, and, upon consummation of the exchange offer, certain registration rights with respect to the outstanding Notes will terminate. In addition, any outstanding note holder who tenders in the exchange offer for the purpose of participating in a distribution of the registered Notes may be deemed to have received restricted securities, and if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. To the extent that outstanding Notes are tendered and accepted in the exchange offer, the trading market for untendered and tendered but unaccepted outstanding Notes could be adversely affected. 25 ORGANIZATION OF TRITEL AND TRITEL PCS Prior to January 7, 1999, Tritel's operations were conducted through Airwave Communications and Digital PCS. Airwave Communications was formed in July 1995 by Messrs. Mounger, Martin and Sullivan who are officers and directors of Tritel and Tritel PCS, and various other investors as a "small business" to participate in the FCC's C-Block PCS spectrum auction. Airwave Communications acquired six 30 MHz licenses in the C-Block covering approximately 2.5 million POPs in northern Alabama. Digital PCS was similarly formed in July 1996 as a "very small business" to participate in the FCC'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 POPs 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 consummated the joint venture. Under the AT&T Wireless joint venture, AT&T Wireless contributed to Tritel PCS A- and B-Block licenses covering approximately 9.1 million licensed POPs, 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 licensed POPs. In addition, Central Alabama Partnership, an unrelated party, contributed C-Block licenses covering 475,000 POPs in Montgomery, Alabama to Tritel PCS. The POPs contributed by Airwave Communications and Digital PCS include 1.7 million POPs that overlap with those contributed by AT&T Wireless. All of the Central Alabama POPs also overlap with those held by Tritel PCS. As a result, Tritel PCS holds PCS licenses covering 14.0 million POPs. In exchange for the licenses contributed by AT&T Wireless and intangible benefits of the transaction, Tritel issued $137.1 million of Series A Preferred Stock and Series D Preferred Stock to AT&T Wireless. In exchange for the licenses contributed by Airwave Communications and Digital PCS and additional cash equity of $11.2 million and $3.0 million contributed by them, respectively, Tritel issued $25.6 million of Series C Preferred Stock to Airwave Communications and $6.8 million of Series C Preferred Stock to Digital PCS. Central Alabama received $2.6 million of Series C Preferred Stock in exchange for its licenses and certain other assets. In addition, Tritel raised $149.2 million of cash equity from institutional equity investors, $99.4 million of which has already been funded and $49.8 million of which is committed to be funded, under the institutional investors' irrevocable and unconditional commitments, on September 30, 1999. In sum, Tritel has received cash and non-cash equity funding and irrevocable commitments totaling $321.3 million. Digital PCS continues to hold PCS licenses covering approximately 1.5 million POPs in New Mexico and Texas. Tritel has exercised an option to acquire PCS licenses covering approximately 2.0 million POPs in Florida and southern Georgia owned by Digital PCS for a purchase price of approximately $15 million in cash and Series C Preferred Stock. Tritel subsequently granted to AT&T Wireless two options to purchase these licenses, one of which covers the Fort Walton and Pensacola, Florida POPs and the other the remaining POPs in Florida and southern Georgia. These options expire on November 20, 1999 and April 20, 2000, respectively, unless extended. The purchase price for the licenses subject to the option was the number of shares of Series C Preferred that has a value equal to the aggregate amount paid by Digital PCS to the FCC for the licenses, excluding the FCC debt outstanding. Additionally, Tritel assumed the FCC debt. Under this formula, the purchase price equaled approximately $3.0 million in Series C Preferred Stock and Tritel assumed $12.0 million in FCC debt. See " -- We Would Require Significant Additional Capital if We Were to Acquire and Build Out Additional Licenses." In order to obtain AT&T Wireless's consent to exercise its option with Digital PCS, Tritel has agreed to amend certain of the AT&T joint venture agreements to provide that the definition of PCS Territory in these documents excludes the territory covered by the licenses subject to the option and Tritel and its subsidiaries shall only engage in specified permitted activities related to the licenses or the territories covered by the licenses. 26 On April 20, 1999 Digital PCS sold licenses covering 1.6 million POPs in Louisiana to TeleCorp PCS, another AT&T Wireless joint venture partner, in exchange for an equity interest in TeleCorp PCS. Digital PCS plans to sell its remaining licenses covering 1.5 million POPs in Texas and New Mexico. INFORMATION REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements, including statements regarding, among other items: o future earnings and other operating results, o the estimated cost and timing of our network buildout, o competition and o prospects and trends of the wireless industry. Other statements contained in this prospectus are forward-looking statements and are not based on historical fact, such as statements containing the words "believes," "may," "will," "estimates," "continue," "anticipates," "intends," "expects" and words of similar import. These forward-looking statements are subject to risks, uncertainties and assumptions, including those discussed in "Risk Factors," "Management's Discussion and Analysis," "Business" and elsewhere in this prospectus. Actual results may differ materially from those projected. We believe that our estimates are reasonable; but you should not unduly rely on these estimates, which are based on our current expectations. We undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statements. Neither we, nor any [Initial Purchaser], makes any representation, warranty (express or implied) or assurance as to the completeness or accuracy of these projections and, accordingly, neither expresses an opinion or any other form of assurance regarding them. WHERE YOU CAN FIND MORE INFORMATION We have filed with the Commission a registration statement on Form S-4 to register the new Notes being offered in this prospectus. This prospectus, which forms part of the registration statement, does not contain all of the information included in the registration statement. For further information about Tritel PCS and the registered Notes offered in this prospectus, you should refer to the registration statement and its exhibits. Our Commission filings are available to the public over the internet at the Commission's web site at http://www.sec.gov/. You also may read and copy any document we file at the Commission's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. These documents also are available at the public reference rooms at the Commission's regional offices in New York, New York and Chicago, Illinois. Please call the Commission at 1-800-SEC0330 for further information on the public reference rooms. While any original Notes remain outstanding, we will make available, upon request, to any holder and any prospective purchaser of original Notes the information required pursuant to Rule 144A(d)(4) under the Securities Act during any period in which we are not subject to Section 13 or 15(d) of the Exchange Act. Written requests for such information should be directed to Tritel, Inc., 1080 River Oaks Drive, Suite B-100, Jackson, Mississippi 39208, Attention: Corporate Secretary. 27 USE OF PROCEEDS Tritel PCS will not receive any cash proceeds from the issuance of the registered Notes in exchange for the outstanding Notes. In consideration for issuing the registered Notes, Tritel PCS will receive outstanding Notes in like original principal amount at maturity. Outstanding Notes received in the exchange offer will be cancelled. The net proceeds to Tritel PCS from the offering of the original Notes were approximately $191.0 million after deducting the discount payable to the Initial Purchasers and the estimated offering expenses. The net proceeds of that offering, together with the cash proceeds received by Tritel from the sale of its equity and funds drawn under Tritel PCS's bank facility, will be used to cover each of the following through the end of 2001, when Tritel PCS anticipates that it will have substantially completed the planned buildout of its network and will have achieved positive cash flow from operations: o approximately $529.9 million for Tritel PCS's capital expenditures, including the buildout of its PCS network, o approximately $125.2 for cash interest and to cover financing fees and expenses, o approximately $192.9 million for acquisition of PCS licenses, and o approximately $174.1 million for working capital, including operating cash flow losses. See "Prospectus Summary -- Sources and Uses." 28 CAPITALIZATION The following table sets forth the consolidated capitalization of Tritel as of March 31, 1999 on an actual basis and as adjusted to give effect to the offering of the Senior Subordinated Discount Notes. See "Use of Proceeds." The following table should be read in conjunction with Tritel's consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus.
MARCH 31, 1999 -------------------------- ACTUAL AS ADJUSTED ----------- ------------ (IN THOUSANDS) Cash, cash equivalents and restricted cash ............................. $ 238,394 $ 429,394 ========= ========= Long-term debt: Bank facility(a) ...................................................... $ 200,000 $ 200,000 FCC debt(b) ........................................................... 41,196 41,196 Senior Subordinated Discount Notes .................................... -- 200,240 --------- --------- Total long-term debt ............................................... 241,196 441,436 --------- --------- Series A 10% redeemable convertible preferred stock(c) ................. 90,668 90,668 Adjustment to fair value ............................................... (21,984) (21,984) --------- --------- Total Series A redeemable preferred stock(d) ....................... 68,684 68,684 --------- --------- Stockholders' equity(c): Preferred Stock, par value -- $.01 per share; authorized 1,500,000 shares: Series B Preferred Stock, no shares issued and outstanding ......... -- -- --------- --------- Series C Preferred Stock, 184,233 shares issued and outstanding ...................................................... 124,920 124,920 --------- --------- Series D Preferred Stock, 46,374 shares issued and outstanding 46,374 46,374 Adjustment to fair value ........................................... (11,278) (11,278) --------- --------- Total Series D preferred stock(d) ................................ 35,096 35,096 --------- --------- Common Stock, par value -- $.01 per share; authorized 3,040,009 shares; 40,705 shares issued and outstanding ........................ -- -- Accumulated deficit ................................................... (25,449) (25,449) --------- --------- Total stockholders' equity .......................................... 134,567 134,567 ========= ========= Total capitalization ............................................... $ 444,447 $ 644,687 ========= =========
- ---------- (a) See Note 20 to the Consolidated Financial Statements. (b) The aggregate face amount of the FCC debt is $47.5 million, but this debt is recorded in Tritel's financial statements at a discount to reflect favorable financing terms of 7.0% per annum. (c) See Note 10 to the Consolidated Financial Statements. (d) See the Consolidated Balance Sheets and related Notes. 29 SELECTED CONSOLIDATED FINANCIAL DATA The following selected financial data for the periods indicated have been derived from the Consolidated Financial Statements of Tritel, which statements, except for the three-month periods ended March 31, 1998 and 1999, the related balance sheet data as of March 31, 1999 and the period from inception to March 31, 1999, have been audited by KPMG Peat Marwick LLP, independent certified public accountants, whose report thereon (other than operations for the period from inception through December 31, 1995 and balance sheets at December 31, 1995 and 1996) appears elsewhere in this prospectus. The unaudited financial data referred to above includes, in the opinion of management, all necessary adjustments required for a fair presentation of such data. The results of operations for the three months ended March 31, 1999 are not necessarily indicative of results to be anticipated for the entire year. The selected financial data should be read in conjunction with "Management's Discussion and Analysis" and the Consolidated Financial Statements and notes thereto of Tritel included elsewhere in this prospectus.
PERIOD FROM INCEPTION TO DECEMBER 31, YEARS ENDED DECEMBER 31, -------------- ------------------------------------- 1995 1996 1997 1998 -------------- ----------- ----------- ------------- (DOLLARS IN THOUSANDS) STATEMENTS OF OPERATIONS DATA: Revenues .................... $ -- $ -- $ -- $ -- ------ -------- -------- --------- Operating expenses: Plant expenses .............. -- 4 104 1,939 General and administrative... 121 1,481 3,123 4,947 Other operating expenses .... -- 7 48 800 ------ -------- -------- --------- Total operating expense .... 121 1,492 3,275 7,686 ------ -------- -------- --------- Operating loss .............. (121) (1,492) (3,275) (7,686) Interest income ............. 1 31 121 77 Interest expense and financing cost ............. -- -- -- (722) ------ -------- -------- --------- Loss before extraordinary item and income taxes ..... (120) (1,461) (3,154) (8,331) Extraordinary item -- Loss on return of spectrum... -- -- -- (2,414) ------ -------- -------- --------- Loss before income taxes.... (120) (1,461) (3,154) (10,745) Income tax benefit .......... -- -- -- -- ------ -------- -------- --------- Net loss ................... $ (120) $ (1,461) $ (3,154) $ (10,745) ====== ======== ======== ========= CUMULATIVE THREE CUMULATIVE AMOUNTS MONTHS AMOUNTS SINCE INCEPTION, ENDED SINCE INCEPTION, AT DECEMBER 31, MARCH 31, AT MARCH 31, ------------------ --------------------- ----------------- 1998 1998 1999 1999 ------------------ --------- ----------- ----------------- (DOLLARS IN THOUSANDS) STATEMENTS OF OPERATIONS DATA: Revenues .................... $ -- $ -- $ -- $ -- --------- ------ -------- --------- Operating expenses: Plant expenses .............. 2,047 90 1,956 4,003 General and administrative... 9,672 661 2,890 12,562 Other operating expenses .... 855 12 2,625 3,480 --------- ------ -------- --------- Total operating expense .... 12,574 763 7,471 20,045 --------- ------ -------- --------- Operating loss .............. (12,574) (763) (7,471) (20,045) Interest income ............. 230 20 1,127 1,357 Interest expense and financing cost ............. (722) -- (2,230) (2,952) --------- ------ -------- --------- Loss before extraordinary item and income taxes ..... (13,066) (743) (8,574) (21,640) Extraordinary item -- Loss on return of spectrum... (2,414) -- -- (2,414) --------- ------ -------- --------- Loss before income taxes.... (15,480) (743) (8,574) (24,054) Income tax benefit .......... -- -- 327 327 --------- ------ -------- --------- Net loss ................... $ (15,480) $ (743) $ (8,247) $ (23,727) ========= ====== ======== =========
30
DECEMBER 31, MARCH 31, ------------------------------------------------------- ----------- 1995 1996 1997 1998 1999 -------- ---------- ----------- ----------------- ----------- (DOLLARS IN THOUSANDS) BALANCE SHEET DATA: Cash and cash equivalents .......................... $ 400 $ 32 $ 1,763 $ 846 $231,939 Other current assets ............................... 4,501 5,000 285 960 1,825 Property and equipment, net ........................ -- 10 13 13,816 33,232 FCC licensing costs ................................ 40 62,503 99,425 71,466 (1) 157,811 Intangible assets .................................. -- -- -- -- 40,295 Other assets ....................................... 3 186 1,027 1,933 35,054 ------ ------- -------- --------- -------- Total assets ....................................... $4,944 $67,731 $102,513 $ 89,021 $500,156 ====== ======= ======== ========= ======== Total current liabilities .......................... $3,425 $ 8,553 $ 8,425 $ 32,911 $ 3,849 Long-term debt ..................................... -- 53,504 77,200 51,599 (2) 241,196 Other non-current liabilities ...................... -- -- 8,126 6,494 51,860 Total Series A redeemable preferred stock .......... -- -- -- -- 68,684 Total stockholders' equity (deficit) ............... 1,519 5,674 8,762 (1,983) 134,567 ------ ------- -------- --------- -------- Total liabilities and stockholders' equity ......... $4,944 $67,731 $102,513 $ 89,021 $500,156 ====== ======= ======== ========= ======== OTHER FINANCIAL DATA: Ratio of earnings to fixed charges (3) ............. -- -- -- -- --
- ---------- (1) See Note 5 to the consolidated financial statements. (2) See Note 8 to the consolidated financial statements. (3) For purposes of determining the ratio of earnings to fixed charges, earnings are defined as income before income taxes plus fixed charges. Fixed charges consist of interest expense and other financing costs on all indebtedness (including amortization of discount and deferred debt issuance costs). Earnings were insufficient to cover fixed charges by $140,000 for the period from inception (July 27, 1995) through December 31, 1995, $4.8 million, $10.4 million and $18.9 million for the years ended December 31, 1996, 1997 and 1998, respectively, and $3.1 million and $12.5 million for the three-month periods ended March 31, 1998 and 1999. 31 MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis of the financial condition and results of operations of Tritel PCS and Tritel should be read in conjunction with the consolidated financial statements and notes thereto of Tritel, which are included in this prospectus. See also "Special Note Regarding Forward Looking Statements." GENERAL Tritel PCS is a development stage enterprise formed for the purpose of establishing a regional PCS wireless telecommunications network in the south-central United States. Tritel PCS owns PCS licenses covering approximately 14.0 million licensed POPs located in contiguous markets in the states of Alabama, Georgia, Kentucky, Mississippi and Tennessee. As a member of the AT&T Wireless Network, Tritel PCS is the exclusive provider to AT&T Wireless of mobile wireless PCS services in its markets. Tritel PCS's agreements with AT&T Wireless and certain affiliates allow it to use the AT&T brand name and logo together with the SunCom name. Tritel PCS has incurred significant expenditures in conjunction with its organization and financing, PCS license acquisitions, hiring key personnel and the initial design and construction of its PCS network facilities. Tritel PCS has not yet commenced commercial operations and, as a result, has not yet generated operating revenues or earnings. Tritel PCS intends to initiate the commercial launch of its service in Jackson, Mississippi in the third quarter of 1999 and expects to initiate service in all of its markets by the end of 2001. The timing of launch in individual markets will be determined by various factors, principally the success of Tritel PCS's site acquisition program, zoning and microwave relocation difficulties, equipment delivery schedules and local market and competitive considerations. Tritel PCS intends to continue to expand its coverage in its PCS markets to reach approximately 80% of the licensed POPs in the aggregate by the end of 2001. Thereafter, Tritel PCS will evaluate further coverage expansion on a market-by-market basis. The extent to which Tritel PCS is able to generate operating revenues and earnings will be dependent on a number of business factors, including successfully deploying the PCS network and attaining profitable levels of market demand for Tritel PCS's products and services. See "Risk Factors -- We Have Not Yet Started Operations and We May Not Be Profitable After We Do." FACTORS AFFECTING FUTURE OPERATIONS Tritel PCS expects to generate substantially all of its revenues from sales of mobile wireless telephony services, including local, roaming and long distance. Tritel PCS will sell its services and equipment to retail consumers, businesses, institutions and governments at rates and prices that will be competitive with other wireless providers in its markets. Tritel PCS will distribute to retail consumers through 54 company-owned stores and to a lesser extent, independent retail distributors. Tritel PCS will also employ a direct sales force that will focus primarily on business, institutional and government sales. Tritel PCS believes that it will be able to generate higher sales and penetration through the use of company-owned stores and a direct sales force than would otherwise be achieved through dependence on agents and independent retailers. Tritel PCS will market its services and products under, and management believes that Tritel PCS's sales and marketing efforts will benefit substantially from the use of, the AT&T national and SunCom regional brand names. Tritel PCS's marketing efforts will seek to distinguish its service and product offerings on the basis of the quality and extent of its wireless coverage, including the virtually nationwide coverage its subscribers will enjoy through the AT&T Wireless Network, and the digital service features that will be available to its subscribers. Tritel PCS believes that this focus on the AT&T and SunCom brand names and quality of service, coupled with proactive customer care and simplified and flexible billing, rather than price differention, will increase revenues and margins, increase customer loyalty and reduce churn and cost per gross added subscriber. Industry statistics indicate that average revenue per unit (ARPU) for the wireless communications business has declined substantially over the period 1993-1998. Although this decline 32 has stabilized recently, management believes that some deterioration in ARPU will continue. While management believes that Tritel PCS will benefit from a decline in certain direct operating costs, including billing, interconnect, roaming and long distance charges, its ability to improve its margins will depend primarily on its ability to manage its variable costs, including selling general and administrative expense, costs per gross added subscriber and capital expenditures. A particular focus of Tritel PCS's strategy will be to reduce subscriber churn. Industry data suggest that those 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, Tritel PCS will launch service in its markets only after comprehensive and reliable coverage and service can be maintained in a particular market. In addition, Tritel PCS's billing systems will be designed to provide simple and understandable options on flexible cycles. Specifically, Tritel PCS plans to offer simplified rate plans in each of its markets that are tailored to meet the needs of targeted customer segments. Tritel PCS's rate plans will include a combination of local, long distance and roaming services, as well as bundled minutes with multiple options, designed to suit customers' needs. Finally, proactive subscriber retention will be an important initiative for Tritel PCS's customer care program. OPERATING EXPENSES Tritel PCS's operating expenses will consist of plant operations, sales and marketing and general and administrative expenses. Tritel PCS believes that its plant operations expenses will be favorably affected by its ability to co-locate its antennae and base station equipment on existing tower sites. Currently, of the total of 1,275 sites that Tritel PCS plans to build out, it expects to co-locate approximately 70% on existing towers, enabling Tritel PCS to avoid certain location costs and to share certain other costs. However, cell site lease costs are competitive, and Tritel PCS will be responsible for all costs associated with its own base stations and antennae. Costs per gross added subscriber include subsidies on handset sales. Although management expects that handset costs will decline, it does not expect that it will be able to reduce the overall level of handset subsidies since management also believes that retail handset prices will decline proportionally with costs. Recent industry data indicate that interconnect, roaming and long distance charges that Tritel PCS will incur will continue to decline, due principally to competitive pressures and new technologies. Management will focus on application of systems and procedures to reduce billing expense and improve subscriber communication. These systems and procedures will include debit billing, credit card billing, over-the-air payment and Internet billing systems. Tritel PCS will incur other costs, including costs related to network maintenance, administrative overhead, office and store leases, and telephone and utility costs. These costs will grow significantly as its operations expand and its customer base and call volumes increase. Over time, these expenses should represent a reduced percentage of revenues as the customer base grows. RESULTS OF OPERATIONS THREE-MONTH PERIODS ENDED MARCH 31, 1998 AND MARCH 31, 1999 OPERATING EXPENSES Plant expenses were $90,000 and $2.0 million for the periods ended March 31, 1998 and 1999, respectively. These expenses were primarily related to an increase in engineering and operating staff devoted to the design and implementation of Tritel PCS's network. 33 Tritel PCS expects that the majority of its future plant 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. General and administrative expenses increased from $661,000 for the first quarter of 1998 to $2.9 million for the first quarter of 1999. The increase was due to the development and growth of infrastructure and staffing relating to information technology, billing systems, customer care, financial reporting and other administrative functions incurred in the preparation for commercial launch of the Tritel PCS network in 1999. Sales and marketing expenses increased from $6,000 in the first quarter of 1998 to $1.0 million in 1999. The increase was associated with the salary and benefits for sales and marketing personnel and for market development, including planning and leasing of regional offices. Tritel PCS expects to incur significant selling and marketing costs including commissions, promotional events and advertising as it prepares for and launches markets in 1999. Depreciation and amortization expenses were $6,000 for the period ended March 31, 1998, compared to $1.6 million one year later. The 1999 expenses related to the depreciation of furniture, fixtures, and office equipment, as well as the amortization of deferred charges and certain of Tritel's agreements with AT&T Wireless. Financing costs were $2.2 million for the period ended March 31, 1999. They were associated with the conversion of debt to an investor of Digital PCS to Digital PCS equity. YEARS ENDED DECEMBER 31, 1996, DECEMBER 31, 1997 AND DECEMBER 31, 1998 OPERATING EXPENSES Plant expenses were $4,000, $104,000 and $1.9 million for the years ended December 31, 1996, 1997 and 1998, respectively. These expenses were primarily related to an increase in engineering and operating staff devoted to the design and implementation of future operations of Tritel PCS's network. Tritel PCS expects the majority of its future plant 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. General and administrative expenses increased from $1.5 million in 1996, to $3.1 million in 1997 and $4.9 million in 1998. The increases were due to the development and growth of infrastructure and staffing relating to information technology, billing customer care, financial reporting and other administrative functions incurred in the preparation for commercial launch of Tritel PCS's network in 1999. Management's strategy of stressing the importance of customer care will cause the customer care department to become a larger part of ongoing general and administrative expenses. Billing costs will increase as the number of customers increases. Tritel's general and administrative expenses also increased because of the expenses incurred in raising capital for the buildout and development of the network and certain start-up costs. Sales and marketing expenses increased from $5,000 in 1996 to $28,000 in 1997 and $452,000 in 1998. These increases were associated with the salary and benefits for sales and marketing personnel and for market development, including planning and leasing of regional offices. Management expects to incur significant selling and marketing costs, including commissions, promotional events and advertising, as Tritel PCS prepares to launch markets in 1999. Depreciation and amortization expenses were $2,000 in 1996 compared to $20,000 in 1997 and $348,000 in 1998. These expenses in 1998 related to the depreciation of furniture, fixtures and office equipment, as well as the amortization of deferred charges. Interest expense, net of interest income, for 1998 was $722,000. The interest expense related to licenses retained by Digital PCS. 34 During July 1998, Tritel PCS recorded an extraordinary loss on the return of C-Block spectrum of $2.4 million allowed by the FCC under restructuring guidelines. LIQUIDITY AND CAPITAL RESOURCES The buildout of the Tritel PCS network and the marketing and distribution of its products and services will require substantial capital. Tritel PCS currently estimates that its capital requirements, including capital expenditures, the cost of acquiring licenses, working capital, debt service requirements and anticipated operating losses, for the period from inception through the end of 2001, assuming substantial completion of the Tritel PCS network buildout to cover 80% of the Licensed POPs in the aggregate by the end of 2001, will total approximately $1.0 billion, of which approximately $66.8 million had been expended as of March 31, 1999. Costs associated with the network buildout include switches, base stations, towers and antennae, radiofrequency engineering, cell site acquisition and construction, and microwave relocation. Management estimates that capital expenditures associated with the buildout will total approximately $530 million from inception through the end of 2001, including a commitment to purchase a minimum of $300 million in equipment and services from Ericsson. The actual funds required to build out Tritel PCS's network may vary materially from these estimates, and additional funds could be required in the event of significant departures from the current business plan, in the event of unforeseen delays, cost overruns, unanticipated expenses, regulatory expenses, engineering design changes and other technological risks. In connection with the consummation of the joint venture with AT&T Wireless, Tritel PCS received unconditional and irrevocable equity commitments from institutional equity investors in the aggregate amount of $149.2 million in return for the issuance of Series C Preferred Stock. On January 7, 1999, approximately $99.4 million of these commitments were funded. The remaining equity commitments of $49.8 million are required to be funded on September 30, 1999. See "Principal Stockholders." On January 7, 1999, Tritel PCS entered into a loan agreement that provides for a senior bank facility with a group of lenders for an aggregate amount of $550 million of senior secured credit facilities. The bank facility provides for (1) a $250 million reducing revolving credit facility maturing on June 30, 2007, (2) a $100 million term credit facility maturing on June 30, 2007, and (3) a $200 million term credit facility maturing on December 31, 2007. Up to $10 million of the facility may be used for letters of credit. At March 31, 1999, Tritel PCS had borrowed $200 million under the bank facility. See "Description of Certain Indebtedness -- Bank Facility." Tritel PCS believes that the proceeds from this offering, together with the financing made available to it by the FCC, the availability under its bank facility and the equity investments it has received or that have been committed, will provide it with sufficient funds to build out its existing network as planned. See "Use of Proceeds." The terms of the bank facility will permit Tritel PCS, subject to certain terms and conditions, including compliance with certain leverage ratios and satisfaction of buildout and subscriber milestones, to draw up to $550 million to finance working capital requirements, capital expenditures and other corporate purposes. As of March 31, 1999, Tritel PCS could have borrowed up to a total of approximately $273.7 million pursuant to the terms of the bank facility. As of that date, after giving effect to the offering of the Notes, Tritel PCS could have borrowed approximately $473.9 million under the bank facility. Although management estimates that it will have sufficient funds available from its existing financing sources to build out 80% of its licensed POPs, it is possible that additional funding will be necessary. See "Risk Factors -- We May Require Additional Funding." Tritel has an option to purchase from Digital PCS an additional 2.0 million POPs in Florida and southern Georgia for consideration of approximately $15 million, which would consist of $3.0 million of Series C Preferred Stock and the assumption of $12.0 million of FCC debt. This option, which expires on May 20, 1999, may not be exercised without the prior consent of AT&T Wireless, and Tritel does not expect this consent to be forthcoming. However, if allowed to exercise the option, Tritel would probably do so and would either sell the licenses to a third party or seek to build out the markets itself. To do the latter would require additional capital, probably including both debt and 35 equity, of at least $110 million for additional capital expenditures and to cover operating cash flow losses and working capital requirements. See "Risk Factors--We Would Require Significant Additional Capital if We Were to Acquire and Build Out Additional Licenses." Tritel Finance, Inc. is a wholly owned finance subsidary of Tritel PCS. Tritel Finance owns all of Tritel PCS's infrastructure equipment located outside of Mississippi, and leases that equipment to Tritel Communications, Inc., a wholly owned operating subsidary of Tritel PCS. These intercompany leases are treated as operating leases. PCS infrastructure equipment located within Mississippi is owned by Tritel Communications, Inc. PENDING LICENSE ACQUISITION On March 23, 1999, the FCC commenced a re-auction of the C-, D-, E- and F- Block licenses that had been returned to the FCC under an FCC restructuring order or that had been forfeited for noncompliance with FCC rules or for default under the related FCC financing. Tritel PCS participated in this re-auction along with AT&T Wireless and Triton PCS through ABC Wireless, L.L.C., an entity formed for this purpose. ABC Wireless was eligible to participate in the C-Block re-auction as a "very small business" under applicable FCC rules. ABC Wireless agreed to bid on licenses in markets designated by each of Tritel PCS, AT&T Wireless and Triton PCS, and each of them agreed to purchase any licenses obtained by ABC Wireless in the markets designated by them. Before the re-auction, Tritel PCS loaned $7.5 million to ABC Wireless to fund Tritel PCS's participation in the re-auction. In the re-auction, ABC Wireless was successful in bidding for an additional 15 to 30 MHz of spectrum covering a total of 5.7 million POPs, all of which are already covered by Tritel PCS's existing licenses. Nashville and Chattanooga are the largest cities covered by the additional licenses. The total bid price for these additional licenses was $7.8 million. Tritel PCS will apply its $7.5 million loan to ABC Wireless and pay cash for the balance, to pay for these licenses. As a result of the re-auction, Tritel PCS will hold PCS licenses for spectrum in excess of 45 MHz in several small cities in its markets. FCC rules limit PCS providers to a total of 45 MHz of spectrum in any given market. In order to hold a license for more than 45 MHz, Tritel PCS would have to obtain the consent of the FCC. Tritel PCS believes that it will be able to obtain the necessary consents, although it is possible that the FCC will not consent and the licenses for that spectrum will not transfer to Tritel PCS. During July 1998, Tritel PCS took advantage of a reconsideration order by the FCC allowing companies holding C-Block PCS licenses several options to restructure their license holdings and associated obligations. Tritel PCS 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, Tritel PCS 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 FCC by $33.0 million. As a result of the disaggregation election, Tritel PCS recognized an extraordinary loss of approximately $2.4 million. YEAR 2000 Many currently installed computer systems and software applications are encoded to accept only two digit entries in the year entry of the date code field. Beginning in the year 2000, these codes will need to accept four digit year entries to distinguish 21st century dates from 20th century dates. Tritel PCS has implemented a Year 2000 program to ensure that its computer systems and applications will function properly after 1999. Tritel PCS believes that it has allocated adequate resources for this purpose and expects to successfully complete its Year 2000 compliance program on a timely basis, although there can be no certainty that this will be the case. Tritel PCS does not expect to incur material expenses or meaningful delays in completing its Year 2000 compliance program. Tritel PCS has sought to acquire and implement computer systems and software that already have the ability to process Year 2000 data. Therefore, Tritel PCS does not expect a need to convert any 36 existing systems or software for Year 2000 compliance. Ericsson has represented that the software within its PCS equipment will be able to process calendar dates falling on or after January 1, 2000. However, Tritel PCS cannot be certain that the Year 2000 software of this equipment will be compatible with the other software it uses. The ability of Ericsson, or any other third parties with whom Tritel PCS transacts business, to adequately address its Year 2000 issues is outside of Tritel PCS's control. It is possible that Tritel PCS's failure, or a third party's failure, to adequately address Year 2000 issues will adversely affect Tritel PCS's business and operating results. Because Tritel PCS has sought to acquire systems and software that are Year 2000 compliant, it does not have a contingency plan. Management will continue to monitor the risk associated with Year 2000 processing, as well as its vendors' Year 2000 compliance and will develop a contingency plan if the circumstances warrant such a plan. See "Risk Factors -- Year 2000 Issues Could Cause Interruption or Failure of Our Computer Systems." QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Tritel PCS is not exposed to fluctuations in currency exchange rates since its operations are entirely within the United States. Tritel PCS is exposed to the impact of interest rate changes on its short-term cash investments, consisting of U.S. Treasury obligations and certain other investments in respect of institutions with the highest credit ratings, all of which have maturities of three months or less. These short-term investments carry a degree of interest rate risk. Tritel PCS believes that the impact of a 10% increase or decline in interest rates would not be material to its investment income. Tritel PCS will use interest rate swaps to hedge the effects of fluctuations in interest rates on its bank facility. These transactions will meet the requirements of hedge accounting, including designation and correlation. These interest rate swaps will be managed in accordance with Tritel PCS's policies and procedures. Tritel PCS will not enter into these transactions for trading purposes. The resulting gains or losses, measured by quoted market prices, will be accounted for as part of the transactions being hedged, except that losses not expected to be recovered upon the completion of hedged transactions will be expensed. Gains or losses associated with interest rate swaps will be computed as the difference between the interest expense per the amount hedged using the fixed rate compared to a floating rate over the term of the swap agreement. Tritel PCS intends to enter into an interest rate swap agreement to fix the interest rate of at least 50% of the outstanding balance of its bank facility within 90 days after March 31, 1999. 37 BUSINESS OVERVIEW Tritel PCS is a member of the AT&T Wireless Network and intends to become a leading provider of PCS services in the south-central United States. In May 1998, Tritel entered into a joint venture with AT&T Wireless PCS, Inc., a wholly owned subsidiary of AT&T Corp., to become the exclusive provider of AT&T Wireless mobile PCS services in virtually all of a contiguous area covering approximately 14.0 million POPs in Alabama, Georgia, Kentucky, Mississippi and Tennessee. In each of its markets, Tritel PCS will use the AT&T brand name with equal emphasis to the SunCom brand. This joint venture is part of AT&T's strategy to expand its PCS coverage in the United States. As a result of the joint venture, Tritel PCS will be able to enter its markets in a co-branding arrangement using the AT&T brand and logo, which Tritel PCS believes to be among the most respected and recognized in the world. Tritel PCS expects to offer its customers immediate, virtually nationwide roaming over the AT&T Wireless Network. Tritel PCS also expects to benefit from the nationwide advertising and promotional activities of AT&T Wireless and AT&T, and from AT&T Wireless's vendor discounts on various products and services, including handsets and infrastructure equipment. Supplementally, Tritel has entered into an agreement with two other AT&T affiliates, Triton PCS and TeleCorp PCS, to operate with those affiliates under a common regional brand name, SunCom, throughout an area covering approximately 43 million POPs primarily in the south-central and southeastern United States. Tritel PCS believes this arrangement will allow the SunCom participants to establish a strong regional brand name within their markets and to achieve advertising and marketing cost savings. AT&T Wireless operates the largest digital wireless network in North America. Its network consists of AT&T Wireless's existing digital and analog systems, PCS systems being constructed by four joint venture partners, including Tritel PCS, and systems currently operated by third parties with which AT&T Wireless has roaming agreements. In the aggregate, these systems covered 96% of the total POPs throughout the United States as of December 31, 1998. In forming this joint venture, AT&T Wireless contributed licenses covering approximately 9.1 million of our 14.0 million total licensed POPs. In exchange for its licenses and the other benefits to us from the joint venture, AT&T Wireless received 17.09% of our fully diluted common equity interest, with a stated vaue of $137.1 million. Airwave Communications and Digital PCS contributed PCS licenses covering 6.6 million licensed POPs. These contributed POPs include 1.7 million POPs that overlap with those contributed by AT&T Wireless, resulting in our holding PCS licenses covering a total of 14.0 million POPs. In exchange for their licenses and $14.2 million of cash, Airwave Communications and Digital PCS received a total of $32.4 million of our equity. In addition, we have raised $149.2 million of cash equity from institutional equity investors, $99.4 million of which has already been funded and $49.8 million of which is committed to be funded, under the investors' irrevocable and unconditional commitments on September 30, 1999. Central Alabama Partnership contributed to us 475,000 overlapping POPs in Montgomery, Alabama in exchange for $2.6 million of equity. Tritel PCS's licenses authorize it to provide PCS services in the following major population and business centers, including:
MARKET 1998 POPS - ------------------ ---------- Nashville, TN 1,675,700 Louisville, KY 1,448,400 Birmingham, AL 1,297,800 Knoxville, TN 1,074,000 Lexington, KY 893,400 Jackson, MS 657,800 Mobile, AL 653,900
38 Tritel PCS believes that a substantial majority of its licensed POPs are located in areas that have demographic characteristics well-suited to the provision of wireless telecommunications services, with favorable commuting patterns and rapidly growing business environments. THE TRITEL PCS NETWORK The Tritel PCS network will offer advanced PCS services on a local and regional basis and in many other markets throughout the United States. Tritel PCS intends to offer contiguous market coverage using its own network facilities, the regional markets covered by the SunCom brand alliance and the AT&T Wireless Network, all of which use a common technology platform, IS-136 Time Division Multiple Access, or TDMA. Tritel PCS believes that IS-136 TDMA will provide its subscribers with excellent voice quality, fewer dropped calls than existing analog systems and virtually nationwide roaming over the AT&T Wireless Network. To maximize the commercial utility of IS-136 TDMA, Tritel PCS will offer its customers tri-mode handsets, which can automatically pass or "hand-off" calls between IS-136 TDMA systems and analog or TDMA-based digital cellular systems throughout the nation. Several major wireless telecommunications service providers in North America have selected IS-136 TDMA for their digital PCS networks, including AT&T Wireless, SBC Communications, BellSouth, United States Cellular Corporation and Canada's Rogers Cantel Mobile Communications Inc. BellSouth currently provides IS-136 TDMA service within many of Tritel PCS's markets. TRITEL PCS'S OWN NETWORK FACILITIES. Tritel PCS intends to provide coverage to approximately 80% of its licensed POPs by the end of 2001. Tritel PCS has begun its initial network buildout, including initial radiofrequency design and cell site acquisition, in the concentrated population centers within its markets. Tritel PCS expects to commence PCS service in Jackson, Mississippi during the third quarter of 1999, Louisville and Lexington, Kentucky, Nashville and Knoxville, Tennessee during the fourth quarter of 1999, and in Birmingham and Mobile, Alabama during the second quarter of 2000. Tritel PCS is designing its PCS network to offer efficient and extensive coverage within its markets. Tritel PCS's cell site acquisition strategy is to co-locate as many of its cell sites as possible on existing towers and other transmitting or receiving facilities. Tritel PCS believes this strategy will reduce its site acquisition costs and minimize delays due to zoning and other local regulations. Tritel PCS plans to launch service only after comprehensive and reliable coverage can be maintained within a particular market. Tritel PCS expects that there will be areas within its market that it will ultimately build out, but where it will not, at least initially, have coverage. In these areas of its markets, Tritel PCS will have the immediate benefit of AT&T Wireless's existing roaming arrangements with other carriers to provide service. If it can obtain better rates than those offered by AT&T Wireless, Tritel PCS may seek direct roaming agreements with some local carriers providing compatible service. These "intra-market roaming agreements" will permit Tritel PCS's customers to use their handsets in these areas with less likelihood of dropped calls. These agreements will also allow Tritel PCS to launch its service at a lower level of capital expenditures than would otherwise be required, without adversely impacting the service it will be able to offer its customers. THE SUNCOM BRAND ALLIANCE. Tritel has entered into an agreement with two other AT&T Wireless affiliates, Triton PCS and TeleCorp PCS, to create a common regional market brand, SunCom, and to provide for sharing certain development, research, advertising and support costs. This regional brand alliance holds PCS licenses that cover approximately 43 million POPs in primarily the south-central and southeastern United States from New Orleans, Louisiana to Richmond, Virginia. To ensure that all SunCom customers will receive the same high quality service throughout the SunCom region, all three SunCom affiliates: o have agreed to build out their respective networks, adhering to the same AT&T Wireless quality standards, 39 o have agreed to use tri-mode handsets with IS-136 TDMA technology, and o are expected to enter into roaming agreements. THE AT&T WIRELESS NETWORK. AT&T Wireless is one of the largest providers of wireless telecommunications services, with over 9.7 million total wireless subscribers worldwide, including 5.1 million digital wireless subscribers worldwide, as of December 31, 1998. AT&T Wireless also has the largest digital wireless network in North America. Through the AT&T Wireless Network, AT&T Wireless and Tritel PCS can provide virtually nationwide coverage for wireless services. Tritel PCS will be the exclusive provider of mobile PCS services for the AT&T Wireless Network within Tritel PCS's markets, except for 790,000 mostly rural POPs in Kentucky. AT&T Wireless has granted Tritel PCS a license to co-brand with the AT&T logo and other service marks in Tritel PCS's business. Tritel PCS also has established roaming, purchasing, engineering and other arrangements with AT&T Wireless. These arrangements will provide Tritel PCS customers immediate, virtually nationwide roaming on the AT&T Wireless Network. JOINT VENTURE AND STRATEGIC ALLIANCE WITH AT&T Tritel PCS's joint venture with AT&T Wireless is part of AT&T's strategy to expand its IS-136 TDMA digital wireless coverage in the United States. AT&T's four affiliate agreements, including its joint venture with Tritel PCS, will provide features and functionality within its national coverage area. The relationship with AT&T Wireless is valuable to Tritel PCS because, among other reasons, the relationship enables Tritel PCS to market its PCS service using what Tritel PCS believes to be one of the world's most respected and recognizable brands, AT&T. Tritel PCS also expects to take advantage of the virtually nationwide coverage of the AT&T Wireless Network and the extensive national advertising of AT&T Wireless and AT&T. As part of the Tritel PCS-AT&T Wireless alliance, AT&T Wireless contributed licenses for approximately 9.1 million of Tritel PCS's 14.0 million total licensed POPs. In exchange for the AT&T contributed POPs and the other benefits provided for in the agreements governing the joint venture, AT&T Wireless received a 17.09% fully diluted common equity interest in Tritel PCS, (preferred stock with a stated value of $137.1 million). AT&T Wireless contributed licenses provide for the right to use 20 MHz of authorized frequencies in the geographic areas covered by those licenses. In order to create these licenses, AT&T Wireless partitioned and disaggregated the original 30 MHz A- and B-Block PCS licenses it received in these markets. AT&T Wireless has retained 10 MHz of spectrum in Tritel PCS's coverage area and has the right to offer any non-competing services on that spectrum. Tritel PCS believes that its spectrum is sufficient for its coverage areas. BUSINESS STRATEGY Tritel PCS plans to employ the following strategies to develop its PCS business: LEVERAGE THE BENEFITS OF ITS AT&T WIRELESS AFFILIATION. Tritel PCS will exploit the following benefits of its AT&T affiliation to distinguish itself from other PCS providers in its markets, to increase its revenues and to reduce its operating costs: Use of AT&T Brand and Logo. Tritel PCS believes the AT&T brand is among the most recognized brands in the United States. Management believes that branding has become increasingly important as the consumer base for wireless services has expanded. The AT&T brand affiliation will be the highest point of emphasis in marketing Tritel PCS's PCS services. Tritel PCS expects that, wherever possible, advertisements, handsets, product packaging, billing statements and in-store retail displays will prominently display the AT&T logo in equal emphasis with the SunCom logo. Tritel PCS may not use the AT&T logo on the exterior of its retail stores. Exclusive Provider of PCS to AT&T Wireless Customers. Tritel PCS will be the exclusive provider of mobile PCS services for the AT&T Wireless Network within Tritel PCS's markets, 40 except for 790,000 mostly rural POPs in Kentucky. Tritel PCS will provide PCS services to customers located in Tritel PCS's markets responding to AT&T's national advertising and to AT&T's national account customers located in Tritel PCS's markets. Additionally, Tritel PCS will supply roaming services in its markets to customers of AT&T Wireless and other AT&T joint venture partners. Nationwide Roaming. Tritel PCS expects to offer its customers immediate, virtually nationwide roaming on the AT&T Wireless Network. Tritel PCS believes many of the roaming arrangements negotiated by AT&T Wireless are at rates more favorable than Tritel PCS would be able to negotiate on its own. AT&T Sales Efforts. AT&T currently employs a sales force for long distance and other AT&T services of approximately 275 representatives within Tritel PCS's markets. Tritel PCS expects to piggyback on AT&T's sales efforts to provide PCS services to those AT&T customers in its markets seeking wireless services as part of their AT&T service package. Access to AT&T Wireless Products and Services. As an affiliate of AT&T Wireless, Tritel PCS expects to benefit from AT&T Wireless-related discounts on purchases of various products and services including handsets and infrastructure equipment. Although there is currently no written agreement, Tritel PCS has access to engineering, technical support and other AT&T Wireless support services and expects to benefit from AT&T Wireless's research into new TDMA features. DISTRIBUTE THROUGH COMPANY STORES. Tritel PCS's distribution strategy will focus principally on direct distribution through company-owned retail stores. Tritel PCS expects that the company stores will help foster higher quality customer contact, resulting in higher sales and penetration, lower customer acquisition costs and lower customer churn than can typically be achieved through indirect distribution channels. Tritel PCS currently plans to open 54 company stores to service the markets being launched in 1999 and 2000. Tritel PCS also plans to employ a direct sales force to target small to medium-sized businesses. In addition, management believes that the ability to perform over-the-air activation of service will lead to expanded opportunities to gain subscribers through alternative channels for sales and marketing. ENHANCE BRAND AWARENESS THROUGH THE SUNCOM BRAND ALLIANCE. Tritel PCS intends to promote the SunCom brand through joint marketing efforts with its SunCom affiliates. The overlapping media markets of the affiliates should allow the affiliates to advertise effectively on a regional basis. The alliance intends to produce advertising materials jointly and to seek sponsorship of sporting and other events to create awareness of the SunCom brand. The alliance will also be more likely to achieve minimum volume requirements that could not have been met individually in purchasing customized products bearing the SunCom logo. In addition, Tritel PCS will engage in its own independent marketing efforts under the SunCom brand, including stand-alone media campaigns. Thus, Tritel PCS will have the flexibility to be a part of a regional brand alliance and also market more heavily in its home markets according to its own schedule for launching its PCS services. CAPITALIZE ON MANAGEMENT EXPERTISE AND LOCAL MARKET KNOWLEDGE AND PRESENCE. Tritel PCS's and its subsidiaries' management have extensive experience in successfully building out and managing wireless communications systems. Several executives of Tritel PCS and its subsidiaries have served as senior managers at major wireless telecommunications providers, including United States Cellular Corporation, Nextel Communications, Western Wireless Corporation and MobileComm. A number of key members of Tritel PCS's and its subsidiaries' management teams also have experience managing and operating competitive wireless markets within Tritel PCS's footprint. Tritel PCS intends to combine its local market knowledge with the AT&T and SunCom brands to create strong ties with subscribers and their communities. Additionally, Tritel PCS's and its subsidiaries' decentralized management structure with regional managers, company stores and local direct sales 41 force should enable Tritel PCS to respond effectively to individual market changes. Tritel PCS believes that its local market presence, local promotional efforts and customer service focus, combined with strong consumer recognition of the AT&T brand, will enable it to gain market share and achieve a favorable competitive position. EMPHASIZE ADVANTAGES OF PCS TECHNOLOGY. Tritel PCS will seek to differentiate its PCS capability from that of its analog cellular competitors by focusing on the services, features and benefits that digital technology offers, including superior voice quality, longer battery life, more secure communications, short text and numeric messages, voice mail, message waiting indicator, caller ID and single number service. The IS-136 TDMA technology, unlike the CDMA and GSM digital technologies, allows for the simultaneous use of digital control channel and analog voice channels. This feature may offer analog operators an economic means with which to provide digital data features without the need to upgrade their entire analog systems. Tritel PCS expects that its customers will roam on a number of analog cellular systems having digital control channels that will provide digital data features and which are operated by roaming partners of Tritel PCS and AT&T Wireless. SERVICES AND FEATURES Tritel PCS will seek to provide reliable, high quality service at affordable prices. The following features and services are currently available to IS-136 TDMA users, and Tritel PCS expects to offer them to its customers: SUPERIOR VOICE QUALITY AND TECHNOLOGY. Tritel PCS plans to use enhanced IS-136 TDMA equipment, which is capable of providing superior voice quality. EXTENDED BATTERY LIFE. Tritel PCS's handsets will have a battery life that is significantly longer than the battery life on existing analog cellular systems, because of the supporting digital control channel. The IS-136 TDMA technology standard allows a handset to draw significantly less battery power while accessing a digital control channel by entering into sleep mode, which alerts the handset of an incoming call and thereby extends the length of time a battery can be used without having to be recharged. Analog cellular systems, on the other hand, must stay in constant contact with a cell site in order to receive an incoming call. MORE SECURE CALLS. Through the use of an authentication key, the digital technology eliminates the need for personal identification numbers ("PINs"). Digital technology also offers enhanced privacy of calls than is available on analog systems. Because each voice signal is converted into a stream of data bits, which are encoded and then separated, calls are more difficult to decode. SHORT MESSAGING AND SOPHISTICATED CALL MANAGEMENT. These services include a set of advanced features for receiving short text and numeric messages and managing calls such as short text messages, voice mail, message waiting indicator, caller ID, call rejection, call routing and forwarding, three-way calling and call waiting. TRI-MODE HANDSETS. The tri-mode phone handsets that Tritel PCS will offer to its customers can operate in analog mode on the 850 MHz bandwidth, in digital mode on the 1900 MHz bandwidth and also with a digital control channel and analog voice channel on the 850 MHz bandwidth. These handsets, which are designed for use on an IS-136 TDMA system such as Tritel PCS's, enable a user to initiate a call on a digital cellular or PCS network and then be handed off, without interruption, to an analog network if the user roams to a location where digital coverage is unavailable. A user may also initiate a call on an analog network and have that call handed off to a TDMA-based digital cellular network. Tritel PCS currently plans to offer tri-mode handsets manufactured by Nokia and Ericsson, and expects to offer additional handsets of other manufacturers as they become available. The Nokia and Ericsson models are capable of providing advanced digital PCS services and features that meet the operability and feature set requirements with which Tritel PCS is required to comply under the AT&T Wireless joint venture. Tritel PCS expects that all handsets and their packaging will prominently display the AT&T and SunCom logos with equal emphasis. 42 SINGLE NUMBER SERVICE. This service can transfer all incoming calls between primary landline and wireless locations automatically. When a customer's handset is activated, Tritel PCS's network can route all incoming calls to the customer's wireless number. When the handset is deactivated, all calls can be directed to the customer's primary landline location. This service will make it possible for customers to receive all of their calls and text messages through a single telephone number, enhancing the "anytime, anywhere" functionality of Tritel PCS's wireless communications network. ADVANCED DATA FEATURES. Tritel PCS expects to launch its PCS service offering voice and short messaging services only. However, the IS-136 TDMA technology and tri-mode handsets are capable of handling more complex data exchange features, which include electronic mail, internet access, and access to stock quotes, sports scores and weather reports. Tritel PCS will continue to explore providing these services based on consumer demand. CUSTOMIZED BILLING. Tritel PCS plans to offer special billing services that cater to the needs of consumers, including simplified monthly billing statements and flexible billing cycles. Tritel PCS believes that simple, accurate bills are necessary to support the customer's perception of quality service. In addition, Tritel PCS intends to offer customized billing options, including debit billing, enabling customers to charge calls against pre-paid accounts, threshold billing, which will limit customers to a pre-selected level of charges per month and neighborhood/zonal billing, which will provide service at reduced charges within certain home areas. Tritel PCS will also be able to offer "Wireless Office Services" to corporate customers, which can include zonal billing for all usage and four-digit dialing within the wireless office. The wireless communications industry continues to undergo substantial technological innovation. As a result, Tritel PCS expects new services and features to become commercially available for IS-136 TDMA systems in the future. Tritel PCS plans to make those services and features available to its customers. MARKETING AND DISTRIBUTION Tritel PCS's overall marketing strategy will be to emphasize the AT&T brand name, the benefits of digital technology, the breadth of Tritel PCS's coverage and its focus on customer service, all of which will be provided at competitive prices. Tritel PCS will employ a sales and marketing approach with highly definable and measurable goals, which will focus on the use of company stores as a method of building a customer base. COMPANY STORES. Tritel PCS's company-owned and operated retail stores will be modeled after AT&T Wireless's retail stores, with the exception that Tritel PCS may not use the AT&T logo on the outside of its store fronts. Sales representatives in company stores will receive in-depth training on the advantages of PCS and the AT&T Wireless and SunCom alliances. Management also believes that in-store customer education on PCS services and features will increase customer satisfaction and usage. The company stores are intended to be customer destinations in response to advertising and promotions, rather than impulse stops. Company stores are being designed to facilitate demonstration of the benefits of Tritel PCS's PCS services and features. The decentralized nature of the stores will enable sales representatives to emphasize flexible rate plans and the different advantages to customers on a market-by-market basis. In addition, emphasis will be placed on the virtually nationwide roaming and service features attributable to the IS-136 TDMA technology and the tri-mode handsets. Tritel PCS intends to locate company stores on heavy traffic arteries, in high visibility areas, and near high profile anchor retailers. Nearly all of the company stores will be located in retail shopping centers and the stores are expected to range from 1,200 to 2,000 square feet. Tritel PCS plans to open 28 company stores in 1999 and an additional 26 stores in 2000 to service the markets being launched by the end of 2000. 43 DIRECT SALES FORCE. Tritel PCS will also use a direct sales force. Tritel PCS's sales agents will be assigned to specific regions within its markets using company stores as bases of operations. Sales agents will receive training on the advantages of PCS and will be provided with product and service research, proposal writing and competitor analysis information. The Tritel PCS sales force will seek to coordinate with AT&T to offer bundled telephony and related services. Tritel PCS plans to have an initial direct sales force of approximately 60 sales people to cover the markets expected to be launched in 1999. INDIRECT DISTRIBUTION CHANNELS. To augment its direct distribution efforts, Tritel PCS will seek to use mass retailers in its markets. Management believes that the AT&T brand recognition along with over-the-air activation capability will facilitate distribution through mass retailers. In the future, Tritel PCS may use other distribution techniques as well, including simplified retail sales processes and new, lower cost channels such as inbound telesales through a toll-free number, affinity marketing programs and Internet sales. Tritel PCS plans to participate in the existing SunCom Internet website, which is located on the Internet at http://www.suncom.com. Management believes that there is a high correlation between Internet users and wireless telecommunications users. The SunCom website is expected to provide for direct sales to customers, as well as product and service information and customer service. Customers on the SunCom website will be directed to the appropriate SunCom affiliate based on the geographic location of the customer. Internet-based services and features, such as the ability to e-mail a message to a SunCom subscriber's handset, will also be explored. Over-the-air activation will permit direct shipment to customers and remote activation. Additionally, customers located in Tritel PCS's markets seeking to subscribe for PCS services on the AT&T Wireless Internet website will be referred through a toll-free number to Tritel PCS for their PCS services. FOCUS ON LOCAL ADVERTISING AND PROMOTION. Tritel PCS plans to advertise and promote its PCS services and products through various local media and consumer education programs, including local television, radio, print, billboard and direct mail. To reach a broad base of potential subscribers, Tritel PCS will combine mass marketing efforts and direct marketing approaches to build and promote the AT&T Wireless and SunCom brands locally, generate sales and retain customers. Further, as markets are launched, Tritel PCS will offer various promotional programs designed to entice new subscribers, including special limited term and introductory rate and feature programs, product demonstrations and special events. In addition to its local marketing strategies, Tritel PCS expects that the national promotional efforts by AT&T and AT&T Wireless will increase interest and sales through Tritel PCS's distribution channels. Tritel PCS believes AT&T Wireless's national "customer pull" strategies for promotion will encourage potential customers to visit Tritel PCS's company stores and local retailers to seek out the branded service. PROMOTIONS TO TARGET SPECIFIC SUBSCRIBER TYPES. Tritel PCS plans to create distinct marketing programs for different customer segments, including high volume wireless users, home business operators, corporate accounts and casual wireless users. For each segment, Tritel PCS expects to create a specific marketing program including a service package, pricing plan and promotional strategy. Management believes that by tailoring its service packages and marketing efforts to specific market segments, customers will perceive a higher value in relation to the cost of service, will be more inclined to use Tritel PCS's service, and will have increased customer loyalty and higher levels of customer satisfaction. Tritel PCS expects to employ sophisticated marketing and database systems to enable personalization of services for individual customers and implementation of a proactive customer retention program. The deployment of these systems should enable Tritel PCS to better identify attractive niche opportunities and provide feedback on the effectiveness of its marketing campaigns. PRICING. Management believes that a service- and feature-based strategy, as opposed to a rate-based strategy, will be more successful in acquiring and retaining subscribers. As part of a decentralized marketing strategy, Tritel PCS will offer its retail subscribers and national and corporate 44 account subscribers volume and service based rate plans that are responsive to market trends. Tritel PCS's billing system has the technology and capacity to enable Tritel PCS to offer numerous pricing plans to its customers. Tritel PCS will also offer its customers prepaid debit pricing and neighborhood/zonal pricing options. Tritel PCS is not required to use any published AT&T Wireless pricing plan in its markets, although it may choose to do so. Tritel PCS will evaluate existing pricing plans of other service providers, including AT&T's Digital OneRate plan, and will consider offering such plans to its customers. Tritel PCS may also offer promotions such as free incoming calls for the first minute in order to encourage customers to give out their phone numbers. CUSTOMER SERVICE OPERATIONS. Tritel PCS's customer service strategy is predicated upon building strong relationships with customers, beginning with the subscriber's handset purchase. Subscribers who purchase handsets from company stores will be able to activate service immediately through an in-store representative of Tritel PCS. Subscribers purchasing their handsets from independent retailers will be able to activate service by using the handset to call a customer service representative of Tritel PCS. Either way, the subscriber will be 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. Tritel PCS also plans to offer special billing services that cater to the needs of consumers, including simplified monthly billing statements and flexible billing cycles. Tritel PCS expects future enhancements to include on-line billing and account information. AT&T Wireless and the SunCom affiliates, including Tritel PCS, will exchange information and share best practices in order to provide customers with better customer care. TRITEL PCS'S MARKETS Tritel PCS's markets are situated principally in Alabama, Georgia, Kentucky, Mississippi and Tennessee. The major population centers in Tritel PCS's markets include the cities of Nashville, Louisville, Birmingham, Knoxville, Lexington, Jackson and Mobile. Tritel PCS's licenses will complement the PCS and cellular coverage areas of AT&T Wireless. Tritel PCS anticipates that its footprint of licensed POPs will contribute to reduced operating expenses due to its contiguous nature. Tritel PCS believes that a substantial majority of its licensed POPs are located in areas that have demographic characteristics that are well-suited to the provision of wireless telecommunications services with favorable commuting patterns and rapidly growing business environments. Four state capitals are included within Tritel PCS's markets. There are over 2,500 total miles of interstate highway within Tritel PCS's markets. Tritel PCS believes that the significant network of interstate highways within its markets will lead to increased mobile communications usage. 45 The following table sets forth certain key demographic information for Tritel PCS's markets: SELECT DEMOGRAPHIC STATISTICS
GROWTH IN POPS MARKET 1998 POPS 1990-1998 (%) - -------------------------------------- ------------- ---------------- Nashville, TN 1,675,700 17.24% Louisville, KY 1,448,400 7.05 Birmingham, AL 1,297,800 8.12 Knoxville, TN 1,074,000 13.28 Lexington, KY 893,400 9.47 Jackson, MS 657,800 6.87 Mobile, AL 653,900 10.01 Chattanooga, TN 548,400 7.34 Huntsville, AL 496,400 12.87 Montgomery, AL 475,300 7.85 Biloxi, MS 382,000 12.42 Tupelo-Corinth, MS 312,500 7.13 Clarkesville, TN/Hopkinsville, KY 260,800 18.28 Tuscaloosa, AL 253,100 6.39 Bowling Green--Glasgow, KY 244,200 9.65 Dothan--Enterprise, AL 217,500 3.47 Greenville--Greenwood, MS 210,500 (1.59) Meridian, MS 205,900 2.95 Florence, AL 183,500 6.01 Gadsden, AL 183,500 5.46 Hattiesburg, MS 181,000 11.80 Columbus-Starkville, MS 171,000 2.76 Owensboro, KY 164,700 4.84 Anniston, AL 164,000 1.30 Decatur, AL 142,800 8.51 Corbin, KY 142,200 10.92 Opelika--Auburn, AL 136,900 10.40 Cookeville, TN 132,400 12.59 Somerset, KY 123,900 11.12 Rome, GA 122,300 6.26 Dalton, GA 116,300 17.95 McComb--Brookhaven, MS 110,100 2.61 Atlanta counties (Carroll, Haralson) 108,000 NA Cleveland, TN 96,100 9.95 Laurel, MS 81,300 2.78 Selma, AL 74,100 (0.54) Natchez, MS 71,800 (1.91) La Grange, GA 70,100 9.19 Vicksburg, MS 61,700 4.05 Madisonville, KY 46,300 0.43 Montgomery, MS (Memphis MTA) 12,300 0.59 --------- ----- Total 14,003,900 10.19% ========== ===== National Total POPs and Average Growth in POPs for all BTAs 276,675,000 9.55% =========== =====
- ---------- Source: 1999 Cellular/PCS POP Book, Kagan 46 The major metropolitan centers within Tritel PCS's markets are Louisville, Nashville, Birmingham, Knoxville, Lexington, Jackson and Mobile. LOUISVILLE. Greater Louisville, which is Tritel PCS's largest market with approximately 2.3 million people, including Lexington, encompasses several counties in Kentucky and southern Indiana. Greater Louisville is also at the cross roads of three major highways, I-64, I-65 and I-71, as well as four major railways. The Greater Louisville area is a leading manufacturing center, particularly for automobiles and durable goods with an increasing emphasis on services, particularly transportation and health care. Major employers include United Parcel Service, General Electric, Ford Motor, Columbia/HCA Healthcare and Humana Inc. NASHVILLE. Nashville, Tennessee's capital, has a population of approximately 1.7 million people and is a vital transportation, business, educational and tourist center for the U.S. The population of the ten-county area comprising Nashville grew by 27% between 1980 and 1996 to 1,250,300, or 23% of Tennessee's total population. Additionally, Nashville International Airport is served by a number of the major U.S. carriers. Nashville is a major rail transportation hub connecting 19 states and is a convergence point for three major interstate highways, I-40, I-65 and I-24. Major employers include Vanderbilt University and Medical Center, Columbia/HCA Healthcare, Saturn Corporation, Nissan Motor Corp., Ford Motor Company, BellSouth, Bankers Trust, SunTrust, Kroger and Ingram Industries. BIRMINGHAM. Birmingham has a population of approximately 1.3 million people. The four-county Birmingham area, which includes six colleges and universities, anchors Alabama's business and cultural life with 21% of the state's population, 23% of the total business establishments, 24% of the retail sales and 31% of the payroll dollars. Three major highways pass through Birmingham, I-20, I-59 and I-65. Major employers include University of Alabama at Birmingham, Baptist Health System, Bruno's, SouthTrust Bank, BellSouth, Wal-Mart, Alabama Power Company, Blue Cross-Blue Shield of Alabama and American Cast Iron Pipe. KNOXVILLE. Knoxville is a growing city with a population of approximately 1.1 million people and a solid economic foundation. Job growth since 1997 has been 3.3%, significantly higher than the national average of 1.9%. Knoxville is centrally located in the eastern United States and is served by three major interstate highways, I-40, I-75 and I-81. Major manufacturing companies in the area include Clayton Homes, DeRoyal Industries, Robertshaw Controls and Matsushita Electronic Corp. JACKSON. Jackson has a population of approximately 658,000 people and is home to six colleges and universities. Two major interstate highways, I-20 and I-55, pass through Jackson. Key industries include automobile parts manufacturing, aircraft parts manufacturing, telecommunications, healthcare delivery, government, transportation and poultry processing. MOBILE. Mobile has a population of approximately 654,000 people and is a regional center for medical care, research and education. Its port is one of the nation's leading facilities for coal and forest product exports. Two major highways, I-10 and I-65, pass through Mobile. Major employers include BellSouth, Coca-Cola Bottling Company, International Paper Company, DuPont Mobile Manufacturing and the University of South Alabama. 47 NETWORK BUILDOUT Tritel PCS has begun its initial buildout, including the RF design and cell site acquisition, in the concentrated population centers within its markets. Tritel PCS anticipates commencing PCS service during 1999 and 2000 in the following markets:
EXPECTED MARKET LAUNCH DATE 1998 POPS - ---------------------------------- ------------------------ ------------ Jackson and Vickburg, MS Third Quarter of 1999 719,500 Louisville and Lexington, KY Fourth Quarter of 1999 2,341,800 Nashville and Clarksville, TN / Fourth Quarter of 1999 1,936,500 Hopkinsville, KY Knoxville, TN Fourth Quarter of 1999 1,074,000 Chattanooga and Cleveland, TN / Fourth Quarter of 1999 760,800 Dalton, GA Huntsville and Decatur, AL Fourth Quarter of 1999 639,200 Montgomery, AL First Quarter of 2000 475,300 Birmingham, AL Second Quarter of 2000 1,297,800 Mobile, AL Second Quarter of 2000 653,900 Tupelo, MS Second Half of 2000 312,500 Tuscaloosa, AL Second Half of 2000 253,100 Meridian, MS Second Half of 2000 205,900 Hattiesburg, MS Second Half of 2000 181,000 Anniston, AL Second Half of 2000 164,000
Tritel PCS intends to build out its PCS network to provide coverage to 80% of the licensed POPs by the end of 2001. Tritel PCS is focusing initially on the concentrated population and business centers of the major metropolitan areas and the adjoining interstate highways. Thereafter, Tritel PCS intends to build out cities with fewer than 375,000 POPs and will continue to build out interstate and state highways. Tritel PCS intends to launch service only after a significant portion of the planned buildout for a given major city has been completed. In addition, prior to launching service, Tritel PCS intends to perform extensive field testing to ensure comprehensive and reliable coverage within a particular market. Bechtel Corporation is providing the overall project and construction management of the design, site acquisition, installation and testing of its PCS transmission system. Bechtel is a respected world leader in providing engineering project and construction management services. The contract with Bechtel is based on specified hourly fees. Initial RF Design. Two RF engineering firms, Galaxy Personal Communications Services, Inc., a wholly owned subsidiary of World Access, Inc. ("Galaxy"), for the Mississippi, Alabama, Georgia and eastern Tennessee sites, and Wireless Facilities, Inc. ("WFI"), for the Nashville, Tennessee and the Louisville and Lexington, Kentucky sites, are performing the initial RF design for the network. Based upon their engineering designs, Galaxy and WFI determine the required number of cell sites to operate the network and identify the general geographic areas in which they propose to locate each of the required cell sites. Tritel PCS's network is being 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. The initial RF design has been completed for all markets that Tritel PCS expects to launch in 1999 and a majority has been completed for the markets that Tritel PCS expects to launch in 2000. Site Identification, Acquisition and Construction. Tritel PCS has arrangements with two firms, Spectrasite Communications, Inc. and GeoTrans Wireless, to identify and acquire the sites on which it will locate the towers, antennae and other equipment necessary for the operation of its PCS system. 48 After Galaxy and WFI identify the general geographic area in which to locate cell sites, Spectrasite and GeoTrans survey potential sites to identify two potential tower sites within each geographic location. Galaxy and WFI 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 Spectrasite and GeoTrans are based upon specified hourly fees. Tritel PCS 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) construction of a tower by Tritel PCS itself. First preference in site acquisition is being given to sites on which Tritel PCS 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 Tritel PCS associated with the building of a tower and any zoning difficulties have likely been resolved. Second preference is being given to sites where Tritel PCS 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 Tritel PCS. The principal advantage of this method is that it reduces Tritel PCS's capital expenditures, although operating expenses will reflect the required lease payments. Third preference is being given to those "greenfield sites" that Tritel PCS would acquire and then arrange for the construction of a tower that it would own. Tritel PCS expects that it will need approximately 1,275 cell sites in order to achieve 80% coverage of the licensed POPs. Based on its work to date, Tritel PCS expects that approximately 70% will be co-locates on existing sites, 25% will be built-to-suit by tower construction companies and 5% will be constructed by Tritel PCS. Microwave Relocation. Prior to the FCC's auction of PCS licenses in the 1850-1970 MHz frequency bandwidths, these frequencies were used by various fixed microwave operators. The FCC has established procedures for PCS licensees to relocate these existing microwave paths, generally at the PCS licensee's expense. See "-- Government Regulation -- Relocation of Fixed Microwave Licensees." Tritel PCS has engaged WFI to relocate the microwave paths that currently use its bandwidth. Under its arrangement with Tritel PCS, WFI is performing spectrum analysis, identifying which paths require relocation, presenting a cost analysis and time frame for the relocation and, ultimately, performing the relocation of those microwave paths. Tritel PCS expects to relocate approximately 200 spectrum paths, of which approximately 120 paths already have been relocated. Including cost sharing for relocations performed by other PCS licensees and cost sharing reimbursements by other PCS licenses paid to Tritel PCS, Tritel PCS expects to spend a net total of approximately $25 million for microwave relocation. Tritel PCS plans to complete the microwave relocation for all 1999 launch cities by August 1999 and does not expect any delays to its scheduled service launches. Mobile Switching Centers. In order to cover its approximately 14.0 million POPs, Tritel PCS will utilize six switching centers located in six of its major markets Louisville, Nashville, Birmingham, Knoxville, Mobile and Jackson. Except for the Mobile location, the locations for the switching centers have been leased and are currently being constructed or renovated. The Mobile location is expected to be leased and built on a timely basis in conjunction with the scheduled launch for that market. Each switching center will serve several purposes, including, among others, routing calls, managing call handoff, managing access to landlines and providing access to voice mail. Network Operations Center. Tritel PCS will utilize Ericsson's Network Operations Center ("NOC") located in Richardson, Texas during the initial buildout and deployment of Tritel PCS's network in order to launch service earlier and reduce its initial capital expenditures. The NOC'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. Tritel PCS plans to build and operate its own NOC at its switch facilities in Jackson, Mississippi by 2001. Interconnection. Tritel PCS's digital PCS network will connect to the landline telephone system through local exchange carriers ("LECs"). Tritel PCS has entered into an interconnection agreement 49 with BellSouth and plans to enter into interconnection agreements with smaller local exchange carriers within its markets. Additionally, Tritel PCS has entered into a long distance agreement with AT&T providing for preferred rates for long distance services. Network Communications Equipment. Tritel PCS has entered into an exclusive equipment supply agreement with Ericsson under which it will purchase the radio base stations, switches and certain other related PCS transmission equipment, software and services necessary to establish its PCS network. Ericsson has assigned a dedicated project management team to assist Tritel PCS in the installation and testing of the equipment that will comprise Tritel PCS's PCS transmission system. Tritel PCS has agreed that, during the term of the agreement, Ericsson shall be the exclusive provider to Tritel PCS of certain PCS transmission equipment, materials and services within Tritel PCS's markets. Tritel PCS has agreed to purchase at least $300 million of equipment over a five-year period. TDMA Technology Standard. One of the most important decisions for a PCS operator is the selection of the network technology standard. Standards are important in allowing compatability among different wireless systems, permitting a customer to roam throughout various operators' systems using the same telephone handset. There are three primary digital wireless standards: IS-136 TDMA, CDMA or GSM. Tritel PCS has chosen IS-136 TDMA as its digital technology standard to offer the highest quality service, a full range of features and services and to ensure compatibility with systems constructed by AT&T Wireless, which also uses IS-136 TDMA. IS-136 TDMA offers well-developed features, integrated software systems and equipment that is commercially available. Wireless providers that have selected IS-136 TDMA for their digital networks include AT&T Wireless, SBC Communications, BellSouth and Rogers Cantel. For this reason, IS-136 TDMA is expected to be widely available in the United States, Canada and South America. COMPETITION There are two established cellular providers in each of Tritel PCS's markets. These providers have significant infrastructure in place, often at low historical cost, have been operational for many years, have substantial existing subscriber bases and have substantially greater capital resources than Tritel PCS. In addition, in most of Tritel PCS's markets, there are at least three PCS providers currently offering commercial service or likely to begin offering service before Tritel PCS will. Tritel PCS will also face competition from paging, dispatch and conventional mobile radio operations, as well as SMR and ESMR, including those ESMR networks operated by Nextel and its affiliates in Tritel PCS's markets. Tritel PCS will also be competing with resellers of wireless services. Tritel PCS expects competition in the wireless telecommunications industry to be dynamic and intense as a result of the entrance of new competition and the development of new technologies, products and services. 50 COMPETITION FROM OTHER PCS AND CELLULAR PROVIDERS. Tritel PCS may compete directly with five or more PCS and cellular providers in each of its markets. Principal PCS and cellular competitors in Tritel PCS's markets are BellSouth and its BellSouth Mobility subsidiary, Powertel, GTE, Sprint PCS, Century Telephone, PrimeCo and ALLTEL. The table set forth below shows the PCS and cellular entities that management believes currently to hold wireless licenses for a significant number of POPs within each of Tritel PCS's seven largest markets. The table also provides for each competitor information on the type of service, spectrum block, whether operational and technology standard that management believes to be currently applicable. The table does not reflect the recently concluded FCC re-auctioning of certain PCS licenses, which licenses have not yet been granted.
WIRELESS ANNOUNCED SERVICE AND PCS DIGITAL MARKET CARRIER SPECTRUM BLOCK OPERATIONAL STANDARD - ------------------ ---------------------- ----------------- ------------- ---------- Birmingham, AL GTE Cellular Yes CDMA (1,297,800 POPs) BellSouth Mobility Cellular Yes TDMA Sprint PCS PCS -- A Yes CDMA Powertel PCS -- B Yes GSM ALLTEL PCS -- D Yes CDMA Omnipoint PCS -- F No GSM Jackson, MS BellSouth Mobility Cellular Yes TDMA (657,800 POPs) Centurytel Cellular Yes Analog Powertel PCS -- A Yes CDMA 21st Century Telesis PCS -- C No -- Sprint PCS PCS -- D No CDMA Bay Springs PCS -- E No -- PCSouth, Inc. PCS -- F Yes TDMA Knoxville, TN GTE Cellular Yes CDMA (1,074,000 POPs) U.S. Cellular Cellular Yes TDMA BellSouth Mobility PCS -- B Yes GSM Leap Wireless PCS -- C No CDMA Sprint PCS PCS -- D Yes CDMA Powertel PCS -- E No GSM Tennessee L.P. PCS -- F No -- Lexington, KY BellSouth Mobility Cellular Yes TDMA (893,400 POPs) GTE Cellular Yes CDMA Sprint PCS PCS -- B Yes CDMA Next Wave PCS -- C No CDMA Powertel PCS -- D Yes GSM Northcoast Oper Co. PCS -- F No --
51
WIRELESS ANNOUNCED SERVICE AND PCS DIGITAL MARKET CARRIER SPECTRUM BLOCK OPERATIONAL STANDARD - ------------------ -------------------- ----------------- ------------- ----------- Louisville, KY BellSouth Mobility Cellular Yes TDMA (1,448,400 POPs) GTE Cellular Yes CDMA Sprint PCS PCS -- B Yes CDMA Next Wave PCS -- C No CDMA Powertel PCS -- D/E Yes GSM Mobile, AL BellSouth Mobility Cellular Yes TDMA (653,900 POPs) GTE Cellular Yes CDMA Sprint PCS PCS -- A No CDMA PrimeCo PCS -- B Yes CDMA Mobile Tri-States PCS -- C Yes GSM ALLTEL PCS -- D Yes CDMA Nashville, TN BellSouth Mobility Cellular Yes TDMA (1,675,700 POPs) GTE Cellular Yes CDMA Sprint PCS PCS -- A Yes CDMA Leap Wireless PCS -- C No CDMA Powertel PCS -- D/E Yes GSM Omnipoint-Galloway PCS -- F No GSM
Tritel PCS considers its primary competitors to be BellSouth and Powertel. BellSouth, through its BellSouth Mobility subsidiary, provides analog and TDMA-based digital cellular services in markets that substantially overlap Tritel PCS's markets. BellSouth has deployed IS-136 TDMA technology in all of its digital markets in which it competes with Tritel PCS, except Knoxville where it has deployed the GSM standard. GTE, Tritel PCS's other principal cellular competitor, has begun to upgrade its network to provide digital cellular service. Powertel's PCS markets overlap nearly all of Tritel PCS's markets. Powertel has deployed the GSM digital technology standard in all of its PCS markets. The GSM technology currently does not permit roaming onto an analog cellular system without reconnecting the call. As a result, Powertel customers currently have to drop and reinitiate calls as they roam from Powertel's PCS service to the service of an analog cellular provider. FCC rules permit the partitioning and disaggregation of broadband PCS licenses into licenses to serve smaller service areas, which could allow other new wireless telecommunications providers to enter Tritel PCS's markets. It is also possible for an A-, B- or C-Block license holder to subdivide its 30 MHz license into several smaller components, such as 20 MHz and 10 MHz portions. If such an apportionment did occur, Tritel PCS could face additional PCS competition in certain of its markets. COMPETITION FROM OTHER TECHNOLOGIES. In addition to PCS and cellular operators and resellers, Tritel PCS may also face competition from other existing communications technologies, including enhanced specialized mobile radio. The ESMR system incorporates characteristics of cellular technology, including low power transmission and interconnection with the landline telephone network. A limited number of ESMR operators have recently begun offering short messaging, data services and voice messaging service on a limited basis. Nextel offers ESMR service in a number of Tritel PCS's markets. The integrated digital enhanced network ("iDEN") technology that Nextel has deployed integrates the capabilities of three currently different devices: a dispatch radio, a cellular telephone and an alphanumeric pager. Nextel is offering service in Birmingham, Louisville, Knoxville 52 and Nashville, and Tritel PCS believes it is likely that Nextel will expand its service to other cities in Tritel PCS's markets. Within the area in which Tritel PCS competes, Southern Communications Services, Inc. also has begun to deploy ESMR cell sites over much of Georgia, Alabama and southeastern Mississippi. In the future, cellular and PCS offerings will also compete more directly with traditional landline telephone service operators, and may compete with services offered by energy utilities, and cable and wireless cable operators seeking to offer communications services through their existing infrastructure. Additionally, continuing technological advances in telecommunications, the availability of more spectrum and FCC policies that encourage the development of new spectrum-based technologies make it impossible to predict the extent of future competition. See "Risk Factors -- We Face Intense Competition From Other PCS and Cellular Providers." INDUSTRY OVERVIEW Wireless telecommunications products and services evolved from basic paging services to mass-market voice only analog cellular services and have now progressed to PCS, digital cellular and wireless data. Each new generation of wireless telecommunications products and services has generally been characterized by improved product quality, broader service offerings and enhanced features. Because PCS operators have selected different technologies and are targeting different market segments, no uniform definition of PCS exists. Rather, individual operators have implemented separate service strategies with a wide range of differentiation in service offerings and targeted markets. The provision of cellular telephone service began with providers utilizing the 850 MHz band of radio frequency in 1983 when the FCC began issuing two licenses per market throughout the United States. Since then, the demand for wireless telecommunications has grown rapidly, driven by the increased availability of services, technological advancements, regulatory changes, increased competition and lower prices. According to the Cellular Telecommunications Industry Association ("CTIA"), the number of wireless subscribers in the United States, including cellular, PCS and SMR, has grown from approximately 200,000 at June 30, 1985 to over 55.9 million at December 31, 1998, which reflected a penetration rate of 25%. 53 The following graph and table set forth certain United States wireless industry statistics: [GRAPHIC OMITTED]
YEAR ENDED DECEMBER 31, ------------------------------------------------------------------------------------------ 1992 1993 1994 1995 1996 1997 1998 WIRELESS INDUSTRY STATISTICS (1) ------------ ------------ ------------ ------------ ------------ ------------ ------------ Total service revenues (in billions) $ 7.8 $ 10.9 $ 14.2 $ 19.1 $ 23.6 $ 27.5 $ 33.1 Wireless subscribers at end of period (in millions) .............. 11.0 16.0 24.1 33.8 44.0 55.3 69.2 Subscriber growth .................. 46.0 % 45.1 % 50.8 % 40.0 % 30.4 % 25.6 % 25.1 % Average monthly revenues per subscriber ........................ $ 68.68 $ 61.49 $ 56.21 $ 51.00 $ 47.70 $ 42.78 $ 39.43 Ending penetration ................. 4.3 % 6.2 % 9.2 % 12.9 % 16.6 % 20.0 % 25.0 % Digital subscribers at end of period (in millions) .............. -- -- -- -- -- 6.5 18.3
- ---------- Source: Cellular Telecommunications Industry Association and Census Bureau Data. (1) Reflects domestic U.S. commercially operational cellular, ESMR and PCS providers. In 1993, the FCC allocated a portion of the radio spectrum, 1850-1990 MHz, for the provision of a new wireless communications service commonly known as PCS. The FCC has described PCS as radio communications that encompass mobile and ancillary communication that provide services to individuals and businesses and can be integrated with a variety of competing networks. The FCC's stated objectives in auctioning bandwidth for PCS were to foster competition to existing carriers, increase availability of wireless services to a broader segment of the public, and bring innovative technology to the U.S. wireless industry. From 1995 through 1997, the FCC conducted auctions in which industry participants were awarded PCS licenses for designated areas throughout the United States. INDUSTRY OUTLOOK. Wireless telecommunication technology developments are expected to evolve and continue to drive consumer growth as users demand more sophisticated services and products. 54 Tritel PCS believes that wireless telecommunications penetration rates will increase as prices fall and greater emphasis is placed on the development and use of mass retail distribution channels. Tritel PCS believes that the initial success of PCS operators in the United States, and the corresponding acceleration of wireless penetration overall, supports the forecasted rapid growth of PCS services. OPERATION OF PCS AND CELLULAR COMMUNICATIONS SYSTEMS. Wireless communications system service areas, whether PCS or cellular, are divided into multiple cells. In both PCS and cellular systems, each cell site contains a transmitter, a receiver and signaling equipment. The cell site is connected by microwave or landline telephone to a switch that uses computers to control the operation of the communications system for the entire service area. The system controls the transfer of calls from cell to cell as a subscriber's handset travels, coordinates calls to and from handsets, allocates calls among the cells within the system and connects calls to the local landline telephone system or to a long distance telephone carrier. Wireless communications providers establish interconnection agreements with local exchange carriers and interexchange carriers, thereby integrating their system with the existing landline communications systems. Because the signal strength of a transmission between a handset and a cell site declines as the handset moves away from the cell site, the switching office and the cell site monitor the signal strength of calls in progress. When the signal strength of a call declines to a predetermined level, the switching office tries to "hand off" the call to another cell site where the signal strength is stronger. If a handset leaves the service area of a PCS or cellular system, then the call will be disconnected unless there is a compatible technology capable of a roaming connection in the adjacent system that will enable a "hand off." Analog cellular handsets are functionally compatible with cellular systems in all markets within the United States. As a result, analog cellular handsets may be used wherever a subscriber is located, as long as a cellular system is operational in the area. Although 1900 MHz PCS and 850 MHz cellular systems utilize similar technologies and hardware, they operate on different frequencies and may use different technical and network standards. As a result, until the recent introduction of dual-mode handsets, it was not possible for users of one type of system to place calls on a different type of system outside of their service area, or to hand off calls from one type of system to another. PCS systems operate under one of three principal digital signal transmission technologies, or standards, that have been proposed by various operators and vendors for use in PCS systems: 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 utilizes TDMA technology is currently unable to use a tri-mode handset when traveling in an area not served by TDMA-based PCS operators, unless the handset permits the subscriber to use the analog cellular system in that area. DIGITAL VS. ANALOG TECHNOLOGY. 850 MHz cellular services transmit voice and data signals over analog-based systems, which use one continuous electronic signal that varies in amplitude or frequency over a single radio channel. Conversely, 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 increased capacity, along with enhancements in digital technology standards, allows digital-based wireless technologies to offer new and advanced services, such as greater call privacy and more robust data transmission features, such as "mobile office" applications, including facsimile, electronic mail, advanced text paging services and connecting portable computers with computer/data networks. PCS is an all-digital wireless telephony service, which differs from existing cellular and other CMRS networks in three primary aspects: o PCS operates in the 1850-1990 MHz frequency band while cellular and SMR operate in the 800-900 MHz frequency band. 55 o PCS spectrum was auctioned in bands of 30 MHz or 10 MHz, while each initial cellular provider received 25 MHz of bandwidth and ESMR providers collected approximately 10 to 15 MHz in each market through a combination of allocations, auctions, acquisitions and management agreements. o PCS operators are expected, but not required, to operate fully digital systems. Compared to analog cellular systems, digital systems, including PCS and digital cellular systems, offer superior voice quality, increased protection against eavesdropping and extended battery life due to the reduced power consumption of digital components. PCS AUCTIONS. In order to increase competition, promote improved quality and service, and make available the widest possible range of wireless telecommunications services to United States consumers, federal legislation was enacted in 1993 directing the FCC to allocate radio frequency spectrum for PCS by competitive bidding. In 1993, the FCC allocated 120 MHz of spectrum in the 2 GHz band for the provision of PCS. The 120 MHz of spectrum allocated for PCS was divided into three 30 MHz blocks (A-, B- and C- Blocks) and three 10 MHz blocks (D-, E- and F- Blocks). Two different service areas have been designated: 51 MTAs for the A- and B-Blocks and 493 BTAs for the C-, D-, E- and F-Blocks. In March 1995, the FCC completed the A- and B-Block PCS auctions, resulting in the award of two 30 MHz licenses in all but three of the MTAs, which three were the subject of previous awards pursuant to the FCC's pioneer preference program. In May 1996, the FCC completed the C-Block auction, resulting in the award of one 30 MHz license in each of the BTAs where the applicant was found qualified to hold a license. In January 1997, the FCC completed the auctions for the D-, E- and F-Block PCS auctions, resulting in the award of three 10 MHz BTA licenses in each BTA where the applicant was found qualified to hold a license. The C- and F-Block licenses are reserved for Entrepreneurs while the A-, B-, D- and E- Block licenses are not restricted to any specific type of applicant. Certain C-Block PCS licensees have chosen to return all or a portion of their spectrum to the government pursuant to an FCC order permitting such licensees to restructure. Tritel PCS chose to return 15 MHz of spectrum for certain POPs in northern Alabama. On April 15, 1999, the FCC completed an auction of all C-Block spectrum, along with several D-, E- and F- Block licenses, which have either been returned pursuant to the restructuring order or otherwise forfeited for noncompliance with the rules or default under the government financing. Tritel PCS participated in this auction along with AT&T Wireless, TeleCorp PCS and Triton PCS. Tritel PCS made a loan of $7.5 million for bidding on licenses to ABC Wireless, L.L.C., an entity through which these parties participated in the auction. While Tritel PCS was unable to bid on the northern Alabama licenses which it returned to the FCC, it did bid on additional spectrum within its markets. See "Management's Discussion and Analysis -- Pending License Acquisitions." FACILITIES Tritel PCS currently owns no real property. Tritel PCS has entered into leases for an aggregate of 44,000 square feet of office space in Jackson, Mississippi for use as Tritel PCS's principal executive offices. The leases have initial terms ranging from five years to ten years, with an option to renew for an additional five years. Tritel PCS has also entered into a lease for 16,000 square feet of office space in Flowood, Mississippi for use as a customer operations center. This lease has an initial term of five and one-half years, with an option to renew for an additional five years. Management expects that Tritel PCS's current executive office and customer operations office facilities will be sufficient through at least 2004. Tritel PCS has entered into leases in Jackson, Birmingham, Mobile, Nashville, Knoxville, Louisville, Lexington and elsewhere for regional project offices. Tritel PCS has leased mobile switching centers in Knoxville, Nashville, Birmingham, Louisville and Jackson and plans to enter into a lease for a switch center in Mobile. Each switching center will have a common design with up to 13,000 square feet of space. The lease term for the switch centers is 56 generally in the range of ten to fifteen years, with Tritel PCS having an option to extend the term for five or ten years. These six switch centers are sufficient to cover all of Tritel PCS's markets and, accordingly, Tritel PCS does not expect to add switch centers in the future. Company retail stores will be located throughout Tritel PCS's markets. These stores will generally cover 1,200 to 2,000 square feet of space and the leases will generally be for an initial five year term, with one or more five-year renewal options. Tritel PCS plans to open 28 company stores in 1999 and an additional 26 in 2000 to service all markets being launched in 1999 and 2000. Tritel PCS expects to lease approximately 95% of its cell sites, either through existing sites or built-to-suit sites. The cell site lease term is generally for five years with one or more five year renewal options. Maintenance of the site is typically included in the lease arrangement and performed by the lessor. Additionally, Tritel PCS is currently negotiating master lease agreements with other wireless providers and tower companies to lease space on their existing cell sites throughout Tritel PCS's markets. Tritel PCS expects that it will need to construct approximately 40 cell sites for its planned network buildout through 2000. PERSONNEL At March 31, 1999, Tritel PCS had 117 employees, including 33 in technical operations, 27 in marketing and sales operations, 16 in customer operations, 11 in management information systems, 8 in human resources and 22 in corporate and financial. Most of Tritel PCS's employees are located at the corporate and customer service operations locations in Jackson, Mississippi. Technical operations and market and sales operations personnel are located in each of the regional markets of Birmingham, Chattanooga, Huntsville, Knoxville, Louisville, Lexington, Mobile, Montgomery and Nashville. LEGAL PROCEEDINGS Department of Justice Investigation On April 25, 1997, Digital PCS, the predecessor-in-interest to Tritel PCS, received a civil investigative demand letter from the Antitrust Division of the Department of Justice requesting documents and information concerning its participation in the FCC's PCS auctions. The civil investigative demand was issued in connection with the Antitrust Division's investigation of allegations that Digital PCS and others improperly communicated competitively significant auction information through strategic bidding behavior. Other bidders reportedly received similar civil investigative demands. While the FCC was investigating this specific claim, it issued all but nine of the D-, E- and F-Block licenses awarded to Digital PCS in the January 1997 auctions. Subsequently, the FCC issued the remaining nine licenses to Digital PCS in November 1997 and assessed Digital PCS a $650,000 fine for apparent violations of FCC bidding rules in connection with Digital PCS's bidding practices. In August 1998, the FCC rescinded the $650,000 fine, finding that its rules were not sufficiently clear as to be enforceable against Tritel PCS. In November 1998, as part of a prearranged settlement, the Department of Justice simultaneously filed a lawsuit against, and entered into a consent decree with, Digital PCS and two other companies. The consent decree imposed no penalties and made no finding of wrongdoing. Pursuant to the terms of the decree, Digital PCS promised not to use so-called "trailing numbers" in its bids during future FCC auctions. However, the FCC recently modified its auction structure so that it is no longer possible for anyone to use trailing numbers in FCC auctions. While Tritel PCS was not a party to either the litigation or the consent decree, Tritel PCS intends to voluntarily abide by the terms of the consent decree. 57 Other Proceedings On March 28, 1997, Edwin Welsh, individually and derivatively as a "beneficial shareholder" of Mercury Wireless Management, Inc. ("MWM"), filed a complaint against Airwave Communications, Digital PCS, Mercury Southern, LLC, MWM, and Messrs. Mounger, Sullivan and Martin in the Chancery Court of the First Judicial District of Hinds County, Mississippi. The plaintiff had been an employee of Mercury Communications Company prior to the FCC's C-Block PCS auction. The plaintiff has claimed wrongful termination of employment, breach of contract, including breach of an alleged employment agreement, usurpation of corporate opportunities, breach of fiduciary duties and other matters, and seeks actual and punitive damages in an unspecified amount, as well as attorneys fees and court costs. Mr. Welsh also seeks an order requiring that stock of MWM or the "Mercury company which owns the PCS licenses" equal to 5% of Messrs. Mounger, Sullivan and Martin's collective interests be issued to him. Further, he seeks an order compelling the defendants to transfer all PCS licenses to MWM, and he seeks to impose a constructive trust upon the PCS licenses in an amount equal to 5% of the "collective interest" of Messrs. Mounger, Sullivan and Martin. The defendants are vigorously defending all claims and Tritel PCS believes that its business prospects are not materially affected by this matter and that adverse resolution of this matter could not reasonably be expected to have a material adverse effect on Tritel PCS. Tritel PCS is subject to various claims arising in the ordinary course of business and is a party to various legal proceedings which constitute ordinary routine litigation incidental to Tritel PCS's business. In the opinion of management, all such matters in the aggregate are not expected to have a material adverse effect on Tritel PCS. 58 GOVERNMENT REGULATION OVERVIEW As a recipient of licenses acquired through the C-Block auction and the F-Block auction, Tritel PCS's ownership structure and operations are and will be subject to substantial FCC regulation. FCC AUTHORITY The Communications Act of 1934, as amended (the "Communications Act"), grants the FCC the authority to regulate the licensing and operation of all non-federal government radio-based services in the United States. The scope of the FCC's authority includes: o allocating radio frequencies, or spectrum, for specific services; o establishing qualifications for applicants seeking authority to operate such services, including PCS applicants; o approving initial licenses, modifications thereto, license renewals, and the transfer or assignment of such licenses; o promulgating and enforcing rules and policies that govern the operation of spectrum licensees; o the technical operation of wireless services, interconnection responsibilities between and among PCS, other wireless services such as cellular, and landline carriers; and o imposition of monetary fines and for license revocation for any substantial violations of those rules and regulations under its broad oversight authority. With respect to market entry and the promotion of a competitive marketplace for wireless providers, the FCC regularly conducts rulemaking and adjudicatory proceedings to determine and enforce rules and policies potentially affecting broadband PCS operations. REGULATORY FORBEARANCE The FCC announced that it would forbear from applying several regulations to CMRS services, including its rules concerning the filing of tariffs for the provision of interstate services. Congress specifically authorized the FCC to forbear from applying such regulation in the Omnibus Budget Reconciliation Act of 1993. With respect to PCS, the FCC has stated its intent to continue monitoring competition in the PCS service marketplace. The FCC also concluded that Congress intended to preempt state and local rate and entry regulation of all CMRS providers, including PCS, but established procedures for state and local governments to petition the FCC for authority to continue or initiate such regulation. Thus far the FCC has denied all state petitions seeking to continue rate or entry regulation of CMRS. REGULATORY PARITY The FCC has adopted rules designed to create symmetry in the manner in which it regulates similar types of mobile service providers. According to these rules, all commercial mobile radio service ("CMRS") providers that provide substantially similar services will be subject to similar regulation. A CMRS service is one in which the mobile radio service is provided for a profit, interconnected to the public switched telephone networks, and made available to the public. Under these rules, providers of SMR and ESMR services are subject to regulations similar to those governing cellular and PCS carriers if they offer an interconnected commercial mobile service. COMMERCIAL MOBILE RADIO SERVICE SPECTRUM OWNERSHIP LIMIT The FCC has limited the amount of broadband CMRS spectrum, including cellular, broadband PCS and SMR, in which an entity may hold an attributable interest in a given geographic area to 45 MHz. For these purposes, only PCS and other CMRS licenses are attributed to an entity where its 59 equity exceeds certain thresholds, the entity is an officer or director of a broadband PCS, cellular or SMR licensee, or certain other relationships exist which cause an interest to be attributable. Thus, entities with attributable interests in cellular licenses, which are for 25 MHz, in certain markets cannot hold more than 20 MHz of PCS spectrum in the same markets. Tritel PCS's ability to raise capital from entities with attributable broadband CMRS interests in certain geographic areas is likely to be limited by this restriction. This restriction was challenged and although the U.S. Court of Appeals for the District of Columbia Circuit remanded the case to the FCC for further action, the FCC has affirmed the restriction. Although the case has not been resolved with finality, Tritel PCS has been advised by its special FCC counsel that the possibility of a material adverse effect accruing to Tritel PCS as a result of an unfavorable decision is remote. OTHER FCC REQUIREMENTS The FCC had been conducting rulemakings to address interconnection issues among CMRS carriers and between CMRS and local exchange carriers ("LECs"). These proceedings were significantly affected by the 1996 Act and FCC rulemakings conducted pursuant to the 1996 Act. See "-- 1996 Act" and "-- FCC Interconnection Proceedings." The FCC has adopted rules that prohibit broadband PCS, cellular and certain SMR licenses from restricting the resale of their services. The FCC has determined that the availability of resale will increase competition at a faster pace by allowing new entrants to the wireless market quickly through the resale of their competitors' services while they are building out their own facilities. This prohibition is scheduled to expire in November, 2002. However, the FCC has received petitions requesting the FCC to extend the five-year period. Additionally, the FCC requires such carriers to provide roaming service to subscribers of other such carriers, through which traveling subscribers of other carriers may make calls after establishing a method of payment with a host carrier. The FCC has revised its rules to permit CMRS operators, including PCS licensees, to use their assigned spectrum to provide fixed local loop and other services on a co-primary basis with mobile services. The FCC is continuing its rulemaking proceeding to determine the extent to which such fixed services fall within the scope of CMRS regulation. The FCC has imposed number portability requirements on broadband PCS, cellular and certain SMR providers. The Commission's number portability rules requires that such licensees provide their customers with the ability to change carriers while retaining phone numbers. Specifically, by December 31, 1998, CMRS providers subject to the number portability requirements were required to have the capability of obtaining routing information, such as by querying the appropriate regional number portability database, administered by Lockheed Martin IMS, in order to deliver calls from their networks to ported numbers anywhere in the United States. Cellular and PCS licensees may accomplish this end by either contracting with a local exchange carrier or an interexchange carrier to query number portability databases, or investing in new equipment to deliver the ported calls. By November 24, 2002, these providers must be able to offer number portability without the impairment of quality, reliability, or convenience when switching service providers, including the ability to support roaming throughout their networks. The FCC has solicited further comment on the appropriate cost-recovery methods regarding long-term number portability. The FCC also requires cellular, PCS, and certain SMR carriers to transmit all wireless 911 emergency calls to Public Safety Answering Points ("PSAPs") without any credit checks or validation. The FCC also requires that such carriers must be capable of transmitting 911 calls from individuals with speech or hearing disabilities through means such as text telephone devices. Because of difficulties associated with achieving TTY compatibility on digital wireless systems, the FCC granted a temporary waiver of this requirement for parties that requested such a waiver, including Tritel, on December 31, 1998. The FCC is reviewing the pending petitions for waiver. If Tritel's petition is not granted, it would be expensive and very difficult to comply. Since October 1, 1998, carriers using digital equipment, including Tritel PCS, have been required to relay the mobile telephone number of the originator of a 911 call as well as the location of the cell that is handling the call. By October 2001, carriers must be able to provide the PSAP with the location of the mobile caller within 60 a radius of 125 meters. The FCC proceeding implementing these requirements is ongoing and these requirements remain subject to further modification. The FCC has denied petitions to establish federal cost-recovery methods for the provision of emergency 911 services, leaving it to local governments to develop cost-recovery solutions tailored to meet local conditions and needs. In addition, the Commission has refrained from adopting any limitation of liability for carriers who transmit 911 calls placed by non-subscribers, deferring instead to state tort law. In August 1996, as revised in August 1997, the FCC adopted new guidelines and methods for evaluating the effects of RF emissions from transmitters including PCS mobile telephones and base stations. The new guidelines, which are generally more stringent than previous requirements, were effective immediately for hand-held devices and became effective for other devices on October 15, 1998. These guidelines have been challenged in federal court as insufficient to protect the public health. If the FCC is required to impose more stringent requirements as a result, it would adversely affect Tritel PCS's business. Wireless providers are subject to the Communications Assistance for Law Enforcement Act ("CALEA") also know as "the Wiretap Act," which is under the purview of the Department of Justice. CALEA is designed to ensure that law enforcement can conduct authorized wiretaps of communications utilizing advanced technologies. Adherence to CALEA requires carriers to have a specific number of open ports available for law enforcement personnel with the appropriate legal authority to perform wiretaps on the carrier's network. In addition, carriers are required to file their policies and procedures for complying with CALEA with the FCC. Full implementation of CALEA's assistance capability requirements, however, is not required until June 30, 2000 because the FCC has found that there is a lack of equipment available to meet these requirements. In addition, there is strong disagreement over the technical standards with which carriers must comply. The expense that will be imposed upon wireless carriers as a result of full implementation cannot be known until the technical standard is adopted. In September 1997, the FCC initiated a Notice of Inquiry into the service billing option Calling Party Pays. This option would allow carriers to charge the party placing the call for wireless air time and all other applicable charges. Any such regulations in this area could have a significant impact on wireless carriers as it is believed that overall minutes of use for carriers would increase as the cost of incoming calls gets shifted to the calling party. However, before the FCC could implement such a billing option in this country there are several technological, legal and consumer protection issues which must be resolved. The primary issue surrounds the ability to alert landline subscribers placing a call to a mobile subscriber of premium charges resulting from the use of both a wireless and landline network. Secondarily is the issue of whether such a billing mechanism should even be regulated. Although the FCC favors adopting Calling Party Pays, the issues surrounding this proceeding could take substantial time to resolve. OTHER FEDERAL REGULATIONS Wireless networks are subject to certain Federal Aviation Administration, Environmental Protection Agency and FCC guidelines regarding the location, lighting and construction of transmitter towers and antennas. In addition, the FCC has authority to enforce certain provisions of the National Environmental Policy Act as they would apply to Tritel PCS's facilities. Tritel PCS intends to use common carrier point-to-point microwave and traditional landline facilities to connect base station sites and to link them to their respective main switching offices. These microwave facilities have historically been separately licensed by the FCC on a first-come, first-served basis, although the FCC could decide to auction certain of such licenses, and are subject to specific service rules. Wireless providers also must satisfy a variety of FCC requirements relating to technical and reporting matters. One such requirement is the coordination of proposed frequency usage with adjacent wireless users, permittees and licensees in order to avoid RF interference between adjacent networks. In addition, the height and power of base station transmitting facilities and the type of signals they emit must fall within specified parameters. 61 STATE AND LOCAL REGULATION The scope of state regulatory authority covers such matters as the terms and conditions of interconnection between LECs and wireless carriers, customer billing information and practices, billing disputes, other consumer protection matters, environmental, zoning, and historical preservation, certain facilities construction issues, the bundling of services and equipment, and requirements relating to making capacity available to third party carriers on a wholesale basis. In these areas, particularly the terms and conditions of interconnection between LECs and wireless providers, the FCC and state regulatory authorities share regulatory responsibilities with respect to interstate and intrastate issues, respectively. Tritel PCS and its subsidiaries have been and intend to remain active participants in rulemaking and other administrative policy proceedings before the FCC and before state regulatory authorities. Proceedings with respect to the foregoing policy issues before the FCC and state regulatory authorities could have a significant impact on the competitive market structure among wireless providers and the relationships between wireless providers and other carriers. GENERAL PCS REGULATIONS In June 1994, the FCC allocated spectrum for broadband PCS services between the 1850 to 1990 MHz bands. Of the 120 MHz available for licensed PCS services, the FCC created six separate blocks of spectrum identified as the A-, B-, C-, D-, E- and F-Blocks. The A-, B- and C-Blocks are each allocated 30 MHz of spectrum, the D-, E- and F-Blocks are allocated 10 MHz each. For each block, the FCC adopted a 10-year PCS license term with an opportunity to renew. The FCC also allocated 20 MHz of spectrum within the PCS band for unlicensed use. The FCC adopted a "rebuttable presumption" that all PCS licensees are common carriers, subject to Title II of the Communications Act. Accordingly, each PCS licensee deemed to be a common carrier must provide services upon reasonable request and the rates, terms and conditions of service must not be unjustly or unreasonably discriminatory. STRUCTURE OF PCS BLOCK ALLOCATIONS The FCC defines the geographic contours of the licenses within each PCS block based on the MTAs and BTAs. The FCC awarded A- and B-Block licenses in 51 MTAs. The C-, D-, E- and F-Block spectrum were allocated on the basis of 493 smaller BTAs. In addition, there is a CMRS spectrum cap limiting all CMRS licensees to an aggregate of 45 MHz of PCS, cellular and SMR spectrum in any given market. All but three of the 51 total A-Block licenses and all 51 B-Block licenses were auctioned in 1995. Three A-Block licenses were awarded separately pursuant to the FCC's "pioneer's preference" program. The auctioned A- and B-Block licenses were awarded in June 1995. Spectrum in the C- and F-Blocks is reserved for "entrepreneurs." See "-- C-Block License Requirements." The FCC completed its initial auction for the C-Block on May 6, 1996 and relicensed 18 C-Block licenses on which initial auction winners defaulted in a re-auction that ended on July 16, 1996. Before granting licenses won by a successful bidder, the FCC requires that such bidder submit a Long Form Application for each market in which it has submitted a winning bid. Airwave Communications filed its Long Form Application for the C-Block auction on May 22, 1996. This submission began an administrative process in which parties, or the Commission on its own motion, had an opportunity to challenge Airwave Communications' qualifications to be an FCC licensee. No member of the public challenged the Airwave Communications' applications and on September 17, 1996, the FCC granted licenses to Airwave Communications for all of its C-Block markets. On September 24, 1996, Airwave Communications paid to the U.S. Government the full amount of the downpayment required following the grant of C-Block licenses. The D-, E-, and F-Block licenses were auctioned simultaneously, with the auction closing on January 14, 1997. On January 23, 1997, Digital PCS paid to the U.S. Government the full amount of 62 the downpayment required following the close of the D-, E- and F-Block auctions. On January 30, 1997, Digital PCS submitted its Long Form Application for the licenses won at the D-, E- and F-Block auctions. The deadline for parties to challenge Digital PCS's applications was March 21, 1997. Although Digital PCS's applications were challenged, the FCC has granted licenses to Digital PCS. In December 1996, the FCC adopted rules permitting broadband PCS carriers to partition any service areas within their license areas and disaggregate any amount of spectrum within their spectrum blocks to entities that meet the eligibility requirements for the spectrum blocks. The purpose of the FCC's rule change was to permit existing PCS licensees and new PCS entrants to have greater flexibility to determine how much spectrum and geographic area they need or desire in order to provide PCS service. Thus, A-, B-, D- and E-Block licensees may sell or lease partitioned or disaggregated portions of their licenses at any time to entities that meet the minimum eligibility requirements of the Communications Act. Entrepreneur Block (C- and F-Block) licensees may only sell or lease partitioned or disaggregated portions of their licenses to other qualified Entrepreneurs during the first five years of their license terms, and such entities would take over partitioned service areas subject to separately established installment payment obligations. After five years, licenses are freely transferable, 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 auction preferences, such a sale would be subject to immediate payment of the outstanding balance of the government installment payment debt as a condition of transfer. A transfer to a company which qualifies for a lower level of auction preferences will be subject to partial repayment of bidding credits and installment payments as a condition of transfer. Additionally, such a sale may be subject to full repayment of the bidding credits. The FCC's rules concerning whether C and F Block licenses must repay the bid credit as a condition of transfer during years six through ten is currently under review. THE 1996 ACT On February 8, 1996, the President signed the 1996 Act, which effected a sweeping overhaul of the Communications Act. In particular, the 1996 Act substantially amended Title II of the Communications Act, which governs telecommunications common carriers. The policy underlying this legislative reform was the opening of the telephone exchange service markets to full competition. The 1996 Act makes all state and local barriers to competition unlawful, whether they are direct or indirect. It directs the FCC to initiate rulemaking proceedings on local competition matters and to preempt all inconsistent state and local laws and regulations. The 1996 Act requires incumbent landline LECs to open their networks to competition through interconnection and access to unbundled network elements and prohibits state and local barriers to the provision of interstate and intrastate telecommunications services. The 1996 Act prohibits state and local governments from enforcing any law, rule or legal requirement that prohibits or has the effect of prohibiting any person from providing interstate or intrastate telecommunications services. States retain jurisdiction under the 1996 Act to adopt laws necessary to preserve universal service, protect public safety and welfare, ensure the continued quality of telecommunications services and safeguard the rights of consumers. Implementation of the provisions of the 1996 Act is the task of the FCC, the state public utility commissions and a joint federal-state board. Much of the implementation of the 1996 Act is being completed in numerous rulemaking proceedings with short statutory deadlines. These proceedings address some issues and proposals that were already before the FCC in pending rulemaking proceedings affecting the wireless industry, as well as additional areas of telecommunications regulation not previously addressed by the FCC and the states. Some specific provisions of the 1996 Act which are expected to affect wireless providers are summarized below. These provisions generally have proven helpful to wireless carriers. There can be no assurance, however, that these provisions or their implementation by federal or state regulators will not have a material adverse effect on Tritel PCS. 63 EXPANDED INTERCONNECTION OBLIGATIONS The 1996 Act establishes a general duty of all telecommunications carriers, including PCS licensees, to interconnect with other telecommunications carriers, directly or indirectly. The 1996 Act also contains a detailed list of requirements with respect to the interconnection obligations of LECs. These "interconnection" obligations include resale, number portability, dialing parity, access to rights-of-way and reciprocal compensation. The FCC has determined that all CMRS carriers are considered telecommunications carriers, but for now, CMRS providers such as Tritel do not meet the 1996 Act's definition of an LEC. LECs designated as "incumbents" (i.e., those providing landline local exchange telephone service at the time the 1996 Act was adopted) have additional interconnection obligations including: (1) to negotiate in good faith; (2) to interconnect on terms that are reasonable and non-discriminatory at any technically feasible point at cost-based rates, plus a reasonable profit; (3) to provide nondiscriminatory access to facilities and network elements on an unbundled basis; (4) to offer for resale at wholesale rates any service that LECs provide on a retail basis; and (5) to provide actual co-location of equipment necessary for interconnection or access. Portions of these requirements have been challenged in court. See "-- FCC Interconnection Proceedings." The 1996 Act establishes a framework for state commissions to mediate and arbitrate negotiations between incumbent LECs and carriers requesting interconnection, services or network elements. The 1996 Act establishes deadlines and policy guidelines for state commission decision-making and federal preemption in the event a state commission fails to act. REVIEW OF UNIVERSAL SERVICE REQUIREMENTS The 1996 Act contemplates that interstate telecommunications providers, including CMRS providers, will "make an equitable and non-discriminatory contribution" to support the cost of providing universal service, although the FCC can grant exemptions in certain circumstances. A decision adopted by the 1996 Act-mandated Federal-State Joint Board (the "Joint Board") rejected arguments that CMRS providers should be exempted from universal service obligations and concluded that, to the extent such carriers provide interstate service, they must contribute to universal service support mechanisms. The Joint Board also found that states could require CMRS providers to contribute to state support mechanisms. The FCC now requires all CMRS carriers to contribute to a universal service fund. PROHIBITION AGAINST SUBSIDIZED TELEMESSAGING SERVICES The 1996 Act prohibits incumbent LECs from subsidizing telemessaging services (i.e., voice mail, voice storage/retrieval, live operator services and related ancillary services) from their telephone exchange service or exchange access and from discriminating in favor of its own telemessaging operations. CONDITIONS ON RBOC PROVISION OF IN-REGION INTERLATA SERVICES The 1996 Act establishes conditions generally requiring that, before engaging in landline interexchange services in states in which they provide landline local service, referred to as in-region interLATA services, regional Bell Operating Companies ("RBOCs") and their affiliates must provide access and interconnection to one or more unaffiliated competing providers of telephone exchange service. RBOCs and their affiliates may provide wireless services, including broadband PCS, in markets that cross LATA boundaries as an incidental interLATA service. The specific interconnection requirements, which RBOCs must offer on a non-discriminatory basis, include: interconnection and unbundled access; access to poles, ducts, conduits and rights-of-way owned or controlled by RBOCs; unbundled local loops; unbundled local transport; unbundled local switching; access to emergency 911, directory assistance, operator call completion and white pages; access to telephone numbers, databases and signaling for call routing and completion; number portability; local dialing parity; reciprocal compensation; and resale. 64 RBOC COMMERCIAL MOBILE JOINT MARKETING The RBOCs are permitted to market jointly and sell wireless services in conjunction with telephone exchange service, exchange access, intraLATA and interLATA telecommunications and information services. CMRS FACILITIES SITING The 1996 Act limits the rights of states and localities to regulate placement of CMRS facilities so as to "prohibit" or prohibit effectively the provision of wireless services or to "discriminate" among providers of such services. It also eliminates environmental effects from RF emissions, provided the wireless system complies with FCC rules, as a basis for states and localities to regulate the placement, construction or operation of wireless facilities. EQUAL ACCESS The 1996 Act provides that wireless carriers are not required to provide equal access to common carriers for interexchange toll services. The FCC is authorized to require unblocked access to long distance providers of the user's choice subject to certain conditions. DEREGULATION The FCC is required to forebear from applying any statutory or regulatory provision that it determines is not necessary to keep telecommunications rates and terms reasonable or to protect consumers. A state may not apply a statutory or regulatory provision that the FCC decides to forebear from applying. In addition, the FCC must review its telecommunications regulations every two years and change any that are no longer necessary. The 1996 Act was explicit in its preemption of certain components of local regulation of CMRS carriers, including the authority to preclude antenna site construction due to concerns over RF emissions. Rather than directly challenge federal authority in this area, local governments have instituted moratoria on further construction while the health, safety, and historic preservation aspects of this matter are studied further. Currently there are over 200 such moratoria in effect across the country, including one city in Tritel PCS's markets, Decatur, Alabama. There are a number of bills pending in Congress, some of which would strengthen the federal government's preemption authority and some which would weaken federal authority. Tritel PCS cannot predict how this issue will be resolved and the extent to which it may have a material impact on its ability to rapidly and efficiently construct its PCS network. FCC INTERCONNECTION PROCEEDINGS In August 1996, the FCC adopted rules to implement the interconnection provisions of the 1996 Act. In its interconnection order, the FCC determined that CMRS-to-CMRS interconnection may be accomplished indirectly through the interconnection of each CMRS provider to an incumbent LEC's network. The FCC determined that LECs are required to enter into reciprocal compensation arrangements with all CMRS providers for the transport and termination of traffic between LEC and CMRS networks. Additionally, the FCC established default "proxy" rates for reciprocal compensation, interconnection and unbundled network elements to be used unless or until a state develops rates for these items based on the Total Element Long Run Incremental Cost ("TELRIC"). The proxy rates for CMRS-to-LEC interconnection would result in significant savings when compared with rates that CMRS providers, principally cellular carriers, have been paying to LECs for transport and termination of traffic. On July 18, 1997, as amended October 14, 1997, the U.S Court of Appeals for the Eighth Circuit, acting on consolidated petitions for review of the FCC's interconnection order, struck down the rate-related portions of the interconnection order. The court found that the FCC is without jurisdiction to establish pricing regulations regarding intrastate telephone service. The FCC appealed the Eighth Circuit's decision to the U.S. Supreme Court and on January 25, 1999, the Court reversed 65 in part and affirmed in part the Eighth Circuit's decision. The Court upheld the FCC's right to implement the local competition provisions of the 1996 Act, including the rate-related portions of the interconnection order. Only Section 51.139 of the FCC's rules was remanded for further proceedings. Section 51.139 covers a competing carrier's access to an LEC's network elements. The FCC has commenced a proceeding to implement the Court's directive. The Court's ruling should have no material adverse affect on Tritel PCS. The portions of the FCC's interconnection order that are not related to pricing issues went into effect on October 15, 1996. It is not possible to determine the final outcome of the FCC's actions on remand or the effect such outcome will have on CMRS carriers, including Tritel PCS. RELOCATION OF FIXED MICROWAVE LICENSEES In an effort to balance the competing interests of existing microwave users and newly authorized PCS licensees in the spectrum allocated for PCS use, the FCC has adopted (a) a transition plan to relocate fixed microwave operators that currently are operating in the PCS spectrum, and (b) a cost sharing plan so that if the relocation of an incumbent benefits more than one PCS licensee, the benefiting PCS licensees will help defray the costs of the relocation. PCS licensees will only be required to relocate fixed microwave incumbents if they cannot share the same spectrum. The transition and cost sharing plans expire on April 4, 2005, at which time remaining incumbents in the PCS spectrum will be responsible for their costs to relocate fixed microwave incumbents to alternate spectrum locations. Relocation generally involves a PCS operator compensating an incumbent for costs associated with system modifications and new equipment required to move to alternate, readily available spectrum. The transition plan, as modified, allows most microwave users to operate in the PCS spectrum for a two-year voluntary negotiation period and an additional one-year mandatory negotiation period. For public safety entities dedicating a majority of their system communications for police, fire, or emergency medical service operations, the voluntary negotiation period is three years. The FCC recently shortened the voluntary negotiation period to one year for commercial microwave operators, but retained the three year negotiation period for public safety licenses. Parties unable to reach agreement within these time periods may refer the matter to the FCC for resolution, but the existing microwave user is permitted to continue its operations until final FCC resolution of the matter. The FCC's cost-sharing plan allows PCS licensees that relocate fixed microwave links outside of their license areas to receive reimbursements from later-entrant PCS licensees that benefit from the clearing of their spectrum. Two non-profit clearinghouses currently administer the FCC's cost-sharing plan. Thus, Tritel PCS may be required in certain circumstances to defray the cost of earlier relocations by A-, B- and C-Block licensees. C-BLOCK LICENSE REQUIREMENTS Airwave Communications was the winning bidder for six licenses in the C-Block auction, which was designated as an Entrepreneurs Block. FCC rules require each C-Block applicant and licensee qualify as Entrepreneur in order to hold C-Block licenses and that it qualify as a Small Business in order to receive certain financing preferences. The FCC determined that Entrepreneurs that qualify as Small Businesses would be eligible to receive a C-Block Loan from the U.S. Government for 90% of the dollar amount of their net winning bids in the C-Block auction. For Small Businesses, the period during which C-Block licensees may make interest-only payments is six years, with payments of principal and interest amortized over the remaining four years of the license term. The interest rate for outstanding principal is 7.0%. In order to ensure continued compliance with the FCC rules, the FCC has announced its intention to conduct random audits during the initial ten-year PCS license terms. See "Risk Factors -- We Depend on FCC Licenses -- C- and F-Block License Requirements." 66 ENTREPRENEURS REQUIREMENTS In order to hold a C-Block license, an entity and its affiliates must have had (a) less than $125 million in gross revenues in each of fiscal 1993 and 1994 (the "Entrepreneurs Revenues Limit") and (b) less than $500 million in total assets (the "Entrepreneurs Asset Limit" and, together with the Entrepreneurs Revenues Limit, the "Entrepreneurs Requirements") at the time it filed its application to qualify for the C-Block auction on FCC Form 175 (the "Short Form"). Airwave Communications filed its Short Form on November 6, 1995. In calculating a licensee's gross revenues and total assets for purposes of the Entrepreneurs Requirements, the FCC includes the gross revenues and total assets of the licensee's affiliates, those persons or entities that hold attributable interests in the licensee, and the affiliates of such persons or entities. However, the gross revenues and total assets of certain affiliates are not attributable to the licensee if the licensee maintains an organizational structure that satisfies certain Control Group Requirements (as defined below). For at least five years after winning a C-Block license, a licensee must continue to meet the Entrepreneurs Requirements in order to remain eligible for the bidding credits it received in the FCC's installment payment program. By claiming status as an "entrepreneur," Airwave Communications qualified to enter the C-Block auction and is qualified to hold C-Block licenses. If the FCC were to determine that Airwave Communications did not satisfy the Entrepreneurs Requirements at the time it participated in the C-Block auction or that Tritel fails to meet the ongoing Entrepreneurs Requirements, the FCC could revoke Tritel's PCS licenses, require Tritel to restructure in order to come into compliance with the relevant regulation, fine Tritel, or take other enforcement actions, including imposing the unjust enrichment penalties. Although Tritel believes it has met the Entrepreneurs Requirements, there can be no assurance that it will continue to meet such requirements or that, if it fails to continue to meet such requirements, the FCC will not take action against Tritel. See "Risk Factors -- We Depend on FCC Licenses -- C- and F-Block License Requirements." SMALL BUSINESS REQUIREMENTS An entity that meets the Entrepreneurs Requirements may also receive certain preferential financing terms if it meets certain other requirements (the "Small Business Requirements"). These preferential financing terms include a 25% bidding credit and the ability to make quarterly interest-only payments on its C-Block Loan for the first six years of the license term. To meet the Small Business Requirements, a licensee must have had average annual gross revenues of not more than $40 million for the three calendar years preceding the date it filed its Short Form. In calculating a licensee's gross revenues for purposes of the Small Business Requirements, the FCC includes the gross revenues of the licensee's affiliates, those persons or entities that hold attributable interests in the licensee, and the affiliates of such persons or entities. By claiming status as a Small Business, Airwave Communications, Tritel's predecessor in interest, qualified for the 25% bidding credit and preferential financing. If the FCC were to determine that Tritel does not qualify as a "small business", then Tritel could be forced to repay the value of the bidding credit and preferential financing for which it was not qualified. Further, the FCC could revoke Tritel's PCS licenses, require Tritel to restructure in order to come into compliance with the relevant regulation, fine Tritel or take other enforcement actions, including imposing unjust enrichment penalties. Although Tritel has been structured to meet the Small Business Requirements, there can be no assurance that it will continue to meet such requirements or that, if it fails to continue to meet such requirements, the FCC will not take any of the aforementioned actions against Tritel. CONTROL GROUP REQUIREMENTS If a C-Block licensee maintains an organizational structure in which at least 25% of its total equity on a fully-diluted basis is held by a control group (the "Control Group") that meets certain requirements (the "Control Group Requirements"), the FCC excludes certain assets and revenues from being attributed to such total revenue and gross asset calculations. The Control Group Requirements mandate that the Control Group, among other things, have and maintain both actual and legal control of the licensee. Under the Control Group Requirements: 67 o an established group of investors meeting certain financial qualifications (the "Qualifying Investors") must own at least 15% of the licensee entity's total equity interest on a fully-diluted basis and at least 50.1% of the voting power in the licensee entity, and o additional members ("Additional Control Group Members") must hold, on a fully-diluted basis, the remaining 10% Control Group equity interest in the licensee entity. Additional Control Group Members must be either: o other Qualifying Investors in the Control Group; o individual members of the licensee's management; or o non-controlling institutional investors, including most venture capital firms meeting FCC-specified criteria. A C-Block licensee must have met the Control Group Requirements at the time it filed its Short Form and must continue to meet the Control Group requirements for five years following the License Grant Date. Commencing the fourth year of the license term, the FCC rules (a) eliminate the requirement that Additional Control Group Members hold the 10% Control Group equity interest and (b) allow the Qualifying Investors to reduce the minimum required Control Group equity interest from 15% to 10%. In order to meet the Control Group Requirements, Tritel's Restated Certificate of Incorporation provides that outstanding shares of capital stock of Tritel shall always be subject to redemption by action of the Board of Directors of Tritel if, in the judgment of the Board of Directors, such redemption is necessary to prevent the loss or secure the reinstatement of any license from the FCC held by Tritel or any of its subsidiaries. Although Tritel believes that it has taken sufficient steps to meet the Control Group Requirements, there can be no assurance that Tritel has met or will continue to meet the Control Group Requirements, or that the failure to meet such requirements would not have a material adverse effect on Tritel PCS, including the possible revocation of Tritel's PCS licenses by the FCC. ASSET AND REVENUE CALCULATION In determining whether an entity qualifies as an "entrepreneur" and as a "small business," the FCC attributes the gross revenues and assets of the entity, its attributable investors and their affiliates to the entity's total gross revenues and total assets. Generally, an individual or entity is an affiliate of an applicant or person if it, directly or indirectly, (a) controls the applicant or person or (b) is controlled by such an applicant or person. Affiliation can arise from common investments, familial or spousal relationships, contractual relationships, voting trusts, joint venture agreements, stock ownership, stock options, convertible debentures and agreements to merge. The gross revenues and assets of noncontrolling investors and their affiliates with ownership interests that do not exceed the applicable FCC "passive" investor ownership thresholds are not attributed to C-Block licensees for purposes of determining whether such licensees financially qualify for the applicable C-Block auction preferences. The Entrepreneurs Requirements and the Small Business Requirements provide that, to qualify as a "passive" investor, an entity may not own more than 25% of Tritel's total equity on a fully diluted basis and may not vote more than 25% of the voting interests. Although Tritel believes that it currently complies with the Entrepreneurs Requirements and the Small Business Requirements, there can be no assurance that Tritel's ownership composition will not, in the future, exceed these "passive investor" limits or otherwise violate the Entrepreneurs Requirements or the Small Business Requirements. In addition, if an entity makes bona fide loans to a C-Block licensee, the assets and revenues of the creditor would not be attributed to the licensee unless the creditor is otherwise deemed an affiliate of the licensee, or the loan is treated by the FCC as an equity investment and such treatment would cause the creditor/investor to exceed the applicable ownership interest thresholds for purposes of the financial affiliation rules. The FCC permits a creditor/investor to use standard terms to protect its investment in C-Block licensees, such as covenants, rights of first refusal and super-majority voting 68 rights. On specified issues, such as those for which the holders of Tritel's Common Stock have voting rights, the FCC has stated that it will be guided, but not bound by, criteria used by the Internal Revenue Service to determine whether a debt investment is bona fide debt. The FCC's application of its affiliation rules is largely untested and there can be no assurance that the FCC or the courts will not treat certain of Tritel's lenders or investors as affiliates of Tritel for purposes of determining Tritel's compliance with the Entrepreneurs Requirements. FOREIGN OWNERSHIP LIMITATIONS The Communications Act requires that non-U.S. citizens, their representatives, foreign governments or corporations otherwise subject to domination and control by non-U.S. citizens may not own of record or vote (a) more than 20% of the capital contribution to a common carrier directly, or (b) more than 25% of the capital contribution to the parent corporation of a common carrier licensee, if the FCC determines such holdings are not within the public interest. Because the FCC classifies PCS as a common carrier offering, PCS licensees are subject to the foreign ownership limits. Congress recently eliminated restrictions on non-U.S. citizens serving as members on the board of directors and officers of a common carrier radio licensee or its parent. In January 1996, the United States, by its representative to the WTO, entered into an agreement with 69 other countries around the world which, among other things, expanded the permitted level of foreign ownership in U.S. common carrier licenses. The agreement was ratified by the United States and the other signatories as of February 5, 1998. Under the WTO agreement, the United States has agreed to permit indirect foreign ownership of up to 100% of a licensed company, however direct ownership will continue to be limited to 20%. Entities wishing to exceed the 25% indirect ownership threshold will now be accorded a strong presumption that foreign investment by other WTO member countries would serve the public interest. The FCC will review applications to exceed the 25% benchmark on a streamlined processing schedule. Airwave Communications' Long Form Application with the FCC after the completion of the C-Block auction indicates that Airwave Communications is in compliance with the FCC foreign-ownership rules. However, if the foreign ownership of Tritel were to exceed 25% in the future, the FCC could revoke Tritel PCS's licenses, require Tritel to restructure its ownership to come into compliance with the foreign ownership rules or impose other penalties. Further, Tritel's Restated Certificate of Incorporation enables Tritel to redeem shares from holders of Common Stock whose acquisition of such shares results in a violation of such limitation. The restrictions on foreign ownership could adversely affect Tritel's ability to attract additional equity financing from entities that are, or are owned by, non-U.S. entities. See "Risk Factors -- We Face Broad and Evolving Government Regulation." F-BLOCK LICENSE REQUIREMENTS The FCC has for the most part extended its C-Block eligibility requirements and auction rules to the F-Block, with the following exceptions. For the purposes of determining the "entrepreneur's" asset limit, F-Block applicants do not count the value of C-Block licenses, although they must count other CMRS licenses, including A-Block and B-Block PCS licenses. F-Block auction participants, as well as D- and E-Block participants, were required to pay 20% of their net winning bid, as opposed to only 10% required of C-Block bidders. Participants in the F-Block auction could qualify for either of two bidding credit levels: applicants with average gross revenues of not more than $40 million of the previous three years received a 15% bidding credit, while applicants with average gross revenues of not more than $15 million for the same period are referred to as "very small businesses" and received a 25% bidding credit. For "small businesses" and "very small businesses," the period during which F-Block licensees may make interest-only payments is two years, as opposed to six years for C-Block "small businesses," with payments of principal and interest amortized over the remaining eight years of the license term. The interest rate applicable to Digital PCS for outstanding principal is 6.125%. Furthermore, F-Block licensees that fall more than 180 days behind in scheduled installment payments will incur a 5% late payment fee. By claiming status as a "very small business," Airwave Communications qualified for the 25% bidding credit and the most favorable installment payment plan offered by the FCC. 69 Digital PCS was the winning bidder for 32 licenses in the D-, E- and F-Block auction. The markets are comprised of 29 licenses in the F-Block, one license in the D-Block and two licenses in the E-Block. With respect to those licenses won in the F-Block auction, Tritel 1. believes that Digital PCS structured itself to satisfy the FCC's "very small business" requirements, 2. intends to maintain diligently its qualification as a "very small business," and 3. has structured the Notes, including certain restrictions on ownership and transfer, in a manner intended to ensure compliance with the applicable FCC rules. Tritel has relied on representations of its investors to determine its compliance with the FCC's rules applicable to C-Block and F-Block licenses. There can be no assurance, however, that Tritel's investors or Tritel itself will continue to satisfy these requirements during the term of any PCS license granted to the License Subsidiaries or that Tritel will be able to successfully implement divestiture or other mechanisms included in Tritel's Restated Certificate of Incorporation that are designed to ensure compliance with FCC rules. Any non-compliance with FCC rules could subject Tritel to penalties, including a fine or revocation of its PCS licenses. See "Risk Factors -- We Have Substantial Debt Obligations to the U.S. Government," "-- We Depend on FCC Licenses," and "-- We Face Broad and Evolving Government Regulation." TRANSFER RESTRICTIONS Within the first five years of the grant of a C- or F- Block license, transfer of the license is permitted only to another entity eligible for the C- or F-Block, such as another "small business" or "very small business." 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, such a sale would be subject to full payment of bidding credits and immediate payment of the outstanding balance of the government installment payment debt as a condition of transfer, known as the "FCC unjust enrichment" penalties. In addition, if Tritel wishes to make any change in ownership structure during the initial license term involving the de facto or de jure control of Tritel, it must seek FCC approval and may be subject to the FCC unjust enrichment penalties indicated above. BUILDOUT REQUIREMENTS The FCC has mandated that recipients of PCS licenses adhere to five-year and 10-year buildout requirements. Under both five- and 10-year buildout requirements, all 30 MHz PCS licensees, such as C-Block licensees, must construct facilities that offer coverage to at least one-third of the population in their service area within five years from the date of initial license grants. Service must be provided to two-thirds of the population within 10 years. In the D-, E- and F-Blocks, 10 MHz PCS licenses are required to reach one-quarter of the population within five years or make a showing of substantial service within five years. The FCC, however, has not defined the term "substantial services." Violations of these regulations could result in license revocations or forfeitures or fines or other sanctions, such as reductions in service areas. ADDITIONAL REQUIREMENTS As a C- and F-Block licensee, Tritel will be subject to certain restrictions that limit, among other things, the number of broadband PCS licenses it may hold as well as certain cross-ownership restrictions pertaining to cellular and other wireless investments. PENALTIES FOR PAYMENT DEFAULT In the event that the License Subsidiaries become unable to meet their obligations under the Government Financing, the FCC could in such instances reclaim some or possibly all of Tritel's licenses, re-auction them, and subject Tritel 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 lesser of the subsequent winning bid and the defaulting bidder's bid amount. See "Risk Factors -- We Face Broad and Evolving Government Regulation" and "-- We Have Substantial Debt Obligations to the U.S. Government." 70 JOINT VENTURE AGREEMENTS WITH AT&T WIRELESS On May 20, 1998, Tritel, Airwave Communications, Digital PCS, AT&T Wireless, TWR Cellular, Inc., an indirect wholly-owned subsidiary of AT&T Corp., cash equity investors purchasing shares of Series C Preferred in a preferred equity offering (the "Cash Equity Investors") and certain members of management (the "Management Stockholders") entered into the Securities Purchase Agreement which provided for the formation of the Tritel-AT&T Wireless joint venture and related equity investments. On January 7, 1999, the transactions contemplated by the Securities Purchase Agreement were closed and the parties entered into a Network Membership License Agreement, Roaming Agreement, Roaming Administration Agreement, Stockholders' Agreement, Long Distance Agreement, Closing Agreement and agreed on a form of Resale Agreement. The following description is a summary of the material provisions of the Securities Purchase Agreement, Network Membership License Agreement, Roaming Agreement, Roaming Administration Agreement, Stockholders' Agreement, Long Distance Agreement, Closing Agreement and form of Resale Agreement. It does not restate those agreements in their entirety and is qualified in its entirety by reference to each agreement. Securities Purchase Agreement Under the Securities Purchase Agreement: (1) AT&T Wireless and TWR assigned the AT&T contributed POPs to Tritel or one or more wholly-owned subsidiaries of Tritel in exchange for shares of Tritel's Series A Preferred Stock and Series D Preferred Stock (the "AT&T Equity"); (2) Airwave Communications and Digital PCS assigned to Tritel or one or more wholly-owned subsidiaries of Tritel their contributed POPs 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 POPs; and (3) the Cash Equity Investors purchased shares of the Series C Preferred. The AT&T contributed POPs are comprised of licenses providing for the right to use 20 MHz of authorized frequencies in geographic areas that cover approximately 9.1 million POPs, 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, and market and sell to others, any services on the 10 MHz of spectrum that it retains in the creation of the AT&T contributed POPs, subject to the exclusivity provisions of the Stockholders' Agreement and the License Agreement. In connection with its purchase of the AT&T Equity, AT&T Wireless and TWR each made certain customary representations and warranties with respect to their organization, power and authority, conflicts, litigation and their intent to hold the AT&T Equity as an investment rather than with a view to distribution. With respect to the AT&T contributed POPs, AT&T Wireless and TWR each further represented and warranted that they are each in full compliance with all eligibility rules of the FCC to hold their PCS licenses, and that they are the authorized legal holders of the PCS licenses that support the AT&T contributed POPs. Tritel also made certain customary representations and warranties concerning, among other things, its organization, power and authority, conflicts, litigation, capitalization, authority to issue the AT&T Equity, the status of the AT&T Equity, liabilities and the ownership of its subsidiaries. Tritel also represented and warranted that it was in full compliance with all eligibility rules of the FCC to hold PCS licenses, and that it would continue to qualify as a "small business" and as a "smaller business" within the meaning of the Small Business Investment Company Act of 1958, as amended (the "SBIC Act"). Tritel agreed not to engage in any activity which constitutes an ineligible business activity within the meaning of the regulations under the SBIC Act. In addition, Tritel agreed to take certain measures to facilitate continued compliance with such regulations, including using the proceeds of the sale of securities to the cash equity investors only for eligible business activities within the meaning of the SBIC Act. 71 Except as specified in the Securities Purchase Agreement and the related agreements, none of AT&T Wireless, TWR nor any of their respective affiliates has any further obligation or commitment to acquire debt or equity securities of Tritel, provide or arrange for debt or equity financing for Tritel or provide services to or otherwise assist Tritel in connection with the conduct of its business. The Securities Purchase Agreement does not contain any restrictions on AT&T Wireless, TWR, or any of their respective affiliates, from competing, directly or indirectly, with Tritel. AT&T Wireless Network Membership License Agreement As part of its strategic alliance with AT&T Wireless, Tritel has entered into the AT&T Wireless Network Membership License Agreement with AT&T Corp. and its affiliates ("AT&T"), including AT&T Wireless. Under the License Agreement, Tritel has been granted a royalty-free, non-exclusive license to use the AT&T logo with the globe design, the related trade dress and the expression "Member, AT&T Wireless Services Network" and certain variations of the foregoing (collectively, the "AT&T Licensed Marks"), in equal emphasis with its own brands or marks, in its markets in the marketing of its mobile wireless telecommunications products and services. The license does not permit, however, the use of the AT&T Licensed Marks in connection with providing or reselling long distance or local service or any other product or service other than those covered by Tritel's PCS licenses. AT&T has retained the unimpaired right to use the AT&T Licensed Marks in Tritel's markets for marketing, offering or providing any products or services. AT&T will not grant to any other person providing mobile wireless telecommunications products or services in Tritel's markets a right or license to use the AT&T Licensed Marks, except to a person that is a reseller of Tritel's services, a person acting as Tritel's agent or a person that provides fixed wireless telecommunications services to or from specific locations, such as buildings or office complexes, so long as such services do not constitute mobile wireless telecommunications services in Tritel's markets. Tritel is not permitted to assign, sub-license or transfer any of its rights, obligations or benefits under the License Agreement. In an effort to ensure that Tritel's service meets AT&T's high quality standards, Tritel has agreed to abide by certain quality standards set forth in the License Agreement and to permit AT&T to conduct inspections of its facilities from time to time. The License Agreement is for an initial term of five years. The License Agreement will be renewed for an additional five-year term if: o each party gives the other notice of intent to renew at least 90 days prior to the expiration of the initial term, or o during the period which begins 120 days prior to expiration and ends 110 days prior to expiration, either party requests that the other party provide notice of intent to renew, and the other party either gives notice of intent to renew or fails to respond to such request. AT&T is permitted to terminate the License Agreement if Tritel: o uses the AT&T Licensed Marks other than as provided in the License Agreement; o uses the AT&T Licensed Marks in connection with any marketing or provision of telecommunications services that fails to meet AT&T's quality standards in any material respect; o refuses or neglects a request by AT&T Wireless for access to Tritel's facilities or marketing materials for a period of more than five business days after the receipt of notice thereof; o experiences a change of control; o becomes bankrupt; o fails to maintain its rights to hold FCC licenses with respect to its markets representing 5% or more of Tritel's POPs, unless the failure is the result of AT&T's actions or inactions; o licenses, assigns, transfers, disposes of or relinquishes any of the rights granted to it in, and other than as permitted by, the License Agreement; 72 o fails to obtain permission from AT&T Wireless to use the AT&T Licensed Marks in sponsoring, endorsing or affiliating with any event, meeting, charitable endeavor or other undertaking that has a material adverse effect on AT&T or the AT&T Licensed Marks; o fails to maintain any and all confidential information furnished to it in the strictest confidence; or o commits a Substantial Company Breach (as defined in the Stockholders' Agreement). Upon the later to occur of: (a) consummation of a Disqualifying Transaction, as defined below, or (b) the second anniversary of the date AT&T gives notice to Tritel that it has entered into a letter of intent or binding agreement to engage in a Disqualifying Transaction, AT&T may terminate the License Agreement with Tritel by providing notice to Tritel. However, no such termination may occur during the initial term. If Tritel has not exercised its right to convert all of AT&T's Series A and Series D Preferred into Series B Preferred, the termination only applies to that portion of Tritel's markets that overlap the markets in which a party to such Disqualifying Transaction owns an FCC license to provide Commercial Mobile Radio Service (the "Overlap Markets"). Upon a termination of the License Agreement, Tritel must cease using the AT&T Licensed Marks within 90 days. The License Agreement will also terminate in the event that AT&T Wireless converts any of its shares of Series A Preferred into Common Stock on the later of (a) the initial term plus any renewal periods, or (b) two years from the date of such conversion. The term "Disqualifying Transaction" means a merger, consolidation, asset acquisition or disposition, or other business combination involving AT&T Corp. or its affiliates and another person, which other person (a) derives from telecommunications businesses annual revenues in excess of $5 billion, (b) derives less than one-third of its aggregate revenues from wireless telecommunications services, (c) owns FCC Licenses to offer, and does offer, mobile wireless telecommunications services, except certain specified services, serving more than 25% of the POPs within Tritel's licensed territory, and (d) with respect to which AT&T Wireless has given notice to Tritel specifying that such merger, consolidation, asset acquisition or disposition or other business combination shall be a Disqualifying Transaction for purposes of this agreement and the transactions contemplated thereby. Roaming Agreement Tritel and AT&T Wireless, along with their respective affiliates, have also entered into an intercarrier roamer service agreement, called the Roaming Agreement, to allow subscribers of one party to roam onto the wireless network of the other party when a subscriber travels into a geographic area that the other party services. The Roaming Agreement states that both Tritel and AT&T Wireless will provide automatic call delivery to the other party's customers who roam into its geographic area. To facilitate this service, each party will agree to provide continuously the necessary hardware, software and transmission facilities to support such call delivery, either directly or through a separate network of wireless communications carriers. The Roaming Agreement has an initial term of 20 years, subject to earlier termination, and thereafter will continue on a month-to-month basis until terminated with 90 days written notice. The agreement may be terminated or suspended upon default by either party for o material breach of any term of the Roaming Agreement that continues unremedied for 30 days; o a voluntary liquidation or dissolution of either party; o a final order by the FCC revoking or denying renewal of a material PCS license or permit granted to either party; or o a bankruptcy of either party. 73 Either party may suspend its performance of the Roaming Agreement if it determines that unauthorized use of the system has reached an unacceptable level of financial loss. Roaming Administration Service Agreement Tritel and AT&T Wireless also have entered into a roaming administration service agreement to allow Tritel to receive certain benefits under intercarrier roaming services agreements between AT&T Wireless and other specified wireless carriers, to permit subscribers of those other wireless carriers to use the facilities of Tritel in accordance with the applicable intercarrier roaming services agreements and to make available to Tritel the roaming administration services of AT&T Wireless. The Roaming Administration Agreement provides that AT&T Wireless will perform, for a fee, roaming administration and settlement services to manage Tritel's roaming program. The Roaming Administration Agreement has an initial term of two years, subject to earlier termination, and thereafter will renew automatically for successive terms of one year each until either party chooses not to renew upon 90 days prior written notice. The Roaming Administration Agreement may be terminated for any of the following reasons: o material breach by either party; o material and unreasonable interference of one party's operations by the operations of the other party for a period exceeding ten days; o by AT&T Wireless with respect to any intercarrier roaming services agreement or its interoperability agreement with EDS Personal Communications Corporation, in the event the applicable agreement expires or is terminated. The current interoperability agreement with EDS Personal Communications Corporation expires on March 31, 2000, with respect to settlement services and on June 30, 1999, with respect to call validation services; o by AT&T Wireless in the event that Tritel is no longer a member in good standing with the North American Cellular Network, Inc.; o by AT&T Wireless with respect to the roaming administration services received under AT&T Wireless's interoperability agreement with EDS Personal Communications Corporation should that agreement expire or terminate; or o by either party for any reason upon 180 days prior written notice. Upon termination of the Roaming Administration Agreement for any of the reasons set forth above, each party shall immediately, or upon final accounting, pay all amounts owing to the other parties thereunder, whether due or to become due. Stockholders' Agreement AT&T Wireless, the Management Stockholders and the Cash Equity Investors (collectively, the "Stockholders") have entered into a Stockholders' Agreement with Tritel o to provide for the management of Tritel; o to impose certain restrictions on the sale, transfer or other disposition of the securities of Tritel; and o to create certain rights related to such securities, including a right of first offer, a right of participation, a right of inclusion and registration rights. Management. The Stockholders' Agreement provides that the Board of Directors of Tritel will consist of thirteen members. For so long as required by the FCC, the Management Stockholders will designate four members, each of whom must be an officer of Tritel and each of whom will have 1/2 of a vote, AT&T Wireless will designate two members and the Cash Equity Investors will designate three members. The remaining four directors will be designated by the Management Stockholders, and if permitted by FCC regulation, one such designation will be subject to the consent of the Cash Equity 74 Investors alone, with the remaining three subject to the consent of the Cash Equity Investors and AT&T Wireless. Once permitted by FCC regulation, the remaining four directors will be designated by the Cash Equity Investors, with three of these designations subject to the consent of AT&T Wireless and Messrs. Mounger, Martin and Sullivan. No Director may be removed without cause. All actions of the Board of Directors will require a majority vote of the entire Board of Directors, except that certain significant transactions will require the vote of at least three of the five directors designated by the Cash Equity Investors and AT&T Wireless and four of the six votes cast by the directors designated by the Management Stockholders and the four remaining directors designated by the Management Stockholders or the Cash Equity Investors as described above. Such significant transactions include, but are not limited to, o a sale or transfer of a material portion of the assets of Tritel or any subsidiary; o a merger or consolidation of Tritel or any subsidiary; o the offering of any securities of Tritel or any subsidiary other than as contemplated by the Securities Purchase Agreement; o the hiring or termination of any executive officer of Tritel; o the incurrence of certain indebtedness; o the making of certain capital expenditures; and o the initiation of any bankruptcy proceeding, dissolution or liquidation of Tritel or any subsidiary. Restrictions on Transfer. The Stockholders, including AT&T Wireless and TWR, have agreed not to, directly or indirectly, transfer or otherwise grant or create certain liens in, give, place in trust or otherwise voluntarily or involuntarily dispose of ("Transfer") any share of Company Stock (as defined in the Stockholders' Agreement) beneficially owned by such Stockholder on or prior to an initial public offering of Tritel's common stock (an "IPO"), subject to certain limited exceptions. Right of First Offer. Prior to an IPO and following an IPO, for transfers of 10% or more of the Common Stock on a fully diluted basis, if a non-AT&T Wireless stockholder desires to sell shares of Preferred or Common Stock, other than Voting Preference Stock and Class C Common Stock, to a third party, such stockholder must first offer such shares to AT&T Wireless. AT&T Wireless will then have ten business days to offer to purchase all, but not less than all, of such shares at the offered price. If AT&T Wireless does not accept such offer, such investor may offer the shares to other potential purchasers at or above the offer price, for up to 90 days. If AT&T Wireless or TWR desires to sell shares of Preferred or Common Stock, other than Voting Preference Stock and Class C Common Stock, the Cash Equity Investors will have the same Right of First Offer. In the event that neither any Cash Equity Investor nor AT&T Wireless purchases such shares pursuant to the above rights, the shares may be sold to any person other than a Prohibited Transferee (as defined in the Stockholders' Agreement). Right of Participation. On or prior to an IPO, if Tritel proposes to offer, issue, sell or otherwise voluntarily or involuntarily dispose of any equity security for cash, each Stockholder shall have the right to acquire a proportionate percentage of such equity securities based on the number of shares of Class A Voting Common Stock beneficially owned by such Stockholder relative to the total number of Class A Voting Common Stock outstanding (the "Purchase Right"). The Purchase Right will not apply to an offering pursuant to a stock option or stock appreciation rights plan. Right of Inclusion. No Stockholder shall Transfer shares of any series or class of Preferred, other than Series B Preferred, or Common Stock (collectively, "Inclusion Stock") to persons who are not affiliates of such person if the Transfer would result in such Stockholder, or Stockholders acting in concert, Transferring 25% or more of the outstanding shares of any class of Inclusion Stock (an "Inclusion Event"), unless the terms and conditions of such Transfer include an offer to AT&T Wireless, the Cash Equity Investors and the Management Stockholders (each, an "Inclusion Event 75 Offeree") for each of them to sell to the purchaser of the Inclusion Stock the same proportion of each Inclusion Event Offeree's Inclusion Stock as proposed to be sold by the selling Stockholder. In the event that such person does not agree to purchase all of the shares of Inclusion Stock proposed to be sold, then the selling Stockholder and each Inclusion Event Offeree will have the right to sell a proportionate amount of Inclusion Stock to such person. For purposes of determining an Inclusion Event, if the Inclusion Stock is Series C Preferred, then Series D shall also be deemed to be Inclusion Stock, and Series C Preferred and Series D Preferred shall be deemed to be one class of Preferred Stock. Right of First Negotiation. Following an IPO, any Stockholder desiring to Transfer any shares of Common Stock or Series C Preferred (x) pursuant to an underwritten registration, (y) pursuant to Rule 144 under the Securities Act or (z) in a transaction or series of related transactions resulting in the Transfer of not more than ten percent of all Common Stock on a fully diluted basis, excluding for such purposes the Series A Preferred Stock, must first give AT&T Wireless written notice thereof containing the proposed terms of such sale. For the applicable first negotiation period, AT&T Wireless will have the exclusive right to negotiate with such Stockholder regarding the purchase of such shares. The Stockholder has the right to reject any offer made by AT&T Wireless during such first negotiation period. Upon the expiration of the first negotiation period, the Stockholder has the right to sell the shares included in the notice on such terms and conditions as are acceptable to the Stockholder in its sole discretion during the applicable offer period. If shares of Common Stock are proposed to be Transferred pursuant to an underwritten registration, the applicable first negotiation period is ten days and the applicable offer period is 120 days. If shares of Common Stock are proposed to be Transferred pursuant to Rule 144, the applicable first negotiation period is three hours and the applicable offer period is five business days. If shares of Common Stock are proposed to be Transferred in a transaction or series of related transactions resulting in the sale of not more than ten percent of all Common Stock on a fully diluted basis, excluding for such purposes the Series A Preferred, the applicable first negotiation period is one business day, provided the notice is given prior to 9:00 a.m. on the day prior to the proposed Transfer, and the applicable offer period is ten business days. Demand Registration Rights. From and after the ninety-first day following the date of the IPO (or such longer period as may be required by the managing underwriter), any "Qualified Holder" and Management Stockholders that in the aggregate beneficially own at least 50.1% of the Class A Voting Common Stock then beneficially owned by the Management Stockholders (each, a "Demanding Stockholder") will have the right to require Tritel to file a registration statement under the Securities Act covering the Class A Common Stock (a "Demand Registration"), subject to certain limited exceptions. A "Qualified Holder" is defined as: (a) any Stockholder or group of Stockholders that beneficially owns (x) greater than 33 1/3% of the outstanding shares of Common Stock on a fully diluted basis or (y) shares of Class A Voting Common Stock reasonably expected, upon sale, to result in aggregate gross proceeds of at least $25 million; or (b) AT&T Wireless and TWR for so long as they beneficially own in the aggregate greater than two-thirds of the initial issuance to them of shares of Series A Preferred. Tritel will not be obligated to effect more than two separate Demand Registrations in any twelve-month period, provided that only one request for Demand Registration may be exercised by AT&T Wireless and/or Management Stockholders that in the aggregate beneficially own at least 50.1% of the shares of the Class A Voting Common Stock then beneficially owned by the Management Stockholders during any twelve-month period. If Tritel determines that a Demand Registration would interfere with any pending or contemplated material transaction, Tritel may defer such Demand Registration subject to certain limitations. 76 Piggyback Registration Rights. If Tritel proposes to register any shares of Class A Voting Common Stock with the Securities and Exchange Commission under the Securities Act, Tritel will, subject to certain limitations, give notice of the proposed registration to all Stockholders and include all Common Stock as to which it has received a request for inclusion, subject to customary underwriter cutbacks. Consequences of a Disqualifying Transaction. Upon consummation of a Disqualifying Transaction, the exclusivity provisions of the Stockholder Agreement applicable to AT&T Wireless and TWR will terminate as to all of Tritel's markets. However, if Tritel has not exercised its right to convert all of AT&T Wireless's Series A and Series D Preferred into Series B Preferred, the termination applies only to the Overlap Markets. Upon AT&T Wireless's terminating its obligations and those of TWR in connection with a Disqualifying Transaction, Tritel will have the right to cause AT&T Wireless and TWR, or their transferees other than any Cash Equity Investor, to exchange all or a proportionate number of shares of Series A Preferred then owned by AT&T Wireless and TWR equal to a fraction, the numerator of which is the number of POPs in the Overlap Markets and the denominator of which is the total number of POPs in all of Tritel's markets, for an equivalent number of shares of Series B Preferred. Tritel shall have similar conversion rights with respect to any Series D Preferred shares, or Series B Preferred or Common Stock into which such shares have been converted, owned by AT&T Wireless and TWR. Additional Covenants. To induce the Stockholders to enter into the Stockholders' Agreement, Tritel has agreed to, among other things: o construct a network system to cover the territory of its PCS licenses according to an agreed upon buildout plan; o arrange for all necessary microwave relocation and reimburse AT&T for any such relocation costs it incurs in connection with the AT&T contributed POPs; o offer certain service features and adhere to certain quality standards; o refrain from entering into certain merger, sale or liquidation transactions or to effect a change in the business of Tritel without the prior consent of AT&T Wireless; o refrain from marketing, offering, providing or reselling interexchange services other than its own or AT&T Wireless's; o enter into Resale Agreements with AT&T Wireless from time to time at the request of AT&T Wireless; o refrain from soliciting for employment AT&T Wireless's personnel for a limited period; and o permit AT&T Wireless to co-locate certain cell sites in locations holding Tritel cell sites. Concurrently, AT&T Wireless has agreed to, among other things: o assist Tritel in obtaining discounts from AT&T Wireless equipment vendors; o refrain from soliciting for employment Tritel's personnel for a limited period; and o permit Tritel to co-locate certain cell sites in locations holding AT&T Wireless cell sites. In addition, stockholders other than AT&T Wireless that are subject to the Stockholders' Agreement have agreed to refrain from providing, reselling or acting as agent for any person offering wireless services in territories designated to Tritel. Term. The Stockholders' Agreement will terminate after eleven years and may be terminated earlier upon the consent of all parties, or if one Stockholder should beneficially own all of the Class A Voting Common Stock. If not otherwise terminated, the provisions regarding the management of Tritel will terminate upon the earlier to occur of an IPO or the expiration of ten years, and the provisions regarding registration rights will terminate after 20 years. 77 Long Distance Agreement Tritel and AT&T Wireless Services, Inc. have entered into a Long Distance Agreement which provides that Tritel will purchase interstate and intrastate long distance services from AT&T Wireless for a term of up to three years. These long distance services will be purchased at preferred rates, which are contingent upon Tritel's continuing affiliation with AT&T Wireless, and will be resold to Tritel's customers. Under the Long Distance Agreement, Tritel must meet a yearly minimum traffic volume commitment which is to be negotiated between Tritel and AT&T Wireless. If the minimum traffic volume commitment is not met by Tritel, then it must pay to AT&T Wireless an amount equal to the difference between AT&T Wireless's expected fee based on the minimum traffic volume commitment and its fee based on the actual traffic volume. Closing Agreement Tritel, AT&T Wireless and the other parties to the Securities Purchase Agreement have entered into a Closing Agreement to provide for certain matters set forth in the Securities Purchase Agreement, including, among other things, consent for certain of Tritel's subsidiaries to enter into agreements and to conduct Tritel's operations, and direction that certain PCS licenses be transferred to Tritel's subsidiaries by AT&T Wireless, Airwave Communications, Digital PCS and Central Alabama Partnership. Resale Agreement Tritel and AT&T Wireless have also agreed on the form of a Resale Agreement to be entered into from time to time, which permits AT&T Wireless, its affiliates and one person designated by AT&T Wireless, who is licensed to provide telecommunications services in such area under AT&T's service marks, for any geographic area within the territory covered by Tritel's licenses (each, a "Reseller") to purchase access to and usage of Tritel's wireless telecommunications services for resale to its subscribers. Tritel has agreed to provide service to the Reseller on a nonexclusive basis, and therefore will retain the right to market and sell its services to other customers in competition with AT&T Wireless. The Resale Agreement will have an initial term of ten years and will be automatically renewed for additional one-year terms, unless it is previously terminated. The Reseller has the right to terminate the Resale Agreement for any reason upon 180 days written notice. Following the eleventh anniversary of the commencement date of the Resale Agreement, either party may terminate the agreement on 90 days written notice for any reason. In addition, either the Reseller or Tritel may terminate the Resale Agreement after any of the following events occur and continue unremedied for some time period: o certain bankruptcy events of Tritel or the Reseller; o the failure of either the Reseller or Tritel to pay any sum owed to the other at the time such amount comes due; o the failure of the Reseller or Tritel to perform or observe any other material term, condition, or covenant to be performed by it under the Resale Agreement; o the commission of any illegal act by or the filing of any criminal indictment or information against the Reseller, its proprietors, partners, officers, or directors or stockholders controlling in the aggregate or individual 10% or more of the voting rights or equity interests of the Reseller; o the furnishing, within a twelve-month period, by the Reseller to Tritel of two or more checks that are not paid when presented due to insufficient funds; o an unauthorized assignment of the Resale Agreement; o failure by the Reseller to meet the eligibility requirements as described in the Resale Agreement; and 78 o either party attempts to incorporate into its marks, or challenge the other party's service marks, trademarks or trade names, including, without limitation, all terms and conditions of each service plan selected by the Reseller. Upon termination, Tritel will have no further obligation to provide the Reseller access to and usage of Tritel's PCS services. 79 MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The executive officers and directors of Tritel, and their ages, at March 31, 1999, were as follows:
NAME AGE POSITION - ------------------------------ ----- --------------------------------------------------------------- William M. Mounger, II ....... 42 Chairman of the Board of Directors and Chief Executive Officer William S. Arnett ............ 48 Director and President Jerry M. Sullivan, Jr. ....... 40 Director, Executive Vice President and Chief Operating Officer E.B. Martin, Jr. ............. 42 Director, Executive Vice President, Treasurer and Chief Financial Officer Scott I. Anderson ............ 40 Director Alex P. Coleman .............. 32 Director Gary S. Fuqua ................ 47 Director Ann K. Hall .................. 34 Director Andrew Hubregsen ............. 38 Director H. Lee Maschmann ............. 41 Director Elizabeth L. Nichols ......... 45 Director Kevin J. Shepherd ............ 43 Director
The executive officers and directors of Tritel PCS, at March 31, 1999, were as follows:
NAME POSITION - --------------------------------- ------------------------------------------------------------------ William M. Mounger, II .......... Chairman of the Board of Directors, Chief Executive Officer and President Jerry M. Sullivan, Jr. .......... Director, Executive Vice President and Chief Operating Officer E.B. Martin, Jr. ................ Director, Executive Vice President, Treasurer and Chief Financial Officer
The executive officers, directors and key employees of Tritel Communications, Inc., our operating subsidiary, at March 31, 1999, were as follows:
NAME AGE POSITION - --------------------------------- ----- -------------------------------------------------------- William M. Mounger, II .......... 42 Chairman of the Board of Directors and Chief Executive Officer William S. Arnett ............... 48 President Jerry M. Sullivan, Jr. .......... 40 Director, Executive Vice President and Chief Operating Officer E.B. Martin, Jr. ................ 42 Director, Executive Vice President, Treasurer and Chief Financial Officer T. Clark Akers .................. 41 Senior Vice President-External Affairs Timothy Burnette ................ 42 Senior Vice President-Engineering and Technical Operations Keith Halford ................... 47 Senior Vice President-Marketing Kirk Hughes ..................... 39 Senior Vice President-Information Systems Doug McQueen .................... 38 Senior Vice President-Market Operations James H. Neeld, IV .............. 38 Senior Vice President-General Counsel and Secretary Karlen Turbeville ............... 39 Senior Vice President-Finance
80 William M. Mounger, II. Mr. Mounger has served as Chief Executive Officer of Tritel and Mercury Communications since 1998 and 1990, respectively. In addition, Mr. Mounger served as President of Tritel until January 1999. Mr. Mounger was a member of the Cellular One Advisory Council from 1992-1994 and served as its Chairman from 1993-94. In recent years, Mr. Mounger has served as President of Delta Cellular Communications, as President of Alaska-3 Cellular, as Vice President of Mobile Talk, Inc., an SMR operator, as President of Southeastern Cellular Communications, and as President or executive officer in several other cellular companies. In 1996, Mr. Mounger was one of three original founders of Unity Communications, a reseller of long distance and wireless services. From 1983 to 1988, he was a partner in Sunbelt Cellular Partners, which merged with other entities to form Vanguard Cellular in 1987. William S. Arnett. Mr. Arnett has served as President of Tritel since January 1999. Mr. Arnett has served as President of Flying A Towers, a communication tower leasing company. Mr. Arnett served as President of a division of Dial Call Communications from 1994 to 1996 and with Nextel Communications following the merger of Dial Call into Nextel Communications until 1996. Mr. Arnett served as Chief Operating Officer of Transit Communications Corporation from 1993 to 1994 and as President of Rural Cellular, Inc. from 1990 to 1993. Mr. Arnett also held several positions at United States Cellular from 1984 to 1990, most recently serving as Corporate Vice President, Marketing and Operations. Jerry M. Sullivan, Jr. Mr. Sullivan has served as Executive Vice President and Chief Operating Officer of Tritel since 1993. Mr. Sullivan has also served as the Vice President and Chief Operating Officer of Mercury Communications, and Alaska-3 Cellular Corporation. In 1994, Mr. Sullivan joined and became an active member of the Universal Wireless Communications Consortium ("UWCC"). Mr. Sullivan also represents Tritel in the Personal Communications Industry Association ("PCIA"), where he is actively involved with the Broadband PCS Alliance Council. As Vice President and Chief Operating Officer of Mercury Communications, Mr. Sullivan was responsible for all operations applicable to Mercury's cellular markets. Mr. Sullivan served as Regional Manager of Mercury Communications for multiple Mississippi cellular markets, and was responsible for seeking potential acquisitions and business opportunities for Mercury throughout the United States. Prior to joining Mercury in 1993, Mr. Sullivan was a senior manager of First Energy Corporation, a wholly owned subsidiary of ChemFirst, Inc., formerly First Mississippi Corporation. E.B. Martin, Jr. Mr. Martin has served as Executive Vice President, Treasurer and Chief Financial Officer of Tritel since 1997. Mr. Martin has also served as the Vice President and Chief Financial Officer of Mercury Communications from 1990 to 1993 and since 1997. Mr. Martin was a shareholder of the law firm of Young, Williams, Henderson & Fuselier, P.A. from 1993 to 1996 and currently is a shareholder of its affiliate, Young, Williams, Henderson, Fuselier & Associates, Ltd. Mr. Martin has experience in handling mergers and acquisitions of domestic and international wireless companies. He has been responsible for arranging debt and equity financing for numerous cellular properties and has extensive experience in managing individual and institutional venture capital investments, litigation and contractual negotiations. Mr. Martin also serves as Secretary/Treasurer for Mercury Communications, Alaska-3 Cellular Corporation and Mercury Wireless Management. Scott I. Anderson. Mr. Anderson has served as a Director of Tritel since January 1999. Since 1997, Mr. Anderson has served as a principal in Cedar Grove Partners, LLC, an investment and consulting/advisory partnership, and, since 1998, as a principal in Cedar Grove Investments, LLC, a small "angel" capital investment fund. Mr. Anderson was an independent board member of PriCellular Corp from March 1997 through June 1998, when the company went private. He is a board member and advisory board member of Tegic, a wireless technology licensing company, a board member of TeleCorp PCS, a board member of Triton PCS and a board member of Xypoint, a private emergency 911 service company. He was employed by McCaw Cellular Communications and AT&T Wireless from 1986 until 1997, where he last served as Senior Vice President of the Acquisitions and Development group. 81 Alexander P. Coleman. Mr. Coleman has served as a Director of Tritel since January 1999. Since 1996, Mr. Coleman has served as a Vice President and Investment Partner of Dresdner Kleinwort Benson Private Equity LLC's leveraged buyout group. Prior to joining Dresdner Kleinwort Benson, Mr. Coleman served in several corporate finance positions for Citicorp/Citibank N.A. from 1989 through 1995, most recently as Vice President of Citicorp Venture Capital. Gary S. Fuqua. Mr. Fuqua has served as a Director of Tritel since January 1999. Mr. Fuqua has managed corporate development activities at Entergy since 1998. In addition, Mr. Fuqua oversees Entergy's non-regulated domestic retail businesses, including District Energy, Entergy Security and Entergy's various telecommunications businesses. Before he joined Entergy, Mr. Fuqua served as a Vice President with Enron Ventures Corporation in London. He also founded and managed his own company prior to joining Enron in 1988. He is a member of Entergy Enterprises' Board of Directors, and President of Entergy Technology Holdings. Mr. Fuqua is also a member of the board of TeleCorp PCS. Ann K. Hall. Ms. Hall has served as a Director of Tritel since January 1999. Since 1995, Ms. Hall has served in various roles for AT&T Wireless Services, Inc., most recently as Director of Partnership Markets. In this role, she has assisted AT&T Wireless's affiliate, Telecorp PCS, in launching its wireless operations, and she was previously involved in overseeing the financial operations for AT&T Wireless's partnership interests in the Los Angeles and Houston markets. Prior to joining AT&T Wireless Services, Inc., Ms. Hall worked for Ernst & Young LLP's Telecommunications Consulting Practice, during which time McCaw Cellular was one of her main clients. Before working in the Telecommunications Industry, Ms. Hall worked as a Product Development Engineer at National Semiconductor and later at Intel Corporation in the Technology Development Finance group. Andrew Hubregsen. Mr. Hubregsen has served as a Director of Tritel since January 1999. Mr. Hubregsen is a Senior Vice President with Conseco Private Capital Group, Inc. He is responsible for Conseco's approximately $700 million portfolio of private equity and equity related investments in a wide variety of industries. Mr. Hubregsen joined Conseco in September 1992 in the area of Corporate Development and has identified, negotiated and structured acquisitions in both core and non-core business. Prior to joining Conseco, Mr. Hubregsen was employed at GE Capital Services in the Financial Institutions Group of the Corporate Finance Division. While at GE Capital, Mr. Hubregsen worked on a variety of leveraged debt and equity transactions. H. Lee Maschmann. Mr. Maschmann has served as a Director of Tritel since January 1999. Mr. Maschmann is Vice President of Partnership Operations, Engineering for AT&T Wireless Services, Inc. In this role, he has assisted AT&T Wireless's affiliates, Telecorp PCS and Triton PCS in launching their wireless operations. He was previously involved in overseeing the Technical Operations and Engineering for AT&T Wireless's partnership interests in the Los Angeles and Houston markets. Prior to that, he oversaw the engineering and construction of AT&T Wireless's PCS markets in the Southwest region. Since 1985, Mr. Maschmann has held a number of technical leadership positions with AT&T Wireless Services, Inc., McCaw Communications, and MetroCel Cellular. Elizabeth L. Nichols. Ms. Nichols has served as a Director of Tritel since January 1999. Ms. Nichols has served as a Director and President of JDN Realty Corp., a publicly traded real estate investment trust since 1994 and is a Director of Ruby Tuesday, Inc. Prior to joining JDN Realty Corp., Ms. Nicholas worked for approximately 18 years in the real estate industry for JDN Enterprises, Inc., Dobson & Johnson Mortgage Banking firm and First American National Bank. Kevin J. Shepherd. Mr. Shepherd has served as a Director of Tritel since January 1999. Mr. Shepherd has served as President of Triune, Inc., a financial advisory firm servicing high net worth individuals since its inception in 1989. T. Clark Akers. Mr. Akers has served as Senior Vice President-External Affairs since 1995. Mr. Akers is responsible for federal, state and local governmental relations and maintaining Tritel's relationships with the FCC and the Wireless Bureau and developing relationships with the Public Service Commissions, Planning Commissions and other regulatory agencies in states in which Tritel will do business. 82 Timothy Burnette. Mr. Burnette has served as Senior Vice President--Engineering & Technical Operations since May 1999. He is responsible for the construction and operation of Tritel's TDMA IS-136 PCS network. Prior to joining Tritel, Mr. Burnette served as Director of Network Operations (River Region) for Nextel from 1994 to 1995, Vice President of Network Operations (River Region) for Nextel from 1995 to 1996, and Vice President, Corporate Development, for Hemphill Corporation, a tower and construction company primarily focused on the wireless communications industry, from 1996 to 1999. Keith Halford. Mr. Halford has served as Senior Vice President-Marketing since February 1999. He is responsible for Tritel's overall marketing strategy. Prior to joining Tritel, Mr. Halford was Principal of Transactional Marketing Consultants beginning in March 1995, where he assisted television networks, advertising agencies and telemarketing firms in the creation of e-commerce opportunities. From 1993 through March 1995, Mr. Halford was President of RSTV Inc. where he created "ViaTV", an auction-based, satellite delivered television channel. Kirk Hughes. Mr. Hughes has served as Senior Vice President-Information Systems since 1998. He is responsible for Tritel's management information systems and support. Prior to joining Tritel in 1998, Mr. Hughes was employed with MobileComm, a national paging company, for 13 years, where he last served as Vice President of Information Systems. In that capacity Mr. Hughes managed a staff of 75 employees serving a customer base of 4 million people. Doug McQueen. Mr. McQueen has served as Senior Vice President-Market Operations since July 1998. He is responsible for direct and indirect sales, oversight of the construction and staffing of the company's retail stores and overall supervision of Tritel's regional managers. Prior to becoming Senior Vice President-Market Operations, Mr. McQueen was Vice President-Regional Manager with Tritel from 1997 and General Manager of Mercury Communications's Madisonville, KY market from September 1991 through April 1994. From May 1994 through January 1997, Mr. McQueen was employed with Clear Communications as a Regional Manager for its Kentucky and West Virginia markets. Mr. McQueen was General Manager for United States Cellular's Evansville, Indiana market from 1986 to 1991. James H. Neeld, IV. Mr. Neeld has served as Senior Vice President-General Counsel and Secretary since April 1999 and April 1998, respectively. He is responsible for general corporate and other legal matters. Prior to becoming Senior Vice President-General Counsel in 1999, Mr. Neeld was a shareholder of the Jackson, Mississippi law firm, Young, Williams, Henderson & Fuselier, P.A. and its affiliate Young, Williams, Henderson, Fuselier & Associates, Ltd. Mr. Neeld began his career with Young, Williams, Henderson & Fuselier, P.A. in 1985 and was a director of the firm from 1994 through 1997, and remains of counsel to the firm. While in private practice, Mr. Neeld focused on telecommunications and general corporate law, corporate finance, acquisitions, transactions and business planning. Mr. Neeld currently serves on the Executive Committee of the Business Law Section of the Mississippi Bar and is a member of the Mississippi Secretary of State's Business Law Advisory Group. Karlen Turbeville. Ms. Turbeville has served as Senior Vice President-Finance since 1991. She also has served as Vice President of Alaska - 3 Cellular Corporation and as Vice President of Finance and Director for Mercury Communications. Since joining Mercury Communications in 1991, Ms. Turbeville has held direct responsibility for the financial, treasury, billing, customer care, roaming, investor relations, budgeting and regulatory reporting functions for all RSA markets. Prior to joining Mercury Communications, Ms. Turbeville was a Manager at Tann, Brown & Russ Co., Ltd., a Mississippi accounting firm. Ms. Turbeville is a Certified Public Accountant with experience in accounting, auditing and consulting, including six years with Arthur Andersen & Co. where she worked with Worldcom, Skytel and cellular companies, and companies in the transportation, public utility and banking industries. The Bylaws of Tritel provide that the Board of Directors will have between one and thirteen members. According to the terms of the Stockholders' Agreement, the Board of Directors will consist of thirteen members. For so long as required by the FCC, the Management Stockholders will 83 designate four members, each of whom must be an officer of Tritel and each of whom will have 1/2 of a vote, AT&T Wireless will designate two members and the Cash Equity Investors will designate three members. The remaining four directors will be designated by the Management Stockholders, and if permitted by FCC regulation, one such designation will be subject to the consent of the Cash Equity Investors alone, with the remaining three subject to the consent of the Cash Equity Investors and AT&T Wireless. Once permitted by FCC regulation, the remaining four directors will be designated by the Cash Equity Investors, with three of these designations subject to the consent of AT&T Wireless and Messrs. Mounger, Martin and Sullivan. All directors will hold office until the annual meeting of stockholders next following their election and until their successors are elected and qualified. No Director may be removed without cause. Officers are elected annually by and serve at the discretion of the Board of Directors. Tritel's Bylaws provide that the Board of Directors may establish committees to exercise certain powers delegated by the Board of Directors. At present, the Board has established an Audit Committee, whose members are Mr. Coleman, Mr. Fuqua and Ms. Hall, and a Compensation Committee, whose members are Messrs. Hubregsen, Maschmann and Shepherd. COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS EXECUTIVE COMPENSATION The following table sets forth certain information with respect to the compensation paid by Tritel for services rendered during fiscal year 1998 by its chief executive officer and its four most highly compensated executive officers (the "Named Executive Officers"). Mr. Arnett became President in January 1999 and was not an employee of Tritel prior to such appointment. SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ANNUAL COMPENSATION AWARDS ------------------------------------------ ------------- SECURITIES OTHER ANNUAL UNDERLYING NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS - ------------------------------------------- ----------- ----------- -------------- ------------- William M. Mounger, II Chairman of the Board and Chief Executive Officer ........................ $225,000 $112,500 -- -- Jerry M. Sullivan, Jr. Executive Vice President and Chief Operating Officer .................. 225,000 112,500 -- -- E.B. Martin, Jr. Executive Vice President and Chief Financial Officer .................. 225,000 112,500 -- -- Karlen Turbeville Senior Vice President -- Finance ......... 175,000 87,500 -- -- John Greathouse Senior Vice President -- Chief Technical Officer ........................ 175,000 97,500 $2,700 --
Stock Options There were no stock options granted to the Named Executive Officers during fiscal year 1998. DIRECTORS COMPENSATION It is not anticipated that the directors designated by the cash equity investors will receive cash compensation for their service on the Board of Directors. Other non-employee directors receive a quarterly stipend of $2,500, $1,000 for attending each Board or committee meeting and $500 for participating in each Board or committee meeting held by teleconference. In addition, Tritel has 84 adopted the 1999 Stock Option Plan for Non-Employee Directors and anticipates granting stock options to qualifying non-employee directors in fiscal year 1999. All directors, including directors who are Tritel employees, will be reimbursed for out-of-pocket expenses in connection with attendance at meetings. EMPLOYMENT AGREEMENTS Tritel has entered into employment agreements with Messrs. Arnett, Martin, Mounger and Sullivan. The employment agreements provide for a term of five years at an annual base salary of $225,000, subject to increase as determined by the Board of Directors. Each executive officer will also be eligible for an annual bonus of up to 50% of his base salary upon achievement of certain objectives to be determined by the Board of Directors or its Compensation Committee. The employment agreements provide for termination: o by the executive officer, at any time and at his sole discretion upon 30 days' written notice to Tritel; o by the executive officer, at any time for "Good Reason," as defined in the employment agreements, upon written notice to Tritel; o by Tritel, at any time for "cause," as defined in the employment agreements, upon written notice to the executive officer; o automatically, upon the executive officer's death; o by Tritel, upon the executive officer's "Disability," as defined in the employment agreements, upon written notice to the executive officer; o by Tritel, immediately in the event of an uncured breach of the Management Agreement by the Manager, as defined below; and o by Tritel, if Tritel does not meet certain corporate objectives. Depending upon the reason for termination of the employment agreements, the executive officer may be entitled to a severance payment upon such termination. The employment agreements grant to Tritel certain repurchase rights with respect to the shares of Class A Common and Class C Common received by some of the executive officers upon the closing of the joint venture and the shares of Class A Common received by William S. Arnett. The employment agreements provide that the equity to be received by the executive officers is subject to the following vesting schedule:
VESTING DATE EVENT PERCENT OF BASE SHARES - ------------------------------------------------------------------------- ----------------------- Commencement Date(1) ............................................... 20% Second Anniversary ................................................. 15 Third Anniversary .................................................. 15 Fourth Anniversary ................................................. 15 Fifth Anniversary .................................................. 15 Completion of Year 1 and Year 2 of Minimum Build-Out Plan .......... 10 Completion of Year 3 of Minimum Build-Out Plan ..................... 10 --- Total ............................................................. 100% === ------------ (1) The first vesting date event for Mr. Arnett is the First Anniversary.
For purposes of this vesting schedule, the term "Base Shares" means eleven-fifteenths (11/15) of the executive officer's Class A Common and Class C Common and, in the case of Mr. Arnett, eleven-fifteenths (11/15) of Class A Common. The employment agreements provide for repurchase by Tritel of each executive officer's non-vested stock upon the occurrence of specified events and allow 85 for accelerated vesting upon certain termination events. Until the stock is vested, the certificates evidencing the shares of stock are to be held in escrow. The employment agreements also contain customary restrictions on the executive officers' ability to compete with Tritel, solicit employees of Tritel and on the disclosure of confidential information of Tritel. Notwithstanding the foregoing, certain terms of Mr. Arnett's employment agreement differ from the employment agreements of the other executive officers. With respect to termination, Mr. Arnett may be terminated by Tritel, at any time with or without "Cause," as defined in the employment agreements, upon written notice to him, and Mr. Arnett's employment is not subject to the terms of the Management Agreement. 1999 STOCK OPTION PLAN Tritel's 1999 Stock Option Plan (the "Stock Option Plan") authorizes the grant of certain tax-advantaged stock options that are intended to qualify 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 13,566 shares of common stock of Tritel ("Awards"). The Stock Option Plan provides for the grant of Awards to qualified officers, employee directors and other key employees of, and consultants to, Tritel and its subsidiaries, provided, however that incentive stock options may only be granted to employees. As of March 31, 1999, no options have been issued under the Stock Option Plan. As of March 31, 1999, 11,531 shares have been issued 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 ("10% Stockholder"), the term of those stock options shall be for no more than five years. The number and terms of each Award 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. The exercise price of incentive stock options and nonqualified stock options granted under the Stock Option Plan must not be less than the fair market value of the common stock on the grant date, except that the exercise price of incentive stock options granted to a 10% Stockholder must not be less than 110% of such fair market value on the grant date. The aggregate fair market value on the date of grant of the common stock for which incentive stock options are exercisable for the first time by an employee during any calendar year may not exceed $100,000. The Stock Option Plan will terminate in 2009 unless extended by amendment. In the event a participant in the Stock Option Plan terminates employment with Tritel, the Board or the compensation committee may accelerate the vesting and exercisability of any stock option or stock appreciation right or lapse the restrictions on any restricted share or deferred share if it determines such action to be equitable under the circumstances or in Tritel's best interest. 1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS 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 50,000 shares of common stock of Tritel to non-employee directors of Tritel. As of March 31, 1999, no 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 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. 86 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 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 Messrs. Mounger, Sullivan and Martin. Airwave Communications transferred its C-Block PCS licenses, comprising approximately 2.5 million POPs 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 4.1 million POPs 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 POPs transferred by Digital PCS, 1.7 million overlap with those contributed by AT&T Wireless. OWNERSHIP OF THE REMAINING AFFILIATE LICENSES; OPTION TO PURCHASE LICENSES IN GEORGIA AND FLORIDA Digital PCS continues to hold PCS licenses covering approximately 3.5 million POPs in Florida, Georgia, Louisiana, New Mexico and Texas. Digital PCS has granted Tritel an option, for which Tritel will pay a total of $909,000, permitting Tritel to acquire PCS licenses covering approximately 2.0 million POPs in Florida and southern Georgia owned by Digital PCS. The option expires on May 20, 1999. If Tritel exercises the option, the purchase price for the licenses will be the number of shares of Series C Preferred that has a value equal to the aggregate amount paid by Digital PCS to the FCC for the licenses, excluding the FCC debt outstanding. Additionally, Tritel will assume the FCC debt. Under this formula, the purchase price would be equal to approximately $3.0 million in Series C Preferred Stock and Tritel would assume $12.0 million in FCC debt. This option may not be exercised without the prior consent of AT&T Wireless, and Tritel does not expect this consent to be forthcoming. See "Risk Factors -- We Would Require Significant Additional Capital if We Were to Acquire and Build Out Additional Licenses." The AT&T joint venture agreements provide that if Tritel exercises the option, the definition of Tritel's markets for purposes of the joint venture agreements would be expanded to include the markets covered by the option licenses. On April 20, 1999, Digital PCS sold licenses covering 1.6 million POPs in Louisiana to Telecorp PCS, another AT&T Wireless joint venture partner, in exchange for an equity interest in Telecorp PCS. Management intends for the remaining licenses, covering 1.5 million POPs in Texas and New Mexico, to remain with Digital PCS. LOANS TO PREDECESSORS On January 7, 1999, Tritel entered into a secured promissory note agreement under which it agreed to lend up to $2.5 million to Airwave Communications and Digital PCS. 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 Airwave Communications's and Digital PCS's ownership interest in Tritel and certain equity securities of TeleCorp PCS. Any proceeds from the sale of licenses by Airwave Communications and Digital PCS, net of the FCC debt repayment, 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's and Digital PCS's interest in Tritel based on a valuation of Tritel's stock at that time. 87 MANAGEMENT AGREEMENT Tritel has entered into a Management Agreement with Tritel Management, LLC, a Mississippi limited liability company, which is wholly owned by the Messrs. Martin, Mounger and Sullivan. Pursuant to the Management Agreement, Tritel Management is to be responsible for the design, construction and operation of Tritel and its business, all subject to Tritel's oversight, review and ultimate control and approval. Tritel will pay Tritel Management a fee of $10,000 per year for such services and will reimburse Tritel Management for out-of-pocket expenses incurred on behalf of Tritel. The term of the Management Agreement is five years, subject to termination upon the occurrence of certain events described in the Management Agreement. RELATIONSHIP WITH MERCURY COMMUNICATIONS Mercury Communications, a company wholly owned by Messrs. Martin, Mounger and Sullivan, provides management services to Alaska-3 Cellular, LLC, the owner of the non-wireline Alaska-3 Cellular license. In conjunction with Mercury Communications' transfer of its employees to Tritel, Mercury Communications has subcontracted to Tritel the back-office management functions associated with managing Alaska-3's cellular market. For the services provided by Tritel, Mercury Communications pays a monthly fee in the amount of $14,250. During 1997 and 1998, Tritel reimbursed Mercury Communications for actual expenses to cover the salaries and employee benefits of Mercury Communications employees who were providing services almost exclusively to Tritel. Tritel reimbursed Mercury Communications $1,312,000 and $3,709,000 for such expenses in 1997 and 1998, respectively. On January 7, 1999, after consummation of the transactions described herein, the employees of Mercury Communications who were providing services to Tritel became employees of Tritel. During April 1997, Tritel advanced $249,000 on behalf of Mercury Communications to repay a loan Mercury Communications had incurred from a third party. The balance due from Mercury Communications on this advance was $247,000 at December 31, 1997 and 1998 and $240,000 at March 31, 1999. RELATIONSHIP WITH MERCURY WIRELESS MANAGEMENT, INC. Mercury Wireless Management, Inc. ("MWM"), a company wholly owned by Messrs. Martin, Mounger and Sullivan, provides management and marketing services to communications tower owners, including municipalities. MWM has contracted to provide such services to the City of Jackson, Mississippi. Under the City of Jackson contract, MWM receives a percentage of rentals generated from the leasing of the facilities managed by MWM. Tritel has entered into various leases to co-locate its equipment on certain towers owned by the City of Jackson and managed by MWM. These leases were negotiated on an arms length basis and incorporate terms substantially identical to those offered by the City of Jackson to unrelated third-party carriers. Tritel's employees perform certain services on behalf of MWM, and MWM reimburses Tritel for these services. Such amounts totaled $17,000 for 1997 and $11,000 for 1998 and were included in amounts due from affiliates at December 31, 1997 and 1998. RELATIONSHIP WITH WIRELESS FACILITIES, INC. Tritel receives site acquisition and microwave relocation services from Wireless Facilities, Inc. Scott I. Anderson, who is a director of Tritel, is also a director of WFI. RELATIONSHIP WITH AT&T WIRELESS Tritel has entered into joint venture agreements with AT&T Wireless and its affiliates, including the Securities Purchase Agreement, the Closing Agreement related thereto, Stockholders' Agreement, Network Membership License Agreement, Roaming Agreement, Resale Agreement, Roaming 88 Administration Agreement and Long Distance Agreement. AT&T Wireless holds Series A Preferred Stock and Series D Preferred Stock valued at $137.1 million and has designated two directors to Tritel's Board of Directors, Ann K. Hall and H. Lee Maschmann. See "Joint Venture Agreements with AT&T Wireless." RELATIONSHIP WITH TELECORP PCS AND TRITON PCS Tritel has common stockholders with TeleCorp PCS and Triton PCS and may be deemed an affiliate by virtue of this common ownership. Scott I. Anderson and Gary S. Fuqua, two of Tritel's directors, serve as directors of TeleCorp PCS. Mr. Anderson also serves as a director of Triton PCS. Tritel has entered into an agreement with TeleCorp PCS and Triton PCS to adopt the common brand name, SunCom, that will be co-branded with the AT&T brand name. RELATIONSHIP WITH ABC WIRELESS, L.L.C. Tritel has made a loan of $7.5 million to ABC Wireless, L.L.C. for the purpose of bidding on licenses in the FCC's auction of C-Block PCS licenses. The members of ABC Wireless are Mr. Anderson, a director of Tritel, and Gerald T. Vento and Thomas H. Sullivan, directors and executive officers of TeleCorp PCS. See "Management's Discussion and Analysis -- Pending License Acquisition." RELATIONSHIP WITH FLYING A TOWERS Tritel has leased several communication towers and expects to lease several additional towers from Flying A Towers. Mr. Arnett is President of Flying A Towers. RELATIONSHIP WITH INITIAL PURCHASERS Affiliates of the Initial Purchasers also provide banking, advisory and other financial services to Tritel PCS and its affiliates in the ordinary course of business. Toronto Dominion (Texas), Inc., an affiliate of TD Securities (USA) Inc., is the administrative agent and issuing bank and affiliates of each of the Initial Purchasers are lenders under Tritel's bank facility. Tritel intends to enter into an interest rate swap agreement with Barclays Bank PLC. See "Plan of Distribution" and "Management's Discussion and Analysis -- Qualitative and Quantitative Market Risk." RELATIONSHIP WITH CASH EQUITY INVESTORS Tritel and the Cash Equity Investors have entered into an Investors Stockholders' Agreement to provide for certain rights with respect to the management of Tritel, and to provide for certain restrictions with respect to the sale, transfer or other disposition of Tritel stock beyond those rights and restrictions set forth in the Stockholders' Agreement. The Investors Stockholders' Agreement provides, subject to limited exceptions with respect to removal of directors and filling of vacancies, that the Cash Equity Investors will vote all of their shares to cause the election of one individual to be designated as a director by each of Conseco, Dresdner and Entergy. Initially, the directors designated by Conseco, Dresdner and Entergy will be Andrew Hubregsen, Alexander P. Coleman and Gary S. Fuqua, respectively. In the event that the right of the Cash Equity Investors to nominate directors is reduced to one director, then that right will be exercisable by Cash Equity Investors owning two-thirds of the outstanding shares of common stock and/or Series C Preferred Stock held by all Cash Equity Investors. Each Cash Equity Investor has agreed, subject to certain limited exceptions, that it will not directly or indirectly transfer or otherwise grant or create certain liens in, give, place in trust or otherwise voluntarily or involuntarily dispose of ("Transfer") any share of the capital stock of Tritel held by it as of January 7, 1999 or thereafter acquired, including a proposed Transfer to any Prohibited Transferee (as defined in the Stockholders' Agreement), or any Regional Bell Operating Companies, Microsoft Corporation, GTE, SNET or any of their respective affiliates, successors or 89 assigns. In addition, if a Cash Equity Investor desires to Transfer any or all of its shares of the capital stock of Tritel to an affiliate or affiliated successor, then the Cash Equity Investor must first offer all of those shares to the other Cash Equity Investors, subject to certain terms and conditions. Each Cash Equity Investor also has tag along rights and drag along rights. The tag along rights enable non-selling Cash Equity Investors to participate in a sale of certain capital stock of Tritel by other selling Cash Equity Investors, subject to certain terms and conditions. The drag along rights provide, under certain circumstances, that a Cash Equity Investor that proposes to sell its shares of the capital stock of Tritel may compel other non-selling Cash Equity Investors to participate in the proposed sale. The Investors Stockholders' Agreement will terminate upon the termination of the Stockholders' Agreement. RELATIONSHIP WITH YOUNG, WILLIAMS, HENDERSON & FUSELIER, P.A. Young, Williams, Henderson & Fuselier, P.A. provides legal services to Tritel. E.B. Martin, Jr., who is an officer and director of Tritel, is also a shareholder of the law firm of Young, Williams, Henderson & Fuselier and Associates Ltd., an affiliate of Young, Williams, Henderson & Fuselier, P.A. James H. Neeld, IV, who is Senior Vice President-General Counsel and Secretary of Tritel, is also of counsel to Young, Williams, Henderson & Fuselier, P.A. 90 PRINCIPAL STOCKHOLDERS The following table sets forth certain information with respect to beneficial ownership of Tritel's voting securities, as well as its non-voting common stock, as of the date of this prospectus, by o each stockholder who is known by Tritel to own beneficially more than 5% of any class of Tritel's voting securities, o each of Tritel's directors, o each of the Named Executive Officers and o all directors and executive officers of Tritel as a group. On January 7, 1999, several institutional equity investors, some of which are named in the table below, purchased an aggregate of $149.2 million of Series C Preferred Stock of Tritel. Of this amount, $99.4 million was funded on January 7, 1999 and the remaining $49.8 million is due to be funded, under the institutional investors' irrevocable and unconditional commitments, on September 30, 1999. Most of these institutional investors entered into investor loan agreements with Ericsson pursuant to which Ericsson provided a total of $60.8 million of loans to them, severally, to fund a portion of the January 7, 1999 purchase. On the same date, Airwave Communications purchased $11.2 million of the Series C Preferred Stock of Tritel and Digital PCS purchased $3.0 million of Series C Preferred Stock. The full $14.2 million was funded on January 7, 1999 by means of an investor loan from Ericsson in that amount. As part of a restructuring of their operations, Digital PCS has agreed to transfer all of its Series C Preferred Stock, including the foregoing $3.0 million of Series C Preferred Stock, to Airwave Communications, which will also assume the $3.0 million loan from Ericsson. The investor loans are subject to limited recourse. The interest thereon, which is at a fixed rate, is not payable for eight years, and the loans are secured by $121.8 million of Series C Preferred Stock owned by the institutional investors and $32.4 million of Series C Preferred Stock owned by Airwave Communications, including the shares to be acquired from Digital PCS. Ericsson made these loans as an additional inducement for Tritel to agree to purchase from Ericsson not less than $300 million of PCS infrastructure equipment, including base stations, switches, software and related peripheral equipment. Shares of Series C Preferred Stock are convertible immediately into shares of Class A Common Stock on a one-for-one basis and, accordingly, holders of Series C Preferred Stock are deemed to own the same number of shares of Class A Common Stock. On all matters to be submited to the stockholders of Tritel, the holders of Series C Preferred Stock have the right to vote on an as-converted basis as a single class with the holders of Tritel's Class A Common Stock. Together the Class A Common Stock and the Series C Preferred Stock cast 4,990,000 votes on all matters not requiring a class vote, while the nine shares of Voting Preference Common Stock cast 5,010,000 votes on all matters not requiring a class vote. The votes to which the Class A Common Stock and Series C Preferred Stock are collectively entitled are allocated to each share on a pro rata basis. Similarily, the votes to which the nine shares of Voting Preference Common Stock are entitled are allocated to each share on a pro rata basis. The Voting Preference Common Stock loses its voting preference when the rules of the FCC so permit, which is currently ten years after the respective issuances of Tritel's C- and F-Block licenses. The Class C Common Stock is non-voting stock. Unless otherwise indicated, each person named below has sole voting and investment power with respect to the shares beneficially owned. 91
COMMON STOCK --------------------------------------------------------------------- CLASS A CLASS C VOTING PREFERENCE COMMON COMMON COMMON ------------------------ ------------------------ ------------------- NAME(1) NUMBER % NUMBER % NUMBER % - ------------------------------------ ------------- ---------- ------------- ---------- -------- ---------- AT&T Wireless(3) ................... -- -- -- -- -- -- Conseco, Inc.(5) ................... -- -- -- -- -- -- Dresdner Kleinwort Benson Private Equity Partners L.P.(6) .................. -- -- -- -- -- -- Triune PCS, LLC(7) ................. -- -- -- -- -- -- Entergy Wireless Corporation(8) .................... -- -- -- -- -- -- MF Financial(9) .................... -- -- -- -- -- -- Airwave Communications, LLC(10) ........................... -- -- -- -- -- -- William M. Mounger, II(10)(11) 5,961.36 16.8% 1,725.56 33.3% 3.0 33.3% Jerry M. Sullivan, Jr.(10) ......... 5,961.36 16.8 1,725.56 33.3 3.0 33.3 E.B. Martin, Jr. ................... 5,961.36 16.8 1,725.56 33.3 3.0 33.3 Karlen Turbeville .................. 2,713.03 7.7 -- -- -- -- John Greathouse .................... 678.26 1.9 -- -- -- -- All officers and directors as a group ............................. 35,518.76 100.0% 5,176.68 100.0% 9.0 100.0% PREFERRED STOCK ----------------------------- PERCENTAGE SERIES C OF TOTAL ----------------------------- VOTING NAME(1) NUMBER %(2) POWER(2) - ------------------------------------ ------------------ ---------- ----------- AT&T Wireless(3) ................... 46,374.10(4) 20.1% 8.7% Conseco, Inc.(5) ................... 50,000.00 27.1 9.4 Dresdner Kleinwort Benson Private Equity Partners L.P.(6) .................. 30,000.00 16.3 5.6 Triune PCS, LLC(7) ................. 24,139.04 13.1 4.5 Entergy Wireless Corporation(8) .................... 20,000.00 10.9 3.8 MF Financial(9) .................... 10,000.00 5.4 1.9 Airwave Communications, LLC(10) ........................... 32,392.36 17.6 6.1 William M. Mounger, II(10)(11) 2,000.00 1.1 18.2 Jerry M. Sullivan, Jr.(10) ......... -- -- 17.8 E.B. Martin, Jr. ................... -- -- 17.8 Karlen Turbeville .................. -- -- * John Greathouse .................... -- -- * All officers and directors as a group ............................. 2,000.00 1.1% 57.1%
- ---------- * Represents less than 1%. (1) Unless otherwise indicated, the address of each person listed in this table is c/o Tritel, Inc., 1080 River Oaks Drive, Suite B-100, Jackson, Mississippi 39208. (2) The percentage of the Series C Preferred Stock owned by AT&T Wireless assumes it has converted all of its Series D Preferred Stock into Series C Preferred Stock. The percentage of the Series C Preferred Stock owned by each other holder assumes AT&T Wireless has not converted its Series D Preferred Stock. The percentage of the total voting power of Tritel held by all persons in the table assumes AT&T Wireless has converted its Series D Preferred Stock. (3) Address is: 5000 Carillon Point, Kirkland, WA 98033. (4) Consists of 46,374.10 shares Series D Preferred Stock, which are assumed to have been converted into an equivalent number of shares of Series C Preferred Stock. AT&T Wireless also owns 90,668.33 shares of Series A Preferred Stock. (5) These shares are held through Washington National Insurance Company and United Presidential Life Insurance Company. Address is: 11825 North Pennsylvania Street, Carmel, IN 46032. (6) Address is: 75 Wall Street, 24th Floor, New York, NY 10005. (7) Address is: 4770 Baseline Road, Suite 380, Boulder, CO 80303. (8) On April 26, 1999, Entergy Wireless Company notified Tritel and the stockholders of Tritel of its offer to sell its 20,000 shares of Series C Preferred Stock pursuant to the right of first offer held by certain stockholders of Tritel under the Stockholders' Agreement and the Investors Stockholders' Agreement. Entergy has advised Tritel that its decision to sell its shares reflects a shift in its strategic focus. Tritel has received indications that certain other existing stockholders are interested in purchasing Entergy's shares. Entergy's address is: Three Financial Centre, 900 South Shackelford, Suite 210, Little Rock, AR 72211. (9) Address is: 73 Treemont Street, Suite 13, Boston, MA 02108. (10) Assumes the transfer of 6,802.4 shares of Series C Preferred Stock from Digital PCS to Airwave Communications. Southern Farm Bureau Life Insurance Company has a controlling interest in Airwave Communications. Mr. Mounger and his family have an approximately 10% equity interest in Airwave Communications through M3, LLC. Jerry M. Sullivan, Jr.'s wife and members of her family have a less than 10% equity interest in Airwave Communications through McCarty Communications LLC. Messrs. Mounger and Sullivan disclaim any beneficial interest in the shares of Tritel owned by Airwave Communications. (11) Mr. Mounger controls Trillium PCS, LLC, which owns 2,000 shares of Series C Preferred Stock. 92 DESCRIPTION OF CERTAIN INDEBTEDNESS GOVERNMENT DEBT Because Tritel qualifies as a "small business" for the purpose of C-Block licenses and a "very small business" for the purposes of F-Block licenses, it is entitled to receive preferential financing for these licenses from the U.S. Government. The total license fee payable to the U.S. Government 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, Tritel 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 U.S. Government is approximately $12.0 million. Under the preferential financing terms for the F-Block licenses, Tritel 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 and principal over the remaining eight years of the license term. As a C- and F-Block licensee, Tritel may incur substantial financial penalties, license revocation or other enforcement measures at the FCC's discretion, in the event that it fails to make timely quarterly installment payments. Where a C or F-Block licensee anticipates defaulting on any required payment, it may request a three to six month grace period before the FCC cancels its license. In the event of default by a C- or F-Block licensee, the FCC 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. See "Government Regulation." BANK FACILITY The following description is not complete and is qualified in its entirety by reference to the provisions of the Amended and Restated Loan Agreement, dated as of March 31, 1999 (the "Bank Facility"), among Tritel PCS, as borrower, Tritel, as parent, Toronto Dominion (Texas), Inc., Barclays Bank PLC, NationsBank, N.A., and other financial institutions signatory thereto, as lenders, and Toronto Dominion (Texas), Inc., as administrative agent for the lenders and The Toronto-Dominion Bank, Houston Agency, as the issuing bank, and other related documents entered into in connection with the Bank Facility. The Bank Facility provides for an aggregate of up to $550 million of senior secured credit facilities including up to: o a $250 million reducing revolving credit facility (the "Revolver"), o a $100 million term credit facility (the "Term Loan A") and o a $200 million term credit facility (the "Term Loan B"). The final maturity date for the Revolver and the Term Loan A is June 30, 2007 and for the Term Loan B is December 31, 2007. At March 31, 1999, Tritel PCS had amounts outstanding under the Bank Facility of approximately $200 million. Tritel PCS's ability to draw funds under the Bank Facility is subject to customary conditions including, among others, the following: o Total Debt outstanding may not exceed 70% of Total Capital, and o Senior Debt may not exceed 50% of Total Capital, except that under certain circumstances, including satisfaction of buildout and subscriber milestones, this percentage may be increased to as much as 55%. 93 As of March 31, 1999, Tritel PCS could have borrowed up to a total of approximately $273.7 million pursuant to the terms of the Bank Facility. As of that date, after giving effect to the offering of the Notes, Tritel PCS could have borrowed approximately $473.9 million under the Bank Facility. The Bank Facility also provides Tritel PCS with letters of credit of up to $10 million under the Revolver. At the option of Tritel PCS, the Revolver and the Term Loan A bear interest at either the base rate, which is the greater of the prime rate of 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 LIBOR, plus an applicable margin ranging from a minimum of 1.75% to a maximum of 3.75% (the "LIBOR Margin"), in each case, depending on the occurrence of the third anniversary of the Loan Agreement, the generation of positive operating cash flow by Tritel PCS and Tritel PCS's total leverage ratio. At the option of Tritel PCS, the Term Loan B bears interest at either the base rate, plus an applicable margin of either 2.75% or 3.50%, or LIBOR, plus an applicable margin of either 3.75% or 4.50%, in each case depending on whether or not Tritel PCS has achieved positive cash flow and the third anniversary of the Bank Facility has occurred. Tritel PCS must pay a per annum commitment fee 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. Tritel PCS also must pay a letter of credit fee equal to the LIBOR Margin 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 Bank Facility bearing interest at LIBOR plus the LIBOR 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. The Bank Facility is secured by: o a perfected first priority lien on all tangible and intangible assets, including FCC licenses if legally permitted, of Tritel, Tritel PCS and each of their present and future subsidiaries, o a pledge of all the capital stock of Tritel PCS and each of its present and future subsidiaries and o a pledge of Tritel's equity subscription agreements. In addition, the Bank Facility is secured by upstream guarantees from Tritel PCS's direct and indirect subsidiaries, both present and future, and a downstream guarantee from Tritel. The Bank Facility contains various covenants that restrict the ability of Tritel and its subsidiaries, among other things, to: o incur additional indebtedness, o grant liens, o make guarantees, o engage in mergers, acquisitions, investments, consolidations, liquidations, dissolutions and asset sales, o make distributions and other restricted payments, o engage in transactions with affiliates, o own real estate and 94 o restrict upstream dividends by subsidiaries to Tritel PCS. The Bank Facility contains certain financial and operating covenants including, among other things: o a maximum senior debt to total capitalization ratio, o a maximum total debt to total capitalization ratio, o a minimum percentage of covered POPs, o a minimum number of subscribers, o a minimum amount of revenues, o a maximum amount of capital expenditures, o a maximum total leverage ratio, o a maximum senior leverage ratio, o a minimum fixed charge coverage ratio and o a minimum interest coverage ratio. Events of default under the Bank Facility include: o any acceleration of, or any default permitting acceleration of, indebtedness of Tritel PCS, its subsidiaries or Tritel, Inc. exceeding $5.0 million, o loss of the right to use any AT&T trademark pursuant to the Network Membership License Agreement within five years after March 31, 1999 and, thereafter, loss of such right under specific circumstances, o failure of any party to the Securities Purchase Agreement, Stockholders' Agreement or Bid Equity Commitments Documentation (as defined in the Loan Agreement) to comply with a funding or contribution obligation thereunder exceeding 30 days, o the occurrence or existence of any Change of Control Event (as defined in the Loan Agreement), and o other usual and customary events of default under senior secured credit facilities. The lenders under the Bank Facility received fees reflecting then-existing market conditions, as well as reimbursement of their expenses. 95 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER Tritel PCS originally sold the outstanding Notes to NationsBanc Montgomery Securities LLC, Barclays Capital Inc., TD Securities (USA) Inc., BNY Capital Markets, Inc., CIBC World Markets Corp. (formerly CIBC Oppenheimer Corp.) and Credit Lyonnais Securities (USA) Inc. (the "Initial Purchasers"). The Initial Purchasers subsequently placed the outstanding Notes with: o qualified institutional buyers in reliance on Rule 144A under the Securities Act; and o qualified buyers outside the United States in reliance on Regulation S under the Securities Act. Tritel PCS entered into a registration rights agreement with the Initial Purchasers, as a condition to their purchase of the outstanding Notes, pursuant to which Tritel PCS has agreed, for the benefit of the outstanding Note holders, at its own expense, to use its reasonable best efforts file a registration statement for this exchange offer, of which this prospectus is a part, with the Securities and Exchange Commission (the "SEC") within 60 days after the issue date of the Notes. In addition, Tritel PCS will use its reasonable best efforts to cause the registration statement to become effective within 210 days after the issue date of the Notes. When the exchange offer registration statement is declared effective, Tritel PCS will offer the registered Notes in exchange for tender of the outstanding Notes. For each outstanding Note tendered to Tritel PCS pursuant to the exchange offer, the holder of such outstanding Note will receive a registered Note having an original principal amount at maturity equal to that of the tendered outstanding Note. Based upon interpretations by the SEC staff set forth in certain no-action letters to third parties (including Exxon Capital Holdings Corp., SEC No-Action Letter (April 13, 1989); Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5, 1991); and Shearman & Sterling, SEC No-Action Letter (July 2, 1993)), Tritel PCS believes that the registered Notes issued pursuant to this exchange offer in exchange for the outstanding Notes, in general, will be freely tradable after the exchange offer, without compliance with the registration and prospectus delivery requirements of the Securities Act. However, any purchaser of outstanding Notes who is a Tritel PCS "affiliate," within the meaning of Rule 405 under the Securities Act, who does not acquire the registered Notes in the ordinary course of business, or who tenders in the exchange offer for the purpose of participating in a distribution of the registered Notes, could not rely on the SEC staff position enunciated in such no-action letters and, in the absence of an applicable exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. A holder's failure to comply with those requirements in such an instance may result in that holder incurring liability under the Securities Act which we will not indemnify. As the above-mentioned no-action letters and the registration rights agreement contemplate, each holder accepting the exchange offer is required to represent to us, in a letter of transmittal, that: o the holder or the person receiving the registered Notes, whether or not such person is the holder, will acquire those registered Notes in the ordinary course of business; o the holder or any other acquiror is not engaging in a distribution of the registered Notes; o the holder or any other acquiror has no arrangement or understanding with any person to participate in a distribution of the registered Notes; o neither the holder nor any other acquiror is a Tritel PCS affiliate within the meaning of Rule 405 under the Securities Act; and o the holder or any other acquiror acknowledges that if that holder or other acquiror participates in the exchange offer for the purpose of distributing the registered Notes, it must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any such resale and cannot rely on the above-mentioned no-action letters. 96 As indicated above, each broker-dealer that receives for its own account a registered note in exchange for outstanding Notes must acknowledge that it: o acquired the outstanding Notes for its own account as a result of market-making activities or other trading activities; o has not entered into any arrangement or understanding with Tritel PCS or any Tritel PCS "affiliate" to distribute the registered Notes; and o will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the registered Notes. For a description of the procedures for resales by participating broker-dealers, see "Plan of Distribution." In the event that (1) changes in the law or the applicable interpretations of the SEC staff do not permit Tritel PCS to effect this exchange offer, or (2) if for any other reason the exchange offer is commenced and not consummated within 30 days after the exchange offer registration statement is declared effective, or (3) if any holder of Transfer Restricted Securities notifies Tritel PCS prior to the 20th day following consummation of the exchange offer that: o it is prohibited by law or Commission policy from participating in the exchange offer; o that it may not resell the registered Notes acquired by it in the exchange offer to the public without delivering a prospectus and the prospectus contained in the exchange offer registration statement is not appropriate or available for such resales; or o that it is a broker-dealer and owns outstanding Notes acquired directly from Tritel PCS or an affiliate of Tritel PCS, then Tritel PCS will: o file, on or prior to 30 days after the earlier of (a) the date on which Tritel PCS determines that the exchange offer registration statement need not or cannot be filed as a result of clause (1) above and (b) the date on which Tritel PCS receives the notice specified in clause (3) above, (such earlier date, the "Shelf Filing Deadline"), a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the exchange offer registration statement (the "Shelf Registration Statement")), covering resales of the outstanding Notes; o use its reasonable best efforts to cause such Shelf Registration Statement to become effective on or prior to 90 days after the Shelf Filing Deadline for the Shelf Registration Statement; and o use reasonable best efforts to keep effective the shelf registration statement until the earlier of two years after the outstanding Notes' original issuance date, subject to extension under certain circumstances, or such time as all of the applicable outstanding Notes have been sold. "Transfer Restricted Securities" means: o each outstanding Note until the date on which such outstanding Note has been exchanged by a Person other than a broker-dealer for a registered Note in the exchange offer; o each outstanding Note until following the exchange by a broker-dealer in the exchange offer of an outstanding Note for a registered Note, the date on which such registered Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the prospectus contained in the exchange offer registration statement; o each outstanding Note until the date on which such outstanding Note has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement; 97 o each outstanding Note until the date on which such outstanding Note is distributed to the public pursuant to Rule 144 under the Securities Act; and o each registered Note held by a broker-dealer until the date on which such registered Note is disposed of by a broker-dealer pursuant to the "Plan of Distribution" section in this prospectus. If: o Tritel PCS fails to file any of the registration statements required by the registration rights agreement on or before the date specified for such filing; o any of such registration statements is not declared effective by the Commission on or prior to the date specified for such effectiveness (the "Effectiveness Target Date"); o Tritel PCS fails to consummate the exchange offer within 30 business days of the Effectiveness Target Date with respect to the exchange offer registration statement; o the Shelf Registration Statement is declared effective but thereafter ceases to be effective or usable in connection with resales of Transfer Restricted Securities during the periods specified in the registration rights agreement; or o the exchange offer registration statement is filed and declared effective but thereafter will cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such exchange offer registration statement that cures such failure and that is itself declared effective immediately (each such event referred to in the previous five clauses is a "Registration Default"), then Tritel PCS will pay liquidated damages to each holder of outstanding Notes, with respect to the first 90-day period immediately following the occurrence of the first Registration Default in an amount equal to $.05 per week per $1,000 principal amount of outstanding Notes held by such holder. The amount of the liquidated damages will increase by an additional $.05 per week per $1,000 principal amount of outstanding Notes with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of $.25 per week per $1,000 principal amount of outstanding Notes. All accrued liquidated damages will be paid by Tritel PCS on each damages payment date to the global Note holder by wire transfer of immediately available funds or by federal funds check and to holders of outstanding certificated Notes by wire transfer to the accounts specified by them or by mailing checks to their registered addresses if no such accounts have been specified. Following the cure of all Registration Defaults, the accrual of liquidated damages will cease but liquidated damages accrued and unpaid will survive until paid in full. Tritel PCS will, if and when it files the Shelf Registration Statement, provide to each applicable holder of the outstanding Notes copies of the prospectus which is a part of the Shelf Registration Statement. A holder that sells the outstanding Notes pursuant to the Shelf Registration Statement generally: o must be named as a selling security holder in the related prospectus; o must deliver a prospectus to purchasers; o will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales; and o will be bound by the provisions of the registration rights agreement which are applicable to that holder, including certain indemnification obligations. In addition, each of the outstanding Note holders must deliver information to Tritel PCS, to be used in connection with the Shelf Registration Statement, in order to have his or her outstanding Notes included in the Shelf Registration Statement and to benefit from the provisions set forth in the foregoing paragraph. 98 The registration rights agreement covering the outstanding Notes provides that Tritel PCS will file an exchange offer registration statement with the SEC within 60 days after the issue date of the Notes. In the event that Tritel PCS and the guarantors do not comply with their obligations under the registration rights agreement, they will be required to pay to the holders of the Notes liquidated damages up to a maximum of $0.25 per week per $1,000 in principal amount of Notes held by such holders for each week or part of a week that the Registration Default continues. Tritel PCS will not be required to pay liquidated damages for more than one Registration Default at any given time. Liquidated damages will cease to accrue following the cure of all Registration Defaults. The sole remedy available to the outstanding Note holders will be the collection of these liquidated damages. All liquidated damages payable because a Registration Default occurred will be payable to the outstanding Notes holders in cash on each May 15 and November 15, commencing with the first such date occurring after any such liquidated damages begin to accrue, until the Registration Default is cured. Outstanding Note holders must: o make certain representations to us in order to participate in the exchange offer; o deliver information to be used in connection with the shelf registration statement, if required; and o provide comments on the shelf registration statement within the time periods set forth in the registration rights agreement, in order to have their outstanding Notes included in the Shelf Registration Statement and to benefit from the provisions regarding liquidated damages payable because a Registration Default occurred, as set forth above. By acquiring Transfer Restricted Securities, a holder will be deemed to have agreed to indemnify Tritel PCS against certain losses arising out of information furnished by such holder in writing for inclusion in any Shelf Registration Statement. holders of outstanding Notes will also be required to suspend their use of the prospectus included in the Shelf Registration Statement under certain circumstances upon receipt of written notice to that effect from Tritel PCS. The preceding summary of the material provisions of the registration rights agreement is subject to, and is qualified in its entirety by, all the provisions of the registration rights agreement, a copy of which is filed as an exhibit to the exchange offer registration statement of which this prospectus is a part. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal for the exchange offer, we will accept any and all outstanding Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. See "--Expiration Date; Extensions; Amendments." Tritel PCS will issue $1,000 original principal amount at maturity of registered Notes in exchange for each $1,000 original principal amount at maturity of outstanding Notes accepted in the exchange offer. Holders may tender some or all of their outstanding Notes pursuant to the exchange offer. However, outstanding Notes may be tendered only in integral multiples of $1,000. The form and terms of the registered Notes are the same as the form and terms of the outstanding Notes except that: o the registered Notes have been registered under the Securities Act and hence will not bear legends restricting their transfer; and o the registered Note holders will not be entitled to certain rights under the registration rights agreement covering the outstanding Notes, including the provisions providing for an increase in the interest rate on the outstanding Notes in certain circumstances relating to the timing of the exchange offer, all of which rights will terminate when the exchange offer is terminated. 99 The registered Notes will evidence the same debt as the outstanding Notes and will be entitled to the benefits of the indenture governing the outstanding Notes. As of the date of this prospectus, $372,000,000 aggregate principal amount at maturity of Notes were outstanding. We have fixed the close of business on , 1999 as the record date for the exchange offer for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Outstanding Note holders do not have any appraisal or dissenters' rights under the Delaware General Corporation Law or the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC related to such offers. Tritel PCS shall be deemed to have accepted validly tendered outstanding Notes when, as and if we give oral or written notice to The Bank of New York, which is the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the registered Notes from Tritel PCS. If any tendered outstanding Notes are not accepted for exchange either because of an invalid tender, the occurrence of certain other events set forth herein, or otherwise, the certificates for the unaccepted outstanding Notes will be returned, without expense, to the tendering holder as promptly as practicable after the exchange offer's expiration date. Holders who tender outstanding Notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding Notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See "--Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS We shall keep the exchange offer open for at least 30 days, or longer if required by applicable law, including in connection with any material modification or waiver of the terms or conditions of the exchange offer that requires such extension, after the date that notice of the exchange offer is mailed to outstanding Note holders. The expiration date shall be 5:00 p.m., New York City time, on , 1999, unless we, in our sole discretion, extend the exchange offer, in which case the expiration date shall be the latest date and time to which we extend the exchange offer. If we decide to extend the exchange offer, we will notify the exchange agent of the extension by oral or written notice, and will mail an announcement of the extension to the registered holders prior to 10:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Tritel PCS reserves the right, in its sole discretion: o to delay accepting any outstanding Notes, to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under "--Conditions" shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the exchange agent; or o to amend the terms of the exchange offer in any manner. We will give oral or written notice of any delay in acceptance, extension, termination or amendment to the registered holders as promptly as practicable. PROCEDURES FOR TENDERING Only an outstanding Note holder may tender such outstanding Notes in the exchange offer. To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile thereof, have the signatures thereon guaranteed if the letter of transmittal so requires, or transmit an agent's message in connection with a book-entry transfer, and mail or otherwise deliver 100 the letter of transmittal or facsimile, or agent's message, together with the outstanding Notes and any other required documents, to the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. In addition, either: o the exchange agent must receive the letter of transmittal and certificates for the outstanding Notes prior to the expiration date; o the exchange agent must receive a timely confirmation of a book-entry transfer of the outstanding Notes into the exchange agent's account at The Depository Trust Company ("DTC") pursuant to the procedure for book-entry transfer described below, prior to the expiration date; or o the holder must comply with the guaranteed delivery procedures described below. For effective tender, the exchange agent must receive the outstanding Notes or book-entry confirmation, as the case may be, the letter of transmittal, and other required documents, at the address set forth below under "--Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. Delivery of documents to the book entry transfer facility in accordance with its procedure does not constitute delivery to the exchange agent. DTC has authorized DTC participants that hold outstanding Notes on behalf of the outstanding Notes' beneficial owners to tender their outstanding Notes as if they were holders. To effect a tender of outstanding Notes, DTC participants should either: o complete and sign the letter of transmittal, or a manually signed facsimile thereof, have the signature guaranteed if required by the instructions, and mail or deliver the letter of transmittal, or the manually signed facsimile, to the exchange agent pursuant to the procedure set forth in "Procedures for Tendering;" or o transmit their acceptance to DTC through the DTC automated tender offer program for which the transaction will be eligible and follow the procedure for book-entry transfer set forth in "--Book-Entry Transfer." By executing the letter of transmittal or an agent's message, each holder will make to Tritel PCS the representations set forth above in the third paragraph under the heading "--Purpose and Effect of the Exchange Offer." Each holder's tender, and Tritel PCS's acceptance, will constitute agreement between such holder and Tritel PCS in accordance with the terms, and subject to the conditions, set forth herein and in the letter of transmittal or agent's message. THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THE LETTER OF TRANSMITTAL OR AGENT'S MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE HOLDER'S ELECTION AND SOLE RISK. AS AN ALTERNATIVE TO MAIL DELIVERY, HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, HOLDERS SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO TRITEL PCS. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM. Any beneficial owner whose outstanding 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 the registered holder to tender on the beneficial owner's behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the letter of transmittal. A member of the Medallion System must guarantee signatures on a letter of transmittal or a notice of withdrawal, as the case may be, unless the outstanding Notes tendered pursuant thereto are tendered: o by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the letter of transmittal; or 101 o for the account of a Medallion System member. In the event that signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed, such guarantee must be by a Medallion System member. If a person other than the registered holder of any outstanding Notes listed therein signs the accompanying letter of transmittal, the outstanding Notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as his or name appears on the outstanding Notes, with the signature guaranteed by a Medallion System member. If trustees, executors, administrators, guardians, attorneys-in-fact, offices of corporations, or others acting in a fiduciary or representative capacity sign the letter of transmittal or any outstanding Notes or bond powers, such persons should so indicate when signing, and they must submit evidence satisfactory to Tritel PCS of their authority to so act, with the letter of transmittal. Tritel PCS will determine, in its sole discretion, all questions as to the validity, form, eligibility, including time of receipt, and acceptance and withdrawal of tendered outstanding Notes. This determination will be final and binding. We reserve the absolute right to reject any and all outstanding Notes not properly tendered, or any outstanding Notes, Tritel PCS's acceptance of which would, in the opinion of Tritel PCS's counsel, be unlawful. We also reserve the right, in our sole discretion, to waive any defects, irregularities or conditions of tender as to particular outstanding 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 outstanding Notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding Notes, neither Tritel PCS, the exchange agent nor any other person shall incur any liability for failure to give such notification. Tenders of outstanding Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. If the exchange agent receives any outstanding Notes that are not properly tendered, and as to which the defects or irregularities have not been cured or waived, the exchange agent will return them to the tendering holders, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date. ACCEPTANCE OF OUTSTANDING NOTES FOR EXCHANGE; DELIVERY OF REGISTERED NOTES For each outstanding Note Tritel PCS accepts for exchange, the holder will receive a registered Note having a principal amount at maturity equal to that of the surrendered outstanding Note. For purposes of the exchange offer, Tritel PCS shall be deemed to have accepted properly tendered outstanding Notes for exchange when, as and if Tritel PCS has given oral or written notice thereof to the exchange agent. In all cases, Tritel PCS will issue registered Notes for outstanding Notes that are accepted for exchange pursuant to the exchange offer only after the exchange agent's timely receipt of certificates for such outstanding Notes, or a timely book-entry confirmation of the outstanding Notes into the exchange agent's account at the book-entry transfer facility, plus a properly completed and duly executed letter of transmittal or agent's message and all other required documents. If Tritel PCS does not accept any tendered outstanding Notes for any reason set forth in the terms and conditions of the exchange offer, we will return the unaccepted or non-exchanged outstanding Notes without expense to the tendering holder, or, in the case of outstanding Notes tendered by book-entry transfer into the exchange agent's account, the non-exchanged outstanding Notes will be credited to an account maintained with the book-entry transfer facility, as promptly as practicable after the expiration date. BOOK-ENTRY TRANSFER The exchange agent will establish a new account or utilize an existing account at DTC for the outstanding Notes promptly after the date of this prospectus, and any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of outstanding Notes may make a book-entry tender of outstanding Notes by causing DTC to transfer such 102 outstanding Notes into the exchange agent's account in accordance with DTC's procedures for such transfer. However, the exchange agent must receive, at its address set forth below under the caption "Exchange Agent," on or prior to the expiration date, or the holders must comply with the guaranteed delivery procedures described below to submit, the letter of transmittal, or a manually signed facsimile thereof, properly completed and validly executed, with any required signature guarantees, or an agent's message, and any other required documents. Document delivery to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent. The term "agent's message" means a message transmitted by DTC to, and received by, the exchange agent, forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering the outstanding Notes, stating: o the aggregate principal amount of outstanding Notes which have been tendered by such participant; o that such participant has received and agrees to be bound by the terms of the letter of transmittal; and o that Tritel PCS may enforce that agreement against the participant. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their outstanding Notes and: o whose outstanding Notes are not immediately available; o who cannot deliver their outstanding Notes, the letter of transmittal or any other required documents, to The Bank of New York, which is the exchange agent; or o who cannot complete the procedures for book-entry transfer, prior to the expiration date, may effect a tender if: (1) the tender is made through a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States; (2) prior to the expiration date, the exchange agent receives from an institution listed in clause (1) above a properly completed and duly executed Notice of Guaranteed Delivery, by facsimile transmission, mail or hand delivery, setting forth the name and address of the holder, the certificate number(s) of the outstanding Notes and the principal amount of outstanding Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, or an agent's message, together with the certificate(s) representing the outstanding Notes, or a confirmation of book-entry transfer of the 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 institution with the exchange agent; and (3) the exchange agent receives, no later than five New York Stock Exchange trading days after the expiration date, the certificate(s) representing all tendered outstanding Notes in proper form for transfer, or a confirmation of book-entry transfer of such outstanding Notes into the exchange agent's account at the book-entry transfer facility, together with a letter of transmittal, or facsimile thereof, properly completed and duly executed, with any required signature guarantees, or an agent's message, and all other documents required by the letter of transmittal. Holders who wish to tender their outstanding Notes according to the guaranteed delivery procedures set forth above may request that the exchange agent send them a Notice of Guaranteed Delivery. 103 WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of outstanding Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on , 1999; otherwise such tenders are irrevocable. To withdraw a tender of outstanding Notes in the exchange offer, the exchange agent must receive a telegram, telex, letter or facsimile transmission notice of withdrawal at its address set forth herein prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must: o specify the name of the person having deposited the outstanding Notes to be withdrawn; o identify the outstanding Notes to be withdrawn, including the certificate number(s) and principal amount of such outstanding Notes, or, in the case of outstanding Notes transferred by book-entry transfer, the name and number of the account at the book-entry transfer facility to be credited; o be signed by the holder in the same manner as the original signature on the letter of transmittal by which the outstanding Notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the outstanding Notes register the transfer of such outstanding Notes into the name of the person withdrawing the tender; and o specify the name in which to register the outstanding Notes, if different from that of the depositor. Tritel PCS will determine all questions as to the validity, form and eligibility, including time of receipt, of the notices. This determination shall be final and binding on all parties. Any outstanding Notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no registered Notes will be issued with respect thereto unless the outstanding Notes so withdrawn are validly retendered. Tritel PCS will return to the holder any outstanding Notes which have been tendered but which are not accepted for exchange without expense to the holder, as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer. Holders may retender properly withdrawn outstanding Notes by following one of the procedures described above under "--Procedures for Tendering" at any time prior to the expiration date. CONDITIONS Notwithstanding any other term of the exchange offer, we shall not be required to accept for exchange, or offer registered Notes for, any outstanding Notes, and may terminate or amend the exchange offer as provided herein before the acceptance of the outstanding Notes, if: (1) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our judgment, might impair materially our ability to proceed with the exchange offer, or any material adverse development has occurred in any existing action or proceeding with respect to Tritel PCS or any of its subsidiaries; or (2) any law, statute, rule, regulation or interpretation by the SEC staff is proposed, adopted or enacted, which, in our judgment, might impair materially our ability to proceed with the exchange offer, or impair materially our contemplated benefits from the exchange offer; or (3) any governmental approval has not been obtained, which approval we shall, in our discretion, deem necessary for the consummation of the exchange offer as contemplated hereby. If we determine in our discretion that any of the conditions are not satisfied, we may: o refuse to accept any outstanding Notes and return all tendered outstanding Notes to the tendering holders; 104 o extend the exchange offer and retain all outstanding Notes tendered prior to the expiration of the exchange offer, subject, however, to the holders' rights to withdraw the outstanding Notes; or o waive the unsatisfied conditions and accept all properly tendered outstanding Notes which have not been withdrawn. We shall keep the exchange offer open for at least 30 days, or longer if applicable law so requires, including, in connection with any material modification or waiver of the terms or conditions of the exchange offer that requires such extension under applicable law, after the date we mail notice of the exchange offer to outstanding Note holders. EXCHANGE AGENT The Bank of New York has been appointed as the exchange agent for this exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal, and requests for notice of guaranteed delivery should be directed to the exchange agent, addressed as follows: The Bank of New York 101 Barclay Street, 21W New York, New York 10286 Attn: Corporate Trust Administration By Facsimile: (212) 815-5915 DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. FEES AND EXPENSES Tritel PCS will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by officers and regular employees of Tritel PCS and its affiliates or its agents. Tritel PCS has not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers, or others soliciting acceptances of the exchange offer. Tritel PCS, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of pocket expenses in connection with the exchange offer. Tritel PCS will pay the cash expenses incurred in connection with the exchange offer. Such expenses include the exchange agent's and the trustee's fees and expenses, accounting and legal fees, and printing costs, among others. ACCOUNTING TREATMENT The registered Notes will be recorded at the same carrying amount as the outstanding Notes, which is discounted face value, as reflected in Tritel PCS's accounting records on the date of exchange. Accordingly, Tritel PCS will not recognize any gain or loss for accounting purposes. The exchange offer expenses will be expensed over the term of the registered Notes. CONSEQUENCES OF FAILURE TO EXCHANGE The outstanding Notes that are not exchanged for registered Notes pursuant to the exchange offer will remain restricted securities. Accordingly, such outstanding Notes may be resold only: o to Tritel PCS, upon redemption thereof or otherwise; 105 o so long as the outstanding Notes are eligible for resale pursuant to Rule 144A, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act, and based upon an opinion of counsel reasonably acceptable to us; o outside the United States to a foreign person in a transaction meeting the requirements of Regulation S under the Securities Act; or o pursuant to an effective registration statement under the Securities Act. Any resale of outstanding Notes must comply with any applicable securities laws of any state of the United States. 106 DESCRIPTION OF THE NOTES You can find the definitions of certain terms used in this description under the subheading "--Certain Definitions." Certain other capitalized terms are defined in the indenture governing the Notes. In this section, "Tritel PCS" means Tritel PCS, Inc. and does not include its subsidiaries. The registered Notes have the same form and terms as the outstanding Notes, which they replace, with two exceptions. First, because the issuance of the registered Notes has been registered under the Securities Act, the registered Notes will not bear legends restricting their transfer. Second, the holders of registered Notes will not be entitled to rights under the registration rights agreement, since the primary provision of that agreement will terminate when the exchange offer is consummated. A copy of the indenture, dated May 11, 1999 (the "Indenture"), between Tritel PCS, the parent and subsidiary guarantors and The Bank of New York, as trustee (the "Trustee"), has been filed as an exhibit to the exchange offer registration statement of which this prospectus forms a part. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (the "Trust Indenture Act"). The following description is a summary of the material provisions of the Indenture and the Registration Rights Agreement. It does not restate those agreements in their entirety. We urge you to read the Indenture and the Registration Rights Agreement because they, and not this description, define your rights as holders of the Notes. Copies of the Indenture and the Registration Rights Agreement are available as set forth below under "-- Additional Information." Certain defined terms used in this description but not defined below under "-- Certain Definitions" have the meanings assigned to them in the Indenture. BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES THE NOTES The Notes: o are senior subordinated obligations of Tritel PCS; o are subordinated in right of payment with all existing and future Senior Debt of Tritel PCS; o are senior in right of payment to any future Subordinated Indebtedness of Tritel PCS; and o are unconditionally guaranteed by the Guarantors. THE GUARANTEES The Notes are guaranteed by: o our parent company, Tritel, by means of the Parent Guarantee; and o all of our Subsidiaries, except our License Subsidiaries, by means of the Subsidiary Guarantees. Each Guarantee of the Notes: o is a general unsecured obligation of the Guarantor; o is subordinated in right of payment to all existing and future Senior Debt of the Guarantor; and o is pari passu in right of payment with any future senior subordinated Indebtedness of the Guarantor. Our License Subsidiaries will not guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, they will pay the holders of their debts and their trade creditors before they will be able to distribute any of their assets to us. Tritel, Tritel 107 PCS and the Subsidiary Guarantors held 68.4% of Tritel's consolidated assets as of March 31, 1999. See footnote 17 to our Consolidated Financial Statements included at the back of this prospectus for more detail about the division of our consolidated revenues and assets between our guarantor and non-guarantor Subsidiaries. As of March 31, 1999, Tritel PCS had $200.0 million of Senior Debt outstanding and non-guarantor Subsidiaries had $41.2 million on a book value basis of FCC debt outstanding. As of the date of the Indenture, all of Tritel PCS's subsidiaries will be "Restricted Subsidiaries." However, under the circumstances described below under the subheading "-- Certain Covenants -- Unrestricted Subsidiaries," Tritel PCS will be permitted to designate certain of its subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. PRINCIPAL, MATURITY AND INTEREST The Notes will mature on May 15, 2009, will be limited to $372.0 million aggregate principal amount at maturity. The Notes will be issued at a substantial discount from the aggregate stated principal amount thereof. For federal income tax purposes, significant amounts of original issue discount, taxable as ordinary income, will be recognized by holders of the Notes annually as long as they hold the Notes, including in advance of the receipt of cash interest payments thereon. See "Certain Federal Income Tax Considerations." No interest will be paid or accrued on the Notes prior to May 15, 2004. Thereafter, each Note will bear interest at the rate set forth on the cover page hereof from May 15, 2004, or from the most recent interest payment date to which interest has been paid or duly provided for, payable semiannually on May 15 and November 15 in each year, commencing May 15, 2004, until the principal thereof is paid or duly provided for, to the person in whose name the Note, or any predecessor Note, is registered at the close of business on the May 1 or November 1 next preceding such interest payment date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. The principal of and premium, if any, and interest on the Notes will be payable, and the Notes will be exchangeable and transferable, at the office or agency of Tritel PCS in The City of New York maintained for such purposes, which initially will be the office of the Trustee located at 101 Barclay Street, New York, NY 10286, Attn: Corporate Trust Administration Department. The Notes will be issued only in registered form without coupons and only in denominations of $1,000 and any integral multiple thereof. No service charge will be made for any registration of transfer or exchange or redemption of Notes, but Tritel PCS may require payment in certain circumstances of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any Notes that remain outstanding after the consummation of the Exchange Offer and Exchange Notes issued in connection with the Exchange Offer will be treated as a single class of securities under the Indenture. The Notes will not be entitled to the benefit of any sinking fund. METHODS OF RECEIVING PAYMENTS ON THE NOTES If a Holder has given wire transfer instructions to Tritel PCS, Tritel PCS will pay all principal, interest and premium and Liquidated Damages, if any, on that Holder's Notes in accordance with those instructions. All other payments on Notes will be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless Tritel PCS elects to make interest payments by check mailed to the Holders at their addresses set forth in the register of Holders. PAYING AGENT AND REGISTRAR FOR THE NOTES The Trustee will initially act as Paying Agent and Registrar. Tritel PCS may change the Paying Agent or Registrar without prior notice to the Holders, and Tritel PCS or any of its Restricted Subsidiaries may act as Paying Agent or Registrar. 108 TRANSFER AND EXCHANGE A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and Tritel PCS may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. Tritel PCS is not required to transfer or exchange any Note selected for redemption. Also, Tritel PCS is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed. The registered Holder of a Note will be treated as the owner of it for all purposes. SUBSIDIARY GUARANTEES The Guarantors will jointly and severally guarantee Tritel PCS's obligations under the Notes. Each Guarantee will be subordinated to the prior payment in full of all Senior Debt of that Guarantor. The obligations of each Subsidiary Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors -- Federal and State Statutes Allow Courts, Under Specific Circumstances, to Void the Subsidiary Guarantees of the Notes." Except as provided below, a Guarantor may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into, whether or not such Guarantor is the surviving Person, another Person, other than Tritel PCS or another Guarantor, unless: (1) immediately after giving effect to that transaction, no Default or Event of Default exists; and (2) either: (a) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under the Indenture, its Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture and appropriate collateral documents satisfactory to the Trustee; or (b) the Net Proceeds of any such sale or other disposition of a Subsidiary Guarantor are applied in accordance with the "Asset Sales" provisions of the Indenture. A Guarantor will be released from its Guarantee: (1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor, including by way of merger or consolidation, to a Person that is not, either before or after giving effect to such transaction, a Subsidiary of Tritel PCS, if the Guarantor applies the Net Proceeds of that sale or other disposition in accordance with the "Asset Sales" provisions of the Indenture; or (2) in connection with any sale of all of the Capital Stock of a Guarantor to a Person that is not, either before or after giving effect to such transaction, a Subsidiary of Tritel PCS, if Tritel PCS applies the Net Proceeds of that sale in accordance with the "Asset Sales" provisions of the Indenture. See "-- Repurchase at the Option of Holders -- Asset Sales." A Subsidiary Guarantor will also be automatically released from its Guarantee if the Subsidiary Guarantor is designated as an Unrestricted Subsidiary. The Indenture will provide that, in the event the Banks release or terminate a guarantee by Tritel or a Subsidiary Guarantor of all the obligations under the Bank Credit Agreement, except a release or termination by or as a result of payment in full of all Obligations under the Bank Credit Agreement, Tritel or such Subsidiary Guarantor, as the case may be, will be automatically and unconditionally released and discharged from all of its obligations under its Guarantee. 109 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 Debt of Tritel PCS, including Senior Debt incurred after the date of the Indenture. The holders of Senior Debt will be entitled to receive payment in full of all Obligations due in respect of Senior Debt, including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt, 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 "-- Legal Defeasance and Covenant Defeasance," in the event of any distribution to creditors of Tritel PCS: (1) in a liquidation or dissolution of Tritel PCS; (2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Tritel PCS or its property; (3) in an assignment for the benefit of creditors; or (4) in any marshaling of Tritel PCS's assets and liabilities. Tritel PCS also may not make any payment in respect of the Notes, except in Permitted Junior Securities or from the trust described under "-- Legal Defeasance and Covenant Defeasance", if: (1) a payment default on Designated Senior Debt occurs and is continuing beyond any applicable grace period; or (2) any other default occurs and is continuing on any series of Designated Senior Debt that permits holders of that series of Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of such default (a "Payment Blockage Notice") from Tritel PCS or the holders of any Designated Senior Debt. 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 Debt 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. 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 "-- Legal Defeasance and Covenant 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 Debt. Upon the proper written request of the holders of Senior Debt, the Trustee or the Holder, as the case may be, will deliver the amounts in trust to the holders of Senior Debt or their proper representative. 110 Tritel PCS must promptly notify holders of Senior Debt 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 Tritel PCS, Holders of Notes may recover less ratably than creditors of Tritel PCS who are holders of Senior Debt. See "Risk Factors -- Your Right to Receive Payments on the Notes and Guarantees is Junior to Payments on Senior Indebtedness and to Our Secured Obligations." "Designated Senior Debt" means: (1) any Indebtedness outstanding under the Bank Credit Agreement; and (2) any other Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by Tritel PCS as "Designated Senior Debt" by the board of directors of Tritel PCS at the time of its initial issuance in a resolution delivered to the Trustee. "Designated Senior Indebtedness" of a Subsidiary Guarantor will have a correlative meaning. "Permitted Junior Securities" means: (1) Equity Interests in Tritel PCS or any Guarantor; or (2) debt securities that are subordinated to all Senior Debt, and to any debt securities issued in exchange for Senior Debt, to substantially the same extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees are subordinated to Senior Debt under the Indenture. "Senior Debt" means: (1) all Indebtedness of Tritel PCS or any Guarantor outstanding under the Bank Credit Agreement and all Hedging Obligations with respect thereto; (2) any other Indebtedness of Tritel PCS or any Guarantor permitted to be incurred under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes or any Subsidiary Guarantee; and (3) all Obligations with respect to the items listed in the preceding clauses (1) and (2). Notwithstanding anything to the contrary in clauses (1), (2) and (3) above, Senior Debt will not include: (1) any liability for federal, state, local or other taxes owed or owing by Tritel PCS; (2) any Indebtedness of Tritel PCS to any of its Subsidiaries or other Affiliates; (3) any trade payables; or (4) the portion of any Indebtedness that is incurred in violation of the Indenture. 111 REDEMPTION The Notes will be redeemable at the election of Tritel PCS, as a whole or from time to time in part, at any time on or after May 15, 2004, on not less than 30 nor more than 60 days' prior notice at the redemption prices, expressed as percentages of principal amount at maturity, set forth below, together with accrued interest and Liquidated Damages, if any, to the redemption date, if redeemed during the 12-month period beginning on May 15 of the years indicated below, subject to the right of holders of record on the relevant record date to receive interest due on the related interest payment date:
REDEMPTION YEAR PRICE - ----------------------- ------------- 2004 ................ 106.375% 2005 ................ 104.250 2006 ................ 102.125
and thereafter at 100% of the principal amount at maturity, together with accrued interest and Liquidated Damages, if any, to the redemption date. In addition, at any time prior to May 15, 2002, Tritel PCS may redeem up to 35% of the aggregate principal amount at maturity of the Notes with proceeds of one or more Equity Offerings at a redemption price of 112.75% of the Accreted Value thereof as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase; provided that: (1) at least 65% of the aggregate principal amount at maturity of the Notes remains outstanding immediately after the occurrence of such redemption, excluding Notes held by Tritel PCS and its Restricted Subsidiaries; and (2) the redemption must occur within 60 days following the date of the closing of such Equity Offering. REPURCHASE AT THE OPTION OF HOLDERS CHANGE OF CONTROL If a Change of Control occurs, each Holder of Notes will have the right to require Tritel PCS to repurchase all or any part, equal to $1,000 or an integral multiple thereof, of that Holder's Notes pursuant to an offer on the terms set forth in the Indenture ("Change of Control Offer"). In the Change of Control Offer, Tritel PCS will offer a payment ("Change of Control Payment") in cash equal to 101% of the Accreted Value as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase, if such redemption occurs prior to May 15, 2004, or 101% of the Accreted Value as of the date of purchase, together with accrued and unpaid interest and Liquidated Damages, if any, if such redemption date occurs on or after May 15, 2004. Within ten days following any Change of Control, Tritel PCS will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date ("Change of Control Payment Date") specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. Tritel PCS will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of the Indenture, Tritel PCS will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of the Indenture by virtue of such conflict. In the event that at the time of any Change of Control the terms of the Bank Credit Agreement restrict or prohibit the repurchase of Notes pursuant to this covenant, then prior to the mailing of the 112 notice to holders of Notes provided for in the prior paragraph but in any event within 30 days following any Change of Control, Tritel PCS convenants that it will either (1) repay in full all amounts outstanding under the Bank Credit Agreement or offer to repay in full all amounts outstanding under the Bank Credit Agreement and repay the amounts due to each Bank who has accepted such offer or (2) obtain the requisite consent under the agreements governing the Bank Credit Agreement to permit the repurchase of the Notes as provided for in the prior paragraph. On the Change of Control Payment Date, Tritel PCS will, to the extent lawful: (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer; (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount at maturity of Notes or portions thereof being purchased by Tritel PCS. The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail, or cause to be transferred by book entry, to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. The provisions described above that require Tritel PCS to make a Change of Control Offer following a Change of Control will be applicable regardless of whether any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the Holders of the Notes to require that Tritel PCS repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. Tritel PCS 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 Tritel PCS and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the properties or assets of Tritel PCS and its Restricted Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of Notes to require Tritel PCS to repurchase such Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Tritel PCS and its Restricted Subsidiaries taken as a whole to another Person or group may be uncertain. ASSET SALES Tritel PCS will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) Tritel PCS or the Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; (2) such fair market value is determined by Tritel PCS's Board of Directors and evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee; and 113 (3) at least 75% of the consideration therefor received by Tritel PCS or such Restricted Subsidiary is in the form of cash or Cash Equivalents, or like-kind property in a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code. For purposes of this provision, each of the following shall be deemed to be cash: (a) any liabilities, as shown on Tritel PCS's or such Restricted Subsidiary's most recent balance sheet, of Tritel PCS or any Restricted Subsidiary, other than contingent liabilities and liabilities that are by their terms subordinated to the Notes, that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases Tritel PCS or such Restricted Subsidiary from further liability; and (b) any securities, notes or other obligations received by Tritel PCS or any such Restricted Subsidiary from such transferee that are contemporaneously, subject to ordinary settlement periods, converted by Tritel PCS or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion. Within 360 days after the receipt of any Net Proceeds from an Asset Sale, Tritel PCS may apply such Net Proceeds at its option: (1) to permanently repay or prepay any then outstanding Indebtedness under the Bank Credit Agreement, other senior Indebtedness of Tritel PCS or Indebtedness of any Restricted Subsidiary; or (2) to invest in properties or assets that replace the properties and assets that are the subject of such Asset Sale or in properties or assets that will be used in the business of Tritel PCS or any Restricted Subsidiary (or enter into a legally binding agreement to do so). If any such legally binding agreement to invest such Net Proceeds is terminated, then Tritel PCS may, within 90 days of such termination or within 12 months after such Asset Sale, whichever is later, apply or invest such Net Proceeds, or enter into another legally binding agreement to do so, which closes within 16 months of such Asset Sale, as provided in clause (1) or (2), without regard to the parenthetical contained in clause (2), above. Pending the final application of any such Net Proceeds, Tritel PCS may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds exceeds $15.0 million, Tritel PCS will make an offer ("Asset Sale Offer") to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of Accreted Value plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Tritel PCS may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the Accreted Value of the Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis based on the Accreted Value of the Notes and such other pari passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Tritel PCS will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sales provisions of the Indenture, Tritel PCS will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such conflict. 114 The agreements governing Tritel PCS's other Indebtedness contain prohibitions of certain events, including events that would constitute a Change of Control or an Asset Sale. In addition, the exercise by the Holders of Notes of their right to require Tritel PCS to repurchase the Notes upon a Change of Control or an Asset Sale could cause a default under these other agreements, even if the Change of Control or Asset Sale itself does not, due to the financial effect of such repurchases on Tritel PCS. Finally, Tritel PCS's ability to pay cash to the Holders of Notes upon a repurchase may be limited by Tritel PCS's then existing financial resources. SELECTION AND NOTICE If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows: (1) if the Notes are listed, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or (2) if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate. No Notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any Note is to be redeemed in part only, the notice of redemption that relates to that Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of them called for redemption. CERTAIN COVENANTS RESTRICTED PAYMENTS Tritel PCS will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, take any of the following actions on or prior to December 31, 2002: (a) declare or pay any dividend on, or make any distribution to holders of, any shares of the Capital Stock of Tritel PCS or any Restricted Subsidiary, other than: (1) dividends or distributions payable solely in Equity Interests, other than Disqualified Stock; or (2) dividends or distributions by a Restricted Subsidiary payable to Tritel PCS or another Restricted Subsidiary; (b) purchase, redeem or otherwise acquire or retire for value including, without limitation, in connection with any merger or consolidation involving Tritel PCS, any Equity Interests of Tritel PCS or any Affiliate of Tritel PCS, other than any Restricted Subsidiary of Tritel PCS; (c) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness, except a payment of interest or principal at the Stated Maturity thereof; or (d) make any Restricted Investment. All such payments and other actions set forth in and not excluded from clauses (a) through (d) above are collectively referred to as "Restricted Payments." At any time after December 31, 2002, Tritel PCS will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment unless at the time of, and immediately after giving effect to, the proposed Restricted Payment: 115 (1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (2) Tritel PCS would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness, other than Permitted Debt, pursuant to the first paragraph of the covenant described below under the caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock;" and (3) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after the Issue Date would not exceed an amount equal to the sum of: (a) (A) Consolidated EBITDA accrued during the period, treated as one accounting period, from January 1, 2003 to the end of Tritel PCS's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (the "Computation Period") less (B) 1.5 times Consolidated Interest Expense accrued during the Computation Period; plus (b) the aggregate Net Proceeds received by Tritel PCS either (x) as capital contributions to Tritel PCS after the Issue Date or (y) from the issue or sale, other than to a Subsidiary of Tritel PCS, of its Equity Interests, other than Disqualified Stock, on or after the Issue Date, excluding proceeds of any Equity Offering that are used to redeem Notes as discussed above under "-- Redemption"; plus (c) the aggregate Net Proceeds received by Tritel PCS or any Restricted Subsidiary from the sale, disposition or repayment, other than to Tritel PCS or a Restricted Subsidiary, of any Investment made after the Issue Date 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 (d) the aggregate Net Proceeds received by Tritel PCS from the issuance, other than to a Subsidiary of Tritel PCS, on or after the Issue Date of its Equity Interests, other than Disqualified Stock, upon the conversion of, or exchange for, Indebtedness of Tritel PCS. For purposes of determining the amount expended for Restricted Payments, property other than cash will be valued at its fair market value as determined by the Board of Directors of Tritel PCS, whose good faith determination will be conclusive. Notwithstanding the foregoing and so long as no Default or Event of Default, except with respect to clauses (1), (2), (3) and (4) of this paragraph, has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit, whether the relevant event occurs before or after December 31, 2002: (1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of Tritel PCS in exchange for, or out of the net proceeds of the substantially concurrent sale, other than to a Subsidiary of Tritel PCS, of, Equity Interests of Tritel PCS, other than Disqualified Stock; (3) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the Net Proceeds of a substantially concurrent issuance and sale, other than to a Subsidiary, of Equity Interests, other than Disqualified Stock, of Tritel PCS; (4) the purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness in exchange for, or out of the Net Proceeds of a substantially 116 concurrent issuance or sale, other than to a Restricted Subsidiary, of Subordinated Indebtedness, so long as Tritel PCS or a Restricted Subsidiary would be permitted to refinance such original Subordinated Indebtedness with such new Subordinated Indebtedness pursuant to clause (11) of the definition of "Permitted Debt" (see "-- Incurrence of Indebtedness and Issuance of Preferred Stock"); (5) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness in the event of a change of control in accordance with provisions similar to the "-- Repurchase at the Option of Holders -- Change of Control" covenant; provided that, prior to or simultaneously with such repurchase, Tritel PCS has made the Change of Control Offer as provided in such covenant with respect to the Notes and has repurchased all Notes validly tendered for payment in connection with such Change of Control Offer; (6) the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of Tritel PCS, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees, or their estates or beneficiaries under their estates, or by any employee benefit plan, upon death, disability, retirement or termination of employment or pursuant to the terms of any employee benefit plan or any other agreement under which such shares of stock or related rights were issued; provided that (A) the aggregate cash consideration paid for such purchase, redemption, acquisition, cancellation or other retirement of such shares of Capital Stock after the Issue Date does not exceed $2 million in any fiscal year and (B) any unused amount in any 12-month period may be carried forward to one or more future periods; (7) make payments to Tritel 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 Tritel PCS 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 Tritel and its consolidated subsidiaries; (8) make payments to Tritel to reimburse Tritel for its out-of-pocket operating and administrative expenses attributable to Tritel PCS, provided this reimbursement may not exceed $1.0 million in any fiscal year; and (9) payments not otherwise permitted by clauses (1) through (8) in an amount not to exceed $10 million. The actions described in clauses (2), (3), (5), (6) and (9) of this paragraph will be Restricted Payments that will be permitted to be taken in accordance with this paragraph but will reduce the amount that would otherwise be available for Restricted Payments under clause (3) of the first paragraph of this covenant and the actions described in clauses (1), (4), (7) and (8) of this paragraph will be Restricted Payments that will be permitted to be taken in accordance with this paragraph and will not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of the first paragraph of this covenant. For the purpose of making any calculations under the Indenture, (a) if a Restricted Subsidiary is designated an Unrestricted Subsidiary, Tritel PCS will be deemed to have made an Investment in amount equal to the fair market value of the net assets of such Subsidiary at the time of such designation as determined by the Board of Directors of Tritel PCS, whose good faith determination will be conclusive, and (b) any property transferred to or from an Unrestricted Subsidiary will be valued at fair market value at the time of such transfer, as determined by the Board of Directors of Tritel PCS, whose good faith determination will be conclusive. If the aggregate amount of all Restricted Payments calculated under the foregoing provision includes an Investment in an Unrestricted Subsidiary or other Person that thereafter becomes a Restricted Subsidiary, the aggregate amount of all Restricted Payments calculated under the foregoing provision will be reduced by the lesser of (x) the net asset value of such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and (y) the initial amount of such Investment. 117 If an Investment resulted in the making of a Restricted Payment, the aggregate amount of all Restricted Payments calculated under the foregoing provision will be reduced by the amount of any net reduction in such Investment, resulting from the payment of interest or dividends, loan repayment, transfer of assets or otherwise, to the extent such net reduction is not included in Tritel PCS's Consolidated Net Income; provided that the total amount by which the aggregate amount of all Restricted Payments may be reduced may not exceed the lesser of (x) the cash proceeds received by Tritel PCS and its Restricted Subsidiaries in connection with such net reduction and (y) the initial amount of such Investment. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK Tritel PCS will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness, including Acquired Debt, and Tritel PCS will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that Tritel PCS and its Subsidiary Guarantors may incur Indebtedness, including Acquired Debt, or issue Disqualified Stock, if, after giving pro forma effect to such incurrence, including the application of the net proceeds therefrom, (1) the Consolidated Leverage Ratio would be less than or equal to (A) 7.0 to 1.0, if the Indebtedness is to be incurred prior to May 15, 2004 or (B) 6.0 to 1.0, if the Indebtedness is to be incurred on or after May 15, 2004, or (2) in the case of any incurrence of Indebtedness prior to May 15, 2004, Total Consolidated Indebtedness would be equal to or less than 75% of Total Invested Capital. In making the foregoing calculation, (A) pro forma effect shall be given to any Indebtedness to be incurred or repaid on such date; (B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions that occur during the four fiscal quarters for which financial statements of Tritel PCS are available immediately prior to such Transaction Date (the "Reference Period") or thereafter and on or prior to the Transaction Date as if they had occurred and such proceeds had been applied on the first day of such Reference Period; (C) pro forma effect shall be given to asset dispositions and asset acquisitions, including giving pro forma effect to the application of proceeds of any asset disposition, that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into Tritel PCS or any Restricted Subsidiary during such Reference Period or subsequent to such period and on or prior to the Transaction Date and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period; provided that to the extent that clause (B) or (C) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based upon the four full fiscal quarters immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed for which financial information is available; and (D) the aggregate amount of Indebtedness outstanding as of the Transaction Date will be deemed to include the total amount of funds outstanding and/or available under any revolving credit facilities of Tritel PCS or its Restricted Subsidiaries. The first paragraph of this covenant will not prohibit the incurrence of any and all of the following items of Indebtedness (collectively, "Permitted Debt"): (1) Indebtedness of Tritel PCS or any Restricted Subsidiary under the Bank Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $600.0 million, and any guarantees of such Indebtedness by a Restricted Subsidiary; (2) Indebtedness of Tritel PCS or any Restricted Subsidiary outstanding on the Issue Date, other than Indebtedness described under clause (1) above or (15) below but including Indebtedness then owed to the FCC; 118 (3) Telecommunications Indebtedness; (4) Indebtedness represented by the Notes and any Subsidiary Guarantee; (5) Subordinated Indebtedness owed by Tritel PCS to any Restricted Subsidiary or Indebtedness owed by any Restricted Subsidiary to Tritel PCS or any other Restricted Subsidiary; provided that, in each case, such Indebtedness is held by Tritel PCS or such Restricted Subsidiary; (6) Obligations of Tritel PCS or any Restricted Subsidiary entered into in the ordinary course of business (A) pursuant to Hedging Obligations relating to Indebtedness of Tritel PCS or a Restricted Subsidiary otherwise permitted under the Indenture that are entered into for the purpose of protecting against fluctuations in interest rates in respect of such Indebtedness and not for speculative purposes, or (B) pursuant to Currency Agreements entered into by Tritel PCS or any of its Restricted Subsidiaries in respect of its (x) assets or (y) obligations, as the case may be, denominated in a foreign currency; (7) Indebtedness of Tritel PCS or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock; (8) Acquired Debt of a Person, other than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or the acquisition of assets from such Person, as the case may be, provided that Tritel PCS on a pro forma basis could incur $1.00 of additional Indebtedness, other than Permitted Debt, pursuant to the first paragraph of the "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant; (9) Guarantees by any Restricted Subsidiary made in accordance with the provisions of the "Limitation on Issuances of Guarantees of Indebtedness by Restricted Subsidiaries" covenant; (10) Indebtedness of Tritel PCS not permitted by any other clause of this definition, in an aggregate principal amount not to exceed $50 million at any one time outstanding; (11) any renewals, extensions, substitutions, refinancings or replacements (each, for purposes of this clause, a "refinancing") of any outstanding Indebtedness, other than Indebtedness incurred pursuant to clause (1), (3), (5), (6), (7), (9), (10), (12), (13) or (14) of this definition, including any successive refinancings thereof, so long as (A) any such new Indebtedness is in a principal amount that does not exceed the principal amount so refinanced, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by Tritel PCS as necessary to accomplish such refinancing, plus the amount of the expenses of Tritel PCS incurred in connection with such refinancing, (B) in the case of any refinancing of Subordinated Indebtedness, such new Indebtedness is made subordinate to the Notes at least to the same extent as the Indebtedness being refinanced and has a final maturity date after the maturity date of the Notes, (C) such refinancing Indebtedness does not have an Average Life less than the Average Life of the Indebtedness being refinanced and has a final maturity date later than the Indebtedness being refinanced, or permit redemption at the option of the holder earlier than the earliest date of redemption at the option of the holder, of the Indebtedness being refinanced and (D) such Indebtedness incurred either by Tritel PCS or any Restricted Subsidiary who is the obligor on the Indebtedness being refinanced; (12) Capital Lease Obligations of Tritel PCS or any Restricted Subsidiary with respect to the leasing by Tritel PCS or any Restricted Subsidiary of tower sites, telephone and computer systems, operating facilities and, in each case, equipment that is a fixture thereto; provided, that such Capital Lease Obligations shall not exceed $25 million in aggregate principal amount at any time outstanding; (13) Indebtedness of Tritel PCS or a Restricted Subsidiary represented by letters of credit for the account of Tritel PCS or a Restricted Subsidiary to provide security for workers compensation claims, payment obligations for self insurance or similar requirements in the ordinary course of business; 119 (14) Indebtedness of Tritel PCS 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; and (15) Indebtedness of an Restricted Subsidiary to the FCC in respect of PCS licenses in an aggregate face amount not to exceed $75 million at any time. Tritel PCS will not incur any Indebtedness, including Permitted Debt, that is contractually subordinated in right of payment to any other Indebtedness of Tritel PCS unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of Tritel PCS shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of Tritel PCS solely by virtue of being unsecured. For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, Tritel PCS will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. LIMITATION ON OTHER SENIOR SUBORDINATED DEBT Tritel PCS will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any of its Senior Debt and senior in any respect in right of payment to the Notes. No Subsidiary Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any of its Senior Debt and senior in any respect in right of payment to such Guarantor's Subsidiary Guarantee. LIENS Tritel PCS will not, and will 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 Subsidiary Guarantee, as the case may be, or is Subordinated Indebtedness, upon any of their property or assets, now owned or hereafter acquired, 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 will not apply to any Lien securing Acquired Debt created prior to the incurrence of such Indebtedness by Tritel PCS 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 Tritel PCS or the Subsidiary Guarantor. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES Tritel PCS will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: (1) pay dividends or make any other distributions on its Capital Stock to Tritel PCS or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to Tritel PCS or any of its Restricted Subsidiaries; (2) pay any Indebtedness owed to Tritel PCS or any other Restricted Subsidiary; (3) make loans or advances to Tritel PCS or any of its Restricted Subsidiaries; or (4) transfer any of its properties or assets to Tritel PCS or any of its Restricted Subsidiaries. 120 However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of: (1) Existing Indebtedness as in effect on the date of the Indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such Existing Indebtedness, as in effect on the date of the Indenture; (2) any agreement or other instrument of a Person acquired by Tritel PCS or any Restricted Subsidiary in existence at the time of such acquisition, but not created in contemplation thereof, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; (3) with respect to a Restricted Subsidiary, imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of Tritel PCS's Capital Stock in, or substantially all the assets of, such Restricted Subsidiary in compliance with the "-- Repurchase at the Option of Holders -- Asset Sales" covenant; (4) any such customary encumbrance or restriction contained in a security document creating a Lien permitted under the Indenture to the extent relating to the property or asset subject to such Lien, including, without limitation, customary restrictions relating to assets securing any Telecommunications Indebtedness or the Bank Credit Agreement under the applicable security documents; or (5) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices. MERGER, CONSOLIDATION OR SALE OF ASSETS Tritel PCS may not, directly or indirectly: (1) consolidate or merge with or into another Person, whether or not Tritel PCS is the surviving corporation; or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of Tritel PCS and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person; unless: (1) either (a) Tritel PCS is the surviving corporation, or (b) the Person formed by or surviving any such consolidation or merger, if other than Tritel PCS, or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (2) the Person formed by or surviving any such consolidation or merger, if other than Tritel PCS, or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of Tritel PCS under the Notes, the Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee; (3) immediately after giving effect to such transaction or series of transactions on a pro forma basis, and treating any obligation of Tritel PCS or a Restricted Subsidiary in connection with or as a result of such transaction as having been incurred as of the time of such transaction, no Default or Event of Default exists; (4) Tritel PCS or the Person formed by or surviving any such consolidation or merger, if other than Tritel PCS, or to which such sale, assignment, transfer, conveyance or other disposition shall have been made: (a) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of Tritel PCS immediately preceding the transaction; and (b) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable 121 four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness, other than Permitted Indebtedness, pursuant to the first paragraph of the covenant described above under the caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock;" (5) if any of the property or assets of Tritel PCS or any of its Restricted Subsidiaries would thereupon become subject to any Lien, the provisions of the "Liens" covenant are complied with; and (6) Tritel PCS or the Person formed by or surviving any such consolidation or merger, if other than Tritel PCS, shall have delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that such transaction complies with the terms of the Indenture. Upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all of substantially all of the properties and assets of Tritel PCS in accordance with the immediately preceding paragraph in which Tritel PCS is not the continuing obligor under the Indenture, the Person formed by or surviving any such consolidation or merger, if other than Tritel PCS, shall succeed to, and be substituted for, and may exercise every right and power of, Tritel PCS under the Indenture, with the same effect as if such successor had been named as Tritel PCS therein. When a successor assumes all the obligations of its predecessor under the Indenture and the Notes, the predecessor shall be released from those obligations; provided that in the case of a transfer by lease, the predecessor shall not be released from the payment of principal and interest on the Notes. TRANSACTIONS WITH AFFILIATES Tritel PCS will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"), unless: (1) such Affiliate Transaction is on terms that are no less favorable to Tritel PCS or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Tritel PCS or such Restricted Subsidiary with an unrelated Person; and (2) Tritel PCS delivers to the Trustee: (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph: (1) any employment or consulting agreement entered into by Tritel PCS or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of Tritel PCS or such Restricted Subsidiary; (2) transactions between or among Tritel PCS and/or its Restricted Subsidiaries; (3) transactions with a Person that is an Affiliate of Tritel PCS solely because Tritel PCS owns an Equity Interest in such Person; (4) payment of reasonable directors fees, expenses and indemnification to Persons who are not otherwise Affiliates of Tritel PCS; 122 (5) sales of Equity Interests, other than Disqualified Stock, to Affiliates of Tritel PCS; (6) Restricted Payments that are permitted by the provisions of the Indenture described above under the caption "-- Restricted Payments;" (7) 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 Tritel PCS or such Restricted Subsidiary, as applicable, than those available from unaffiliated third parties; (8) transactions involving the leasing or sharing or other use by Tritel PCS or any Restricted Subsidiary of communications network facilities, including, without limitation, cable or fiber lines, equipment of transmission capacity, of any Affiliate of Tritel PCS (such Affiliate being a "Related Party") on terms that are no less favorable, when taken as a whole, to Tritel PCS or such Restricted Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (9) transactions involving the provision of telecommunication services by a Related Party in the ordinary course of its business to Tritel PCS or any Restricted Subsidiary, or by Tritel PCS or any Restricted Subsidiary to a Related Party, on terms that are no less favorable, when taken as a whole, to Tritel PCS or such Restricted Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (10) any sales agency agreements pursuant to which an Affiliate has the right to market any or all of the products or services of Tritel PCS or any of the Restricted Subsidiaries; (11) 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 (12) up to $2.5 million of loans from Tritel PCS to Airwave Communications and Digital PCS to fund the payment of certain litigation-related expenses and contingent liabilities, pursuant to the secured promissory note agreement in effect on the Issue Date. SALE AND LEASEBACK TRANSACTIONS Tritel PCS will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction. However, Tritel PCS or any Restricted Subsidiary may enter into a sale and leaseback transaction if: (1) the lease is for a period, including renewal rights, of not in excess of three years; (2) the lease secures or relates to industrial revenue or pollution control bonds; (3) the transaction is between Tritel PCS and a Restricted Subsidiary or between Restricted Subsidiaries; or (4) Tritel PCS or such Restricted Subsidiary, within 12 months after the sale or transfer of any assets or properties is completed, applies an amount not less than the net proceeds received from such sale in accordance with clause (1) or (2) of the second paragraph of the "-- Repurchase at the Option of Holders -- Asset Sales" covenant. LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN RESTRICTED SUBSIDIARIES Tritel PCS (a) will not permit any Restricted Subsidiary to issue any Capital Stock, other than to Tritel PCS or a Restricted Subsidiary, and (b) will not permit any Person, other than Tritel PCS or a Restricted Subsidiary, to own any Capital Stock of any Restricted Subsidiary. However, this covenant shall not prohibit (1) the sale or other disposition of all, but not less than all, of the issued and outstanding Capital Stock of any Restricted Subsidiary owned by Tritel PCS or any Restricted 123 Subsidiary in compliance with the other provisions of the Indenture or (2) the ownership by directors of directors' qualifying shares or the ownership by foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent mandated by applicable law. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS BY RESTRICTED SUBSIDIARIES Tritel PCS will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of Tritel PCS unless (a) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, and (b) with respect to any guarantee of Subordinated Indebtedness by a Restricted Subsidiary, any such guarantee is subordinated to such Restricted Subsidiary's guarantee with respect to the Notes at least to the same extent as such Subordinated Indebtedness is subordinated to the Notes, provided that the foregoing provision will not be applicable to (1) any guarantee by any Restricted Subsidiary that existed at the time such person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such person becoming a Restricted Subsidiary or (2) the Bank Credit Agreement. Any guarantee by a Restricted Subsidiary of the Notes pursuant to the preceding paragraph may provide by its terms that it will be automatically and unconditionally released and discharged upon (1) any sale, exchange or transfer to any person not an Affiliate of Tritel PCS of all of Tritel PCS's and the Restricted Subsidiaries' Capital Stock in, or all or substantially all the assets of, such Restricted Subsidiary, which sale, exchange or transfer is not prohibited by the Indenture, or (2) the release or discharge of the guarantee that resulted in the creation of such guarantee of the Notes, except a discharge or release by or as a result of payment under such guarantee. AMENDMENTS TO SECURITIES PURCHASE AGREEMENT The Indenture will provide that Tritel PCS will cause Tritel not to amend, modify or waive, or refrain from enforcing, any provision of the Securities Purchase Agreement in any manner that would delay the closing thereunder of Tritel's preferred stock to a date later than September 30, 1999 or would cause the net cash proceeds from the sale of Tritel's preferred stock to be less than $49.7 million. Tritel PCS will also cause Tritel to make a capital contribution to it of the net cash proceeds from such sale. ADDITIONAL SUBSIDIARY GUARANTEES If Tritel PCS or any of its Restricted Subsidiaries acquires or creates another Restricted Subsidiary after the Issue Date, then that newly acquired or created Restricted Subsidiary must become a Subsidiary Guarantor and execute a supplemental indenture satisfactory to the Trustee; provided that Tritel PCS shall not cause any License Subsidiary to become a Subsidiary Guarantor unless such License Subsidiary incurs Indebtedness other than Indebtedness in respect of the Bank Credit Agreement or Indebtedness to the FCC. Each new Subsidiary Guarantee will have the same terms as the Subsidiary Guarantees described above. BUSINESS ACTIVITIES Tritel PCS will not, and will not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business. UNRESTRICTED SUBSIDIARIES The Board of Directors of Tritel PCS may designate any Subsidiary, including any newly acquired or newly formed Subsidiary, to be an Unrestricted Subsidiary so long as (1) neither Tritel PCS nor any Restricted Subsidiary is directly or indirectly liable for any Indebtedness of such Subsidiary, (2) no default with respect to any Indebtedness of such Subsidiary would permit, upon notice, lapse 124 of time or otherwise, any holder of any other Indebtedness of Tritel PCS or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity, (3) any Investment in such Subsidiary made as result of designating such Subsidiary an Unrestricted Subsidiary will not violate the provisions of the "-- Restricted Payments" covenant, (4) neither Tritel PCS nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from persons who are not Affiliates of Tritel PCS and (5) neither Tritel PCS nor any Restricted Subsidiary has any obligation (a) to subscribe for additional shares of Capital Stock or other equity interest in such Subsidiary or (b) to maintain or preserve such Subsidiary's financial condition or to cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors of Tritel PCS shall be evidenced to the Trustee by filing a board resolution with such Trustee giving effect to such designation. The Board of Directors of Tritel PCS may designate any Unrestricted Subsidiary as a Restricted Subsidiary if immediately after giving effect to such designation, there would be no Default or Event of Default under the Indenture and Tritel PCS could incur $1.00 of additional Indebtedness, other than Permitted Indebtedness, pursuant to the first paragraph of the "-- Incurrence of Indebtedness and Issuance of Preferred Stock" covenant. REPORTS Whether or not required by the Commission, so long as any Notes are outstanding, Tritel PCS will furnish to the Holders of Notes, within the time periods specified in the Commission's rules and regulations: (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 Tritel PCS were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by Tritel PCS's certified independent accountants; and (2) all current reports that would be required to be filed with the Commission on Form 8-K if Tritel PCS were required to file such reports. In addition, following the consummation of the exchange offer contemplated by the Registration Rights Agreement, whether or not required by the Commission, Tritel PCS will file a copy of all of the information and reports referred to 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 securities analysts and prospective investors upon request. In addition, Tritel PCS has agreed that, for so long as any Notes remain outstanding, it will furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. Notwithstanding the preceding paragraphs, Tritel PCS may substitute reports of its parent, Tritel, for its reports so long as Tritel is permitted under applicable rules, regulations and policies of the Commission to file such reports with the Commission in lieu of Tritel PCS filing its own reports. EVENTS OF DEFAULT AND REMEDIES Each of the following is an "Event of Default": (1) default for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the Notes; (2) default in payment when due of the principal of, or premium, if any, on the Notes; 125 (3) failure by Tritel PCS or any of its Restricted Subsidiaries to comply with the provisions described under the captions "-- Repurchase at the Option of Holders -- Change of Control," "-- Repurchase at the Option of Holders -- Asset Sales," "-- Certain Covenants -- Restricted Payments," "-- Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock" or "-- Certain Covenants -- Merger, Consolidation or Sale of Assets;" (4) failure by Tritel PCS or any of its Restricted Subsidiaries for 30 days after notice to comply with any of the other agreements in the Indenture; (5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Tritel PCS or any of its Restricted Subsidiaries, or the payment of which is guaranteed by Tritel PCS or any of its Restricted Subsidiaries, whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, if that default: (a) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"); or (b) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (6) failure by Tritel PCS or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $15.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; (7) any holder or holders, or any Person acting on any such holder's behalf, of any Indebtedness in excess of $15.0 million in the aggregate of Tritel PCS or any Restricted Subsidiary shall, subsequent to the occurrence of a default with respect to such Indebtedness, notify the Trustee of the intended sale or disposition of any assets of Tritel PCS or any Restricted Subsidiary that have been pledged to or for the benefit of such Person to secure such Indebtedness or shall commence proceedings, or take action to retain in satisfaction of any such Indebtedness, or to collect on, seize, dispose of or apply, any such assets of Tritel PCS or any Restricted Subsidiary pursuant to the terms of any agreement or instrument evidencing any such Indebtedness of Tritel PCS or any Restricted Subsidiary or in accordance with applicable law; (8) the Parent Guarantee or any Subsidiary Guarantee issued by a Significant Subsidiary ceases to be in full force and effect or is declared null and void or the Parent Guarantor or any Subsidiary Guarantor that is a Significant Subsidiary denies that it has any further liability under its Guarantee, or gives notice to such effect, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture, and such condition has continued for a period of 30 days after written notice of such failure requiring the Guarantor and Tritel PCS to remedy the same has been given (x) to Tritel PCS by the Trustee or (y) to Tritel PCS and the Trustee by the holders of 25% in aggregate Accreted Value of the Notes then outstanding; and (9) certain events of bankruptcy or insolvency with respect to Tritel PCS, Tritel or any Restricted Subsidiary that constitutes a Significant Subsidiary. In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Tritel PCS, any Restricted Subsidiary that is a Significant Subsidiary or any group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Accreted Value of the then outstanding Notes may declare all the Notes to be due and payable immediately. 126 Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate Accreted Value of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default, except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages, if it determines that withholding notice is in their interest. The Holders of a majority in aggregate Accreted Value of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or Liquidated Damages on, or the principal of, the Notes. In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of Tritel PCS or any Restricted Subsidiary with the intention of avoiding payment of the premium that Tritel PCS would have had to pay if Tritel PCS then had elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to May 15, 2004, by reason of any willful action, or inaction, taken, or not taken, by or on behalf of Tritel PCS with the intention of avoiding the prohibition on redemption of the Notes prior to May 15, 2004, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the Notes. Tritel PCS is required to deliver to the Trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, Tritel PCS is required to deliver to the Trustee a statement specifying such Default or Event of Default. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS No director, officer, employee, incorporator or stockholder of Tritel PCS, as such, shall have any liability for any obligations of Tritel PCS under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. LEGAL DEFEASANCE AND COVENANT DEFEASANCE Tritel PCS may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes ("Legal Defeasance") except for: (1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium and Liquidated Damages, if any, on such Notes when such payments are due from the trust referred to below; (2) Tritel PCS's obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust; (3) the rights, powers, trusts, duties and immunities of the Trustee, and Tritel PCS's obligations in connection therewith; and (4) the Legal Defeasance and Covenant Defeasance provisions of the Indenture. In addition, Tritel PCS may, at its option and at any time, elect to have the obligations of Tritel PCS released with respect to certain covenants that are described in the Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants shall not constitute a 127 Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events, not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events, described under "Events of Default" will no longer constitute an Event of Default with respect to the Notes. In order to exercise either Legal Defeasance or Covenant Defeasance: (1) Tritel PCS must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium and Liquidated Damages, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be, and Tritel PCS must specify whether the Notes are being defeased to maturity or to a particular redemption date; (2) in the case of Legal Defeasance, Tritel PCS shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (a) Tritel PCS has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the 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 Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred; (3) in the case of Covenant Defeasance, Tritel PCS shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes 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; (4) no Default or Event of Default shall have occurred and be continuing either: (a) on the date of such deposit, other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit; or (b) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument, other than the Indenture, to which Tritel PCS or any of its Restricted Subsidiaries is a party or by which Tritel PCS or any of its Restricted Subsidiaries is bound; (6) Tritel PCS must have delivered to the Trustee an Opinion of Counsel to the effect that, assuming no intervening bankruptcy of Tritel PCS between the date of deposit and the 91st day following the deposit and assuming that no Holder is an "insider" of Tritel PCS under applicable bankruptcy law, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (7) Tritel PCS must deliver to the Trustee an Officers' Certificate stating that the deposit was not made by Tritel PCS with the intent of preferring the Holders of Notes over the other creditors of Tritel PCS with the intent of defeating, hindering, delaying or defrauding creditors of Tritel PCS or others; and (8) Tritel PCS must deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. 128 AMENDMENT, SUPPLEMENT AND WAIVER Except as provided in the next two succeeding paragraphs, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate Accreted Value of the Notes then outstanding, including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, the Notes, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate Accreted Value of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes). Without the consent of each Holder affected, an amendment or waiver may not, with respect to any Notes held by a non-consenting Holder: (1) reduce the Accreted Value of Notes whose Holders must consent to an amendment, supplement or waiver; (2) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes, other than provisions relating to the covenants described above under the caption "-- Repurchase at the Option of Holders"; (3) reduce the rate of or change the time for payment of interest on any Note; (4) waive a Default or Event of Default in the payment of principal of, or interest or premium or Liquidated Damages, if any, on the Notes, except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate Accreted Value of the Notes and a waiver of the payment default that resulted from such acceleration; (5) make any Note payable in money other than that stated in the Notes; (6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest or premium or Liquidated Damages, if any, on the Notes; (7) waive a redemption payment with respect to any Note, other than a payment required by one of the covenants described above under the caption "-- Repurchase at the Option of Holders"; or (8) make any change in the preceding amendment and waiver provisions. Notwithstanding the preceding, without the consent of any Holder of Notes, Tritel PCS and the Trustee may amend or supplement the Indenture or the Notes: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated Notes in addition to or in place of certificated Notes; (3) to evidence the succession of another Person to Tritel PCS or any other obligor on the Notes and to provide for the assumption of Tritel PCS's obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of Tritel PCS's assets; (4) to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder; or (5) to comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. SATISFACTION AND DISCHARGE The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder, when: (1) either: 129 (a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to Tritel PCS, have been delivered to the Trustee for cancellation; or (b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and Tritel PCS has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption; (2) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which Tritel PCS is a party or by which Tritel PCS or any Guarantor is bound; (3) Tritel PCS has paid or caused to be paid all sums payable by it under the Indenture; and (4) Tritel PCS has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be. In addition, Tritel PCS must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. INFORMATION CONCERNING THE TRUSTEE If the Trustee becomes a creditor of Tritel PCS, the Indenture limits its right to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign. The Holders of a majority in Accreted Value of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. ADDITIONAL INFORMATION Anyone who receives this prospectus may obtain a copy of the Indenture and Registration Rights Agreement without charge by writing to Tritel PCS, Inc., 1080 River Oaks Drive, Suite B-100, Jackson, Mississippi 39208, Attention: Corporate Secretary. GOVERNING LAW The Indenture and the Notes will be governed by, and construed in accordance with, the laws of the State of New York. BOOK-ENTRY, DELIVERY AND FORM Except as set forth in the next paragraph, the Notes to be resold as set forth herein will initially be issued in the form of one Global Note (the "Global Note"). The Global Note will be deposited on 130 the Closing Date with the Trustee as custodian for The Depository Trust Company (the "Depositary") and registered in the name of Cede & Co., as nominee of the Depositary (such nominee being referred to herein as the "Global Note Holder"). Notes originally purchased by persons outside the United States pursuant to sales in accordance with Regulation S under the Securities Act will be represented upon issuance by a temporary global Note certificate (the "Temporary Certificate"), which will not be exchangeable for Certificated Notes until the expiration of the "40-day restricted period" within the meaning of Rule 903(c)(3) of Regulation S under the Securities Act. The Temporary Certificate will be registered in the name of, and held by, a temporary certificate holder until the expiration of such 40-day period, at which time the Temporary Certificate will be delivered to the Trustee in exchange for Certificated Notes registered in the names requested by such temporary certificate holder. In addition, until the expiration of such 40-day period, transfers of interests in the Temporary Certificate can only be effected through such temporary certificate holder in accordance with the requirements set forth in "Notice to Investors." The Depositary is a limited-purpose trust company that was created to hold securities for its participating organizations (collectively, the "Participants" or the "Depositary's Participants") and to facilitate the clearance and settlement of transactions in such securities between Participants through electronic book-entry changes in accounts of its Participants. The Depositary's Participants include securities brokers and dealers (including the Initial Purchasers), banks and trust companies, clearing corporations and certain other organizations. Access to the Depositary's system is also available to other entities such as banks, brokers, dealers and trust companies (collectively, the "Indirect Participants" or the "Depositary's Indirect Participants") that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. Persons who are not Participants may beneficially own securities held by or on behalf of the Depositary only through the Depositary's Participants or the Depositary's Indirect Participants. Tritel PCS expects that pursuant to procedures established by the Depositary (1) upon deposit of the Global Note, the Depositary will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Note and (2) ownership of the Notes evidenced by the Global Note will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by the Depositary, with respect to the interests of the Depositary's Participants, the Depositary's Participants and the Depositary's Indirect Participants. Prospective purchasers are advised that the laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to own, transfer or pledge Notes evidenced by the Global Note will be limited to such extent. For certain other restrictions on the transferability of the Notes, see "Notice to Investors." So long as the Global Note Holder is the registered owner of any Notes, the Global Note Holder will be considered the sole Holder under the Indenture of any Notes evidenced by the Global Note. Beneficial owners of Notes evidenced by the Global Note will not be considered the owners or Holders thereof under the Indenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the Trustee thereunder. Neither Tritel PCS, nor the Trustee will have any responsibility or liability for any aspect of the records of the Depositary or for maintaining, supervising or reviewing any records of the Depositary relating to the Notes. Payments in respect of the principal of and premium, if any, and interest on any Notes registered in the name of the Global Note Holder on the applicable record date will be payable by the Trustee to or at the direction of the Global Note Holder in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, Tritel PCS and the Trustee may treat the persons in whose names Notes, including the Global Note, are registered as the owners thereof for the purpose of receiving such payments. Consequently, neither Tritel PCS, nor the Trustee has or will have any responsibility or liability for the payment of such amounts to beneficial owners of the Notes. Tritel PCS believes, however, that it is currently the policy of the Depositary to immediately credit the accounts of the relevant Participants with such payments, in amounts proportionate to their respective 131 holdings of beneficial interests in the relevant security as shown on the records of the Depositary. Payments by the Depositary's Participants and the Depositary's Indirect Participants to the beneficial owners of the Notes will be governed by standing instructions and customary practice and will be the responsibility of the Depositary's Participants or the Depositary's Indirect Participants. EXCHANGE OF GLOBAL NOTES FOR CERTIFICATED NOTES A Global Note is exchangeable for definitive Notes in registered certificated form ("Certificated Notes") if: (1) DTC (a) notifies Tritel PCS that it is unwilling or unable to continue as depositary for the Global Notes and Tritel PCS fails to appoint a successor depositary or (b) has ceased to be a clearing agency registered under the Exchange Act; (2) Tritel PCS, at its option, notifies the Trustee in writing that it elects to cause the issuance of the Certificated Notes; or (3) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes. In addition, beneficial interests in a Global Note may be exchanged for Certificated Notes upon prior written notice given to the Trustee by or on behalf of DTC in accordance with the Indenture. In all cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary, in accordance with its customary procedures, and will bear the applicable restrictive legend referred to in "Notice to Investors," unless that legend is not required by applicable law. EXCHANGE OF CERTIFICATED NOTES FOR GLOBAL NOTES Certificated Notes may not be exchanged for beneficial interests in any Global Note unless the transferor first delivers to the Trustee a written certificate, in the form provided in the Indenture, to the effect that such transfer will comply with the appropriate transfer restrictions applicable to such Notes. See "Notice to Investors." SAME DAY SETTLEMENT AND PAYMENT Tritel PCS will make payments in respect of the Notes represented by the Global Notes, including principal, premium, if any, interest and Liquidated Damages, if any, by wire transfer of immediately available funds to the accounts specified by the Global Note Holder. Tritel PCS will make all payments of principal, interest and premium and Liquidated Damages, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address. The Notes represented by the Global Notes are expected to be eligible to trade in the PORTAL market and to trade in DTC's Same-Day Funds Settlement System, and any permitted secondary market trading activity in such Notes will, therefore, be required by DTC to be settled in immediately available funds. Tritel PCS expects that secondary trading in any Certificated Notes will also be settled in immediately available funds. Because of time zone differences, the securities account of a Euroclear or Cedel participant purchasing an interest in a Global Note from a Participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Cedel participant, during the securities settlement processing day, which must be a business day for Euroclear and Cedel, immediately following the settlement date of DTC. DTC has advised Tritel PCS that cash received in Euroclear or Cedel as a result of sales of interests in a Global Note by or through a Euroclear or Cedel participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Cedel cash account only as of the business day for Euroclear or Cedel following DTC's settlement date. 132 CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided. "Accreted Increment" means (a) if the redemption date occurs before the first Semi-Annual Accrual Date, an amount equal to the product of (1) the Accreted Value for the first Semi-Annual Accrual Date less the original issue price multiplied by (2) a fraction, the numerator of which is the number of days from the Closing Date to the redemption date, using a 360-day year of twelve 30-day months, and the denominator of which is the number of days elapsed from the Closing Date to the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months, or (b) if the redemption date occurs between two Semi-Annual Accrual Dates, an amount equal to the product of (1) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Accrual Date multiplied by (2) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the redemption date, using a 360-day year of twelve 30-day months, and the denominator of which is 180. "Accreted Value" means, for any particular date of determination (any such date being herein referred to as a "Specified Date"), the amount provided below for each $1,000 principal amount at maturity of Notes outstanding: A. If the Specified Date occurs on one of the following dates (each a "Semi-Annual Accrual Date"), the Accreted Value will equal the amount set forth below:
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE - ------------------------------------- --------------- November 15, 1999 $ 573.38 May 15, 2000 609.93 November 15, 2000 648.82 May 15, 2001 690.18 November 15, 2001 734.18 May 15, 2002 780.98 November 15, 2002 830.77 May 15, 2003 883.73 November 15, 2003 940.07 May 15, 2004 or thereafter $ 1,000.00
B. If the Specified Date occurs before the first Semi-Annual Accrual Date, the Accreted Value will equal the sum of (1) the original issue price and (2) an amount equal to the product of (a) the Accreted Value for the first Semi-Annual Accrual Date less the original issue price multiplied by (b) a fraction, the numerator of which is the number of days from the issue date of the Notes to the Specified Date, using a 360-day year of twelve 30-day months, and the denominator of which is the number of days elapsed from the issue date of the Notes to the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months. C. If the Specified Date occurs between two Semi-Annual Accrual Dates, the Accreted Value will equal the sum of (1) the Accreted Value for the Semi-Annual Accrual Date immediately preceding such Specified Date and (2) an amount equal to the product of (a) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Accrual Date multiplied by (b) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the Specified Date, using a 360-day year of twelve 30-day months, and the denominator of which is 180. D. If the Specified Date occurs after May 15, 2004, the Accreted Value will equal $1,000. 133 "Acquired Debt" means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Affiliate" means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified 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 meaning correlative to the foregoing. "Asset Acquisition" means (a) any capital contribution, 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, by Tritel PCS or any Restricted Subsidiary in any other Person, or any acquisition or purchase of Capital Stock of any other Person by Tritel PCS or any Restricted Subsidiary, in either case pursuant to which such Person shall become a Restricted Subsidiary or shall be merged with or into Tritel PCS or any Restricted Subsidiary or (b) any acquisition by Tritel PCS or any Restricted Subsidiary of the assets of any Person which constitute substantially all of an operating unit or line of business of such Person or which is otherwise outside of the ordinary course of business. "Asset Disposition" means the sale or other disposition by Tritel PCS or any of its Restricted Subsidiaries, other than to Tritel PCS or another Restricted Subsidiary of Tritel PCS, of (a) all or substantially all of the Capital Stock of any Restricted Subsidiary of Tritel PCS or (b) all or substantially all of the assets that constitute a division or line of business of Tritel PCS or any of its Restricted Subsidiaries. "Asset Sale" means: (1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of business consistent with past practices; provided that the sale, conveyance or other disposition of all or substantially all of the assets of Tritel PCS and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "-- Repurchase at the Option of Holders -- Change of Control" and/or the provisions described above under the caption "-- Certain Covenants -- Merger, Consolidation or Sale of Assets" and not by the provisions of the "-- Repurchase at the Option of Holders -- Asset Sale" covenant; and (2) the issuance of Equity Interests by any of Tritel PCS's Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries. Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales: (1) any single transaction or series of related transactions that involves assets having a fair market value of less than $5.0 million; (2) any disposition of properties and assets of Tritel PCS that is governed by the provisions of the Indenture described under "-- Merger, Consolidation and Sale of Assets" above; (3) a transfer of assets between or among Tritel PCS and its Restricted Subsidiaries; (4) transfers of property or assets to an Unrestricted Subsidiary, if permitted under the "Restricted Payments" covenant; (5) the sale or lease of equipment, inventory, accounts receivable or other assets in the ordinary course of business; and 134 (6) any transfer by Tritel PCS or a Subsidiary of property or equipment with a fair market value of less than $5.0 million to a Person who is not an Affiliate of Tritel PCS in exchange for property or equipment that has a fair market value at least equal to the fair market value of the property or equipment so transferred; provided that, in the event of a transfer described in this clause (6), Tritel PCS shall deliver to the Trustee an officer's certificate certifying that such exchange complies with this clause (6). "Average Life" means, as of the date of determination with respect to any Indebtedness, the quotient obtained by dividing (a) the sum of the products of (x) the number of years from the date of determination to the date or dates of each successive scheduled principal payment, including, without limitation, any sinking fund requirements, of such Indebtedness multiplied by (y) the amount of each such principal payment by (b) the sum of all such principal payments. "Bank Credit Agreement" means the Amended and Restated Loan Agreement dated as of March 31, 1999 between Tritel PCS, Tritel, Toronto Dominion (Texas), Inc, as administrative agent and the Banks, as such agreement may be amended, restated, supplemented, refinanced or otherwise modified from time to time. "Banks" means the banks or other financial institutions that from time to time are lenders under the Bank Credit Agreement. "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning. "Board of Directors" means: (1) with respect to a corporation, the board of directors of the corporation; (2) with respect to a partnership, the Board of Directors of the general partner of the partnership; and (3) with respect to any other Person, the board or committee of such Person serving a similar function. "Capital Lease Obligation" means, with respect to any person, an obligation incurred or assumed under or in connection with any capital lease of real or personal property that, in accordance with GAAP, has been recorded as a capitalized lease. "Capital Stock" means: (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents, however designated, of corporate stock; (3) in the case of a partnership or limited liability company, partnership or membership interests, whether general or limited; and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash Equivalents" means: (1) United States dollars; (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof, provided that the full faith and credit of the United States is pledged in support thereof, having maturities of not more than six months from the date of acquisition; 135 (3) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any lender party to the Bank Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of "B" or better; (4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (5) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Rating Services and in each case maturing within six months after the date of acquisition; and (6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. "Change of Control" means the occurrence of any of the following: (1) for so long as the Voting Preference Common Stock of Tritel remains outstanding and the Voting Preference Common Stock constitutes 50.1% or more of the combined voting power of all classes of Tritel's outstanding Voting Stock pursuant to the Restated Certificate of Incorporation of Tritel, a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than a Permitted Holder, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person will be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of shares of Voting Preference Common Stock having more than 50% of the total voting power of such shares of Voting Preference Common Stock; (2) if there are no shares of Voting Preference Common Stock outstanding or the Voting Preference Common Stock no longer constitutes 50.1% or more of the combined voting power of all classes of Tritel's outstanding Voting Stock pursuant to the Restated Certificate of Incorporation of Tritel, a "person" or "group", other than a Permitted Holder, becomes the "beneficial owner" of Voting Stock having more than 50% of the voting power of the total Voting Stock of Tritel; (3) the direct or indirect sale, transfer, conveyance or other disposition, other than by way of merger or consolidation, in one or a series of related transactions, of all or substantially all of the properties or assets of Tritel PCS and its Restricted Subsidiaries taken as a whole to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act), except to a Permitted Holder; (4) the adoption of a plan relating to the liquidation or dissolution of Tritel PCS; (5) during any consecutive two year period, individuals who at the beginning of such period constituted the Board of Directors of Tritel PCS, together with any new directors whose election to such Board of Directors, or whose nomination for election by the stockholders of Tritel PCS, was approved by a vote of 66% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board of Directors of Tritel PCS then in office; provided, however, that changes in specific representatives of the existing investors that are entitled to nominate board representatives shall be excluded from consideration for purposes of this clause (5); or (6) Tritel ceases to own, directly or indirectly, 100% of the Capital Stock of Tritel PCS. "Consolidated EBITDA" means, for any period, the sum of, without duplication, Consolidated Net Income for such period, plus (or, in the case of clause (d) below, plus or minus) the following items to the extent included in computing Consolidated Net Income for such period: (a) the 136 Consolidated Interest Expense and preferred stock dividends of Tritel PCS and its Restricted Subsidiaries for such period, plus (b) the provision for federal, state, local and foreign income taxes of Tritel PCS and its Restricted Subsidiaries for such period, plus (c) the aggregate depreciation and amortization expense of Tritel PCS and any of its Restricted Subsidiaries for such period, plus (d) any other non-cash charges for such period, and minus non-cash credits for such period, other than non-cash charges or credits resulting from changes in prepaid assets or accrued liabilities in the ordinary course of business; provided that income tax expense, interest expense and preferred stock dividends, depreciation and amortization expense, and non-cash charges and credits of a Restricted Subsidiary will be included in Consolidated EBITDA only to the extent, and in the same proportion, that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income for such period. "Consolidated Interest Expense" means, for any period, the aggregate amount of (a) interest in respect of Indebtedness (including amortization of original issue discount on any Indebtedness and the interest portion of any deferred payment obligation, calculated in accordance with the effective interest method of accounting; all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financings; the net costs associated with Hedging Obligations; and Indebtedness that is guaranteed or secured by Tritel PCS or any of its Restricted Subsidiaries), (b) the interest portion of Capital Lease Obligations paid, accrued or scheduled to be paid or to be accrued by Tritel PCS and its Restricted Subsidiaries during such period and (c) cash dividends paid on Disqualified Stock by Tritel PCS and any Restricted Subsidiary to any Person other than Tritel PCS and its Restricted Subsidiaries. "Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of (a) the aggregate amount of Indebtedness of Tritel PCS and its Restricted Subsidiaries on a consolidated basis as of such date to (b) the product of (x) the aggregate amount of Consolidated EBITDA for the immediately preceding two full fiscal quarters for which internal financial statements are available, taken as one accounting period, multiplied by (y) two. "Consolidated Net Income" means, for any period, the aggregate net income (or loss) of Tritel PCS and its Restricted Subsidiaries for such period determined in conformity with GAAP; provided that the following items shall be excluded in computing Consolidated Net Income (without duplication): (1) the portion of net income (or loss) of any Person (other than Tritel PCS or a Restricted Subsidiary), including Unrestricted Subsidiaries, in which Tritel PCS or any Restricted Subsidiary has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid to Tritel PCS or any Restricted Subsidiary in cash during such period; (2) the net income (or loss) of any Person combined with Tritel PCS or any Restricted Subsidiary on a "pooling of interests" basis attributable to any period prior to the date of combination; (3) the net income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is at the date of determination restricted, directly or indirectly, except to the extent that such net income could be paid to Tritel PCS or a Restricted Subsidiary thereof by loans, advances, intercompany transfers, principal repayments or otherwise; (4) any gains or losses, on an after-tax basis, attributable to Asset Sales; (5) except for purposes of calculating the amount of Restricted Payments that may be made pursuant to clause (3) of the first paragraph of the "Limitation on Restricted Payments" covenant, any amount paid or accrued as dividends on Preferred Stock (other than accrued dividends which, pursuant to the terms of the Preferred Stock, will not be payable prior to the first anniversary after the Stated Maturity of the Notes) of Tritel PCS or any Restricted Subsidiary owned by Persons other than Tritel PCS and any of its Restricted Subsidiaries; and (6) all extraordinary gains and extraordinary losses. 137 "Consolidated Net Worth" means, with respect to any specified Person as of any date, the sum of: (1) the consolidated equity of the common stockholders of such Person and its Restricted Subsidiaries as of such date; plus (2) the respective amounts reported on such Person's balance sheet as of such date with respect to any series of preferred stock, other than Disqualified Stock, that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement entered into by a Person that is designed to protect such Person against fluctuations in currency values. "Default" means any event that is, or after notice or passage of time or both, would be an Event of Default. "Disqualified Stock" means any Capital Stock that, by its terms, or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof, or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require Tritel PCS to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that Tritel PCS may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "-- Certain Covenants -- Restricted Payments." "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). "Equity Offering" means a capital contribution to Tritel PCS from Tritel or a sale by Tritel PCS of its Capital Stock (which is not Disqualified Stock) to Tritel. "Existing Indebtedness" means up to $41.2 million (book value) in aggregate principal amount of Indebtedness of Tritel PCS and its Restricted Subsidiaries (other than Indebtedness under the Bank Credit Agreement) in existence on the date of the Indenture, until such amounts are repaid. "GAAP" means generally accepted accounting principles 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 have been approved by a significant segment of the accounting profession, which are in effect from time to time. "Government Securities" means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of Tritel PCS thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as a custodian with respect to any such U.S. Government obligation or a specific payment of principal of or interest on any such U.S. Government obligation held by such custodian for the account of the holder of such depository receipt. However, except as required by law, such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government obligation or the specific payment of principal of or interest on the U.S. Government obligation evidenced by such depository receipt. 138 "guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness. "Guarantee" 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 Obligations" means, with respect to any specified Person, the obligations of such Person under: (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and (2) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent, in respect of: (1) borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit, or reimbursement agreements in respect thereof; (3) banker's acceptances; (4) representing Capital Lease Obligations; (5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or (6) representing any Hedging Obligations, if and to the extent any of the preceding items, other than letters of credit, would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person, whether or not such Indebtedness is assumed by the specified Person, and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person. 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; and (2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Investments" means, with respect to any Person, all direct or indirect investments by such Person: in other Persons, including Affiliates; in the forms of loans, including Guarantees or other obligations; advances or capital contributions, excluding commission, travel and similar advances to officers and employees made in the ordinary course of business; purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If Tritel PCS or any Restricted Subsidiary of Tritel PCS sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Tritel PCS such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of Tritel PCS, Tritel PCS shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an 139 amount determined as provided in the final paragraph of the covenant described above under the caption "-- Certain Covenants -- Restricted Payments." The acquisition by Tritel PCS or any Restricted Subsidiary of Tritel PCS of a Person that holds an Investment in a third Person shall be deemed to be an Investment by Tritel PCS or such Restricted Subsidiary in such third Person in an amount equal to the fair market value of the Investment held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of the covenant described above under the caption "-- Certain Covenants -- Restricted Payments." "Issue Date" means the date of original issuance of the Notes. "License Subsidiary" means Tritel A/B Holding Corp., Tritel C/F Holding Corp., NexCom, Inc., Clearcall, Inc., Global PCS, Inc., Clearwave, Inc., DigiNet PCS, Inc., DigiCom, Inc. and DigiCall, Inc., each a Delaware corporation, and Aircom PCS, Inc. and QuinCom, Inc., each an Alabama corporation, and any other wholly owned Subsidiary of Tritel PCS designated as a License Subsidiary under the Bank Credit Agreement. However, any such Subsidiary will be a License Subsidiary only so long as its sole assets consist of stock on one or more other License Subsidiaries, one or more PCS Licenses and/or cash from senior loans by Tritel PCS or any Restricted Subsidiary in order to fund amounts due, substantially contemporaneously, to the FCC or with respect to franchise taxes and other similar payments related to the PCS Licenses, and its sole Indebtedness consists of Indebtedness owed to the FCC attributable to such PCS License or Licenses, amounts owed to Tritel PCS or any Restricted Subsidiary under such senior loans, and guarantees of the Bank Credit Agreement. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code, or equivalent statutes, of any jurisdiction. "Marketing Affiliate" means any Person which engages in no activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof. "Net Income" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however: (1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "Net Proceeds" means (a) with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations or escrowed funds, but only when received in the form of, or stock or other assets when disposed for, cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to Tritel PCS or any Restricted Subsidiary), net of (1) brokerage commissions and other fees and expenses (including fees and expenses of legal counsel and investment banks) related to such Asset Sale, (2) provisions for all taxes payable as a result of such Asset Sale, (3) payments made to retire Indebtedness where payment of such Indebtedness is secured by the assets or properties the subject of such Asset Sale, (4) amounts required to be paid to any Person, other than Tritel PCS or any Restricted Subsidiary, owning a beneficial interest in the assets subject to the Asset Sale and (5) appropriate amounts to be provided by Tritel PCS or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by Tritel PCS or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related 140 to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale and (b) with respect to any capital contribution or issuance or sale of Capital Stock as referred to under the "Restricted Payments" covenant, the proceeds of such capital contribution, issuance or sale in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed for, cash or Cash Equivalents, except to the extent that such obligations are financed or sold with recourse to Tritel PCS or any Restricted Subsidiary, net of attorney's fees, accountant's fees and brokerage, consultation, underwriting and other fees and expenses actually incurred in connection with such capital contribution, issuance or sale and net of taxes paid or payable as a result thereof. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Parent Guarantee" means a guarantee of the Notes by the Parent Guarantor in accordance with the provisions of the Indenture. "Parent Guarantor" means Tritel and any successors or assigns permitted under the Indenture. "Permitted Business" means (a) the delivery or distribution of telecommunications, voice, data or video services or (b) any business or activity reasonably related or ancillary thereto, including, without limitation, any business conducted by Tritel PCS or any Restricted Subsidiary on the Issue Date and the acquisition, holding or exploitation of any license relating to the delivery of the services described in clause (a) of this definition. "Permitted Holders" means: (1) each of AT&T, TeleCorp PCS, Triton PCS, the institutional equity investors that purchased Series C Preferred Stock of Tritel on January 7, 1999 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; (2) William M. Mounger, II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr.; the spouse, descendants and heirs of any of the foregoing persons; any trust existing solely for the benefit of one or more of the foregoing persons; the estate or any executor, administrator, conservator or other legal representative of one or more of the foregoing persons; and any corporation, limited partnership, limited liability company or similar entity, all of the Voting Stock of which is owned by one or more of the foregoing persons; and (3) 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 of the persons identified in clauses (1) or (2) above. "Permitted Investments" means: (1) Investments in Cash Equivalents; (2) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers' compensation, performance and other similar deposits; (3) loans and advances to employees made in the ordinary course of business; (4) bonds, notes, debentures or other securities received as a result of Asset Sales permitted under the covenant "-- Repurchase at the Option of Holders -- Asset Sales;" (5) Investments by Tritel PCS or any Restricted Subsidiary in another Person, if as a result of such Investment (a) such other Person becomes a Restricted Subsidiary or (b) such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, Tritel PCS or a Restricted Subsidiary; (6) Investments by Tritel PCS or any of the Restricted Subsidiaries in any one of the other of them; and (7) Investments the sum of which does not exceed $7.5 million at any one time outstanding. 141 "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity. "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Subsidiary" means any Subsidiary other than an Unrestricted Subsidiary. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subordinated Indebtedness" means Indebtedness of Tritel PCS that is subordinated in right of payment to the Notes. "Subsidiary" means, with respect to any specified Person: (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled, without regard to the occurrence of any contingency, to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by Tritel and/or one or more other subsidiaries of Tritel; and (2) any partnership (a) the sole general partner or the managing general partner of which is Tritel and/or one or more other subsidiaries of Tritel or (b) the only general partners of which are Tritel and/or one or more other subsidiaries of Tritel. "Subsidiary Guarantee" means a guarantee of the Notes by a Restricted Subsidiary in accordance with the provisions of the Indenture. "Subsidiary Guarantor" means any Restricted Subsidiary that issues a Subsidiary Guarantee. "Telecommunications Business" means (a) the delivery or distribution of telecommunications, voice, data or video services or (b) any business or activity reasonably related or ancillary thereto, including, without limitation, any business conducted by Tritel PCS or any Restricted Subsidiary on the Closing Date and the acquisition, holding or exploitation of any license relating to the delivery of the services described in clause (a) of this definition. "Telecommunications Indebtedness" means any credit facility entered into with any vendor or supplier, or any financial institution acting on behalf of such a vendor or supplier; provided that the Indebtedness thereunder is incurred solely for the purpose of (A) financing the cost, including the cost of design, development, site acquisition, construction, integration, handset manufacture or acquisition or microwave relocation, of wireless telecommunications networks or systems or for which Tritel PCS or any Restricted Subsidiary has obtained the applicable licenses or authorization to utilize the radio frequencies necessary for the operation of such networks or systems, (B) acquiring the Capital Stock of an entity engaged in the Telecommunications Business and (C) paying fees and expenses incurred in connection therewith. "Total Consolidated Indebtedness" means at any date of determination, an amount equal to (a) the accreted value of all Indebtedness, in the case of any Indebtedness issued with original issue discount, plus (b) the principal amount of all Indebtedness, in the case of any other Indebtedness, of Tritel PCS and the Restricted Subsidiaries outstanding as of the date of determination. "Total Invested Capital" means, at any time of determination, the sum of, without duplication, (a) $271.5 million, the total amount of equity contributed to Tritel as of the Issue Date, plus (b) irrevocable binding commitments to purchase Capital Stock (other than Disqualified Stock) of Tritel existing as of the Issue Date, plus (c) the aggregate Net Proceeds received by Tritel PCS from 142 capital contributions or the issuance or sale of Capital Stock, other than Disqualified Stock but including Capital Stock issued upon the conversion of convertible Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Disqualified Stock) subsequent to the Issue Date, other than to a Restricted Subsidiary; provided, however, such aggregate net proceeds received pursuant to this clause (c) shall exclude any amounts included as commitments to purchase Capital Stock in the preceding clause (b), plus (d) the aggregate Net Proceeds received by Tritel PCS or any Restricted Subsidiary from the sale, disposition or repayment of any Investment made after the Issue Date 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 the disposition of such Investment, plus (e) an amount equal to the consolidated net Investment that Tritel PCS and/or any of the Restricted Subsidiaries has in any Subsidiary that was designated as an Unrestricted Subsidiary after the Issue Date and redesignated as a Restricted Subsidiary in accordance with the covenant described under "-- Certain Covenants -- Unrestricted Subsidiaries," plus (f) Total Consolidated Indebtedness minus (g) the aggregate amount of all Restricted Payments declared or made on or after the Issue Date. "Transaction Date" means, with respect to the incurrence of any Indebtedness by Tritel PCS or any of its Restricted Subsidiaries, the date such Indebtedness is to be incurred and, with respect to any Restricted Payment, the date such Restricted Payment is to be made. "Unrestricted Subsidiary" means (a) any Subsidiary that is designated by the Board of Directors of Tritel PCS as an Unrestricted Subsidiary in accordance with the "Unrestricted Subsidiaries" covenant and (b) any Subsidiary of an Unrestricted Subsidiary. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. 143 DESCRIPTION OF CAPITAL STOCK The following summary of certain provisions of the capital stock of Tritel does not purport to be complete and is subject to, and qualified in its entirety by, the provisions of the Restated Certificate of Incorporation of Tritel, dated January 4, 1999 (the "Restated Certificate of Incorporation") and by the provisions of applicable law. GENERAL The authorized capital stock of Tritel, as set forth in the Restated Certificate of Incorporation, is 4,540,009, which consists of the following: o 1,500,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"), including o 200,000 shares designated "Series A Convertible Preferred Stock" (the "Series A Preferred Stock"), 10% redeemable convertible, $1,000 stated and liquidation value, o 300,000 shares designated "Series B Convertible Preferred Stock" (the "Series B Preferred Stock"), 10% cumulative, $1,000 stated and liquidation value, o 500,000 shares designated "Series C Convertible Preferred Stock" (the "Series C Preferred Stock"), 6.5% cumulative convertible, $1,000 stated and liquidation value, and o 100,000 shares designated "Series D Convertible Preferred Stock" (the "Series D Preferred Stock") (collectively, the "Preferred Stock"), 6.5% cumulative convertible, $1,000 stated and liquidation value, and o 3,040,009 shares of common stock, par value $.01 per share (the "Common Stock"), including o 1,500,000 shares designated "Class A Voting Common Stock" (the "Class A Common Stock"), o 1,500,000 shares designated "Class B Non-Voting Common Stock" (the "Class B Common Stock"), o 10,000 shares designated "Class C Common Stock" (the "Class C Common Stock"), o 30,000 shares designated "Class D Common Stock" (the "Class D Common Stock") and o 9 shares designated "Voting Preference Common Stock" (the "Voting Preference Common Stock") (collectively, the "Common 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 the Series C Preferred Stock, the Series D Preferred Stock and the 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. So long as AT&T Wireless owns at least two-thirds of the number of shares of Series A Preferred Stock owned by it on January 7, 1999, it has the exclusive right, voting separately as a single class, to elect one director of Tritel. 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. Upon any liquidation, dissolution or winding up of Tritel, the holders of the Series A Preferred Stock are entitled to receive a liquidation preference. 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. 144 Tritel issued 90,668 shares of Series A Preferred Stock with a stated value of $90.7 million 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: o the Series B Preferred Stock is not convertible into shares of Common Stock or any other security issued by Tritel; o the Series B Preferred Stock is redeemable at any time at the option of Tritel; o the Series B Preferred Stock may be issued by Tritel pursuant to an exchange of capital stock; and o holders of Series B Preferred Stock do not have the right to elect any directors of Tritel. No Series B Preferred Stock has been issued by Tritel. SERIES C PREFERRED STOCK The 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 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 Tritel'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. The 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, the 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 (the "Invested Amount") 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 an initial public offering meeting certain conditions (the "IPO Date"), each share of Series C Preferred Stock will automatically convert, into shares of Class A Common Stock of and, under certain circumstances, Class D Common Stock. 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. Tritel issued 32,392 shares of Series C Preferred Stock with a stated value of $32.4 million to Airwave Communications and Digital PCS on January 7, 1999 in exchange for PCS licenses covering 6.6 million POPs and $14.2 million in cash. Tritel also issued 149,239 shares of Series C Preferred Stock with a stated value of $149.2 million to institutional investors on January 7, 1999 in exchange for cash and subscriptions receivable. Additionally, Tritel issued 2,602 shares of Series C Preferred Stock with a stated value of $2.6 million to Central Alabama Partnership LP on January 7, 1999 in exchange for its net assets. 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, 145 (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 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: o the Series D Preferred Stock is convertible into an equivalent number of shares of Series C Preferred Stock at any time; o the liquidation preference for Series D Preferred Stock equals $1,000 plus declared but unpaid dividends plus an amount equal to interest on $1,000 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 calculation; o the holders of Series D Preferred Stock do not have any voting rights, other than those required by law or in certain circumstances; and o shares of Series D Preferred Stock are not automatically convertible upon the IPO Date, but will be renamed as "Senior Common Stock" on such date. Tritel issued 46,374 shares of Series D Preferred Stock with a stated value of $46.4 million to AT&T Wireless on January 7, 1999. COMMON STOCK The Common Stock 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: o dividends on the Tracked Common Stock track the assets and liabilities of Tritel C/F Holding Corp., a subsidiary of Tritel; o 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.; o 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, 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; o in the event the FCC indicates that the Class A Common Stock and 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 FCC to permit the Class A Common Stock and Voting Preference Common Stock to vote and act as a single class in the manner described above; o 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; 146 o 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; o 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 o in the event the FCC 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. Tritel issued 35,519 shares of Class A Common Stock, 5,177 shares of Class C Common Stock and 9 shares of Voting Preference Common Stock to certain members of its management on January 7, 1999. LIMITATION ON DIRECTORS' LIABILITIES The Delaware General Corporation Law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breach of directors' fiduciary duty of care. The duty of care requires that, when acting on behalf of the corporation, directors must exercise an informed business judgment based on all material information reasonably available to them. In the absence of the limitations of personal liability authorized by the Delaware statute, directors could be accountable to corporations and their stockholders for monetary damages for conduct that does not satisfy their duty of care. Although the statute does not change directors' duty of care, it enables corporations to limit available relief to equitable remedies such as injunction or rescission. The Restated Certificate of Incorporation limits the liability of Tritel's directors to Tritel or its stockholders to the fullest extent permitted by the Delaware statute. Specifically, the directors of Tritel will not be personably liable for monetary damages for beach of a director's fiduciary duty as a director, except for liability (1) for any breach of the director's duty of loyalty to Tritel or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the Delaware General Corporation Law regarding liability for any unlawful payment of dividends or unlawful stock purchase or redemption or (4) for any transaction from which a director derived an improper personal benefit. The inclusion of this provision in the Restated Certificate of Incorporation may have the effect of reducing the likelihood of derivative litigation against directors and may discourage or deter stockholders or management from bringing a lawsuit against directors for beach of their duty of care, even though such an action, if successful, might otherwise have benefited Tritel and its stockholders. 147 CERTAIN FEDERAL INCOME TAX CONSIDERATIONS GENERAL The following is a summary of material United States federal income tax consequences of the purchase, ownership and disposition of the Notes, but does not purport to be a complete analysis of all potential tax effects. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations thereunder, published rulings and court decisions, all as in effect and existing on the date hereof and all of which are subject to change at any time, which change may be retroactive. This summary applies only to those persons who are the initial Holders of Notes, who acquire the Notes for cash and who hold Notes as capital assets and does not address the tax consequences to taxpayers who are subject to special rules, such as financial institutions, tax-exempt organizations, insurance companies and, except as discussed below under "Foreign Holders," persons who are not citizens or residents of the United States, domestic corporations or partnerships, estates that are subject to United States federal income taxation on income without regard to its source or a trust if a court within the United States is able to exercise primary supervision of the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust, or aspects of federal income taxation that may be relevant to a prospective investor based upon such investor's particular tax situation. Accordingly, purchasers of Notes should consult their own tax advisors with respect to the particular consequences to them of the purchase, ownership and disposition of the Notes, including the applicability of any state, local or foreign tax laws to which they may be subject, as well as with respect to the possible effects of changes in federal and other tax laws. Tritel PCS has received an opinion from Brown & Wood LLP, counsel to Tritel PCS, that, based on the assumptions and subject to the qualifications set forth therein, the information in the following discussion represents their opinion of the material United States federal income tax consequences of the purchase, ownership and disposition of the Notes by Holders who acquire the Notes in their original issuance, as a capital asset, for a purchase price equal to the issue price of the Notes. The opinion is based on currently applicable authorities, which are subject to change, and on the facts and circumstances existing on the date of the opinion. The opinion is not binding on the Internal Revenue Service or on the courts, and no ruling will be requested from the Internal Revenue Service on the issues described below. There can be no assurance that the Internal Revenue Service will not take a different position concerning the matters discussed below and that such positions of the Internal Revenue Service would not be sustained. ORIGINAL ISSUE DISCOUNT Because the Notes are being issued at a discount in excess of a de minimis amount as defined under Treasury Regulations from their "stated redemption price at maturity," the Notes will have original issue discount ("OID") for federal income tax purposes. For federal income tax purposes, OID on a Note will be the excess of the stated redemption price at maturity of the Note over its issue price. The issue price of the Notes will be the first price to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers, at which a substantial amount of the Notes is sold. For purposes of this discussion, it is assumed that all initial Holders will purchase their Notes at the issue price. The stated redemption price at maturity of a Note will be the sum of all payments to be made on such Note, including all stated interest payments, other than payments of "qualified stated interest." Qualified stated interest is stated interest that is unconditionally payable in cash or property, other than debt instruments of the issuer, at least annually at a single fixed rate. Because there will be no required payment of interest on the Notes until November 15, 2004, none of the interest payments on the Notes, under the stated payment schedule, will constitute qualified stated interest. Therefore, each Note will bear OID in an amount equal to the excess of (1) the sum of its principal amount and all stated interest payments over (2) its issue price. A Holder will be required to include OID in income periodically over the term of a Note as such OID accrues, in accordance with a constant yield method based on a compounding of interest, before 148 receipt of the cash or other payment attributable to such income, regardless of the Holder's method of tax accounting, but such Holder will not be required to include separately in income cash payments received on the Notes, even if denominated as interest, to the extent they do not constitute qualified stated interest. The amount of OID required to be included in a Holder's income for any taxable year is the sum of the daily portions of OID with respect to the Note for each day during the taxable year or portion of a taxable year on which such Holder holds the Note. The daily portion is determined by allocating to each day of an accrual period within a taxable year a pro rate portion of an amount equal to the adjusted issue price of the Note at the beginning of the accrual period multiplied by the yield to maturity of the Note. For purposes of computing OID, Tritel PCS will use six-month accrual periods that end on the days in the calendar year corresponding to the maturity date of the Notes and the date six months prior to such maturity date, with the exception of an initial short accrual period. The adjusted issue price of a Note at the beginning of any accrual period is the issue price of the Note increased by the amount of OID previously includible in the gross income of the Holder, and decreased by any payments previously made on the Note. The yield to maturity is the discount rate that, when used in computing the present value of all payments of principal and interest to be made on the Note, produces an amount equal to the issue price of the Note. Under these rules, under the stated payment schedule, Holders of Notes will have to include in gross income increasingly greater amounts of OID in each successive accrual period. A Holder's tax basis in a Note will be increased by the amount of OID includible in the Holder's income under the rules discussed above and decreased by the amount of any payment, including payments of stated interest, with respect to the Note. Tritel PCS has determined that its obligations to pay Liquidated Damages constitutes a remote and incidental contingency within the meaning of the OID rules. See "Description of the Notes--Registration Rights." Accordingly, Tritel PCS does not intend to treat the possibility of payment of Liquidated Damages as affecting the yield to maturity of a Note. In the event that Liquidated Damages are actually paid, there will be adverse tax consequences to the Holders of a Note. Holders should consult their own tax advisors as to the tax consequences to them of payment by Tritel PCS of Liquidated Damages, if any. EFFECT OF MANDATORY AND OPTIONAL REDEMPTION ON OID Tritel PCS may redeem the Notes, in whole or in part, at any time on or after May 15, 2004, at redemption prices specified elsewhere herein plus accrued interest to the date of redemption. The Treasury Regulations contain rules for determining the "maturity date" and the stated redemption price at maturity of an instrument that may be redeemed prior to its stated maturity date at the option of the issuer. Under the OID rules, solely for purposes of the accrual of OID, it is assumed that the issuer will exercise any option to redeem a debt instrument if such exercise will lower the yield-to-maturity of the debt instrument. Tritel PCS has determined that the exercise of its right to redeem the Notes prior to their stated maturity under these rules would not lower the yield-to-maturity of the Notes. On these facts, Tritel PCS would not be presumed to exercise its right to redeem the Notes, prior to their stated maturity under these rules. Prior to May 15, 2002, Tritel PCS at its option may redeem up to 35% of the aggregate principal amount at maturity of the Notes with the proceeds of one or more equity offerings at the redemption price specified elsewhere herein; provided that not less than 65% of the aggregate principal amount at maturity of the Notes would remain outstanding after such redemption. See "Description of the Notes -- Redemption." In the event of a Change of Control, as defined in the Indenture, each holder of Notes shall have the right to require that Tritel PCS purchase such holder's Notes, in whole or in part in integral multiples of $1,000, at a purchase price in cash in an amount equal to 101% of the Accreted Value of the Notes, plus, in each case, accrued interest, if any, to the date of purchase. Such redemption rights and obligations will be treated by Tritel PCS as not affecting the determination of the yield or maturity of the Notes. The Treasury Regulations contain rules for determining the "maturity date" and the stated redemption price at maturity of an instrument that may be redeemed prior to its stated maturity date upon the occurrence of one or more contingencies. Under such Treasury Regulations, if the timing and amounts of the payments that comprise each payment schedule are known as of the issue date, the "maturity date" and stated redemption price at maturity 149 of such an instrument are determined by assuming that payments will be made according to the instrument's stated payment schedule, unless based upon all the facts and circumstances as of the issue date, it is more likely than not that the instrument's stated payment schedule will not occur. Tritel PCS has determined that the stated maturity date and stated payment schedule of the Notes is more likely than not to occur based on the facts and circumstances known as of the issue date. On these facts, under these regulations, the "maturity date" and stated redemption price at maturity of the Notes would be determined on the basis of the stated maturity and stated payment schedule. If, notwithstanding the foregoing, it is presumed that Tritel PCS will exercise its option to redeem, then the maturity date of the Notes for the purpose of calculating yield to maturity would be the exercise date of such call option and the stated redemption price at maturity for each Note would equal the amount payable upon such exercise. If subsequently the call option is not exercised then, for purposes of the OID rules, the issuer would be treated as having issued on the presumed exercise date of the call option a new debt instrument in exchange for the existing instrument. The new debt instrument deemed issued would have an issue price equal to the call price. As a result, another OID computation would have to be made with respect to the constructively issued new debt instrument. SALE, EXCHANGE AND REDEMPTION OF NOTES A sale, exchange or redemption of Notes will result in taxable gain or loss equal to the difference between the amount of cash or other property received and the Holder's adjusted tax basis in the Note. A Holder's adjusted tax basis for determining gain or loss on the sale or other disposition of a Note will initially equal the cost of the Note to such Holder and will be increased by any amounts included in income as OID, and decreased by the amount of any cash payments received by such Holder regardless of whether such payments are denominated as principal or interest. Gain or loss upon a sale, exchange, or redemption of a Note will be capital gain or loss if the Note is held as a capital asset, and will be long term capital gain or loss if the Note has been held by the Holder for more than one year. The deductibility of capital losses is subject to limitations. Prospective investors should consult their own tax advisors concerning these tax law provisions. EXCHANGE OF OUTSTANDING NOTES FOR REGISTERED NOTES The exchange of the outstanding Notes for registered Notes pursuant to the Exchange Offer will not be treated as an exchange for federal income tax purposes because the registered Notes will not differ materially in kind or extent from the outstanding Notes and because the exchange will occur by operation of the original terms of the outstanding Notes. As a result, Holders who exchange their outstanding Notes for registered Notes will not recognize any income, gain or loss for federal income tax purposes. A Holder will have the same adjusted basis and holding period in the registered Notes immediately after the exchange as it had in the outstanding Notes immediately before the exchange. FOREIGN HOLDERS The following discussion is a summary of certain United States federal income tax consequences to a Foreign Person that holds a Note. The term "Foreign Person" means a nonresident alien individual or foreign corporation, but only if the income or gain on the Note is not "effectively connected with the conduct of a trade or business within the United States," in which case, and subject to an applicable treaty, the nonresident alien individual or foreign corporation will be subject to tax on such income or gain in essentially the same manner as a United States citizen or resident or a domestic corporation, as discussed above, and in the case of a foreign corporation, may also be subject to the branch profits tax. Under the "portfolio interest" exception to the general rules for the withholding of tax on interest and original issue discount paid to a Foreign Person, a Foreign Person will not be subject to United States tax, or to withholding, on interest or OID on a Note, provided that (a) the Foreign Person does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Tritel PCS entitled to vote and (b) Tritel PCS, its paying agent or the person who 150 would otherwise be required to withhold tax receives either (1) a statement (an "Owner's Statement") on the applicable Internal Revenue Service's Form W-8 or substantially similar form signed under penalties of perjury by the beneficial owner of the Note in which the owner certifies that the owner is not a United States person and which provides the owner's name and address, or (2) a statement signed under penalties of perjury by a financial institution holding the Note on behalf of the beneficial owners, together with a copy of the Owner's Statement. Regulations which will be effective for payments made after December 31, 2000 would retain these procedures for certifying that a Holder is a Foreign Person and would add several alternative certification procedures. A Foreign Person who does not qualify for the "portfolio interest" exception would be subject to United States withholding tax at a flat rate of 30%, or a lower applicable treaty rate, on interest payments and payments, including proceeds from a sale, exchange or retirement, attributable to OID on the Notes. Gain recognized by a Foreign Person upon the redemption, sale or exchange of a Note, including any gain representing accrued market discount, will not be subject to United States tax unless the Foreign Person is an individual present in the United States for 183 days or more during the taxable year in which the Note is redeemed, sold or exchanged, and certain other requirements are met, in which case the Foreign Person will be subject to United States tax at a flat rate of 30%, unless exempt by applicable treaty. Federal Estate and Gift Tax A Note beneficially owned by an individual who at the time of death is not a domiciliary of the United States will not be subject to United States federal estate tax as a result of such individual's death, provided that such individual does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Tritel PCS entitled to vote within the meaning of Section 871(h)(3) of the Code and provided that the interest payments with respect to such Note would not have been, if received at the time of such individual's death, effectively connected with the conduct of a United States trade or business by such individual. Any individual will not be subject to United States federal gift tax on a transfer of Notes, unless such person is a domiciliary of the United States. BACKUP WITHHOLDING A Holder may be subject, under certain circumstances, to backup withholding at a 31% rate with respect to payments received with respect to the Notes. This withholding applies if the Holder: o fails to furnish his or her social security or other taxpayer identification number ("TIN"), o furnishes an incorrect TIN, o is notified by the Internal Revenue Service that he or she has failed to report properly payments of interest and dividends and the Internal Revenue Service has notified Tritel that he or she is subject to backup withholding, or o fails, under certain circumstances, to provide a certified statement, signed under penalty of perjury, that the TIN provided is his or her correct number and that he or she is not subject to backup withholding. Any amount withheld from a payment to a Holder under the backup withholding rules is allowable as a credit against such Holder's federal income tax liability, provided that the required information is furnished to the Internal Revenue Service. Certain Holders, including, among others, corporations and foreign individuals who comply with certain certification requirements described above under "Foreign Holders," are not subject to backup withholding. Holders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining such an exemption. On October 6, 1997, the Treasury Department issued new regulations (the "New Regulations") which make certain modifications to the withholding, backup withholding and information reporting 151 rules described above. The New Regulations attempt to unify certification requirements and modify reliance standards. The New Regulations will generally be effective for payments made after December 31, 2000, subject to certain transition rules. Prospective investors are urged to consult their own tax advisors regarding the New Regulations. LIMITATION ON TRITEL PCS'S INTEREST DEDUCTIONS The Notes have a maturity date more than five years from the date of issue, have a yield to maturity more than five percentage points higher than the applicable Federal rate and will bear "significant OID." Thus, the Notes will be treated as "applicable high yield discount obligations" ("AHYDOs") under the rules of Sections 163(e) and 163(i) of the Code. Thus, Tritel PCS will not be able to deduct any OID accruing with respect thereto until such interest is actually paid and a portion of such OID will be disallowed altogether. To the extent that the non-deductible portion of OID would have been treated as a dividend if it had been distributed with respect to Tritel PCS's stock, it will be treated as a dividend to corporate Holders of the Notes for purposes of the rules relating to the dividends received deduction. Except as described above, treatment of the Notes as AHYDOs will not affect the reporting of the OID as income by the Holders of the Notes. OTHER TAX CONSEQUENCES In addition to the federal income tax considerations described above, prospective purchasers of the Notes should consider potential state, local, income, franchise, personal property and other taxation in any state or locality and the tax effect of ownership, sale, exchange, or retirement of the Notes in any state or locality. Prospective purchasers of the Notes are advised to consult their own tax advisors with respect to any state or local income, franchise, personal property or other tax consequences arising out of their ownership of the Notes. THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION AND IS NOT TAX ADVICE. ACCORDINGLY, EACH PROSPECTIVE PURCHASER OF THE NOTES SHOULD CONSULT HIS OWN TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO HIM OF THE NOTES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR FOREIGN INCOME TAX LAWS AND ANY RECENT OR PROSPECTIVE CHANGES IN APPLICABLE TAX LAWS. 152 PLAN OF DISTRIBUTION Each broker-dealer that receives registered Notes for its own account pursuant to the exchange offer, where its outstanding 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 registered 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 registered Notes received in exchange for outstanding Notes where such outstanding Notes were acquired as a result of market making or other trading activities. Until , 1999 (90 days after the commencement of the exchange offer), all dealers effecting transactions in the registered Notes may be required to deliver a prospectus. Tritel PCS will not receive any proceeds from any sales of the registered Notes by participating broker-dealers. Registered Notes received by participating broker-dealers for their own account pursuant to 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 the registered 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 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 participating broker-dealer that resells the registered Notes, and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal for the exchange offer states that, by acknowledging that it will deliver, 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. For a period of 180 days after the expiration date, or until all broker-dealers who exchange outstanding Notes which were acquired as a result of market-making activities for registered Notes have sold all registered Notes held by them, we 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. Tritel PCS has agreed to pay all expenses incident to the exchange offer. Tritel PCS will indemnify the holders of the registered Notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act. The registered Notes will not be listed on any stock exchange. The Notes are designated for trading in The Portal Market. LEGAL MATTERS The validity of the New Notes will be passed upon for Tritel PCS by Brown & Wood LLP, New York, New York. Certain other legal matters will be passed upon for Tritel PCS by James H. Neeld, IV, its general counsel, and by Tritel PCS's special FCC counsel, Lukas, Nace, Gutierrez & Sachs, Washington, D.C. EXPERTS The consolidated financial statements of Tritel, Inc. and Predecessor Companies as of December 31, 1997 and 1998, for each of the years in the three-year period ended December 31, 1998 and for the period from July 27, 1995 (inception) to December 31, 1998 have been included herein and in the registration statement in reliance upon the report of KPMG Peat Marwick LLP, independent certified public accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. 153 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) INDEX TO FINANCIAL STATEMENTS
PAGE ----- Independent Auditors' Report .......................................................... F-2 Consolidated Balance Sheets as of December 31, 1997 and 1998 and March 31, 1999 (unaudited) .......................................................................... F-3 Consolidated Statements of Operations for the years ended December 31, 1996, 1997 and 1998, the period from July 27, 1995 (inception) to December 31, 1998, the three month periods ended March 31, 1998 and 1999 (unaudited) and the period from July 27, 1995 (inception) to March 31, 1999 (unaudited) ............................................ F-4 Consolidated Statements of Members' and Stockholders' Equity for the period from July 27, 1995 (inception) to December 31, 1995, the years ended December 31, 1996, 1997 and 1998 and the three-month period ended March 31, 1999 (unaudited) ............ F-5 Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1997 and 1998, the period from July 27, 1995 (inception) to December 31, 1998, the three month period ended March 31, 1999 (unaudited), the period from July 27, 1995 (inception) to March 31, 1999 (unaudited) ........................................................... F-6 Notes to Consolidated Financial Statements ............................................ F-8
In accordance with Securities and Exchange Commission Staff Accounting Bulletin 53, the financial statements of Tritel, Inc. and Predecessor Company are included herein and separate financial statements of Tritel PCS, Inc. and Subsidiary Guarantors are not included. Condensed financial data for Tritel PCS, Inc. and Subsidiary Guarantors is included in Note 17 to the financial statements. F-1 INDEPENDENT AUDITORS' REPORT The Board of Directors Tritel, Inc.: We have audited the accompanying consolidated balance sheets of Tritel, Inc. and Predecessor Companies (development stage companies) (the Companies) as of December 31, 1997 and 1998, 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, 1998 and for the period from July 27, 1995 (inception) to December 31, 1998. These consolidated financial statements are the responsibility of the Companies' managements. 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 Predecessor Companies as of December 31, 1997 and 1998, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1998 and for the period from July 27, 1995 (inception) to December 31, 1998, in conformity with generally accepted accounting principles. Jackson, Mississippi KPMG Peat Marwick LLP February 16, 1999 F-2 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1997 AND 1998 AND MARCH 31, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, -------------------------- MARCH 31, 1997 1998 1999 ASSETS ----------- ------------ ------------ (UNAUDITED) Current assets: ................................................... Cash and cash equivalents ........................................ $ 1,763 846 230,001 Restricted cash .................................................. -- -- 1,938 Due from affiliates .............................................. 275 241 1,318 Prepaid expenses and other current assets ........................ 10 719 507 -------- --- ------- Total current assets ............................................ 2,048 1,806 233,764 Restricted cash ................................................... -- -- 6,455 Property and equipment, net ....................................... 13 13,816 33,232 FCC licensing costs ............................................... 99,425 71,466 157,811 Intangible assets, net of amortization of $980 in 1999 ............ -- -- 40,295 Deferred charges, net of amortization of $347 in 1997, $348 in 1998 and $384 in 1999 ................................................. 1,027 1,933 21,099 Note receivable ................................................... -- -- 7,500 -------- ------ ------- Total assets .................................................... $102,513 89,021 500,156 ======== ====== ======= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Notes payable .................................................... $ 5,000 22,405 -- Accounts payable, accrued expenses and interest .................. 3,425 10,506 3,849 Total current liabilities ....................................... 8,425 32,911 3,849 -------- ------ ------- Non-current liabilities: Long-term debt ................................................... 77,200 51,599 241,196 Note payable to related party .................................... 5,700 6,270 -- Accrued interest and dividends payable ........................... 2,426 224 2,087 Deferred credit -- vendor discount ............................... -- -- 15,000 Deferred income taxes ............................................ -- -- 34,773 -------- ------ ------- Total non-current liabilities ................................... 85,326 58,093 293,056 -------- ------ ------- Total liabilities ............................................... 93,751 91,004 296,905 -------- ------ ------- Series A 10% redeemable convertible preferred stock ............... -- -- 90,668 Adjustment to fair value .......................................... -- -- (21,984) -------- ------ ------- Total Series A redeemable preferred stock ....................... -- -- 68,684 -------- ------ ------- Stockholders' equity: Preferred stock, authorized 1,500,000 shares: Series C, outstanding 184,233 shares at March 31, 1999 .......... -- -- 183,165 Subscription receivable for Series C preferred stock ............ -- -- (49,746) Stock issuance costs ............................................ -- -- (8,499) -------- ------ ------- Total Series C preferred stock ................................. -- -- 124,920 -------- ------ ------- Series D, outstanding 46,374 shares at March 31, 1999 ........... -- -- 46,374 Adjustment to fair value ........................................ -- -- (11,278) -------- ------ ------- Total Series D preferred stock ................................. -- -- 35,096 -------- ------ ------- Net preferred stock ............................................ -- -- 160,016 Common stock, 30 shares issued and outstanding at December 31, 1998 ............................................................. -- -- -- Common stock issued and outstanding at March 31, 1999 -- Class A Voting, 35,519 shares; Class C Non-Voting, 5,177 shares; and Voting Preference, 9 shares ................................. -- -- -- Contributed capital -- Predecessor Companies ...................... 13,497 13,497 -- Accumulated deficit ............................................... (4,735) (15,480) (25,449) -------- ------- ------- Total stockholders' equity (deficit) ........................... 8,762 (1,983) 134,567 -------- ------- ------- Total liabilities and stockholders' equity ..................... $102,513 89,021 500,156 ======== ======= =======
See accompanying notes to consolidated financial statements. F-3 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998, THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998, THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO MARCH 31, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
CUMULATIVE AMOUNTS SINCE CUMULATIVE INCEPTION AMOUNTS DECEMBER 31, AT MARCH 31, SINCE INCEPTION, ----------------------------------- DECEMBER 31, --------------------- AT MARCH 31, 1996 1997 1998 1998 1998 1999 1999 ----------- ----------- ----------- -------------- --------- ----------- ----------------- (UNAUDITED) (UNAUDITED) Revenues ............................. $ -- -- -- -- -- -- -- -------- -- -- -- -- -- -- Operating expenses: Plant expenses ...................... 4 104 1,939 2,047 90 1,956 4,003 General and administrative .......... 1,481 3,123 4,947 9,672 661 2,890 12,562 Sales and marketing ................. 5 28 452 485 6 1,016 1,501 Depreciation and amortization ....... 2 20 348 370 6 1,609 1,979 -------- ----- ----- ----- --- ----- ------ 1,492 3,275 7,686 12,574 763 7,471 20,045 -------- ----- ----- ------ --- ----- ------ Operating loss ....................... (1,492) (3,275) (7,686) (12,574) (763) (7,471) (20,045) Interest income ...................... 31 121 77 230 20 1,127 1,357 Financing cost ....................... -- -- -- -- -- (2,230) (2,230) Interest expense ..................... -- -- (722) (722) -- -- (722) -------- ------ ------ ------- ---- ------ ------- Loss before extraordinary item and income taxes ................. (1,461) (3,154) (8,331) (13,066) (743) (8,574) (21,640) Extraordinary item - Loss on return of spectrum .......... -- -- (2,414) (2,414) -- -- (2,414) -------- ------ ------ ------- ---- ------ ------- Loss before income taxes .......... (1,461) (3,154) (10,745) (15,480) (743) (8,574) (24,054) Income tax benefit ................... -- -- -- -- -- 327 327 -------- ------ ------- ------- ---- ------ ------- Net loss .......................... $ (1,461) (3,154) (10,745) (15,480) (743) (8,247) (23,727) ======== ====== ======= ======= ==== ====== =======
See accompanying notes to consolidated financial statements. F-4 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) CONSOLIDATED STATEMENTS OF MEMBERS' AND STOCKHOLDERS' EQUITY FOR THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1995, THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998 AND THE THREE-MONTH PERIOD ENDED MARCH 31, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
DEFICIT PREFERRED PREFERRED ACCUMULATED MEMBERS' STOCK STOCK DURING AND PREFERRED ISSUANCE SUBSCRIPTION COMMON CONTRIBUTED DEVELOPMENT STOCKHOLDERS' STOCK COSTS RECEIVABLE STOCK CAPITAL STAGE EQUITY ----------- ----------- -------------- -------- ------------- ------------- -------------- Balance at July 27, 1995 ........... $ -- -- -- -- -- -- -- Contributed capital, net of expenses of $25 ................... -- -- -- -- 1,150 -- 1,150 Conversion of debt to equity ....... -- -- -- -- 489 -- 489 Net loss ........................... -- -- -- -- -- (120) (120) -------- -- -- -- ----- ---- ----- Balance at December 31, 1995 ....... -- -- -- -- 1,639 (120) 1,519 Contributed capital, net of expenses of $40 ................... -- -- -- -- 3,910 -- 3,910 Conversion of debt to equity ....... -- -- -- -- 1,706 -- 1,706 Net loss ........................... -- -- -- -- -- (1,461) (1,461) -------- -- -- -- ----- ------ ------ 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 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) Unaudited: Conversion of debt to equity ...... -- -- -- -- 5,700 -- 5,700 Issuance of preferred stock, net of discount .................. 218,261 (8,499) (49,746) -- (13,912) -- 146,104 Issuance of common stock .......... -- -- -- -- -- -- -- Distribution of assets and liabilities to Predecessor Company .......................... -- -- -- -- (5,285) 365 (4,920) Dividends on Series A preferred stock .................. -- -- -- -- -- (2,087) (2,087) Net loss .......................... -- -- -- -- -- (8,247) (8,247) -------- ------ ------- -- ------- ------- ------- Balance at March 31, 1999 ......... $218,261 (8,499) (49,746) -- -- (25,449) 134,567 ======== ====== ======= == ======= ======= =======
See accompanying notes to consolidated financial statements. F-5 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998, THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998, THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO MARCH 31, 1999 (UANUDITED) (AMOUNTS IN THOUSANDS)
DECEMBER 31, ---------------------------------------- 1996 1997 1998 ------------ -------------- ------------ Cash flows from operating activities: Net loss ............................... $ (1,461) (3,154) (10,745) Adjustments to reconcile net loss to net cash used in operating activities: Loss on return of spectrum .......... -- -- 2,414 Depreciation and amortization ....... 2 20 348 Income tax benefit .................. -- -- -- Changes in operating assets and liabilities: Due from affiliates ................ -- (275) 34 Accrued interest receivable ........ 1 (10) (14) Other receivables .................. -- -- (168) Prepaid expenses ................... -- -- (185) Accounts payable and accrued expenses ................. 340 45 (180) Other liabilities .................. -- -- -- Due to affiliates .................. 426 (529) -- -------- ------ ------- Net cash used in operating activities ...................... (692) (3,903) (8,496) -------- ------ ------- Cash flows from investing activities: Purchase of property and equipment (11) (6) (5,970) Cash paid for organization costs ....... (34) (66) -- Deposit for FCC auctions ............... (5,000) -- -- Payment for FCC licenses ............... (3,549) (3,935) -- Refund of FCC deposit .................. 950 1,376 -- Advance under note receivable .......... -- -- -- Capitalized interest on debt used to obtain licenses ...................... (1,325) (415) (2,905) Capitalized interest on network construction ......................... -- -- -- Capitalized direct costs incurred to obtain licenses ...................... (72) (6) -- -------- --------- ------- Net cash used in investing activities ......................... (9,041) (3,052) (8,875) -------- -------- ------- Cash flows from financing activities: Proceeds from notes payable to related parties ...................... 300 5,700 -- Proceeds from notes payable ............ 5,900 5,000 38,705 Proceeds from long-term debt ........... -- -- -- Repayments of notes payable to related parties ...................... (100) (300) -- Repayments of notes payable ............ (625) (5,900) (21,300) (continued) CUMULATIVE CUMULATIVE AMOUNTS AMOUNTS SINCE SINCE INCEPTION, MARCH 31, INCEPTION, AT DECEMBER 31, ------------------------ AT MARCH 31, 1998 1998 1999 1999 ----------------- ------------ ----------- (UNAUDITED) (UNAUDITED) Cash flows from operating activities: Net loss ............................... (15,480) (743) (8,247) (23,727) Adjustments to reconcile net loss to net cash used in operating activities: Loss on return of spectrum .......... 2,414 -- -- 2,414 Depreciation and amortization ....... 370 6 1,609 1,979 Income tax benefit .................. -- -- (327) (327) Changes in operating assets and liabilities: Due from affiliates ................ (241) -- 499 258 Accrued interest receivable ........ (24) (4) (31) (55) Other receivables .................. (168) -- 168 -- Prepaid expenses ................... (185) -- (267) (452) Accounts payable and accrued expenses ................. 271 (204) (1,640) (1,369) Other liabilities .................. -- -- 35 35 Due to affiliates .................. -- 10 -- -- ------- ------ ------ ------- Net cash used in operating activities ...................... (13,043) (935) (8,201) (21,244) ------- ------ ------ ------- Cash flows from investing activities: Purchase of property and equipment (5,986) (6) (22,358) (28,344) Cash paid for organization costs ....... (103) -- -- (103) Deposit for FCC auctions ............... (9,500) -- -- (9,500) Payment for FCC licenses ............... (7,485) -- -- (7,485) Refund of FCC deposit .................. 2,326 -- -- 2,326 Advance under note receivable .......... -- -- (7,500) (7,500) Capitalized interest on debt used to obtain licenses ...................... (4,644) -- (799) (5,443) Capitalized interest on network construction ......................... -- -- (2,916) (2,916) Capitalized direct costs incurred to obtain licenses ...................... (99) -- -- (99) ------- ------ ------- ------- Net cash used in investing activities ......................... (25,491) (6) (33,573) (59,064) ------- ------- ------- ------- Cash flows from financing activities: Proceeds from notes payable to related parties ...................... 9,100 -- -- 9,100 Proceeds from notes payable ............ 50,230 -- -- 50,230 Proceeds from long-term debt ........... -- -- 200,000 200,000 Repayments of notes payable to related parties ...................... (400) -- -- (400) Repayments of notes payable ............ (27,825) -- (22,100) (49,925) (continued)
F-6 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998, THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO DECEMBER 31, 1998, THE THREE MONTH PERIODS ENDED MARCH 31, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO MARCH 31, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
CUMULATIVE CUMULATIVE AMOUNTS AMOUNTS SINCE SINCE DECEMBER 31, INCEPTION, MARCH 31, INCEPTION ---------------------------------- AT DECEMBER 31, ------------------------ AT MARCH 31 1996 1997 1998 1998 1998 1999 1999 ----------- ----------- ---------- --------------- ----------- ------------ ------------ (UNAUDITED) (UNAUDITED) Payment of debt issuance costs and other deferred charges ................ (20) (1,251) (951) (2,222) (149) (27,201) (29,423) Proceeds from vendor discount ........... -- -- -- -- -- 15,000 15,000 Issuance of preferred stock ............. -- -- -- -- -- 113,623 113,623 Capital contributions, net of related expenses .............................. 3,910 5,437 -- 10,497 -- -- 10,497 ----- ------ ---- ------ ---- ------- ------- Net cash provided by (used in) financing activities ................ 9,365 8,686 16,454 39,380 (149) 279,322 318,702 ----- ------ ------ ------ ---- ------- ------- Net increase (decrease) in cash and cash equivalents ........................ (368) 1,731 (917) 846 (1,090) 237,548 238,394 Cash and cash equivalents at beginning of period ..................... 400 32 1,763 -- 1,763 846 -- ----- ------ ------ ------ ------ ------- ------- Cash and cash equivalents at end of period .................................. $ 32 1,763 846 846 673 238,394 238,394 ======= ====== ====== ====== ====== ======= ======= Supplementary Information: Significant non-cash investing and financing activities: Long-term debt incurred to obtain FCC licenses, net of discount ........ $53,259 23,116 -- 76,375 -- -- 76,375 ======= ====== ====== ====== ====== ======= ======= Capitalized interest and discount on debt used to obtain FCC licenses ............................. $ 2,033 6,799 7,614 16,466 2,358 221 17,486 ======= ====== ====== ====== ====== ======= ======= Deposits applied to purchase of FCC licenses ......................... $ 4,500 5,000 -- 9,500 -- -- 9,500 ======= ====== ====== ====== ====== ======= ======= Conversions of debt to equity ......... $ 1,706 805 -- 3,000 -- 6,746 9,746 ======= ====== ====== ====== ====== ======= ======= Capital expenditures included in accounts payable ..................... $ -- -- 5,762 5,762 -- (5,762) -- ======= ====== ====== ====== ====== ======= ======= Election of FCC disaggregation option for return of spectrum: Reduction in FCC licensing costs ............................... $ -- -- 35,442 35,442 -- -- 35,442 ======= ====== ====== ====== ====== ======= ======= Reduction in accrued interest payable and long-term debt .......... $ -- -- 33,028 33,028 -- -- 33,028 ======= ====== ====== ====== ====== ======= =======
See accompanying notes to consolidated financial statements F-7 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) ORGANIZATION AND PRINCIPLES OF CONSOLIDATION Airwave Communications, LLC ("Airwave Communications") (formerly Mercury PCS, LLC) and Digital PCS, LLC ("Digital PCS") (formerly Mercury PCS II, LLC) were formed on July 27, 1995 and July 29, 1996, respectively, for the principal purpose of acquiring for development Personal Communications Services ("PCS") licenses in markets in the south-central United States. Airwave Communications and Digital PCS are referred to collectively as "the Predecessor Company" or "the Predecessor Companies." Tritel, Inc. ("Tritel") was formed on April 23, 1998 by the controlling shareholders of Airwave Communications and Digital PCS for the purpose of developing Personal Communications Services ("PCS") markets in the south-central United States. On January 7, 1999, the Predecessor Company transferred certain assets and liabilities at historical cost to Tritel in exchange for preferred stock in Tritel. Tritel will continue the activities of the 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." The Company has not commenced commercial PCS operations and is still in the development stage. The Company continues to devote most of its efforts to activities such as strategic and financial planning, raising capital and constructing wireless telecommunications network facilities. The consolidated accounts of the Company include its subsidiaries, Tritel PCS, Inc.; 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. Also on January 7, 1999, Tritel entered into the following transactions: o AT&T Wireless PCS, Inc. and TWR Cellular, Inc. (collectively, "AT&T Wireless") contributed PCS licenses to Tritel and entered into agreements with Tritel for the use of the AT&T logo and other service marks, and for roaming arrangements. AT&T Wireless received preferred stock in Tritel with a stated value of $137,042,000 in exchange for the contributed assets. This transaction was accounted for as a purchase business combination by Tritel and is further described in Note 19. o Tritel acquired all of the assets and liabilities of Central Alabama Partnership, LP 132 in exchange for preferred stock in Tritel with a stated value of $2,602,000. Assets, principally PCS licenses, totaling $9,352,000 were acquired and liabilities of $6,750,000 were assumed. This transaction was accounted for as a purchase business combination. o Tritel issued preferred stock with a stated value of $163,369,000 to certain private investors in exchange for cash and stock subscriptions receivable. This transaction is further described in Note 18. o Tritel entered into a $550,000,000 bank financing facility as further described in Note 20 for financing of the development and construction of its wireless network. F-8 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (b) 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. (c) 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 respective assets, generally seven years for wireless network assets and three years for information systems assets. Leasehold improvements are amortized over the 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. (d) FCC LICENSING COSTS Licensing costs are accounted for in accordance with industry standards and include the discounted present value of license fees as described in Note 5 and the direct costs incurred to obtain the licenses. For certain licenses, licensing costs also include capitalized interest on the related debt during the period of time necessary to build out the wireless network. The FCC 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 will begin for each geographic service area upon commencement of service, will be over a period of 40 years. The Company adopted Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" in 1996. Adoption of the statement did not have a material effect on the Company's financial statements at the date of adoption. In accordance with the requirements of SFAS 121, the Company evaluates the propriety of the carrying amounts of its FCC licensing costs whenever current events or circumstances warrant such review to determine whether such assets are impaired. There have been no impairments through March 31, 1999. (e) DEFERRED CHARGES Debt issuance costs are deferred and amortized over the term of the related debt. Direct costs of two purchase business combinations which closed in January 1999 were deferred at December 31, 1998 and included as part of the total costs of the acquisitions. Direct costs incurred for an equity offering which closed in January 1999 were deferred and will be offset against the proceeds of the offering. Direct costs incurred for a proposed offering of senior discount notes were deferred and will be amortized over the term of the related debt. (f) 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, 1996, 1997 and 1998 or any deferred income taxes on any temporary differences in asset bases as of December 31, 1997 and 1998. F-9 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) As mentioned above, Tritel is a C corporation (a taxable entity). When the Predecessor Company transferred certain assets and liabilities to the Company in January 1999, the Company recognized the related deferred tax assets and liabilities for the temporary differences in asset bases by a charge to income tax expense of $2,100,000. As of January 7, 1999, the Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, which requires the use of the asset and liability method in accounting for deferred taxes. (g) 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 FCC licensing costs. Actual results could differ from those estimates. (h) EARNINGS PER SHARE Earnings per share disclosures are not included in the accompanying consolidated financial statements because they are not meaningful. (2) LIQUIDITY As reflected in the accompanying consolidated financial statements, the Company is a development stage company because it has not yet commenced commercial PCS operations. The Company is expected to incur significant expenses in advance of generating revenues and to realize significant operating losses in its initial stages of operations. The buildout of the Company's PCS network and the marketing and distribution of the Company's PCS products and services will require substantial equity and/or debt and there can be no assurance that the Company will be able to raise sufficient capital for such purposes. 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. As mentioned above, the Company entered into certain transactions in January 1999 to fund a significant portion of the planned operating losses and network buildout costs. Management of the Company believes that those transactions will provide adequate funding for the planned expenditures in the initial operations and buildout of the network. Also, the Company has engaged several investment banks to assist it in obtaining high yield debt in amounts necessary to cover additional planned cash needs (see Note 22). There can be no assurance that the Company will obtain additional funding or that such funds, if obtained, 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. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (3) 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 20. Under the terms of the agreement, the Company has placed on deposit $8,393,000 with the depository bank, which will be used for the payment of interest and/or commitment fees due under the bank facility. (4) PROPERTY AND EQUIPMENT Major categories of property and equipment are as follows:
DECEMBER 31, ---------------------- MARCH 31, 1997 1998 1999 --------- ---------- ------------ (UNAUDITED) (DOLLARS IN THOUSANDS) Furniture and fixtures ....................... $17 1,779 2,568 Network construction and development ......... -- 11,416 21,172 Leasehold improvements ....................... -- 728 874 ---- ------ ------ 17 13,923 24,614 Less accumulated depreciation ................ (4) (107) (362) Deposits on equipment ........................ -- -- 8,980 ----- ------ ------ $13 13,816 33,232 ===== ====== ======
(5) FCC LICENSING COSTS The Predecessor Company bid successfully for C-Block licenses with an aggregate license fee of $70,989,000 (such amount is net of a 25% small business discount) and such licenses were granted to the Predecessor Company during 1996. The Predecessor Company also bid successfully for D-, E- and F-Block licenses with an aggregate license fee of $35,727,000 (such amount is net of a 25% small business discount) and such licenses were granted to the Predecessor Company during 1997. The FCC 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 such discount was applied to reduce the carrying amount of the licenses and the debt. Accordingly, the licenses acquired during the years ended December 31, 1996 and 1997 were recorded at $60,358,000 and $30,676,000, respectively. During the years ended December 31, 1996, 1997 and 1998, the Company capitalized interest of $3,358,000, $7,214,000 and $10,519,000, respectively, relating to FCC debt. During the years ended December 31, 1996 and 1997, the Company incurred direct costs of $72,000 and $6,000, respectively, to obtain the licenses. The Company did not incur any costs to obtain licenses during 1998. During July 1998, the Company took advantage of a reconsideration order by the FCC 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 $35,442,000, and F-11 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) reduced the discounted debt and accrued interest due to the FCC by $33,028,000. As a result of the disaggregation election, the Company recognized an extraordinary loss of approximately $2,414,000. As mentioned above and in Note 19, AT&T Wireless contributed certain A- and B-Block PCS licenses to the Company on January 7, 1999 as part of a purchase business combination. The Company recorded such licenses at their aggregate appraised value of $97,880,000 plus $635,000 related allocated costs of the acquisition. Also, in the acquisition of Central Alabama Partnership, LP 132, the Company acquired licenses with an estimated fair value of $9,284,000, exclusive of $6,072,000 of debt to the FCC. Additionally, in connection with the transactions which the Company closed on January 7, 1999, licenses with a carrying amount, including capitalized interest and costs, totaling $21,874,000 were retained by the Predecessor Company (see Note 14). 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 FCC requirement that the Company construct wireless network facilities offering coverage to certain percentages of the population within 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 FCC. (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 $29,500,000 to ABC to fund its participation in the re-auction of FCC licenses that were returned to the FCC by various companies under the July 1998 reconsideration order. The Company's portion of this loan was $7,500,000 and was recorded as a note receivable at March 31, 1999. Subsequent to closing of the agreements, ABC was the successful bidder for licenses covering the Tritel markets with an aggregate purchase price of $7,789,000. The Company has agreed to purchase these licenses for $7,789,000 and expects to consummate that purchase during 1999. Under the agreement, it will apply its $7,500,000 loan, together with additional cash of $289,000, to pay the purchase price. If the licenses are not purchased by March 1, 2004, the note will mature on that date. The note accrues interest at 16% per year. There 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 FCC, the FCC licenses awarded in the re-auction, and ranks pari passu with the notes to AT&T Wireless and Lafayette. (7) NOTES PAYABLE At December 31, 1997, the Company had $5,000,000 payable under a $15,000,000 loan agreement with a supplier. During 1998, this loan agreement was increased to $28,500,000 and was replaced by a loan agreement with a different supplier. The outstanding loan balance at December 31, 1998 was $22,100,000. 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 when certain private investors invested cash in the Company in exchange for convertible preferred stock. F-12 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) At December 31, 1998, the Predecessor Company has available a $1,000,000 line of credit with a commercial bank, expiring 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 $305,000 at December 31, 1998. This line of credit relates specifically to licenses that were retained by the Predecessor Company (see Note 14) and therefore the line was retained by the Predecessor Company. (8) FCC DEBT The FCC 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 FCC debt is secured by all of the Company's rights and interest in the licenses financed. The debt incurred in September 1996 by the Company for the purchase of the C-Block PCS licenses totaled $63,890,000 (undiscounted). The debt bears interest at 7%; 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 $52,700,000. As discussed in Note 5, the Company elected to disaggregate and return one-half of the broadcast spectrum of the C-block licenses. The FCC permitted such spectrum to be returned effective as of the original purchase. As a result, the Company reduced the discounted debt due to the FCC for such licenses by $27,410,000. F-Block licenses were granted in August and November of 1997. The debt incurred by the Company for the purchase of such licenses totaled $15,492,000 (undiscounted) in August 1997 and $12,675,000 (undiscounted) in November 1997. 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 $12,700,000 and $10,415,000 respectively. In the acquisition of Central Alabama Partnership, LP 132 on January 7, 1999, the Company assumed debt of $6,072,000 payable to the FCC for the licenses acquired. Additionally, as described in Notes 5 and 14, certain licenses and the related FCC 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 $15,889,000. As of December 31, 1998 and March 31, 1999, the following is a schedule of future minimum principal payments of the Company's FCC debt due within five years and thereafter:
DECEMBER 31, 1998 MARCH 31, 1999 ------------------------ ----------------------- (DOLLARS IN THOUSANDS) (UNAUDITED) (DOLLARS IN THOUSANDS) December 31, 1999 ............ $ -- March 31, 2000 .......... $ 209 December 31, 2000 ............ 2,494 March 31, 2001 .......... 960 December 31, 2001 ............ 2,975 March 31, 2002 .......... 1,020 December 31, 2002 ............ 3,162 March 31, 2003 .......... 3,163 December 31, 2003 ............ 10,535 March 31, 2004 .......... 9,840 Thereafter ................... 40,946 Thereafter .............. 32,283 -------- -------- 60,112 47,475 Less unamortized discount (8,513) (6,279) -------- -------- Total ....................... $ 51,599 $ 41,196 ======== ========
F-13 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) All the scheduled interest payments on the FCC debt were suspended for the period from January 1997 through March 1998 by the FCC. Payments of such suspended interest resumed in July 1998 with the total suspended interest due in eight quarterly payments. Interest accruing after March 1998 (the date interest resumed after the interest suspension) on all FCC debt is required to be paid in quarterly payments with the first payment due in July 1998. As of March 31, 1999, the Company's suspended interest will be due in quarterly payments of $135,000 through April 30, 2000. The Company is required to make quarterly principal and interest payments on the FCC debt as follows:
QUARTERLY PAYMENTS PAYMENTS PAYMENT BEGIN END AMOUNT -------------- --------------- ----------------------- (UNAUDITED) (DOLLARS IN THOUSANDS) C Block licenses ............................. January 2003 October 2006 $2,306 F Block licenses issued in August 1997 ....... January 2000 October 2007 340 F Block licenses issued in November 1997 ..... April 2000 December 2007 36 Licenses acquired with Central Alabama acquisition ................................ January 2003 October 2006 438
(9) NOTE PAYABLE TO RELATED PARTIES In March 1997, the Company entered into a loan agreement for a $5,700,000 long-term note payable to Southern Farm Bureau Life Insurance Company ("SFBLIC"). SFBLIC is a member of Mercury Southern, LLC, which was a member of the Predecessor Company, and subsequently became an investor in the 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 $6,270,000 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 FCC equity ownership limitations applicable to entrepreneurial block license holders. The Company and SFBLIC subsequently negotiated a revised arrangement under which the amount due of $6,270,000 plus accrued interest of $476,000 was not paid but instead was converted into $8,976,000 of equity in January 1999 when AT&T Wireless contributed certain licenses for equity. The $2,230,000 preferred return to the investor was accounted for as a financing cost during the period ended March 31, 1999. The interest accrued at the contractual rate was capitalized during the accrual period. (10) STOCKHOLDERS' EQUITY The Predecessor Company was organized as a limited liability corporation (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 Company 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. F-14 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) PREFERRED STOCK Following is a summary of the preferred stock of the Company: 1,500,000 shares of authorized preferred stock, par value $.01 per share (the "Preferred Stock"), 1,100,000 of which have been designated as follows: o 200,000 shares designated "Series A Convertible Preferred Stock" (the "Series A Preferred Stock"), 10% redeemable convertible, $1,000 stated and liquidation value (See Note 22); o 300,000 shares designated "Series B Convertible Preferred Stock" (the "Series B Preferred Stock"), 10% cumulative, $1,000 stated and liquidation value (See Note 22); o 500,000 shares designated "Series C Convertible Preferred Stock" (the "Series C Preferred Stock"), 6.5% cumulative convertible, $1,000 stated and liquidation value; and o 100,000 shares designated "Series D Convertible Preferred Stock" (the "Series D Preferred Stock"), 6.5% cumulative convertible, $1,000 stated and liquidation value. Series C Preferred Stock The 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 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. The 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, the 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 (the "Invested Amount") 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 61/2% 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 an initial public offering meeting certain conditions (the "IPO Date"), each share of Series C Preferred Stock will automatically convert, into shares of Class A Common Stock of and, under certain circumstances, Class D Common Stock. 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 $18,262,000 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. F-15 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) The Company also issued 163,369 shares of Series C Preferred Stock with a stated value of $163,369,000 to investors on January 7, 1999 in exchange for cash and subscriptions receivable. 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 $2,602,000 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. 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 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: o the Series D Preferred Stock is convertible into an equivalent number of shares of Series C Preferred Stock at any time; o 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 at the rate of 61/2% per annum, compounded quarterly, from the date of issuance of such share to and including the date of the payment: o the holders of Series D Preferred Stock do not have any voting rights, other than those required by law or in certain circumstances; and o shares of Series D Preferred Stock are not automatically convertible upon an initial public offering of the Company's stock, but will be renamed as "Senior Common Stock" on such date. The Company issued 46,374 shares of Series D Preferred Stock with a stated value of $46,374,000 to AT&T Wireless on January 7, 1999. The stock was recorded at its stated value and a discount was recorded for the excess of the stated value of the stock over the appraised value of assets, net of deferred income taxes, received from AT&T Wireless. COMMON STOCK Following is a summary of the common stock of the Company: 3,040,009 shares of common stock, par value $.01 per share (the "Common Stock"), which have been designated as follows: o 1,500,000 shares designated "Class A Voting Common Stock" (the "Class A Common Stock"), o 1,500,000 shares designated "Class B Non-Voting Common Stock" (the "Class B Common Stock"), F-16 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) o 10,000 shares designated "Class C Common Stock" (the "Class C Common Stock"), o 30,000 shares designated "Class D Common Stock" (the "Class D Common Stock") and o 9 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: o dividends on the Tracked Common Stock track the assets and liabilities of Tritel C/F Holding Corp., a subsidiary of Tritel; o 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.; o 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; o in the event the FCC 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 662/3% or more of the Class A Common Stock, Tritel must seek consent from the FCC 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; o 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; o 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; o 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 o in the event the FCC 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. On January 7, 1999, the Company issued 35,519 shares of Class A Common Stock, 5,177 shares of Class C Common Stock and 9 shares of Voting Preference Common Stock to certain members of management of the Company. Management has determined the stock to have a nominal value based on a recent appraisal of the Company's assets; therefore, no amounts have been assigned to common stock in the accompanying balance sheet and no amounts have been amortized into compensation expense for such shares. F-17 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (11) INCOME TAXES Because the Predecessor Company was a nontaxable entity, the results presented below relate solely to the period ended March 31, 1999. When the Predecessor Company transferred certain assets and liabilities to the Company in January 1999, the Company recognized a deferred tax liability for the temporary differences in asset bases by a charge to income tax expense of $2,100,000. Also, the Company recorded a deferred tax liability of $35,100,000 on the difference in asset bases on the assets acquired from AT&T Wireless. Components of income tax benefit for the three-month period ended March 31, 1999 are as follows:
MARCH 31, 1999 ---------------------------------- CURRENT DEFERRED TOTAL --------- ---------- --------- (UNAUDITED) (DOLLARS IN THOUSANDS) Federal ............. $-- (284) (284) State ............... -- (43) (43) --- ---- ---- $-- (327) (327) === ==== ====
Actual tax expense differs from the "expected" tax benefit using the federal corporate rate of 35% as follows:
MARCH 31, 1999 ----------------------- (UNAUDITED) (DOLLARS IN THOUSANDS) Computed "expected" tax benefit ................................ $ (3,001) Reduction (increase) resulting from: State income taxes, net of federal income tax benefit ......... (279) Nontaxable loss of Predecessor Company ........................ 853 Tax effect of change in tax status ............................ 2,100 --------- $ (327) =========
F-18 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) The tax effects of temporary differences that give rise to significant portions of the deferred tax liability at March 31, 1999 are as follows:
MARCH 31, 1999 ----------------------- (UNAUDITED) (DOLLARS IN THOUSANDS) Deferred tax assets: Net operating loss carryforward ..................................... $ 2,427 Tax basis of capitalized interest and other costs for FCC licenses in excess of book basis .............................................. 141 -------- Total gross deferred tax assets ................................... 2,568 -------- Deferred tax liability Intangible assets book basis in excess of tax basis ................. 15,413 FCC licenses book basis in excess of tax basis ...................... 21,837 Other ............................................................... 91 -------- Total gross deferred tax liabilities .............................. 37,341 -------- Net deferred tax liability ........................................ $ 34,773 ========
(12) FAIR VALUE OF FINANCIAL INSTRUMENTS The following disclosure of the estimated fair value of financial instruments is made pursuant to Financial Accounting Standards 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. Note receivable: The carrying amount of note receivable is believed to approximate fair value due to the imminent conversion of the principal amount as described in Note 6. Notes payable: The carrying amount of notes payable is believed to approximate fair value due to the current nature of the liabilities. Long-term debt: The carrying amount of long-term debt is believed to approximate fair value because such debt was discounted to reflect a market interest rate at inception and such discount is believed to be approximate for valuation of this debt. (13) RELATED PARTY TRANSACTIONS During 1996, the Predecessor Company had an agreement with Mercury Southern, LLC under which it paid a management fee to Mercury Southern, LLC. Management fees were $40,000 per month prior to the PCS auctions and, thereafter, were three cents per month for each person living in a market (POPS) for which the Company had purchased a PCS license. The population in each market was determined in accordance with ordinary estimates and methods used in the telecommunication industry. Total expenses under this management agreement for 1996 were $730,000. This management agreement terminated at the end of 1996. F-19 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) During 1997 and 1998, the Company reimbursed MSM, Inc. ("MSM"), a company owned by members of the Company's management, for actual expenses to cover the salaries and employee benefits of MSM employees who were providing services almost exclusively to the Company. The Company reimbursed MSM $1,312,000 and $3,709,000 for such expenses in 1997 and 1998, respectively. On January 7, 1999, after consummation of the transactions described herein, the employees of MSM who were providing services to the Company became employees of the Company. Further, MSM sometimes paid invoices on behalf of the Company for expenses directly attributable to the Company and was reimbursed from the Company for such expenditures. For expenses shared by both MSM and the Company, MSM paid the expenses and allocated a portion to the Company. The Company reimbursed MSM $144,000 in 1996, $248,000 in 1997 and $325,000 in 1998 for such costs incurred on the Company's behalf. During April 1997, the Company advanced $249,000 on behalf of MSM to repay a loan MSM had incurred from a third party. The balance due from MSM on this advance was $247,000 at December 31, 1997 and 1998 and $240,000 at March 31, 1999. Also, Mercury Wireless Management, Inc. ("MWM"), a company owned by members of the Company's management, reimburses the Company for expenses relating to services performed by the Company's employees on behalf of MWM. Such amounts totaled $17,000 for 1997 and $11,000 for 1998 and were included in amounts due from affiliates at December 31, 1997 and 1998. The Company has also entered into various leases to co-locate its equipment on certain towers managed by MWM. In 1999, Tritel entered into a management agreement with Tritel Management, LLC, a company owned by members of the Company's management, under which Tritel Management, LLC is responsible for the design and construction of the network and operation of the Company, subject to the Company's control. The Company will pay Tritel Management, LLC a fee of $10,000 annually for five years under the terms of the agreement. On January 7, 1999, the Company entered into a secured promissory note agreement under which it agreed to lend up to $2,500,000 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 FCC 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. Additional related party transactions are described in note 9. (14) ASSETS AND LIABILITIES RETAINED BY PREDECESSOR COMPANY Certain assets and liabilities, with carrying amounts of $22,070,000 and $17,150,000, respectively, principally for certain FCC licenses and related FCC debt, which were retained by the Predecessor Company have been reflected in these financial statements as a distribution to the Predecessor Company. Of the assets retained by the Predecessor Company, Tritel has an option to acquire certain PCS licenses for Series C Preferred Stock with a face value of approximately $3,000,000 and assumption of the related FCC debt of approximately $12,000,000. This option expires on May 20, 1999. F-20 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (15) LEASES The Company leases office space, equipment, and co-location tower space under noncancelable operating leases. Expense under operating leases was $3,000 and $334,000 for 1997 and 1998, respectively and was $7,000 and $795,000 for the three month periods ended March 31, 1998 and 1999. 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, 1998 are as follows:
(DOLLARS IN THOUSANDS) 1999 .................... $1,134 2000 .................... 864 2001 .................... 742 2002 .................... 708 2003 .................... 582 Thereafter .............. 135 ------ $4,165 ======
(16) COMMITMENTS AND CONTINGENCIES In December 1998, the Company entered into an acquisition agreement with an equipment vendor whereby the Company agreed to purchase a minimum of $300,000,000 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 $15,000,000 to the Company at the closing of the transactions described herein. The $15,000,000 deferred credit will be accounted for as a reduction in the cost of the equipment as the equipment is purchased. During November 1996, High Plains Wireless, L.P. filed a protest with the FCC against the Predecessor Company alleging, among other things, that through the use of trailing numbers (i.e., the last three digits) in its bids, the Predecessor Company was signaling market preferences and other information to other bidders in violation of FCC rules. While the FCC was investigating this specific claim, it issued all but nine of the D-, E- and F-Block licenses awarded to the Predecessor Company in the January 1997 auctions. Subsequently, the FCC issued the remaining nine licenses to the Predecessor Company in November 1997 and assessed the Predecessor Company a $650,000 fine for apparent violations of FCC bidding rules in connection with the Predecessor Company's bidding practices. In August 1998, the FCC rescinded the $650,000 fine, finding that its rules were not sufficiently clear as to be enforceable against the Company. The United States Department of Justice ("DOJ") conducted an investigation of the Predecessor Company and numerous other parties relating to this same matter. While a suit was filed against the Predecessor Company in November 1998 by the DOJ, the suit was simultaneously settled pursuant to a consent decree that imposed no penalties and made no finding of wrongdoing. The Predecessor Company and certain members of the Company's management are defendants in a lawsuit in which the plaintiffs allege that a member of the Company's management knew confidential information about one of the plaintiffs and that the Predecessor Company conspired to use the information in the D-, E- and F-Block auctions in violation of pre-existing contractual arrangements between the management member and one of the plaintiffs. The suit seeks actual F-21 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) and punitive damages and seeks to convey the F-Block licenses for Lubbock, Texas to the plaintiffs. Management believes this case is without merit and intends to vigorously defend the case. Additionally, the Predecessor Company, certain members of the Company's management and several companies related through common ownership are defendants in a lawsuit in which the plaintiff has claimed wrongful termination of employment, breach of contract, usurpation of corporate opportunities, breach of fiduciary duties and other matters. The suit seeks unspecified actual and punitive damages plus attorneys' fees and court costs. Further, the plaintiff seeks 5% of the portion of stock (equity) and FCC licenses of the Predecessor Company owned by certain members of the Company's management. Management is vigorously defending all claims in the suit and believes that the Company's business prospects are not materially affected by this matter and that adverse resolution of this matter would not have a material adverse effect on the Company. (17) FINANCIAL STATEMENTS OF GUARANTORS In connection with a proposed offering of senior subordinated discount notes (see Note 22) by Tritel's wholly-owned subsidiary, Tritel PCS, Inc., the following condensed consolidating balance sheet as of March 31, 1999 is presented for Tritel, Tritel PCS, Inc. and those subsidiaries of Tritel PCS, Inc. who will serve as guarantors and those who will not serve as guarantors of the senior subordinated discount notes. F-22 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
TRITEL GUARANTOR TRITEL, INC. PCS, INC. SUBSIDIARIES -------------- ----------- -------------- (UNAUDITED) ASSETS (DOLLARS IN THOUSANDS) Current assets: Cash ............................................. $ 150,000 79,941 1,998 Other current assets ............................. 1,095 10 720 Intercompany receivables ......................... 695 185,025 1,740 --------- ------- ----- Total current assets ............................ 151,790 264,976 4,458 Restricted cash ................................... -- 6,455 -- Property and equipment, net ....................... -- -- 33,232 Licenses and other intangibles .................... 40,295 -- -- Deferred charges .................................. -- 21,099 -- Note receivable ................................... -- 7,500 -- Investment in subsidiaries ........................ 179,168 100,953 3,780 --------- ------- ------ Total assets .................................... $ 371,253 400,983 41,470 ========= ======= ====== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable, accrued expenses and other current liabilities ....................... $ -- 74 2,600 Intercompany payables ............................ 150,476 1,017 35,026 --------- ------- ------ Total current liabilities ....................... 150,476 1,091 37,626 --------- ------- ------ Non-current liabilities: Long-term debt ................................... -- 200,000 -- Accrued interest and dividends payable ........... 2,087 -- -- Deferred credit .................................. -- 15,000 -- Deferred income taxes ............................ 15,439 256 (2,322) --------- ------- ------ Total liabilities ............................... 168,002 216,347 35,304 --------- ------- ------ Series A redeemable convertible preferred stock ............................................ 90,668 -- -- Adjustment to fair value .......................... (21,984) -- -- --------- ------- ------ 68,684 -- -- --------- ------- ------ Stockholders' equity .............................. 134,567 184,636 6,166 --------- ------- ------ Total liabilities and equity .................... $ 371,253 400,983 41,470 ========= ======= ====== NON-GUARANTOR CONSOLIDATED SUBSIDIARIES ELIMINATIONS TRITEL, INC. --------------- -------------- ------------- (UNAUDITED) ASSETS (DOLLARS IN THOUSANDS) Current assets: Cash ............................................. -- -- 231,939 Other current assets ............................. -- -- 1,825 Intercompany receivables ......................... -- (187,460) -- -- -------- ------- Total current assets ............................ -- (187,460) 233,764 Restricted cash ................................... -- -- 6,455 Property and equipment, net ....................... -- -- 33,232 Licenses and other intangibles .................... 157,811 -- 198,106 Deferred charges .................................. -- -- 21,099 Note receivable ................................... -- -- 7,500 Investment in subsidiaries ........................ 97,299 (381,200) -- ------- -------- ------- Total assets .................................... 255,110 (568,660) 500,156 ======= ======== ======= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable, accrued expenses and other current liabilities ....................... 1,175 -- 3,849 Intercompany payables ............................ 941 (187,460) -- ------- -------- ------- Total current liabilities ....................... 2,116 (187,460) 3,849 ------- -------- ------- Non-current liabilities: Long-term debt ................................... 41,196 -- 241,196 Accrued interest and dividends payable ........... -- -- 2,087 Deferred credit .................................. -- -- 15,000 Deferred income taxes ............................ 21,400 -- 34,773 ------- -------- ------- Total liabilities ............................... 64,712 (187,460) 296,905 ------- -------- ------- Series A redeemable convertible preferred stock ............................................ -- -- 90,668 Adjustment to fair value .......................... -- -- (21,984) ------- -------- ------- -- -- 68,684 ------- -------- ------- Stockholders' equity .............................. 190,398 (381,200) 134,567 ------- -------- ------- Total liabilities and equity .................... 255,110 (568,660) 500,156 ======= ======== =======
All operations of the Company for the three-month period ended March 31, 1999 took place in Tritel, Tritel PCS, Inc. and the guarantor subsidiaries; therefore, presentation of condensed consolidating income statement and cash flow data would substantially duplicate disclosure in the Company's financial statements. Also, because assets and liabilities were obtained by Tritel in January 1999 from the Predecessor Companies, AT&T Wireless and Central Alabama Partnership, L.P. as described in Notes 1 and 19 and Tritel and its subsidiaries held only nominal assets at December 31, 1998, condensed consolidating financial information for 1998 and prior periods is not meaningful. (18) CASH EQUITY INVESTORS On May 20, 1998, the Company, the Predecessor Company, AT&T Wireless, certain institutional cash equity investors (the "Cash Equity Investors") and certain members of management entered into the Securities Purchase Agreement, which provided for the formation of the Tritel-AT&T Wireless joint venture and related equity investments. On January 7, 1999, the transactions contemplated by the Securities Purchase Agreement were closed and the parties entered into F-23 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) numerous agreements as described throughout these notes. Pursuant to these agreements, on January 7, 1999, the Predecessor Company invested an additional $14,130,000 in Series C Preferred Stock of Tritel, and the Cash Equity Investors purchased an aggregate of $149,239,000 of Series C Preferred Stock of Tritel. Of the total Series C Preferred Stock issued to the Predecessor Company and the Cash Equity Investors, $113,623,000 was funded on January 7, 1999 and the remaining $49,746,000 is due to be funded, under the Cash Equity Investors' irrevocable and unconditional commitments, on September 30, 1999. (19) TRANSACTION WITH AT&T WIRELESS 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 brand name in the south-central United States. On January 7, 1999, the parties closed the transactions contemplated in the Securities Purchase Agreement. Under these agreements, Tritel and AT&T Wireless and the other stockholders of Tritel consented that one or more of Tritel's subsidiaries enter into certain agreements or conduct certain operations on the condition that such subsidiaries at all times be direct or indirect wholly-owned subsidiaries of Tritel. Tritel agreed that it would cause such subsidiaries to perform the obligations and conduct such operations required to be performed or conducted under those agreements. 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. The fair value of the FCC licenses, as determined by an independent appraisal, was $97,880,000 with an estimated useful life of 40 years. In connection with the closing of the AT&T Wireless transaction, the Company entered into certain agreements, including the following: (A) 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 Wireless 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 Services 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 F-24 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 (see Note 20) 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 Wireless'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 Wireless at any time in the event of a significant breach by the Company, including the Company's misuse of any licensed marks, the Company licensing or assigning any of the rights in the License Agreement, the Company's failure to maintain AT&T Wireless's quality standards or if a change in control of the Company occurs. After the initial five-year term, AT&T Wireless 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, have a fair value of $31,000,000, as determined by an independent appraisal, with an estimated useful life of ten years. (B) ROAMING AGREEMENT Pursuant to the Intercarrier Roamer Service Agreement, dated as of January 7, 1999 (the "Roaming Agreement"), between AT&T Wireless, the Company, and their affiliates, each party agrees to provide (each in its capacity as serving provider, the "Serving Carrier") mobile wireless radiotelephone 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 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 license or permit to provide CMRS, provided that such assignee expressly assumes all or the applicable part of the obligations of such party under the Roaming Agreement. The fair value of the Roaming Agreement, as determined by an independent appraisal, was $10,000,000, with an estimated useful life of 20 years. F-25 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (C) STOCKHOLDERS' AGREEMENT The Stockholders' Agreement expires on January 7, 2010. Certain provisions expire upon an initial public offering. Exclusivity Under the Stockholders' Agreement, none of the Stockholders will provide or resell, or act as the agent for any person offering, within the Territory, mobile wireless telecommunications services and frequencies licensed by the FCC ("Company Communications Services"), except AT&T Wireless and its affiliates may (i) resell or act as agent for the Company in connection with the provision of Company Communications Services, (ii) provide or resell wireless telecommunications services to or from certain specific locations, and (iii) resell Company Communications Services for another person in any area where the Company has not placed a system into commercial service in certain instances. Additionally, with respect to the markets listed on the Roaming Agreement, the Company and AT&T Wireless agree to cause their 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 such markets, and refrain from inducing any of its customers to change such programming. Build-out The Company is required to conform to certain requirements regarding the construction of the Company's PCS system. In the event that the Company breaches these requirements, AT&T Wireless may terminate its exclusivity provisions. Disqualifying Transactions In the event of a merger, asset sale or consolidation, as defined, involving AT&T Wireless and another person that derives annual revenues in excess of $5,000,000,000, derives less than one third of its aggregate revenues from wireless telecommunications, and owns FCC licenses to offer mobile wireless telecommunications services to more than 25% of the population within the Company's territory, AT&T Wireless and the Company have certain rights. AT&T may terminate its exclusivity in the territory in which the other party overlaps that of the Company. Resale Agreement Pursuant to the Stockholders' Agreement, the Company is required to enter into a Resale Agreement at the request of AT&T Wireless. Under this agreement, AT&T Wireless will be granted the right to purchase and resell on a nonexclusive basis access to and usage of the Company's services in the Company's licensed area. The Company will retain the continuing right to market and sell its services to customers and potential customers in competition with AT&T Wireless. The Resale Agreement will have a term of ten years and will renew automatically for successive one-year periods unless, after the eleventh anniversary thereof, either party elects to terminate the Resale Agreement. Furthermore, AT&T Wireless may terminate the Resale Agreement at any time for any reason on 90 days written notice. The Company has agreed that the rates, terms and conditions of service, taken as a whole, provided by the Company to AT&T Wireless pursuant to the Resale Agreement, shall be at F-26 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) least as favorable as (or if permitted by applicable law, superior to) the rates, terms, and conditions of service, taken as a whole, provided by the Company to any other customer. Without limiting the foregoing, the rate plans offered by the Company pursuant to the Resale Agreement shall be designed to result in a discounted average actual rate per minute paid by AT&T Wireless for service below the weighted average actual rate per minute billed by the Company to its subscribers generally for access and air time. Neither party may assign or transfer the Resale Agreement or any of its rights thereunder without the other party's prior written consent, which will not be unreasonably withheld, except (a) to an affiliate of that party at the time of execution of the Resale Agreement, (b) by the Company to any of its operating subsidiaries, and (c) to the transferee of a party's stock or substantially all of its assets, provided that all FCC and other necessary approvals have been received. The Company expects to enter into the Resale Agreement upon commencement of its operations in the initial configuration. (20) BANK FACILITY Subsequent to December 31, 1998, the Company entered into a loan agreement (the "Bank Facility"), which provides for (i) a $100,000,000 senior secured term loan (the "Term Loan A"), (ii) a $200,000,000 senior secured term loan (the "Term Loan B") and (iii) a $250,000,000 senior secured reducing revolving credit facility (the "Revolver"). Tritel PCS 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, beginning on December 31, 2002. Also, advances under Term Loan A and Term Loan B are required to be repaid beginning on December 31, 2002, in consecutive quarterly installments. Following is a schedule of the required reductions in the Revolver and the payments on the term loans:
REPAYMENT DATES REVOLVER TERM LOAN A TERM LOAN B - -------------------------------------- ---------- ------------- ------------ (DOLLARS IN THOUSANDS) December 31, 2002 .............. $ 6,250 $ 2,500 $ 2,000 March 31, 2003, June 30, 2003, September 30, 2003 and December 31, 2003 ............. 7,422 2,969 500 March 31, 2004, June 30, 2004, September 30, 2004 and December 31, 2004 ............. 11,328 4,531 500 March 31, 2005, June 30, 2005, September 30, 2005 and December 31, 2005 ............. 13,281 5,313 500 March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006 ............. 16,015 6,406 500 March 31, 2007 and June 30, 2007 25,781 10,313 500 September 30, 2007 ............. -- -- 500 December 31, 2007 .............. -- -- 188,500
F-27 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) Interest on the Revolver, Term Loan A and Term Loan B accrues, at the Company's option, either at a LIBOR rate plus an applicable margin or the higher of the issuing bank's prime rate and the Federal Funds Rate (as defined in the Bank Facility) plus 0.5%, plus an applicable margin. The Revolver and Term Loan A require an annual commitment fee ranging from 0.50% to 1.75% of the unused portion of the Bank Facility. Advances under Term Loan A and funds under the Revolving Bank Facility are not available to the Company until Term Loan B is fully drawn or becomes unavailable pursuant to the terms of the Bank Facility. The Bank Facility also requires 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). No such contracts have been entered into as of March 31, 1999. 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 the ordinary course of business or unused insurance proceeds; and 50% of the net cash proceeds of issuances of equity securities (other than in connection with the equity commitments referred to in Note 18). All obligations of the Company under the facilities are unconditionally and irrevocably guaranteed (the "Bank Facility Guarantees") by Tritel Inc. and all subsidiaries of Tritel PCS, Inc. The bank facilities and guarantees, and any related hedging contracts provided by the lenders under the Bank Facility, are secured by substantially all of the assets of Tritel PCS, Inc. and certain subsidiaries of Tritel PCS, Inc., 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 $250,000,000. As of March 31, 1999, the Company has drawn $200,000,000 of advances under Term Loan B. (21) STOCK OPTION PLANS In January 1999, the Company adopted a stock option plan and a stock option plan for non-employee directors. F-28 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 13,566 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 and nonqualified stock options granted under the Stock Option Plan must not be less than the fair market value of the common stock on the grant date. The Stock Option Plan will terminate in 2009 unless extended by amendment. During the period from January 7, 1999 to March 31, 1999, 11,531 shares were granted under the Stock Option Plan. Such 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. 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 50,000 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 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 March 31, 1999, no options were outstanding under the Non-employee Directors Plan. (22) REDEEMABLE PREFERRED STOCK Following is a summary of the redeemable preferred stock of the Company: 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 the Series C Preferred Stock, the Series D Preferred Stock and the 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. F-29 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) The Company issued 90,668 shares of Series A Preferred Stock with a stated value of $90,668,000 to AT&T Wireless on January 7, 1999. The stock was recorded at its stated value and a discount was recorded for the excess of the stated value of the stock over the appraised value of assets, net of deferred income taxes, received from AT&T Wireless. 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: o the Series B Preferred Stock is redeemable at any time at the option of Tritel, o the Series B Preferred Stock is not convertible into shares of any other security issued by Tritel, and o the Series B Preferred Stock may be issued by Tritel pursuant to an exchange of capital stock. No Series B Preferred Stock has been issued by the Company. F-30 The map on the opposite page is not intended to be an exact representation of Tritel PCS's wireless service area. [GRAPHIC OMITTED] TRITEL PCS, INC. OFFER TO EXCHANGE ITS 12 3/4% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2009 WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 12 3/4% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2009 -------------------- PROSPECTUS -------------------- , 1999 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Section 145 of the Delaware General Corporation Law (the "GCL") provides as follows: "(a) 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) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, 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, with respect to any criminal action or proceeding, had no reasonable cause to believe the person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that the person's conduct was unlawful. (b) 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 by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against 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 and 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 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 indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) To the extent that a present or former director or officer of a corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsections (a) and (b) of this section, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. (d) Any indemnification under subsections (a) and (b) of this section (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the present or former director, officer, employee or agent is proper in the circumstances because the person has met the applicable standard of conduct set forth in subsections (a) and (b) of this section. Such determination shall be made with respect to a person who is a director or officer at the time of such determination, (1) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (2) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (3) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (4) by the stockholders. II-1 (e) Expenses (including attorneys' fees) incurred by an officer or director in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the corporation as authorized in this section. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the corporation deems appropriate. (f) The indemnification and advancement of expenses provided by, or granted pursuant to, the other subsections of this section shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office. (g) A corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the corporation would have the power to indemnify such person against such liability under this section. (h) For purposes of this section, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent for such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this section with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. (i) For purposes of this section, references to "other enterprises" shall include employee benefit plans; references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this section. (j) The indemnification and advancement of expenses provided by, or granted pursuant to, this section shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person. (k) The Court of Chancery is hereby vested with exclusive jurisdiction to hear and determine all actions for advancement of expenses or indemnification brought under this section or under any bylaw, agreement, vote of stockholders or disinterested directors, or otherwise. The Court of Chancery may summarily determine a corporation's obligation to advance expenses (including attorneys' fees)." Article 6 of Tritel PCS's Bylaws provides: INDEMNIFICATION "Indemnification. The Corporation shall, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons who may serve or who have served at any time II-2 as Directors or officers of the Corporation, or who at the request of the Corporation may serve or at any time have served as Directors or officers of another corporation (including subsidiaries of the Corporation) or of any partnership, joint venture, trust or other enterprise, from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law. Such indemnification shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation 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. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person may be entitled under any provisions of the Certificate of Incorporation, other Bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. Definition. For purposes of this Article, the term "Corporation" shall include constituent corporations referred to in Subsection(h) of Section 145 of the General Corporation Law (or any similar provision of applicable law at the time in effect)." The Amended and Restated Certificate of Incorporation of Tritel PCS also limits the personal liability of directors to Tritel PCS and its stockholders for monetary damages resulting from certain breaches of the directors' fiduciary duties. The Amended and Restated Certificate of Incorporation of Tritel PCS provides as follows: "A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (i) for any breach of the director's duty of loyalty to the corporation and to 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 General Corporation Law, or (iv) for any transaction from which such director derived any improper personal benefit." ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT NUMBER EXHIBIT DESCRIPTION - --------- ---------------------------------------------------------------------------------------- 3.1 Certificate of Incorporation of Tritel PCS, Inc., (f/k/a Tritel Holding Corp.) dated May 29, 1998. 3.1.1 Amendment to Certificate of Incorporation of Tritel PCS, Inc., dated April 16, 1999. 3.2 Bylaws of Tritel PCS, Inc., dated May 29, 1998. 3.3 Restated Certificate of Incorporation of Tritel, Inc., dated January 4, 1999. 3.4 Bylaws of Tritel, Inc., dated April 23, 1998. 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 Bylaws of Tritel Finance, Inc., dated May 29, 1998. 4.1 Indenture, dated May 11, 1999 between Tritel PCS, Inc., its parent and certain of its subsidiaries, and The Bank of New York, as trustee. 4.2 Registration Rights Agreement, dated May 11, 1999. 4.3 Form of Notes for 12 3/4% Senior Subordinated Discount Notes due 2009 originally issued by Tritel PCS, Inc. on May 11, 1999 (included as exhibits A-1 and A-2 to Exhibit 4.1 of this registration statement).
II-3
EXHIBIT NUMBER EXHIBIT DESCRIPTION - -------- ----------------------------------------------------------------------------------------- 4.4 Form of Note for 123/4% Senior Subordinated Discount Notes due 2009 to be issued by Tritel PCS, Inc. and registered under the Securities Act of 1933. 5.1 Opinion of Brown & Wood LLP.* 5.2 Opinion of James H. Neeld, IV.* [10.1 Material Contracts]* 12 Statement of Computation of Deficiency of Earnings to Fixed Charges.* 21 Subsidiaries of Tritel PCS, Inc. 23.1 Consent of Brown & Wood LLP (included in Exhibit 5.1 of this registration statement).* 23.2 Consent of James H. Neeld, IV (included in Exhibit 5.2 of this registration statement).* 23.3 Consent of KPMG Peat Marwick LLP.* 24 Powers of Attorney (included on the signature page of this registration statement). 25.1 Form T-1 Statement of Eligibility of The Bank of New York, as trustee.* 27 Financial Data Schedule.* 99.1 Form of Letter of Transmittal. 99.2 Form of Notice of Guaranteed Delivery. 99.3 Form of Exchange Agent Agreement.
- ---------- * To be filed by amendment. ITEM 22. UNDERTAKINGS (a) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities and 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 and Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by any such director, officer or controlling person in connection with the securities being registered, the registrant will submit, unless in the opinion of its counsel the matter has been settled by controlling precedent, to a court of appropriate jurisdiction the question of whether or not such indemnification is against Public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. (c) The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail II-4 or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. (d) The undersigned registrant hereby undertakes 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. This exchange offer, however, does not involve any acquisition, nor are any acquisitions with respect to PSSA expected after the registration statement becomes effective. The transaction covered by this registration statement only involves the exchange of registered for unregistered securities. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on July 8, 1999. TRITEL PCS, INC. By: /s/ E.B. Martin, Jr. ------------------------------------ Name: E.B. Martin, Jr. Title: Executive Vice President, Treasurer, Chief Financial Officer and Director KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints E.B. Martin, Jr. his true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) of and supplements to this Registration Statement and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, to all intents and purposes and as fully as they might or could do in person, hereby ratifying and confirming all that such attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------------------------- ----------------------------------------------- ------------ /s/ William M. Mounger, II Chairman of the Board, Chief Executive Officer - --------------------------- and President July 8, 1999 William M. Mounger, II /s/ E.B. Martin, Jr. Executive Vice President, Treasurer, Chief - --------------------------- Financial Officer and Director July 8, 1999 E.B. Martin, Jr. /s/ Karlen Turbeville Senior Vice President -- Finance (Principal - --------------------------- Accounting Officer) July 8, 1999 Karlen Turbeville
II-6 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT DESCRIPTION PAGE - -------- -------------------------------------------------------------------------------- ----- 3.1 Certificate of Incorporation of Tritel PCS, Inc., (f/k/a Tritel Holding Corp.) dated May 29, 1998. 3.1.1 Amendment to Certificate of Incorporation of Tritel PCS, Inc., dated April 16, 1999. 3.2 Bylaws of Tritel PCS, Inc., dated May 29, 1998. 3.3 Restated Certificate of Incorporation of Tritel, Inc., dated January 4, 1999. 3.4 Bylaws of Tritel, Inc., dated April 23, 1998. 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 Bylaws of Tritel Finance, Inc., dated May 29, 1998. 4.1 Indenture, dated May 11, 1999 between Tritel PCS, Inc., its parent and certain of its subsidiaries, and The Bank of New York, as trustee. 4.2 Registration Rights Agreement, dated May 11, 1999. 4.3 Form of Notes for 123/4% Senior Subordinated Discount Notes due 2009 originally issued by Tritel PCS, Inc. on May 11, 1999 (included as exhibits A-1 and A-2 to Exhibit 4.1 of this registration statement). 4.4 Form of Note for 123/4% Senior Subordinated Discount Notes due 2009 to be issued by Tritel PCS, Inc. and registered under the Securities Act of 1933. 5.1 Opinion of Brown & Wood LLP.* 5.2 Opinion of James H. Neeld, IV.* [10.1 Material Contracts]* 12 Statement of Computation of Deficiency of Earnings to Fixed Charges.* 21 Subsidiaries of Tritel PCS, Inc. 23.1 Consent of Brown & Wood LLP (included in 5.1 of this registration statement).* 23.2 Consent of James H. Neeld, IV (included in 5.2 of this registration statement).* 23.3 Consent of KPMG Peat Marwick LLP.* 24 Powers of Attorney (included on the signature page of this registration statement). 25.1 Form T-1 Statement of Eligibility of The Bank of New York, as trustee.* 27 Financial Data Schedule.* 99.1 Form of Letter of Transmittal. 99.2 Form of Notice of Guaranteed Delivery. 99.3 Form of Exchange Agent Agreement.
- ---------- * To be filed by amendment. EX-3.1 2 CERTIFICATE OF INCORPORATION OF TRITEL HOLDING CORP. Exhibit 3.1 CERTIFICATE OF INCORPORATION OF TRITEL HOLDING CORP. * * * * * 1. The name of the corporation is TRITEL HOLDING CORP. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the general corporation law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is: Ten (10) and the par value of each of such shares is No Dollars and One Cent ($0.01) amounting in the aggregate to No Dollars and Ten Cents ($0.10). 5. The name and mailing address of each incorporator is as follows: NAME MAILING ADDRESS ---- --------------- M. A. Brzoska 1209 Orange Street, Wilmington, DE 19801 D. J. Murphy 1209 Orange Street, Wilmington, DE 19801 L. J. Vitalo 1209 Orange Street, Wilmington, DE 19801 The name and mailing address of each person who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows: NAME MAILING ADDRESS ---- --------------- William M. Mounger, II 1410 Livingston Lane, Jackson, MS 39213-8003 Jerry M. Sullivan, Jr. 1410 Livingston Lane, Jackson, MS 39213-8003 E. B. Martin, Jr. 1410 Livingston Lane, Jackson, MS 39213-8003 6. The corporation is to have perpetual existence. 1 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the bylaws of the corporation. 8. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (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 General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 29th day of May , 1998. /s/ M. A. Brzoska ----------------------------------- M. A. Brzoska /s/ D. J. Murphy ----------------------------------- D. J. Murphy /s/ L. J. Vitalo ----------------------------------- L. J. Vitalo 2 EX-3.1.1 3 AMENDMENT TO CERTIFICATE OF INCORPORATION OF TRITEL PCS, INC. CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION ****** Tritel Holding Corp., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That by unanimous written consent, the Board of Directors and the sole shareholder of Tritel Holding Corp., duly adopted resolutions setting forth an amendment to the Certificate of Incorporation of said corporation, with the Board of Directors declaring said amendment to be advisable and recommending said amendment to the sole shareholder of said corporation. The resolution setting forth the amendment is as follows: NOW, THEREFORE, BE IT RESOLVED, that the Certificate of Incorporation of Tritel Holding Corp. be amended by changing the first Article thereof so that, as amended, said Article shall be and read as follows: The name of the corporation is: Tritel PCS, Inc. SECOND: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Tritel Holding Corp. has caused this certificate to be signed by James H. Neeld, its Secretary, this Sixteenth day of April, 1999. Tritel Holding Corp. By -------------------------------- James E. Neeld, IV, Secretary EX-3.2 4 BYLAWS OF TRITEL HOLDING CORP. - -------------------------------------------------------------------------------- BYLAWS OF TRITEL HOLDING CORP. Adopted as of May 29, 1998 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE 1 -- STOCKHOLDERS......................................................1 1.1 Annual Meeting...................................................1 1.2 Special Meetings.................................................1 1.3 Notice of Meetings; Waiver.......................................1 1.4 Quorum...........................................................2 1.5 Voting...........................................................2 1.6 Voting by Ballot.................................................2 1.7 Adjournment......................................................2 1.8 Proxies..........................................................2 1.9 Organization; Procedure..........................................3 1.10 Consent of Stockholders in Lieu of Meeting......................3 ARTICLE 2 -- BOARD OF DIRECTORS................................................3 2.1 General Powers...................................................3 2.2 Number and Term of Office........................................3 2.3 Election of Directors............................................4 2.4 Annual and Regular Meetings......................................4 2.5 Special Meetings; Notice.........................................4 2.6 Quorum; Voting...................................................4 2.7 Adjournment......................................................5 2.8 Action Without a Meeting.........................................5 2.9 Regulations; Manner of Acting....................................5 2.10 Action by Telephonic Communications.............................5 2.11 Resignation.....................................................5 2.12 Removal of Directors............................................5 2.13 Vacancies and Newly Created Directorships.......................5 2.14 Compensation....................................................6 2.15 Reliance on Accounts and Reports, etc...........................6 ARTICLE 3 -- EXECUTIVE COMMITTEE AND OTHER COMMITTEES..........................6 3.1 How Constituted..................................................6 3.2 Powers...........................................................7 3.3 Quorum; Voting...................................................7 3.4 Action without a Meeting.........................................7 3.5 Regulations; Manner of Acting....................................7 3.6 Action by Telephonic Communications..............................7 3.7 Resignation......................................................7 3.8 Removal..........................................................7 3.9 Vacancies........................................................7 i ARTICLE 4 -- OFFICERS..........................................................8 4.1 Titles...........................................................8 4.2 Election.........................................................8 4.3 Salaries.........................................................8 4.4 Removal and Resignation; Vacancies...............................8 4.5 Authority and Duties.............................................8 4.6 The Chairman of the Board........................................8 4.7 The President....................................................9 4.8 Vice President/Chief Operating Officer...........................9 4.9 Executive Vice President/General Counsel.........................9 4.10 The Vice Presidents............................................10 4.11 The Secretary..................................................10 4.12 The Treasurer..................................................11 4.13 Additional Officers............................................11 4.14 Security.......................................................12 ARTICLE 5 -- CAPITAL STOCK....................................................12 5.1 Certificates of Stock, Uncertificated Shares....................12 5.2 Signatures; Facsimile...........................................12 5.3 Lost, Stolen or Destroyed Certificates..........................12 5.4 Transfer of Stock...............................................13 5.5 Record Date.....................................................13 5.6 Registered Stockholders.........................................13 5.7 Transfer Agent and Registrar....................................13 ARTICLE 6 -- INDEMNIFICATION..................................................13 6.1 Indemnification.................................................13 6.2 Definition......................................................14 ARTICLE 7 -- OFFICES..........................................................14 7.1 Registered Office...............................................14 7.2 Other Offices...................................................14 ARTICLE 8 -- GENERAL PROVISIONS...............................................14 8.1 Dividends.......................................................14 8.2 Reserves........................................................14 8.3 Execution of Instruments........................................15 8.4 Corporate Indebtedness..........................................15 8.5 Deposits........................................................15 8.6 Checks..........................................................15 8.7 Sale, Transfer, etc. of Securities..............................15 8.8 Voting as Stockholder...........................................16 8.9 Fiscal Year.....................................................16 8.10 Seal...........................................................16 ii 8.11 Books and Records..............................................16 ARTICLE 9 -- AMENDMENT OF BYLAWS..............................................16 9.1 Amendment.......................................................16 ARTICLE 10 -- CONSTRUCTION....................................................16 10.1 Construction...................................................16 iii BYLAWS OF TRITEL HOLDING CORP. ARTICLE 1. STOCKHOLDERS 1.1 Annual Meeting. The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before such meeting shall be held at such place, either within or without the State of Delaware, at 9:00 A.M. on the second Wednesday of each April of each year (or, if such day is a legal holiday, then on the next succeeding business day), or at such other date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting. 1.2 Special Meetings. Special meetings of the stockholders may be called at any time by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Board of Directors. A special meeting shall be called by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Secretary, immediately upon receipt of a written request therefor by stockholders holding in the aggregate not less than 10% of the outstanding shares of the Corporation at the time entitled to vote at any meeting of the stockholders. If such officers or the Board of Directors shall fail to call such meeting within 20 days after receipt of such request, any stockholder executing such request may call such meeting. Any such special meeting of the stockholders shall be held at such place, within or without the State of Delaware, as shall be specified in the notice or waiver of notice thereof. 1.3 Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than 10 nor more than 60 days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the record of stockholders of the Corporation, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address. Such further notice shall be given as may be required by law. Whenever notice is required to be given to stockholders hereunder, a written waiver, signed by a stockholder, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice. The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened. 1.4 Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. 1.5 Voting. Except as set forth in the Certificate of Incorporation, if, pursuant to Section 5.5 of these Bylaws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share outstanding in his name on the books of the Corporation at the close of business on such record date. If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation at the close of business on the day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by law or by the Certificate of Incorporation, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. 1.6 Voting by Ballot. No vote of the stockholders need be taken by written ballot or conducted by inspectors of election, unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting. 1.7 Adjournment. If a quorum is not present at any meeting of the stockholders, the stockholders present in person or by proxy shall have the power to adjourn any such meeting from time to time until a quorum is present. Notice of any adjourned meeting of the stockholders of the Corporation need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of the adjourned meeting, conforming to the requirements of Section 1.3 hereof, shall be given to each stockholder of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting. 1.8 Proxies. Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action without a meeting may, by a written instrument signed by such stockholder or his attorney-in-fact, authorize another person or 2 persons to vote at any such meeting and express such consent or dissent for him by proxy. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary. 1.9 Organization; Procedure. At every meeting of stockholders the presiding officer shall be the Chairman of the Board or, in the event of his absence or disability, the President or, in the event of his absence or disability, a presiding officer chosen by a majority of the stockholders present in person or by proxy. The Secretary, or in the event of his absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as Secretary of the meeting. The order of business and all other matters of procedure at every meeting of stockholders may be determined by such presiding officer. 1.10 Consent of Stockholders in Lieu of Meeting. To the fullest extent permitted by law, whenever the vote of the stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such action may be taken without a meeting, without prior notice and without a vote of stockholders, if the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted shall consent in writing to such corporate action being taken. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not so consented in writing. ARTICLE 2. BOARD OF DIRECTORS 2.1 General Powers. Except as may otherwise be provided by law, by the Certificate of Incorporation or by these Bylaws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation. 2.2 Number and Term of Office. The number of Directors constituting the entire Board of Directors shall be not less than one (1) nor more than ten (10), with the actual number thereof serving from time to time to be determined, within such variable minimum and maximum range, by resolution of the stockholders or the Board of Directors; provided, however, that the Board of Directors may increase or decrease by only thirty percent (30%) or less the number of Directors last approved by the stockholders, and only the stockholders may increase or decrease by more than thirty percent (30%) the number of Directors last approved by the 3 stockholders. After the Corporation has issued any shares, only the stockholders may change the variable range for the size of the Board of Directors or change from a variable-range size of Board of Directors to a fixed size of Board of Directors. Each Director (whenever elected) shall hold office until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. 2.3 Election of Directors. Except as set forth in the Certificate of Incorporation and as otherwise provided in Sections 2.12 and 2.13 of these Bylaws, the Directors shall be elected at each annual meeting of the stockholders. If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient. At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election. 2.4 Annual and Regular Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and hour of such meetings. Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telegram, facsimile or cable, to each Director who shall not have been present at the meeting at which such action was taken, addressed to him at his usual place of business, or shall be delivered to him personally. Notice of such action need not be given to any Director who attends the first regular meeting after such action is taken without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting. 2.5 Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or, in the event of his absence or disability, by the President, at such place (within or without the State of Delaware), date and hour as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the Board of Directors may be called on 24 hours' notice, if notice is given to each Director personally or by telephone or facsimile, or on five days' notice, if notice is mailed to each Director, addressed to him at his usual place of business. Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting, and any business may be transacted thereat. 2.6 Quorum; Voting. At all meetings of the Board of Directors, the presence of a majority of the total authorized number of Directors shall constitute a quorum for the 4 transaction of business. Except as otherwise required by law or the Certificate of Incorporation, the vote of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. 2.7 Adjournment. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.5 shall be given to each Director. 2.8 Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors. 2.9 Regulations; Manner of Acting. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Corporation as the Board of Directors may deem appropriate. The Directors shall act only as a Board, and the individual Directors shall have no power as such. 2.10 Action by Telephonic Communications. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 2.11 Resignation. Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the Chairman of the Board, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery. 2.12 Removal of Directors. Except as set forth in the Certificate of Incorporation, any Director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of such Director, cast at a special meeting of stockholders called for that purpose. Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by the stockholders entitled to vote for the election of the Director so removed. If such stockholders do not fill such vacancy at such meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a meeting), such vacancy may be filled in the manner provided in Section 2.13 of these Bylaws. 2.13 Vacancies and Newly Created Directorships. Except as set forth in the Certificate of Incorporation, if any vacancies shall occur in the Board of Directors, by reason of 5 death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies and newly created directorships may be filled by a majority of the Directors then in office, although less than a quorum. A Director elected to fill a vacancy or a newly created directorship shall hold office until his successor has been elected and qualified or until his earlier death, resignation or removal. Any such vacancy or newly created directorship may also be filled at any time by vote of the stockholders. 2.14 Compensation. The amount, if any, which each Director shall be entitled to receive as compensation for his services as such shall be fixed from time to time by resolution of the Board of Directors. 2.15 Reliance on Accounts and Reports, etc. A member of the Board of Directors, or a member of any Committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or Committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, including without limitation independent certified public accountants and appraisers. ARTICLE 3. EXECUTIVE COMMITTEE AND OTHER COMMITTEES 3.1 How Constituted. The Board of Directors may designate one or more Committees, including an Executive Committee, each such Committee to consist of such number of Directors as from time to time may be fixed by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any such Committee, who may replace any absent or disqualified member or members at any meeting of such Committee. In addition, unless the Board of Directors has so designated an alternate member of such Committee, in the absence or disqualification of a member of such Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Thereafter, members (and alternate members, if any) of each such Committee may be designated at the annual meeting of the Board of Directors. Any such Committee may be abolished or redesignated from time to time by the Board of Directors. Each member (and each alternate member) of any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his successor shall have been designated or until he shall cease to be a Director, or until his earlier death, resignation or removal. 6 3.2 Powers. Each Committee shall have and may exercise such powers of the Board of Directors as may be provided by resolution of the Board, provided, that neither the Executive Committee nor any such other Committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law to be submitted to stockholders for approval or (ii) adopt, amend or repeal any of these Bylaws. Each Committee may be granted by the Board of Directors power to authorize the seal of the Corporation to be affixed to any or all papers which may require it. 3.3 Quorum; Voting. Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of such Committee. 3.4 Action without a Meeting. Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee. 3.5 Regulations; Manner of Acting. Each such Committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time. Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceeding. The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such. 3.6 Action by Telephonic Communications. Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 3.7 Resignation. Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery. 3.8 Removal. Any member (any alternate member) of any Committee may be removed at any time, with or without cause, by resolution adopted by a majority of the whole Board of Directors. 3.9 Vacancies. If any vacancy shall occur in any Committee, by reason of death, resignation, removal or otherwise, the remaining members (and any alternate members) 7 shall continue to act, and any such vacancy may be filled by the Board of Directors or the remaining members of the Committee as provided in Section 3.1 hereof. ARTICLE 4. OFFICERS 4.1 Titles. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, the President, a Vice President/Chief Operating Officer, an Executive Vice President/General Counsel, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors also may elect one or more Assistant Secretaries and Assistant Treasurers in such numbers as the Board of Directors may determine, and shall also elect a Chairman of the Board. Any number of offices may be held by the same person. No officer need be a Director of the Corporation. 4.2 Election. Unless otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors. Each officer shall hold office until his successor has been elected and qualified, or until his earlier death, resignation or removal. 4.3 Salaries. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. 4.4 Removal and Resignation; Vacancies. Any officer may be removed with or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the Chairman of the Board. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. 4.5 Authority and Duties. The officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified in these Bylaws, except that in any event each officer shall exercise such powers and perform such duties as may be required by law. 4.6 The Chairman of the Board. The Chairman of the Board shall preside at all meetings of the stockholders and directors. He shall also perform all duties and exercise all powers usually pertaining to the office of a Chairman of the Board of a corporation. He shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chairman of 8 the Board shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.7 The President. The President shall be the chief executive officer of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the Chairman of the Board, the President shall preside at all meetings of the stockholders and directors. He shall manage and administer the Corporation's business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office of a chief executive officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.8 Vice President/Chief Operating Officer. The Vice President/Chief Operating Officer shall, subject to the direction of the Board of Directors and the President, perform all duties and exercise all powers usually pertaining to the office of a chief operating officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the President, Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The Vice President/Chief Operating Officer shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.9 Executive Vice President/General Counsel. The Executive Vice President/General Counsel shall, subject to the directions of the Board of Directors, have general control and supervision of legal and regulatory policies and operations of the Corporation. He shall also be the chief business development officer of the Corporation and in connection therewith shall perform all duties and exercise all powers usually pertaining to the office of a chief business development officer. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business 9 of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors, other than the President or Vice President/Chief Operating Officer. The Executive Vice President/General Counsel shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.10 The Vice Presidents. Each Vice President shall perform such duties and exercise such powers as may be assigned to him from time to time by the President. In the absence of the President, the duties of the President shall be performed and his powers may be exercised by such Vice President as shall be designated by the President, or failing such designation, such duties shall be performed and such powers may be exercised by each Vice President in the order of their election to that office; subject in any case to review and superseding action by the President. 4.11 The Secretary. The Secretary shall have the following powers and duties: (1) He shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose. (2) He shall cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law. (3) Whenever any Committee shall be appointed pursuant to a resolution of the Board of Directors, he shall furnish a copy of such resolution to the members of such Committee. (4) He shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these Bylaws, and when so affixed he may attest to same. (5) He shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these Bylaws. (6) He shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record. 10 (7) He shall sign (unless the Treasurer, an Assistant Treasurer or Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors. (8) He shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors or the President. 4.12 The Treasurer. The Treasurer shall be the chief financial officer of the corporation and shall have the following powers and duties: (1) He shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and accurate records of all receipts of the Corporation. (2) He shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with Section 8.5 of these Bylaws. (3) He shall cause moneys of the Corporation to be disbursed by checks or drafts (signed as provided in Section 8.6 of these Bylaws) upon the authorized depositories of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed. (4) He shall render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his transactions as Treasurer, and render a full financial report at the annual meeting of the stockholders, if called upon to do so. (5) He shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation. (6) He may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing stock of the Corporation the issuance of which shall have been authorized by the Board of Directors. (7) He shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors, or the President. 4.13 Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be 11 determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him, with or without cause. 4.14 Security. The Board of Directors may direct that the Corporation secure the fidelity of any or all of its officers or agents by bond or otherwise. ARTICLE 5. CAPITAL STOCK 5.1 Certificates of Stock, Uncertificated Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until each certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock in the Corporation represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board, President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form. Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws. 5.2 Signatures; Facsimile. All of such signatures on the certificate may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. 5.3 Lost, Stolen or Destroyed Certificates. The Secretary of the Corporation may cause a new certificate of stock or uncertificated shares in place of any certificate therefor issued by the Corporation, alleged to have been lost, stolen or destroyed, upon delivery to the Secretary of an affidavit of the owner or owners of such certificate, or his or their legal representative setting forth such allegation. The Secretary may require the owner or owners of such lost, stolen or destroyed certificate, or his or their legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated shares. 12 5.4 Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Section 151, 156, 202(a) or 218(a) of the General Corporation Law. Subject to the provisions of the Certificate of Incorporation and these Bylaws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation. 5.5 Record Date. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 5.6 Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interest. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so. 5.7 Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars. ARTICLE 6. INDEMNIFICATION 6.1 Indemnification. The Corporation shall, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons who may serve or who 13 have served at any time as Directors or officers of the Corporation, or who at the request of the Corporation may serve or at any time have served as Directors or officers of another corporation (including subsidiaries of the Corporation) or of any partnership, joint venture, trust or other enterprise, from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law. Such indemnification shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation 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. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person may be entitled under any provision of the Certificate of Incorporation, other Bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. 6.2 Definition. For purposes of this Article, the term "Corporation" shall include constituent corporations referred to in Subsection (h) of Section 145 of the General Corporation Law (or any similar provision of applicable law at the time in effect). ARTICLE 7. OFFICES 7.1 Registered Office. The registered office of the Corporation in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the Corporation's registered agent shall be The Corporation Trust Company. 7.2 Other Offices. The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require. ARTICLE 8. GENERAL PROVISIONS 8.1 Dividends. Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation. 8.2 Reserves. There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its 14 absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve. 8.3 Execution of Instruments. The President, any Executive Vice President, any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors or the President may authorize any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments. 8.4 Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors shall authorize. When so authorized by the Board of Directors, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of any interest thereon, by instruments executed and delivered in the name of the Corporation. 8.5 Deposits. Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors or the President, or by such officers or agents as may be authorized by the Board of Directors or the President to make such determination. 8.6 Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors, the Chairman of the Board, or the President from time to time may determine. 8.7 Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors or by the President, any Vice President, the Secretary or the Treasurer, or any other officers designated by the Board of Directors, the Chairman of the Board, or the President may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment. 15 8.8 Voting as Stockholder. Unless otherwise determined by resolution of the Board of Directors, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders of any corporation in which the Corporation may hold stock, and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons. 8.9 Fiscal Year. The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation's first fiscal year which shall commence on the date of incorporation) and shall end in each case on December 31. 8.10 Seal. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware". The form of such seal shall be subject to alteration by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner. 8.11 Books and Records. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors. ARTICLE 9. AMENDMENT OF BYLAWS 9.1 Amendment. Except as set forth in the Certificate of Incorporation, these Bylaws may be amended, altered or repealed at any regular or special meeting of the stockholders by the holders of shares of Common Stock representing at least two-thirds (2/3) of the votes entitled to be cast if, in the case of a special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting. ARTICLE 10. CONSTRUCTION 10.1 Construction. In the event of any conflict between the provisions of these Bylaws as in effect from time to time and the provisions of the Certificate of Incorporation as in effect from time to time, the provisions of the Certificate of Incorporation shall be controlling. 16 EX-3.3 5 RESTATED CERTIFICATE OF INCORPORATION RESTATED CERTIFICATE OF INCORPORATION OF TRITEL, INC. Tritel, Inc., a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows: FIRST: The name of the corporation is Tritel, Inc. (the "Corporation"). The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on April 23, 1998. SECOND: This Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. THIRD: This Restated Certificate of Incorporation restates, integrates and amends the provisions of the Corporation's Certificate of Incorporation, as follows: ARTICLE I The name of the Corporation shall be Tritel, Inc. ARTICLE II The address of the Corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE III The purpose of the Corporation is to engage in, carry on and conduct any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "GCL"). ARTICLE IV 4.1 Classes of Stock. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 4,540,009, consisting of (a) 1,500,000 shares of preferred stock, par value $0.01 per share (the "Preferred Stock"), including 200,000 shares designated "Series A Convertible Preferred Stock" (the "Series A Preferred Stock"), 300,000 shares designated "Series B Preferred Stock" (the "Series B Preferred Stock"), 500,000 shares designated "Series C Convertible Preferred Stock" (the "Series C Preferred Stock") and 100,000 shares designated "Series D Convertible Preferred Stock" (the "Series D Preferred Stock") and (b) 3,040,009 shares of common stock, par value $0.01 per share (the "Common Stock"), including 1,500,000 shares designated "Class A Voting Common Stock" (the "Class A Common Stock") 1,500,000 shares designated "Class B Non-Voting Common Stock" (the "Class B Common Stock"), 10,000 shares designated "Class C Common Stock" (the "Class C Common Stock"), 30,000 shares designated "Class D Common Stock" (the "Class D Common Stock") and 9 shares designated "Voting Preference Common Stock" (the "Voting Preference Common Stock"). (Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Section 4.11.) 4.2 Additional Series of Preferred Stock. (a) Subject to approval by holders of shares of any class or series of Preferred Stock to the extent such approval is required by its terms, the Board of Directors of the Corporation (the "Board of Directors") is hereby expressly authorized, by resolution or resolutions, to provide, out of the unissued shares of Preferred Stock, for series of Preferred Stock in addition to the Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock. Before any shares of any such series are issued, the Board of Directors shall fix, and hereby is expressly empowered to fix, by resolutions, the following provisions of the shares thereof: (i) the designation of such series, the number of shares to constitute such series and the stated value thereof if different from the par value thereof; (ii) whether the shares of such series shall have voting rights, in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be general or limited; (iii) the dividends, if any, payable on such series, whether any such dividends shall be cumulative, and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any shares of stock of any other class or any other series of this class; 2 (iv) whether the shares of such series shall be subject to redemption by the Corporation, and, if so, the times, prices and other conditions of such redemption; (v) the amount or amounts payable upon shares of such series upon, and the rights of the holders of such series in, the voluntary or involuntary liquidation, dissolution or winding up, or upon any distribution of the assets, of the Corporation; (vi) whether the shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof; (vii) whether the shares of such series shall be convertible into, or exchangeable for, shares of stock of any other class or any other series of this class or any other securities and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange; (viii) the limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payment of dividends or the making of other distributions on, and upon the purchase, redemption other acquisition by the Corporation of, the Common Stock or shares of stock of any other class or any other series of this class; (ix) the conditions or restrictions, if any, upon the creation of indebtedness of the Corporation or upon the issue of any additional stock, including additional shares of such series or of any other series of this class or of any other class; and (x) any other powers, preferences and relative, participating, optional and other special rights, and any qualifications, limitations and restrictions thereof. (b) The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. All shares of any one series of Preferred Stock shall be identical in all respects with all other shares of such series, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative. (c) Shares of Preferred Stock of any series that have been redeemed (whether through the operation of a sinking fund or otherwise) or that, if convertible or exchangeable, have been converted into or exchanged for any other security shall have the status of authorized and 3 unissued shares of Preferred Stock of the same series and may be reissued as a part of the series of which they were originally a part or may be reclassified and reissued as part of a new series of shares of Preferred Stock to be created by resolution or resolutions of the Board of Directors or as part of any other series of shares of Preferred Stock, all subject to the conditions or restrictions on issuance set forth in the resolution or resolutions adopted by the Board of Directors providing for the issue of any series of shares of Preferred Stock. (d) Subject to the provisions of this Restated Certificate of Incorporation and except as otherwise provided by law, the stock of the Corporation, regardless of class, may be issued for such consideration and for such corporate purposes as the Board of Directors may from time to time determine. 4.3 Powers, Preferences and Rights of the Series A Preferred Stock. The powers, preferences and rights of the Series A Preferred Stock and the qualifications, limitations and restrictions thereof are as follows: (a) Ranking. The Series A Preferred Stock shall, with respect to dividend rights and rights on liquidation, dissolution or winding up, rank on a parity with the Series B Preferred Stock, and rank senior to Junior Stock. (b) Dividends and Distributions. (i) Dividends. The holders of shares of Series A Preferred Stock shall be entitled to receive, as and when declared by the Board of Directors, out of funds legally available therefor, dividends on each outstanding share of Series A Preferred Stock, at an annual rate per share equal to ten percent (10%) of the Liquidation Preference, calculated on the basis of a 360-day year consisting of twelve 30-day months. Dividends shall be paid quarterly in arrears on the Dividend Payment Date commencing March 31, 1999 in the manner provided in paragraph (iii) below. (ii) Accrued Dividends; Record Date. Dividends payable pursuant to paragraph (i) above shall begin to accrue and be cumulative from the date on which shares of Series A Preferred Stock are issued, and shall begin to accrue on a daily basis, in each case whether or not earned or declared. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of the dividends payable pursuant to paragraph (i) above, which record date shall not be more than 60 days prior to the Dividend Payment Date. (iii) Payment. All dividends shall be payable in cash. Until the 42nd Dividend Payment Date, the Corporation shall have the option to defer payment of dividends on Series A Preferred Stock. Any dividend payments so deferred shall be payable on and not earlier than the 42nd Dividend Payment Date. 4 (iv) Dividends Pro Rata. All dividends paid with respect to shares of Series A Preferred Stock pursuant to this Section 4.3(b) shall be paid pro rata to the holders entitled thereto. In the event that the funds legally available therefor shall be insufficient for the payment of the entire amount of cash dividends payable at any Dividend Payment Date, subject to Section 4.3(c), such funds shall be allocated for the payment of dividends with respect to the shares of Series A Preferred Stock and Series B Preferred Stock pro rata based upon the Liquidation Preference of the outstanding shares. (c) Certain Restrictions. (i) Notwithstanding the provisions of Sections 4.3(b), (e) and (f), cash dividends on the Series A Preferred Stock may not be declared, paid or set apart for payment, nor may the Corporation redeem, purchase or otherwise acquire any shares of Series A Preferred Stock, if (A) the Corporation is not solvent or would be rendered insolvent thereby or (B) at such time the terms and provisions of any law or agreement of the Corporation, including any agreement relating to its indebtedness, specifically prohibit such declaration, payment or setting apart for payment or such redemption, purchase or other acquisition, or provide that such declaration, payment or setting apart for payment or such redemption, purchase or other acquisition would constitute a violation or breach thereof or a default thereunder. (ii) So long as shares of Series A Preferred Stock are outstanding or dividends payable on shares of Series A Preferred Stock have not been paid in full in cash, then the Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of Common Stock or other shares of Junior Stock, except with the prior written consent of holders of a majority of the outstanding shares of Series A Preferred Stock, except that the Corporation may acquire, in accordance with the terms of any agreement between the Corporation and its employees, shares of Common Stock or Preferred Stock at a price not greater than the Market Price as of such date. (iii) The Corporation shall not permit any Subsidiary of the Corporation, or cause any other Person, to make any distribution with respect to, or purchase or otherwise acquire for consideration, any shares of capital stock of the Corporation, unless the Corporation could, pursuant to paragraph (ii) above, make such distribution or purchase or otherwise acquire such shares at such time and in such manner. (d) Voting Rights; Election of Director. (i) The holders of shares of Series A Preferred Stock shall not have any right to vote on any matters to be voted on by the stockholders of the Corporation, except as otherwise provided in paragraphs (ii) and (iii) below or as provided by law, and the shares of Series A Preferred Stock shall not be included in determining the number of 5 shares voting or entitled to vote on any such matters (other than the matters described in paragraphs (ii) and (iii) below or as otherwise required by law). (ii) Unless the consent or approval of a greater number of shares shall then be required by law, the affirmative vote of the holders of a majority of the outstanding shares of Series A Preferred Stock in person or by proxy, at each special and annual meeting of stockholders called for the purpose, or by written consent, shall be necessary to (A) authorize, increase the authorized number of shares of or issue (including on conversion or exchange of any convertible or exchangeable securities or by reclassification) any shares of any class or classes of Senior Stock or Parity Stock or any additional shares of Series A Preferred Stock, (B) authorize, adopt or approve each amendment to this Restated Certificate of Incorporation that would increase or decrease the par value of the shares of Series A Preferred Stock, alter or change the powers, preferences or rights of the shares of Series A Preferred Stock or alter or change the powers, preferences or rights of any other capital stock of the Corporation if after such alteration or change such capital stock would be Senior Stock or Parity Stock, (C) amend, alter or repeal any provision of this Restated Certificate of Incorporation so as to affect the shares of Series A Preferred Stock adversely, or (D) authorize or issue any security convertible into, exchangeable for or evidencing the right to purchase or otherwise receive any shares of any class or classes of Senior Stock or Parity Stock. (iii) So long as the Initial Holders own at least two-thirds (2/3) of the number of shares of Series A Preferred Stock owned by them in the aggregate on the date hereof, holders of shares of Series A Preferred Stock shall have the exclusive right, voting separately as a single class, to elect one director of the Corporation. The foregoing right to elect one director may be exercised at any annual meeting of stockholders or a special meeting of stockholders or holders of Series A Preferred Stock held for such purpose or any adjournment thereof, or by the written consent, delivered to the Secretary of the Corporation, of the holders of a majority of the issued and outstanding shares of Series A Preferred Stock. Notwithstanding the foregoing, the Initial Holder shall have the right, exercisable at any time by written notice delivered to the Secretary of the Corporation, to surrender and cancel irrevocably such right to elect one director of the Corporation. (e) Redemption at Option of the Corporation. The Corporation shall have the right to redeem shares of Series A Preferred Stock pursuant to the following provisions: (i) The Corporation shall not have any right to redeem shares of the Series A Preferred Stock prior to January 15, 2009. Thereafter, subject to the restrictions in Section 4.3(c)(i), the Corporation shall have the right, at its sole option and election, to redeem the shares of the Series A Preferred Stock, in whole but not in part, at any time at a redemption price (the "Series A Redemption Price") per share equal to the Liquidation Preference as of the redemption date; 6 (ii) Notice of any redemption of the Series A Preferred Stock shall be mailed at least ten, but not more than 60, days prior to the date fixed for redemption to each holder of Series A Preferred Stock to be redeemed, at such holder's address as it appears on the books of the Corporation. In order to facilitate the redemption of the Series A Preferred Stock, the Board of Directors may fix a record date for the determination of holders of Series A Preferred Stock to be redeemed, or may cause the transfer books of the Corporation to be closed for the transfer of the Series A Preferred Stock, not more than 60 days prior to the date fixed for such redemption; (iii) Within two Business Days after the redemption date specified in the notice given pursuant to paragraph (ii) above and the surrender of the certificate(s) representing shares of Series A Preferred Stock, the Corporation shall pay to the holder of the shares being redeemed the Series A Redemption Price therefor. Such payment shall be made by wire transfer of immediately available funds to an account designated by such holder or by overnight delivery (by a nationally recognized courier) of a bank check to such holder's address as it appears on the books of the Corporation; and (iv) Effective upon the date of the notice given pursuant to paragraph (ii) above, notwithstanding that any certificate for such shares shall not have been surrendered for cancellation, the shares represented thereby shall no longer be deemed outstanding, the rights to receive dividends thereon shall cease to accrue from and after the date of redemption designated in the notice of redemption and all rights of the holders of the shares of the Series A Preferred Stock called for redemption shall cease and terminate, excepting only the right to receive the Series A Redemption Price therefor in accordance with paragraph (iii) above and the right to convert such shares into shares of Class A Common Stock until the close of business on the third Business Day preceding the redemption date, as provided in Section 4.3(i). (f) Redemption at Option of Holder. (i) No holder of shares of Series A Preferred Stock shall have any right to require the Company to redeem any shares of Series A Preferred Stock prior to January 15, 2019. Thereafter, subject to the restrictions set forth in Section 4.3(c)(i), each holder of shares of Series A Preferred Stock shall have the right, at the sole option and election of such holder, to require the Corporation to redeem all (but not less than all) of the shares of Series A Preferred Stock owned by such holder at a price per share equal to the Series A Redemption Price. (ii) The holder of any shares of the Series A Preferred Stock may exercise such holder's right to require the Corporation to redeem such shares by surrendering for such purpose to the Corporation, at its principal office or at such other office or agency maintained by the Corporation for that purpose, certificates representing the shares of Series A Preferred Stock to be redeemed, accompanied by a written notice stating that 7 such holder elects to require the Corporation to redeem all (but not less than all) of such shares in accordance with the provisions of this Section 4.3(f), which notice may specify an account for delivery of the Series A Redemption Price. (iii) Within two Business Days after the surrender of such certificates, the Corporation shall pay to the holder of the shares being redeemed the Series A Redemption Price therefor. Such payment shall be made by wire transfer of immediately available funds to an account designated by such holder or by overnight delivery (by a nationally recognized courier) of a bank check to such holder's address as it appears on the books of the Corporation. (iv) Such redemptions shall be deemed to have been made at the close of business on the date of the receipt of such notice and of such surrender of the certificates representing the shares of the Series A Preferred Stock to be redeemed and the rights of the holder thereof, except for the right to receive the Series A Redemption Price therefor in accordance herewith, shall cease on such date of receipt and surrender. (g) Reacquired Shares. Any shares of the Series A Preferred Stock redeemed or purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued pursuant to Section 4.2(c) as part of a new series of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions or restrictions on issuance set forth herein. (h) Liquidation, Dissolution or Winding Up. (i) In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, before any distribution or payment to holders of Junior Stock, the holders of shares of Series A Preferred Stock shall be entitled to be paid an amount equal to the Liquidation Preference with respect to each share of Series A Preferred Stock. (ii) If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation available for distribution to the holders of Series A Preferred Stock shall be insufficient to permit payment in full to such holders of the sums which such holders are entitled to receive in such case, then all of the assets available for distribution to holders of the Series A Preferred Stock and Series B Preferred Stock shall be distributed among and paid to such holders ratably in proportion to the amounts that would be payable to such holders if such assets were sufficient to permit payment in full. (iii) Neither the consolidation or merger of the Corporation with or into any other Person nor the sale or other distribution to another Person of all or substantially 8 all the assets, property or business of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 4.3(h). (i) Conversion. (i) Stockholders' Right To Convert. No holder of shares of Series A Preferred Stock shall have any right to convert any shares of Series A Preferred Stock into Class A Common Stock or any other securities of the Corporation prior to January 15, 2007. Thereafter, each share of Series A Preferred Stock held by an Initial Holder or a Qualified Transferee shall be convertible, at the sole option and election of such Initial Holder or Qualified Transferee, into fully paid and non-assessable shares of Class A Common Stock. (ii) Number of Shares of Class A Common Stock Issuable upon Conversion. The number of shares of Class A Common Stock issued upon conversion of shares of Series A Preferred Stock pursuant to paragraph (i) above shall be equal to the product of (A) the Series A Conversion Rate as of the date of the applicable notice pursuant to paragraph (vi) below, multiplied by (B) the number of shares of Series A Preferred Stock to be converted. (iii) Fractional Shares. Fractional shares of Class A Common Stock may be issued upon conversion of shares of Series A Preferred Stock; provided however that, in lieu of any fractional share to which the holder would otherwise be entitled after determination of the aggregate full number of shares of Class A Common Stock issuable in respect of the Series A Preferred Stock then being converted, the Corporation shall have the right, at its option, to pay cash equal to such fraction multiplied by the Market Price of a share of Class A Common Stock on such date. (iv) Mechanics of Conversion. An Initial Holder or Qualified Transferee electing to exercise its option to convert shall surrender to the Corporation, at its principal office or such other office or agency maintained by the Corporation for that purpose, certificates representing the shares of Series A Preferred Stock to be converted, accompanied by a written notice stating that such holder elects to convert such shares in accordance with this Section 4.3(i). The date of receipt of such certificates and notice by the Corporation at such office shall be the conversion date (the "Series A Conversion Date"). If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his or its attorney duly authorized in writing. Within ten Business Days after the Series A Conversion Date (or, if at the time of such surrender the shares of Class A Common Stock are not listed or admitted for trading on any national securities exchange and are not quoted on NASDAQ or any similar service, within ten Business Days of the determination of the Market Price pursuant to the Appraisal Procedure, the Corporation 9 shall issue to such holder a number of shares of Class A Common Stock into which such shares of Series A Preferred Stock are convertible pursuant to paragraph (ii) above. Certificates representing such shares of Class A Common Stock shall be delivered to such holder at such holder's address as it appears on the books of the Corporation. (v) Termination of Rights. All shares of Series A Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate on the Series A Conversion Date, except only the right of the holders thereof to receive shares of Class A Common Stock in exchange therefor and payment of any declared and unpaid dividends thereon. (vi) No Conversion Charge or Tax. The issuance and delivery of certificates for shares of Class A Common Stock upon the conversion of shares of Series A Preferred Stock shall be made without charge to the holder of shares of Series A Preferred Stock for any issue or transfer tax, or other incidental expense in respect of the issuance or delivery of such certificates or the securities represented thereby, all of which taxes and expenses shall be paid by the Corporation. (vii) Reorganization, Reclassification and Merger Adjustment. If there occurs any capital reorganization or any reclassification of the Class A Common Stock of the Corporation, the consolidation or merger of the Corporation with or into another Person (other than a merger or consolidation of the Corporation in which the Corporation is the continuing corporation and which does not result in any reclassification or change of outstanding shares of its Class A Common Stock) or the sale or conveyance of all or substantially all of the assets of the Corporation to another Person, then each share of Series A Preferred Stock shall thereafter be convertible into the same kind and amounts of securities (including shares of stock) or other assets, or both, which were issuable or distributable to the holders of outstanding Class A Common Stock of the Corporation upon such reorganization, reclassification, consolidation, merger, sale or conveyance, in respect of that number of shares of Class A Common Stock into which such share of Series A Preferred Stock might have been converted immediately prior to such reorganization, reclassification, consolidation, merger, sale or conveyance; and, in any such case, appropriate adjustments (as determined in good faith by the Board of Directors of the Corporation, whose determination shall be conclusive) shall be made to assure that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any securities or other assets thereafter deliverable upon the conversion of the Series A Preferred Stock. (viii) Notice of Adjustment. Whenever the securities or other property deliverable upon the conversion of the Series A Preferred Stock shall be adjusted pursuant to the provisions hereof, the Corporation shall promptly give written notice 10 thereof to each holder of shares of Series A Preferred Stock at such holder's address as it appears on the transfer books of the Corporation and shall forthwith file, at its principal executive office and with any transfer agent or agents for the Series A Preferred Stock and the Class A Common Stock, a certificate, signed by the Chairman of the Board, President or one of the Vice Presidents of the Corporation, and by its Chief Financial Officer, Treasurer or one of its Assistant Treasurers, stating the securities or other property deliverable per share of Series A Preferred Stock calculated to the nearest cent or to the nearest one-hundredth of a share and setting forth in reasonable detail the method of calculation and the facts requiring such adjustment and upon which such calculation is based. Each adjustment shall remain in effect until a subsequent adjustment hereunder is required. (ix) Reservation of Class A Common Stock. The Corporation shall at all times reserve and keep available for issuance upon the conversion of the shares of Series A Preferred Stock the maximum number of its authorized but unissued shares of Class A Common Stock as is reasonably anticipated to be sufficient to permit the conversion of all outstanding shares of Series A Preferred Stock, and shall take all action required to increase the authorized number of shares of Class A Common Stock if at any time there shall be insufficient authorized but unissued shares of Class A Common Stock to permit such reservation or to permit the conversion of all outstanding shares of Series A Preferred Stock. (j) Qualified Transfer. If at any time an Initial Holder or Qualified Transferee desires to sell, transfer or otherwise dispose of shares of Series A Preferred Stock pursuant to a Qualified Transfer, it shall, with respect to each such proposed transfer, give written notice (a "Qualified Transfer Notice") to the Corporation at its principal executive office specifying up to ten prospective transferees. Upon receipt of such notice, the Corporation shall have ten days to give written notice to such Initial Holder or Qualified Transferee specifying its disapproval of (A) any or all of such prospective transferees if it has good reason for such disapproval and specifying such reason and (B) up to two of such prospective transferees without good reason. (k) Notice of Certain Events. In case the Corporation shall propose at any time or from time to time (i) to declare or pay any dividend payable in stock of any class to the holders of Common Stock or to make any other distribution to the holders of Common Stock, (ii) to offer to the holders of Common Stock rights or warrants to subscribe for or to purchase any additional shares of Common Stock or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of its Common Stock, (iv) to effect any consolidation, merger or sale, transfer or other disposition of all or substantially all of the property, assets or business of the Corporation which would, if consummated, adjust the Series A Conversion Rate or the securities issuable upon conversion of shares of Series A Preferred Stock, or (v) to effect the liquidation, dissolution or winding up of the Corporation, then, in each such case, the Corporation shall mail to each holder of shares of Series A Preferred Stock, at such holder's address as it appears on the transfer books of the Corporation, a written notice of such proposed 11 action, which shall specify (A) the date on which a record is to be taken for the purpose of such dividend or distribution of rights or warrants or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend or distribution of rights or warrants are to be determined, or (B) the date on which such reclassification, consolidation, merger, sale, conveyance, dissolution, liquidation or winding up is expected to become effective, and such notice shall be so given as promptly as possible but in any event at least ten Business Days prior to the applicable record, determination or effective date, specified in such notice. (l) Certain Remedies. Any registered holder of shares of Series A Preferred Stock shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Restated Certificate of Incorporation and to enforce specifically the terms and provisions of this Restated Certificate of Incorporation in any court of the United States or any state thereof having jurisdiction, this being in addition to any other remedy to which such holder may be entitled at law or in equity. 4.4 Powers, Preferences and Rights of the Series B Preferred Stock. The Series B Preferred Stock shall rank on a parity with the Series A Preferred Stock, and the powers, preferences and rights of the Series B Preferred Stock, and the qualifications, limitations, and restrictions thereof, shall be identical to those of the Series A Preferred Stock, except that (a) shares of Series B Preferred Stock shall not be, pursuant to the terms of Section 4.3(i) or otherwise, convertible into shares of Common Stock or any other security issued by the Corporation, (b) the Corporation may redeem shares of Series B Preferred Stock in accordance with the terms of Section 4.3(e) at any time without regard to whether the redemption date is before, on or after the date referred to in Section 4.3(e)(i), (c) shares of Series B Preferred Stock may be issued by the Corporation in accordance with the terms of Section 4.9, (d) holders of Series B Preferred Stock shall not, pursuant to Section 4.3(d) or otherwise, have the right to elect any directors of the Corporation and (e) the words "Series B Preferred Stock" and "Series A Preferred Stock" shall be substituted for all references in Section 4.3 to Series A Preferred Stock and Series B Preferred Stock, respectively. 4.5 Powers, Preferences and Rights of the Series C Preferred Stock. The powers, preferences and rights of the Series C Preferred Stock and the qualifications, limitations and restrictions thereof are as follows: (a) Ranking. The Series C Preferred Stock shall rank (i) junior to the Series A Preferred Stock and the Series B Preferred Stock with respect to the payment of dividends and the distribution of assets on liquidation, dissolution or winding up, (ii) junior to the Series D Preferred Stock with respect to the distribution of assets on a Statutory Liquidation, (iii) on a parity with the Series D Preferred Stock with respect to the distribution of assets on liquidation, dissolution or winding up (other than on a Statutory Liquidation), (iv) on a parity with the Series D Preferred Stock and the Common Stock with respect to the payment of dividends, and (v) senior to the Common Stock and any series or class of the Corporation's common or preferred 12 stock, now or hereafter authorized (other than Series A Preferred Stock, Series B Preferred Stock or Series D Preferred Stock), with respect to the distribution of assets on liquidation, dissolution and winding up. (b) Dividends. Holders of Series C Preferred Stock shall be entitled to dividends in cash or property when, as and if, declared by the Board of Directors of the Corporation; provided that, in no event shall dividends in excess of the Liquidation Preference be declared or paid. So long as shares of Series C Preferred Stock are outstanding or dividends payable on shares of Series C Preferred Stock have not been paid in full in cash, the Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of any class of common stock or series of preferred stock ranking junior to or on a parity with the Series C Preferred Stock, except that the Corporation may acquire, in accordance with the terms of any agreement between the Corporation and its employees, shares of Common Stock or Preferred Stock at a price not greater than the Market Price as of such date. The Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of Series D Preferred Stock unless concurrently therewith the Corporation shall declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, as the case may be, shares of Series C Preferred Stock ratably in accordance with the number of shares of Series C Preferred Stock and Series D Preferred Stock then outstanding. (c) Liquidation Preference. (i) In the event of any liquidation, dissolution or winding up of the Corporation, the holders of Series C Preferred Stock shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus of any nature, after payment is made to holders of all series of preferred stock ranking senior to the Series C Preferred Stock with respect to rights on liquidation, dissolution or winding up (including, in the case of a Statutory Liquidation, the Series D Preferred Stock), but before any payment shall be made or any assets distributed to the holders of Common Stock or any series of preferred stock ranking junior to the Series C Preferred Stock with respect to rights on liquidation, dissolution or winding up, an amount equal to the Liquidation Preference and no more. (ii) If upon any liquidation, dissolution or winding up of the Corporation the assets of the Corporation to be distributed are insufficient to permit the payment to all holders of Series C Preferred Stock and any other series of preferred stock ranking on a parity with Series C Preferred Stock with respect to rights on liquidation, dissolution or winding up, (including, in the case of a liquidation, dissolution or winding up other than a Statutory Liquidation, the Series D Preferred Stock) to receive their full preferential amounts, the entire assets of the Corporation shall be distributed among the holders of Series C Preferred Stock and all such other series ratably in accordance with their respective Liquidation Preference. 13 (iii) After payment to the holders of Series C Preferred Stock of the amounts set forth in paragraph (i) above, the entire remaining assets and funds of the Corporation legally available for distribution, if any, shall be distributed among the holders of Common Stock and the Series C Preferred Stock and the Series D Preferred Stock in proportion to the shares of Common Stock then held by them and the shares of Common Stock into which their shares of Series C Preferred Stock and Series D Preferred Stock are convertible (as adjusted from time to time in accordance with the terms of Section 4.5(f)) as of the date of the liquidation, dissolution or winding up of the Corporation. (iv) Neither the consolidation or merger of the Corporation with or into any other Person nor the sale or other distribution to another Person of all or substantially all the assets, property or business of the Corporation, shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Section 4.5(c). (d) Voting Rights. (i) Except as set forth in paragraph (ii) below, on all matters to be submitted to the stockholders (including, without limitation, the election of directors), the holders of the Series C Preferred Stock shall have the right and power to vote on any question or in any proceeding and to be represented on any question or in any proceeding and to be represented at, or to receive notice of, any meeting of stockholders in the same manner as holders of Voting Common Stock, and the Series C Preferred Stock shall vote together with the Common Stock as a single class. On any matters on which the holders of the Series C Preferred Stock shall be entitled to vote together with the holders of Common Stock, each holder of Series C Preferred Stock shall be entitled to the number of votes equal to the number of whole shares of Common Stock into which its shares of Series C Preferred Stock are convertible (as adjusted from time to time pursuant to Section 4.5(f)) on the record date for such vote. (ii) The affirmative vote of holders of not less than a majority of Series C Preferred Stock shall be required to (A) authorize, increase the authorized number of shares of or issue (including on conversion or exchange of any convertible or exchangeable securities or by reclassification) any shares of any class or classes of stock ranking senior to or pari passu with the Series C Preferred Stock or any additional shares of Series C Preferred Stock, (B) authorize, adopt or approve each amendment to this Restated Certificate of Incorporation that would increase or decrease the par value of the shares of Series C Preferred Stock, alter or change the powers, preferences or rights of the shares of Series C Preferred Stock or alter or change the powers, preferences or rights of any other capital stock of the Corporation if after such alteration or change such capital stock would rank senior to or pari passu with the Series C Preferred Stock, (C) amend, alter or repeal any provision of this Restated Certificate of Incorporation so as to affect the shares of Series C Preferred Stock adversely, or (D) authorize or issue any security 14 convertible into, exchangeable for or evidencing the right to purchase or otherwise receive any shares of any class or classes of stock senior to or pari passu with the Series C Preferred Stock. (e) Conversion. The shares of Series C Preferred Stock shall be convertible into shares of Common Stock as follows: (i) Optional Conversion. Each share of Series C Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, into the number of fully paid and non-assessable shares of Class A Common Stock of the Corporation as is determined by dividing the Liquidation Preference (as hereafter defined) by the Current Conversion Price (as defined in Section 4.5(f)) in effect at the time of conversion; provided that, unless and until the Tracked Common Stock shall be convertible into Class A Common Stock or Class B Common Stock in accordance with Section 4.7(e)(iii), in lieu of each share of Class A Common Stock issuable to a holder of Series C Preferred Stock pursuant to this paragraph, such holder shall instead receive .932656 shares of Class A Common Stock and .067344 shares of Class D Common Stock, until an aggregate of 12,407.01 shares of Class D Common Stock (or, if the Series D Preferred Stock shall theretofore have been converted into Series C Preferred Stock, an aggregate of 15,530.03 shares of Class D Common Stock) shall have been issued. For purposes of this Section 4.5(e), the "Initial Conversion Price" shall equal $1,000.00. (ii) Automatic Conversion. Upon the IPO Date, each share of Series C Preferred Stock then outstanding shall automatically be converted into such number of fully paid and non-assessable shares of Class A Common Stock of the Corporation as is determined by dividing the Initial Conversion Price by the Current Conversion Price then in effect; provided that, unless and until the Tracked Common Stock shall be convertible into Class A Common Stock or Class B Common Stock in accordance with Section 4.7(e)(iii), in lieu of each share of Class A Common Stock issuable to a holder of Series C Preferred Stock pursuant to this paragraph, such holder shall instead receive .932656 shares of Class A Common Stock and .067344 shares of Class D Common Stock, until an aggregate of 12,407.01 shares of Class D Common Stock (or, if the Series D Preferred Stock shall theretofore have been converted into Series C Preferred Stock, an aggregate of 15,530.03 shares of Class D Common Stock) shall have been issued. (iii) Fractional Shares. Fractional shares of Class A Common Stock may be issued upon conversion of shares of Series C Preferred Stock; provided however that, in lieu of any fractional share to which the holder would otherwise be entitled after determination of the aggregate full number of shares of Class A Common Stock issuable in respect of the Series C Preferred Stock then being converted, the Corporation shall have right, at its option, to pay cash equal to such fraction multiplied by the Market Price of a share of Class A Common Stock on such date. 15 (iv) Mechanics of Optional Conversion. In order for a holder of Series C Preferred Stock to convert such shares into shares of Class A Common Stock and Class D Common Stock, if applicable, such holder shall surrender the certificate or certificates for such shares of Series C Preferred Stock at the office of the transfer agent for the Series C Preferred Stock (or if the Corporation serves as its own transfer agent, at the principal office of the Corporation), together with written notice that such holder elects to convert all or any number of the shares of the Series C Preferred Stock represented by such certificate or certificates. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his or its attorney duly authorized in writing. The date of receipt of such certificates and notice by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) shall be the conversion date (the "Optional Conversion Date"). The Corporation shall, within ten Business Days after the Optional Conversion Date, issue and deliver at such office to such holder of Series C Preferred Stock, or to his or its nominees, a certificate or certificates for the number of whole shares of Class A Common Stock (and any shares of Series C Preferred Stock represented by the certificate delivered to the Corporation by the holder thereof that are not converted into Class A Common Stock) and Class D Common Stock, if applicable, issuable upon such conversion in accordance with the provisions hereof, together with cash in lieu of fractional shares calculated in accordance with paragraph (iii) of this Section 4.5(e). (v) Mechanics of Automatic Conversion. All holders of record of shares of Series C Preferred Stock will be given at least 30 but not more than 60 days' prior written notice of the date fixed (the "Automatic Conversion Date") and the place designated for automatic conversion of all shares of Series C Preferred Stock pursuant to this Section 4.5(e). Such notice will be sent by first class or registered mail, postage prepaid, to each record holder of Series C Preferred Stock at such holder's address last shown on the records of the transfer agent for the Series C Preferred Stock (or the records of the Corporation if it serves as its own transfer agent). On or before the Automatic Conversion Date, each holder of shares of Series C Preferred Stock shall surrender his or its certificate or certificates for all such shares to the Corporation at the place designated in such notice. If required by the Corporation, certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his or its attorney duly authorized in writing. On and after the Automatic Conversion Date, all rights with respect to the Series C Preferred Stock so converted, including the rights, if any, to receive notices and to vote, will terminate, except only the rights of the holders thereof, upon surrender of their certificate or certificates therefor, to receive certificates for the number of shares of Class A Common Stock and Class D Common Stock, if applicable, into which such Series C Preferred Stock has been converted, and payment of any declared but unpaid dividends thereon. As soon as practicable after the Automatic Conversion Date and the surrender of the certificate or certificates representing shares of 16 Series C Preferred Stock, the Corporation shall issue and deliver to such holder, or on his or its written order to his or its nominees, a certificate or certificates for the number of whole shares of Class A Common Stock and Class D Common Stock, if applicable, issuable upon such conversion in accordance with the provisions hereof, together with cash in lieu of fractional shares of Class A Common Stock calculated in accordance with paragraph (iii) of this Section 4.5(e). (vi) Reservation of Shares. The Corporation shall at all times when the Series C Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued stock, for the purpose of effecting the conversion of the Series C Preferred Stock, such number of its duly authorized shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series C Preferred Stock. Before taking any action which would cause Class A Common Stock, upon the conversion of Series C Preferred Stock, to be issued below the then par value of the shares of Class A Common Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Class A Common Stock to the holders of Series C Preferred Stock. (vii) Adjustments for Dividends. Upon any conversion of Series C Preferred Stock, no adjustment to the Initial Conversion Price or the Current Conversion Price shall be made for declared and unpaid dividends on the Series C Preferred Stock surrendered for conversion or on the Class A Common Stock and Class D Common Stock, if applicable, delivered upon conversion. (viii) Termination of Rights. All shares of Series C Preferred Stock which shall have been surrendered for conversion as herein provided or, as to shares of Series C Preferred Stock which are subject to automatic conversion pursuant to paragraph (ii) above, which have not been so surrendered prior to the Automatic Conversion Date, shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate on the Optional Conversion Date or the Automatic Conversion Date, except only the right of the holders thereof to receive shares of Class A Common Stock and Class D Common Stock, if applicable, in exchange therefor and payment of any declared and unpaid dividends thereon. On and as of the Optional Conversion Date or the Automatic Conversion Date, the shares of Class A Common Stock and Class D Common Stock, if applicable, issuable upon such conversion shall be deemed to be outstanding, and the holder thereof shall be entitled to exercise and enjoy all rights with respect to such shares of Class A Common Stock and Class D Common Stock, if applicable, including the rights, if any, to receive notices and to vote. Shares of Series C Preferred Stock converted into Class A Common Stock and Class D Common Stock, if applicable, will be restored to the status of authorized but unissued shares of preferred stock without 17 designation as to series, and may thereafter be issued, whether or not designated as shares of Series C Preferred Stock. (ix) No Conversion Charge or Tax. The issuance and delivery of certificates for shares of Class A Common Stock and Class D Common Stock, if applicable, upon the conversion of shares of Series C Preferred Stock shall be made without charge to the holder of shares of Series C Preferred Stock for any issue or transfer tax, or other incidental expense in respect of the issuance or delivery of such certificates or the securities represented thereby, all of which taxes and expenses shall be paid by the Corporation. (f) Adjustments to Conversion Price. (i) Current Conversion Price. The Initial Conversion Price shall be subject to adjustment from time to time and such conversion price as adjusted shall likewise be subject to further adjustment, all as hereinafter set forth. The term "Current Conversion Price" shall mean, as of any time, the Initial Conversion Price in case no adjustment shall have been made pursuant to this Section 4.5(f), or the Initial Conversion Price as adjusted pursuant to this Section 4.5(f), as the case may be. (ii) Adjustment Formula. If at any time the Corporation shall issue any shares of Common Stock (other than Excluded Stock, as defined in paragraph (vii) below) or any shares of a class or series convertible into Common Stock (other than Excluded Stock) or any Rights or Related Rights (as defined below) (collectively with the Common Stock, "Securities") (other than a dividend or other distribution payable in Common Stock or Convertible Securities, to which paragraph (iv) below applies) for no consideration or a consideration per share (the consideration in each case to be determined in the manner provided in clauses (e) and (f) of paragraph (iii) below) less than the Market Price, as in effect immediately prior to the issuance of such Securities, the Current Conversion Price in effect immediately prior to each such issuance shall forthwith be adjusted to a Current Conversion Price obtained by multiplying such Current Conversion Price in effect immediately prior to such issuance by a fraction having (i) a numerator equal to the sum of (x) the total number of shares of Common Stock outstanding on a Fully Diluted Basis immediately prior to such issuance multiplied by the Market Price as in effect immediately prior to such issuance, plus (y) the consideration received by the Corporation upon such issuance, and (ii) a denominator equal to the total number of shares of Common Stock outstanding on a Fully Diluted Basis immediately after such issuance, multiplied by the Market Price as in effect immediately prior to such issuance. (iii) Adjustment Considerations. For the purpose of any adjustment of the Current Conversion Price pursuant to paragraph (ii) above, the following provisions shall be applicable: 18 (a) In the case of the issuance of options or warrants to purchase, or rights to subscribe for, Common Stock other than Excluded Stock (collectively, the "Rights"), the aggregate maximum number of shares of Common Stock deliverable upon exercise of the Rights shall be deemed to have been issued at the time the Rights were issued, for an aggregate consideration equal to (x) the consideration (determined in the manner provided in clauses (e) and (f) below), if any, received by the Corporation upon the issuance of the Rights, plus (y) the minimum purchase price provided in the Rights for the Common Stock covered thereby; provided, however, that such shares of Common Stock deliverable upon the exercise of the Rights shall not be deemed to have been issued unless such aggregate consideration per share would be less than the Market Price as in effect on the date of and immediately prior to such issuance. (b) In the case of the issuance of securities by their terms convertible into or exchangeable for Common Stock other than Excluded Stock (collectively, the "Convertible Securities"), or options or warrants to purchase, or rights to subscribe for, securities by their terms convertible into or exchangeable for Common Stock other than Excluded Stock (collectively, the "Related Rights"), the aggregate maximum number of shares of Common Stock deliverable upon conversion, exchange or exercise of any Convertible Securities or Related Rights shall be deemed to have been issued at the time the Convertible Securities or the Related Rights were issued and for an aggregate consideration equal to (x) the consideration received by the Corporation upon issuance of the Convertible Securities or the Related Rights (excluding any cash received on account of accrued interest or accrued dividends), plus (y) the additional consideration, if any, to be received by the Corporation upon the conversion, exchange or exercise of the Convertible Securities or Related Rights (the consideration in each case to be determined in the manner provided in clauses (e) and (f) below); provided, however, that such shares of Common Stock deliverable upon such conversion, exchange or exercise of the Convertible Securities or Related Rights shall not be deemed to have been issued unless such aggregate consideration per share would be less than the Market Price as in effect on the date of and immediately prior to such issuance. (c) On any change in the number of shares of Common Stock deliverable upon the exercise of the Rights or Related Rights or upon the conversion, exchange or exercise of the Convertible Securities or on any change in the minimum purchase price of the Rights, Related Rights or Convertible Securities other than a change resulting from the anti-dilution provisions of the Rights, Related Rights or Convertible Securities, the Current Conversion Price shall forthwith be readjusted to such Current Conversion Price as would have been obtained had the adjustment made upon the issuance of such Rights, Related 19 Rights or Convertible Securities not converted, exchanged or exercised prior to such change, been made upon the basis of such change. (d) On the expiration of any of the Rights, Related Rights or Convertible Securities, the Current Conversion Price shall forthwith be readjusted to such Current Conversion Price as would have been obtained had the adjustment made upon the issuance of such Rights or Related Rights or the issuance of any such Convertible Securities been made upon the basis of the issuance of only the number of shares of Common Stock actually issued upon the exercise of such Rights or Related Rights or the conversion, exchange or exercise of any such Convertible Securities. (e) In the case of the issuance of Securities for cash, the consideration shall be deemed to be the amount of cash paid therefor. (f) In the case of the issuance of Securities for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined in good faith by the Board of Directors of the Corporation, whose determination shall be conclusive. (iv) Effect of Dividends, Distributions, Subdivisions or Combinations. If the Corporation declares a dividend or other distribution payable in Common Stock or Convertible Securities or subdivides its outstanding shares of Common Stock into a larger number or combines its outstanding shares of Common Stock into a smaller number, then the Current Conversion Price in effect immediately prior to such dividend, other distribution, subdivision or combination, as the case may be, shall forthwith be adjusted to that price determined by multiplying the Current Conversion Price by a fraction (x) the numerator of which shall be the total number of shares of Common Stock outstanding on a Fully Diluted Basis immediately prior to such dividend, other distribution, subdivision or combination and (y) the denominator of which shall be the total number of shares of Common Stock outstanding on a Fully Diluted Basis immediately after such dividend, other distribution, subdivision or combination. (v) Effect of Distributions In Kind. In case the Corporation shall distribute to the holders of its capital stock any additional shares of its capital stock (other than Securities), stock or other securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends) or options, warrants or rights (excluding Rights or Related Rights), then, in each such case, immediately following the record date fixed for the determination of the holders of Common Stock entitled to receive such distribution, the Current Conversion Price in effect thereafter shall be determined by multiplying the Current Conversion Price in effect immediately prior to such record date by a fraction (A) the numerator of which shall be an amount equal to the remainder of (x) the Market Price of one share of Common Stock 20 less (y) the fair value (as determined in good faith by the Corporation's Board of Directors, whose determination shall be conclusive) of the stock, securities, evidences of indebtedness, assets, options, warrants or rights so distributed in respect of one share of Common Stock, as of the record date applicable to such distribution, as the case may be, and (B) the denominator of which shall be the Market Price of one share of Common Stock, as of the record date applicable to such distribution. Such adjustment shall be made on the date such distribution is made, and shall become effective at the opening of business on the business day following the record date for the determination of stockholders entitled to such distribution. (vi) Reorganization, Reclassification and Merger Adjustment. If there occurs any capital reorganization or any reclassification of the Class A Common Stock of the Corporation, the consolidation or merger of the Corporation with or into another Person (other than a merger or consolidation of the Corporation in which the Corporation is the continuing corporation and which does not result in any reclassification or change of outstanding shares of its Class A Common Stock) or the sale or conveyance of all or substantially all of the assets of the Corporation to another Person, then each share of Series C Preferred Stock shall thereafter be convertible into the same kind and amounts of securities (including shares of stock) or other assets, or both, which were issuable or distributable to the holders of outstanding Class A Common Stock of the Corporation upon such reorganization, reclassification, consolidation, merger, sale or conveyance, in respect of that number of shares of Class A Common Stock into which such share of Series C Preferred Stock might have been converted immediately prior to such reorganization, reclassification, consolidation, merger, sale or conveyance; and, in any such case, appropriate adjustments (as determined in good faith by the Board of Directors of the Corporation, whose determination shall be conclusive) shall be made to assure that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any securities or other assets thereafter deliverable upon the conversion of the Series C Preferred Stock. (vii) Notice of Changes. Whenever the Current Conversion Price shall be adjusted as provided in this Section 4.5(f), the Corporation shall forthwith file, at the office of the transfer agent for the Series C Preferred Stock, at the principal office of the Corporation or at such other place as may be designated by the Corporation, a statement, certified by the chief financial officer of the Corporation, showing in detail the facts requiring such adjustment and the Current Conversion Price that shall be in effect after such adjustment. The Corporation shall also cause a copy of such statement to be sent by first class mail, postage prepaid, to each holder of record of Series C Preferred Stock at such holder's address as shown in the records of the Corporation. (viii) Excluded Stock. As used in this Section 4.5(f), "Excluded Stock" shall mean (A) a maximum of that number of shares representing 5% of all shares of Common Stock outstanding on the date hereof on a Fully-Diluted Basis (such amount to 21 be appropriately adjusted in the event of any stock dividend, stock split or combination, or similar recapitalization affecting the Common Stock) of Common Stock or options for the purchase thereof issued, sold or granted, in the past or future, by the Corporation to its employees, directors or consultants pursuant to bona fide employee stock purchase, option or similar benefit plans or other arrangements approved by the Board of Directors of the Corporation, including the three directors nominated by the Cash Equity Investors and the two directors nominated by AT&T PCS pursuant to the Stockholders Agreement, (B) with the approval of holders of a majority of the outstanding shares of Series C Preferred Stock, a maximum of 5% of the outstanding shares of Common Stock on a Fully Diluted Basis consisting of Common Stock or Convertible Securities issued to creditors in connection with incurrence of indebtedness, and (C) any shares of Series C Preferred Stock or Common Stock issued upon conversion of Preferred Stock as provided herein. (g) Certain Restrictions. (i) Notwithstanding the provisions of Sections 4.5(b), cash dividends on the Series C Preferred Stock may not be declared, paid or set apart for payment, nor may the Corporation redeem, purchase or otherwise acquire any shares of Series C Preferred Stock, if (A) the Corporation is not solvent or would be rendered insolvent thereby or (B) at such time the terms and provisions of any law or agreement of the Corporation, including any agreement relating to its indebtedness, specifically prohibit such declaration, payment or setting apart for payment or such redemption, purchase or other acquisition, or provide that such declaration, payment or setting apart for payment or such redemption, purchase or other acquisition would constitute a violation or breach thereof or a default thereunder. (ii) So long as shares of Series C Preferred Stock are outstanding or dividends payable on shares of Series C Preferred Stock have not been paid in full in cash, the Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of Common Stock or other shares of capital stock of the Corporation ranking junior to or on a parity basis with the Series C Preferred Stock (including the Series D Preferred Stock), except with the prior written consent of holders of a majority of the outstanding shares of Series C Preferred Stock, except that the Corporation may acquire, in accordance with the terms of any agreement between the Corporation and its employees, shares of Common Stock from its employees at a price equal to such employee's purchase price therefor without such consent. (iii) The Corporation shall not permit any Subsidiary of the Corporation, or cause any other Person, to make any distribution with respect to, or purchase or otherwise acquire for consideration, any shares of Common Stock or other shares of capital stock of the Corporation ranking junior to or on a parity basis with the Series C Preferred Stock (including the Series D Preferred Stock) unless the Corporation could, 22 pursuant to paragraph (i) above, make such distribution or purchase or otherwise acquire such shares at such time and in such manner. (h) Redemption. The Series C Preferred Stock is not redeemable. (i) Sinking Fund. There shall be no sinking fund for the payment of dividends or liquidation preferences on the Series C Preferred Stock. 4.6 Powers, Preferences and Rights of the Series D Preferred Stock. (a) General. The powers, preferences and rights of the Series D Preferred Stock, and the qualifications, limitations, and restrictions thereof, shall be identical to those of the Series C Preferred Stock, except that (i) the Series D Preferred Stock shall rank with respect to the other series and classes of capital stock of the Corporation as provided in paragraph (b) below; (ii) in addition to the conversion rights set forth in Section 4.5(e) (subject to clause (iv) below), shares of Series D Preferred Stock shall be convertible at the option of the holder thereof, at any time and from time to time, into an equivalent number of fully paid and non-assessable shares of Series C Preferred Stock, any such conversion being made in accordance with the applicable provisions of Section 4.5(e); (iii) the shares of Series D Preferred Stock shall not have any right to vote on any matters to be voted on by the stockholders of the Corporation, and the shares of Series D Preferred Stock shall not be included in determining the number of shares voting or entitled to vote on any such matters, except that it shall have the right to vote on matters specified in Section 4.5(d)(ii) or as otherwise provided by law; (iv) (A) unless and until the Tracked Common Stock shall be convertible into Class A Common Stock or Class B Common Stock in accordance with Section 4.7(e)(iii), in lieu of each share of Class A Common Stock issuable to a holder of Series D Preferred Stock pursuant to clause (ii) above, such holder shall instead receive .932656 shares of Class A Common Stock and .067344 shares of Class D Common Stock, until an aggregate of 3,123.02 shares of Class D Common Stock shall have been issued and (B) shares of Series D Preferred Stock shall not be subject to automatic conversion upon the IPO Date in accordance with Section 4.5(e)(ii); provided, however, that (x) on and after the IPO Date, the Current Conversion Price shall be deemed to be the Current Conversion Price as of the IPO Date and (y) the Series D Preferred Stock shall be renamed "Senior Common Stock" upon the IPO Date; and (v) the words "Series D Preferred Stock" and "Series C Preferred Stock" shall be substituted for all references in Section 4.5 to Series C Preferred Stock and Series D Preferred Stock, respectively. (b) Ranking. The Series D Preferred Stock shall rank (i) junior to the Series A Preferred Stock and the Series B Preferred Stock with respect to the payment of dividends and the distribution of assets on liquidation, dissolution or winding up, (ii) senior to the Series C Preferred Stock with respect to the distribution of assets on a Statutory Liquidation, (iii) on a parity with the Series C Preferred Stock with respect to the distribution of assets on liquidation, dissolution or winding up (other than on a Statutory Liquidation), (iv) on a parity with the Series C Preferred Stock and the Common Stock with respect to the payment of dividends, and 23 (v) senior to the Common Stock and any series or class of the Corporation'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 the distribution of assets on liquidation, dissolution and winding up. (c) Reservation of Shares. The Corporation shall at all times when the Series D Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued stock, for the purpose of effecting the conversion of the Series D Preferred Stock, such number of its duly authorized shares of Series C Preferred Stock and Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series D Preferred Stock. 4.7 Common Stock. (a) General. Except as otherwise provided herein, all shares of Common Stock issued and outstanding shall be identical, and shall entitle the holders thereof to the same rights, powers and privileges of stockholders under Delaware law. For purposes of this Section 4.7 (and the definitions relating thereto), the Class A Common Stock, the Class B Common Stock and the Voting Preference Stock are herein collectively referred to as the "Non-Tracked Common Stock" and the Class C Common Stock and the Class D Common Stock are herein collectively referred to as the "Tracked Common Stock". (b) Dividends. Subject to Section 4.8(b) and the express terms of any outstanding series of Preferred Stock, dividends may be paid in cash or otherwise with respect to each class of Common Stock out of the assets of the Corporation, upon the terms, and subject to the limitations, provided in this Section 4.7(b), as the Board of Directors may determine. (i) Dividends on the Non-Tracked Common Stock. Dividends on the Non-Tracked Common Stock may be declared and paid only out of the excess of (A) the funds of the Corporation legally available therefor over (B) the Tracked Business Available Dividend Amount (the "Non-Tracked Business Available Dividend Amount"). (ii) Dividends on Tracked Common Stock. Dividends on the Tracked Common Stock may be declared and paid only out of the lesser of (A) the funds of the Corporation legally available therefor and (B) the Tracked Business Available Dividend Amount. The Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of Tracked Common Stock unless concurrently therewith the Corporation shall declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, as the case may be, on the same terms, all shares of Tracked Common Stock ratably in accordance with the number of shares of each class of Tracked Common Stock then outstanding. 24 (iii) Discrimination in Dividends Among the Tracked and Non-Tracked Common Stock. The Board of Directors may at any time, subject to the provisions of Sections 4.7(b)(i) and (ii) and Section 4.8, declare and pay dividends exclusively on the Non-Tracked Common Stock, exclusively on the Tracked Common Stock or on both such categories of Common Stock in equal or unequal amounts, notwithstanding the relative amounts of the Non-Tracked Business Available Dividend Amount and the Tracked Business Available Dividend Amount. (c) Voting. (i) The holders of shares of Common Stock shall be entitled to such voting rights as hereinafter provided, and shall be entitled to notice of any stockholders' meeting and to vote upon such matters as provided herein and in the by-laws of the Corporation, and as may be provided by law. Holders of any class of Common Stock shall not be entitled to cumulate their votes for any purpose. Except as otherwise required by law or provided herein, regardless of the number of shares of any class of Common Stock then outstanding, each class of Common Stock shall be entitled to the number of votes enumerated below and the number of votes or fractional votes to which each share of a particular class of Common Stock shall be entitled shall be the quotient determined by dividing the aggregate number of votes to which such class of Common Stock is entitled by the number of shares of such class of Common Stock then outstanding. Except as otherwise required by law or provided herein, the Class A Common Stock, together with the Series C Preferred Stock, shall have 4,990,000 votes; the Class B Common Stock shall have no votes; the Class C Common Stock shall have no votes; the Class D Common Stock shall have no votes; and the Voting Preference Common Stock shall have 5,010,000 votes. (ii) A quorum for the transaction of business shall be present when a majority of the shares of Voting Preference Common Stock outstanding as of the record date are present, a majority of the shares of all classes of Common Stock other than the Voting Preference Common Stock outstanding as of the record date are present and when shares of all classes of Common Stock with at least 5,010,000 votes are present, except that (x) with respect to actions requiring a majority vote of the Class A Common Stock, the presence of a majority of the outstanding shares of Class A Common Stock shall also be required for a quorum to be present, (y) with respect to actions requiring the vote of a majority vote of the Class C Common Stock, the presence of a majority of the outstanding shares of Class C Common Stock shall also be required for a quorum to be present and (z) with respect to actions requiring the vote of a majority vote of the Class D Common Stock, the presence of a majority of the outstanding shares of Class D Common Stock shall also be required for a quorum to be present. Except as otherwise required by law or provided herein, at any meeting at which a quorum of the Voting Preference Common Stock is present, the vote of the Voting Preference Common Stock having 25 5,010,000 votes shall be sufficient to approve any action required to be approved by the holders of the Common Stock. (iii) In any matter requiring a separate class vote of holders 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 shall be entitled to one vote per share. (iv) In the event that the Corporation shall have received an opinion of regulatory counsel of nationally recognized standing to the effect that the rules, regula tions or policies of the Federal Communications Commission (the "FCC") permit the Class A Common Stock and the Voting Preference Common Stock (x) to be voted as a single class on all matters, (y) to be treated as a single class for purposes of all quorum requirements and (z) to have one vote per share, then, unless the Board of Directors of the Corporation shall have determined, within 30 days after the date of receipt of such opinion, that obtaining the FCC consent described below would be reasonably expected to have a significant detrimental effect on the Corporation, the Corporation shall, upon the affirmative vote of 66-2/3% or more of the Class A Common Stock, seek consent from the FCC to permit the Class A Common Stock and Voting Preference Common Stock to vote and act as a single class in the manner described above. From and after the date that such consent is obtained, the Class A Common Stock and the Voting Preference Common Stock shall be voted as a single class on all matters, shall be treated as a single class for purposes of all quorum requirements, and shall have one vote per share; provided, that the voting rights of the Class B Common Stock, Class C Common Stock and Class D Common Stock and the Preferred Stock shall remain unaffected. (v) 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 this Restated Certificate of Incorporation that adversely affects the powers, preferences or special rights of the holders of the Class B Common Stock. (d) Dissolution, Liquidation or Winding Up. Upon the dissolution, liquidation or winding up of the Corporation, after any preferential amounts to be distributed to the holders of the Preferred Stock and any other class or series of stock having a preference over the Common Stock then outstanding have been paid or declared and funds sufficient for the payment thereof in full set apart for payment, (i) the holders of the Tracked Common Stock shall be entitled to receive pro rata the Tracked Business Available Liquidation Amount and (ii) the holders of the Non-Tracked Common Stock shall be entitled to receive pro rata the excess of (A) all the remaining assets of the Corporation available for distribution to its stockholders over (B) the Tracked Business Available Liquidation Amount. 26 (e) Conversion. (i) Each share of Class B Common Stock may, at the option of the holder thereof, at any time, be converted into one fully paid and non-assessable share of Class A Common Stock. (ii) Each share of Class A Common Stock may, at the option of the holder thereof, at any time, be converted into one fully paid and non-assessable share of Class B Common Stock. (iii) In the event that the Corporation shall have received an opinion of regulatory counsel of nationally recognized standing to the effect that the rules, regula tions or policies of the FCC permit the conversion of shares of Tracked Common Stock into Class A Common Stock or Class B Common Stock, then, unless the Board of Directors of the Corporation shall have determined, within 30 days after receipt of such opinion, that permitting such conversion would be reasonably expected to have a significant detrimental effect on the Corporation, shares of Class C Common Stock and Class D Common Stock shall, upon the affirmative vote of 66-2/3% or more of the Class A Common Stock, be convertible as follows: (x) each share of Class C Common Stock may, at the option of the holder thereof, be converted into one fully paid and non-assessable share of Class A Common Stock or Class B Common Stock, and (y) each share of Class D Common Stock may, at the option of the holder thereof, be converted into one fully paid and non-assessable share of Class A Common Stock or Class B Common Stock. 4.8 (a) Non-Tracked Common Stock. (i) Changes in Capital Stock. The Corporation shall not effect any change in or reclassification of any class or series of the outstanding Non-Tracked Common Stock, whether through stock dividends, stock splits, reverse stock splits, combinations or otherwise, without the payment to the Corporation of any consideration therefor in money, services or property, unless concurrently therewith the Corporation shall effect a corresponding change in each other class and series of the outstanding Non-Tracked Common Stock. (ii) Dividends and Distributions. The Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of Non-Tracked Common Stock unless concurrently therewith the Corporation shall declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, as the case may be, on the same terms, all shares of Non-Tracked Common Stock ratably in accordance with the number of shares of each class and series of Non-Tracked Common Stock then outstanding. 27 (iii) Notices. Any written notice or communication by the Corporation to holders of any class or series of Non-Tracked Common Stock shall be sent to all holders of Non- Tracked Common Stock. (b) Tracked Common Stock. (i) Changes in Capital Stock. The Corporation shall not effect any change in or reclassification of any class or series of the outstanding Tracked Common Stock, whether through stock dividends, stock splits, reverse stock splits, combinations or otherwise, without the payment to the Corporation of any consideration therefor in money, services or property, unless concurrently therewith the Corporation shall effect a corresponding change in each other class and series of the outstanding Tracked Common Stock. (ii) Dividends and Distributions. The Corporation shall not declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, any shares of Tracked Common Stock unless concurrently therewith the Corporation shall declare or pay cash dividends on, or redeem, purchase or otherwise acquire for consideration, as the case may be, on the same terms, all shares of Tracked Common Stock ratably in accordance with the number of shares of each class and series of Tracked Common Stock then outstanding. (iii) Notices. Any written notice or communication by the Corporation to holders of any class or series of Tracked Common Stock shall be sent to all holders of Tracked Common Stock. 4.9 Exchange of Capital Stock. Notwithstanding any other provision of this Restated Certificate of Incorporation to the contrary, in the event that AT&T Wireless PCS Inc. terminates its obligations under Section 8.6 of the Stockholders Agreement pursuant to Section 8.8(c) thereof with respect to any Overlap Territory (as defined therein) (any such termination being referred to hereinafter as the "Exchange Event"), the following provisions shall apply: (a) Right to Exchange. The Corporation shall have the right, exercisable in its sole discretion by written notice (the "Exchange Notice") given to each Initial Holder within 60 days after the Exchange Event, to: (i) require each Initial Holder and each Section 4.9 Transferee to exchange for an equivalent number of shares of Series B Preferred Stock either (A) all of the shares of Series A Preferred Stock then owned by such Initial Holder and such Section 4.9 Transferee or (B) a number of shares of Series A Preferred Stock then owned by each such holder equal to the product of (x) the number of shares of Series A Preferred Stock then owned by such holder multiplied by (y) a fraction, the numerator of which is equal to the number of POPs (as defined in the Stockholders Agreement) in the Overlap 28 Territory and the denominator of which is equal to the total number of POPs in the Territory (as defined in the Stockholders Agreement); and (ii) require each Initial Holder and each Section 4.9 Transferee to exchange, for a number of shares of Series B Preferred Stock determined in accordance with paragraph (b) below, either (A) all of the shares of Series D Preferred Stock owned by such Initial Holder on the date hereof (or shares of Series C Preferred Stock or Common Stock into which such shares or any shares of Series A Preferred Stock or Series C Preferred Stock shall have been converted) and that such Initial Holder or such Section 4.9 Transferee, as the case may be, continues to own on the date of delivery of the Exchange Notice (any such shares of Series D Preferred Stock, Series C Preferred Stock or Common Stock being referred to hereinafter collectively as "Original Shares") or (B) a number of Original Shares of Series D Preferred Stock, Series C Preferred Stock and/or Common Stock, as the case may be, equal to the product of (x) the number of Original Shares of Series D Preferred Stock, Series C Preferred Stock and/or Common Stock, as the case may be, then owned by each such holder, multiplied by (y) a fraction, the numerator of which is equal to the number of POPs in the Overlap Territory and the denominator of which is equal to the total number of POPs in the Territory; provided, that (x) if the Corporation exercises its right under clause (i)(A) of this paragraph (a), it shall be required to exercise its right under clause (ii)(A) of this paragraph (a), and vice-versa; and if the Corporation exercises its right under clause (i)(B) of this paragraph (a), it shall be required to exercise its right under clause (ii)(B) of this paragraph (a), and vice-versa and (y) the provisions of this Section 4.9(a) shall not apply to any Section 4.9 Transferee which is a Cash Equity Investor. (Shares of Series A Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and/or Common Stock subject to exchange pursuant to this Section 4.9 are hereinafter referred to collectively as "Exchange Shares.") (b) Number of Shares of Series B Preferred Stock Issuable in Exchange. The number of shares of Series B Preferred Stock issuable in exchange for Original Shares pursuant to clause (ii) of paragraph (a) above shall be equal to the quotient of the aggregate purchase price paid by the Initial Holder for the Original Shares being exchanged, divided by the Liquidation Preference of the Series B Preferred Stock. (c) Fractional Shares. Fractional shares of Series B Preferred Stock may be issued upon exchange of Exchange Shares; provided however that, in lieu of any fractional shares to which the holder would otherwise be entitled after determination of the aggregate full number of shares of Series B Preferred Stock issuable in respect of the Exchange Shares then being exchanged, the Corporation shall have the right, at its option, to pay cash equal to such fraction multiplied by the Market Price of a share of Common Stock on such date. 29 (d) Mechanics of Exchange. The Exchange Notice shall specify the date fixed for the exchange (the "Exchange Date"), which shall be at least ten but no more than 60 days following delivery of the Exchange Notice, and the place designated for exchange of the Exchange Shares pursuant to this Section 4.9. Such notice will be sent by first class or registered mail, postage prepaid, to each Initial Holder at such holder's address last shown on the records of the transfer agent for the Series A Preferred Stock (or the records of the Corporation if it serves as its own transfer agent). On or before the Exchange Date, each Initial Holder shall surrender its certificate or certificates for all such shares to the Corporation at the place designated in such notice. If required by the Corporation, certificates surrendered for exchange shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the Initial Holder or its attorney duly authorized in writing. (e) Termination of Rights. On and after the Exchange Date (whether or not the applicable certificates have theretofore been surrendered), all rights with respect to the Exchange Shares, including the rights, if any, to receive notices and to vote, will terminate, except only the rights of each Initial Holder and Section 4.9 Transferees to receive certificates for the number of shares of Series B Preferred Stock into which such Exchange Shares have been exchanged, upon surrender of its certificate or certificates therefor, and payment of any declared but unpaid dividends thereon (which shall accrue and be payable at the times and on the other terms applicable to such dividends when declared) and payment of any deferred dividends in respect of Series A Preferred Stock which shall be payable as set forth in Section 4.3(b)(iii). Within ten Business Days after the Exchange Date, the Corporation shall issue and deliver to each Initial Holder, or on its written order to its nominees, a certificate or certificates for the number of whole shares of Series B Preferred Stock issuable upon such exchange in accordance with the provisions hereof, together with cash in lieu of fractional shares calculated in accordance with paragraph (c) of this Section 4.9. (f) Reservation of Shares. The Corporation shall at all times reserve and keep available for issuance upon the exchange of Exchange Shares the maximum number of its authorized but unissued shares of Series B Preferred Stock as is reasonably anticipated to be sufficient to permit the exchange of all outstanding Exchange Shares, and shall take all action required to increase the authorized number of shares of Series B Preferred Stock if at any time there shall be insufficient authorized but unissued shares of Series B Preferred Stock to permit such reservation or to permit the exchange of all outstanding Exchange Shares. (g) Adjustments for Dividends. Upon any exchange of shares of Series A Preferred Stock or Series D Preferred Stock, no adjustment to the rate of conversion shall be made for accrued and unpaid dividends (whether or not declared) on the Series A Preferred Stock or Series D Preferred Stock, as the case may be, surrendered for exchange or on the Series B Preferred Stock delivered upon exchange. (h) No Exchange Charge or Tax. The issuance and delivery of certificates for shares of Series B Preferred Stock upon the exchange of Exchange Shares shall be made without 30 charge to an Initial Holder for any issue or transfer tax, or other incidental expense in respect of the issuance or delivery of such certificates or the securities represented thereby, all of which taxes and expenses shall be paid by the Corporation. 4.10 Redemption of Capital Stock; FCC Approval. (a) Notwithstanding any other provision of this Restated Certificate of Incorporation to the contrary, outstanding shares of capital stock of the Corporation held by Disqualified Holders shall always be subject to redemption by the Corporation, by action of the Board of Directors, if, in the judgment of the Board of Directors, such action should be taken, pursuant to Section 151(b) of the GCL or any other applicable provision of law, to the extent necessary to prevent the loss or secure the reinstatement of any license or franchise from any governmental agency held by the Corporation or any of its Subsidiaries to conduct any portion of the business of the Corporation or any of its Subsidiaries, which license or franchise is conditioned upon some or all of the holders of the Corporation's stock possessing prescribed qualifications. The terms and conditions of such redemption shall be as follows: (i) the redemption price of the shares to be redeemed pursuant to this Section 4.10 shall be equal to the lesser of (x) the Market Price or (y) if such stock was purchased by such Disqualified Holder within one year of the Section 4.10 Redemption Date, such Disqualified Holder's purchase price for such shares; (ii) the redemption price of such shares may be paid in cash, Redemption Securities or any combination thereof; (iii) if less than all the shares held by Disqualified Holders are to be redeemed, the shares to be redeemed shall be selected in such manner as shall be determined by the Board of Directors, which may include selection first of the most recently purchased shares thereof, selection by lot or selection in any other manner determined by the Board of Directors; (iv) at least 30 days' written notice of the Section 4.10 Redemption Date shall be given to the record holders of the shares selected to be redeemed (unless waived in writing by any such holder); provided, however, that only ten days' written notice of the Section 4.10 Redemption Date shall be given to record holders if the cash or Redemption Securities necessary to effect the redemption shall have been deposited in trust for the benefit of such record holders and subject to immediate withdrawal by them upon surrender of the stock certificates for their shares to be redeemed; provided, further, that the record holders of the shares selected to be redeemed may transfer such shares prior to the Section 4.10 Redemption Date to any holder that is not a Disqualified Holder and, thereafter, for so long as such shares are not held by a Disqualified Holder, such shares shall not be subject to redemption by the Corporation; 31 (v) from and after the Section 4.10 Redemption Date, any and all rights of whatever nature (including without limitation any rights to vote or participate in dividends declared on stock of the same class or series as such shares) with respect to the shares selected from redemption held by Disqualified Holders on the Section 4.10 Redemption Date shall cease and terminate and such Disqualified Holders thenceforth shall be entitled only to receive the cash or Redemption Securities payable upon redemption; and (vi) such other terms and conditions as the Board of Directors shall determine. (b) FCC Approval. Notwithstanding anything herein to the contrary, if FCC or other regulatory approval is required to be obtained prior to the conversion of shares of any series or class of Preferred Stock or Common Stock, the holder thereof may nevertheless elect to convert any or all of its shares by written notice given to the Company in accordance with the applicable provision hereof, provided, that such conversion shall not become effective until the close of business on the date of the receipt of the last of any such approvals and of the surrender of the certificates representing the shares of the applicable Preferred Stock or Common Stock to be converted, and the rights of the holder thereof shall continue in full force and effect pending the receipt of all such approvals, except that, in the case of the Series A Preferred Stock, no dividends shall be payable in respect of the period following the Series A Conversion Date, unless the required approvals are not obtained and the conversion has not been effected within one year of the Series A Conversion Date and the applicable conversion notice is withdrawn, in which event the obligation to pay dividends from and after the Series A Conversion Date shall be reinstated in accordance with the terms of Section 4.3(b). 4.11 Definitions. For the purposes of this Restated Certificate of Incorporation, the following terms shall have the meanings indicated: "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. "Appraisal Procedure" means the following procedure for determining the Market Price, for the purpose of calculating the Series A Conversion Rate, in the event that the shares of Class A Common Stock are not listed or admitted for trading on any national securities exchange and are not quoted on NASDAQ or any similar service: (i) Two independent accounting or investment banking firms of nationally recognized standing (each, an "Appraiser"), one chosen by the Corporation and 32 one by the holders of a majority of the outstanding shares of Series A Preferred Stock, shall each determine and attempt to mutually agree upon, the Market Price. Each party shall deliver a notice to the other appointing its Appraiser within 15 days after the applicable notice and surrender pursuant to Section 4.3(iv). If either the Corporation or such holders fail to appoint an appraiser within such 15-day period, the Market Price shall be determined by the Appraiser that has been so appointed. (ii) If within 30 days after appointment of the two Appraisers they are unable to agree upon the Market Price, an independent accounting or investment banking firm of nationally recognized standing shall within ten days thereafter be chosen to serve as a third Appraiser by the mutual consent of such first two Appraisers. The determination of the Market Price by the third Appraiser so appointed and chosen shall be made within 30 days after the selection of such third Appraiser. (iii) If three Appraisers shall be appointed and the determination of one Appraiser is disparate from the middle determination by more than twice the amount by which the other determination is disparate from the middle determination, then the determination of such Appraiser shall be excluded, the remaining two determinations shall be averaged, and such average shall be binding and conclusive on the Corporation and the holders of the Series A Preferred Stock; otherwise the average of all three determinations shall be binding and conclusive on the Corporation and the holders of the Series A Preferred Stock. (iv) In connection with any appraisal conducted pursuant to this Appraisal Procedure, the Appraiser shall adhere to the guidelines provided in the definition of "Market Price" set forth below, including the proviso thereto. (v) The fees and expenses of each Appraiser shall be borne by the Corporation. "Board of Directors" has the meaning specified in Section 4.2(a). "Business Day" shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required by law or executive order to close. "Class A Common Stock" has the meaning specified in Section 4.1. "Class B Common Stock" has the meaning specified in Section 4.1. "Class C Common Stock" has the meaning specified in Section 4.1. "Class D Common Stock" has the meaning specified in Section 4.1. 33 "Closing Price" shall mean, with respect to each share of any class or series of capital stock for any day, (i) the last reported sale price regular way or, in case no such sale takes place on such day, the average of the closing bid and asked prices regular way, in either case as reported on the principal national securities exchange on which such class or series of capital stock is listed or admitted for trading or (ii) if such class or series of capital stock is not listed or admitted for trading on any national securities exchange, the last reported sale price or, in case no such sale takes place on such day, the average of the highest reported bid and the lowest reported asked quotation for such class or series of capital stock, in either case as reported on NASDAQ or a similar service if NASDAQ is no longer reporting such information. "Common Stock" has the meaning specified in Section 4.1. "Disqualified Holder" shall mean any holder of shares of capital stock of the Corporation whose holding of such stock, either individually or when taken together with the holding of shares of capital stock of the Corporation by any other holders, may result, in the judgment of the Board of Directors, in the loss of, or the failure to secure the reinstatement of, any license or franchise from any governmental agency held by the Corporation or any of its Subsidiaries or Affiliates to conduct any portion of the business of the Corporation or any of its Subsidiaries or Affiliates. "Dividend Payment Date" shall mean the last day of each March, June, September and December, except that if any Dividend Payment Date is not a Business Day, then the next succeeding Business Day shall be the Dividend Payment Date. "Excluded Stock" has the meaning specified in Section 4.5(f)(vii). "Fully Diluted Basis" shall mean, with respect to the outstanding shares of Common Stock, the number of shares of Common Stock outstanding assuming the conversion of all outstanding convertible securities (other than the Series A Preferred Stock) and the exercise of all outstanding warrants, options or other rights to subscribe for or purchase any shares of Common Stock. "Initial Holder" means AT&T Wireless PCS Inc., a Delaware corporation, TWR Cellular, Inc., a Maryland corporation, and/or any of its Affiliates that is a Subsidiary of AT&T Corp. "Invested Amount" means, as of any date with respect to each share of Series C Preferred Stock held by any stockholder, an amount equal to the quotient of (i) the aggregate paid-in capital actually paid with respect to all shares of Series C Preferred Stock held by such stockholder as of such date divided by (ii) the total number of shares of Series C Preferred Stock held by such stockholder. 34 "IPO Date" shall mean the first date on which (a) the Common Stock shall have been registered pursuant to an effective Registration Statement under the Securities Act of 1933, as amended, (b) the aggregate gross proceeds received by the Company in connection with such Registration Statement(s) equals or exceeds $50 million, (c) the Common Stock shall be listed for trading on the New York Stock Exchange or the American Stock Exchange or authorized for trading on NASDAQ, including without limitation its National Market System and (d) the price per share paid by purchasers of Common Stock issued in a public offering by the Company equals at least 125% of the Liquidation Preference. "Junior Stock" shall mean, with respect to shares of Series A Preferred Stock or Series B Preferred Stock, any capital stock of the Corporation, including without limitation the Series C Preferred Stock, Series D Preferred Stock and the Common Stock, ranking junior to the Series A Preferred Stock or Series B Preferred Stock, as the case may be, with respect to dividends, distribution in liquidation or any other preference, right or power. "Liquidation Preference" shall mean, as of any date, and subject to adjustment for subdivisions or combinations affecting the number of shares of the applicable series of Preferred Stock: (i) with respect to each share of Series A Preferred Stock and Series B Preferred Stock, $1,000 plus declared but unpaid dividends thereon; (ii) with respect to each share of Series C Preferred Stock, the Invested Amount plus declared but unpaid dividends on such share (if any), plus an amount equal to interest on the Invested Amount at the rate of six and one-half percent (6.5%) per annum, compounded quarterly; and (iii) with respect to each share of Series D Preferred Stock, $1,000 plus declared but unpaid dividends thereon (if any), plus an amount equal to interest on $1,000 at the rate of six and one-half percent (6.5%) per annum, compounded quarterly, from the date of issuance of such share to and including the date of the calculation. "Market Price" shall mean, with respect to each share of any class or series of capital stock for any day, (i) the average of the daily Closing Prices for the ten consecutive trading days commencing 15 days before the day in question or (ii) if on such date the shares of such class or series of capital stock are not listed or admitted for trading on any national securities exchange and are not quoted on NASDAQ or any similar service, the cash amount that a willing buyer would pay a willing seller (neither acting under compulsion) in an arm's-length transaction without time constraints per share of such class or series of capital stock as of such date, viewing the Corporation on a going concern basis, as determined (A) in the case of a determination of "Market Price" for the purpose of calculating the Series A Conversion Rate, pursuant to the Appraisal Procedure and (B) in the case of a determination of Market Price for any other purpose, in good faith by the Board of Directors, whose determination shall be 35 conclusive; provided that, in determining such cash amount, the following shall be ignored: (x) any contract or legal limitation in respect of shares of Common Stock or Preferred Stock, including transfer, voting and other rights, (y) the "minority interest" or "control" status of shares of Common Stock into which shares of Series A Preferred Stock would be converted, and (z) any illiquidity arising by contract in respect of the shares of Common Stock and any voting rights or control rights amongst the stockholders. "NASDAQ" shall mean the National Association of Securities Dealers Automated Quotations System. "Non-Tracked Common Stock" has the meaning specified in Section 4.7(a). "Non-Tracked Business Available Dividend Amount" has the meaning specified in Section 4.7(b)(i). "Parity Stock" shall mean, with respect to shares of Series A Preferred Stock or Series B Preferred Stock, any capital stock of the Corporation ranking on a parity with the Series A Preferred Stock or Series B Preferred Stock, as the case may be, with respect to dividends, distribution in liquidation or any other preference, right or power. "Person" shall mean any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, governmental agency or political subdivision thereof or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "Preferred Stock" has the meaning specified in Section 4.1. "Qualified Transfer" shall mean a sale, transfer or other disposition of shares of Series A Preferred Stock to any prospective transferee specified in a Qualified Transfer Notice, other than a prospective transferee as to which the Company disapproves in accordance with the terms of the second sentence of Section 4.3(j), provided such sale, transfer or other disposition is made pursuant to a binding agreement entered into no later than 180 days after the applicable Qualified Transfer Notice is given. "Qualified Transferee" shall mean, with respect to any shares of Series A Preferred Stock, (i) any Cash Equity Investor that acquired such shares pursuant to Section 4.2 of the Stockholders Agreement or (ii) any other holder that acquired such shares in a Qualified Transfer from an Initial Holder or Qualified Transferee. "Qualified Transfer Notice" has the meaning specified in Section 4.3(i)(x). "Redemption Securities" shall mean any debt or equity securities of the Corporation, any of its subsidiaries or affiliates or any other corporation, or any combination 36 thereof, having such terms and conditions as shall be approved by the Board of Directors and which, together with any cash to be paid as part of the redemption price payable pursuant to Section 4.10, in the opinion of any nationally recognized investment banking firm selected by the Board of Directors (which may be a firm which provides investment banking, brokerage or other services to the Corporation), has a value, at the time notice of redemption is given pursuant to Section 4.10(d) at least equal to the price required to be paid pursuant to Section 4.10(a) (assuming, in the case of Redemption Securities to be publicly traded, that such Redemption Securities were fully distributed and subject only to normal trading activity). "Section 4.9 Transferee" shall mean any transferee of shares of Series A Preferred Stock or Series D Preferred Stock issued to an Initial Holder on the date hereof (or any shares of Series C Preferred Stock or Common Stock into which any such shares are converted) that are acquired in a private transaction. "Section 4.10 Redemption Date" shall mean the date fixed by the Board of Directors for the redemption of any shares of stock of the corporation pursuant to Section 4.10. "Senior Stock" shall mean, with respect to shares of Series A Preferred Stock or Series B Preferred Stock, as the case may be, any capital stock of the Corporation ranking senior to the Series A Preferred Stock or the Series B Preferred Stock, as the case may be, with respect to dividends, distribution in liquidation or any other preference, right or power. "Series A Conversion Date" has the meaning specified in Section 4.3(i)(vi). "Series A Conversion Rate" shall mean, as of any date of determination, a fraction in which the numerator is the Liquidation Preference of one share of Series A Preferred Stock as of such date, and the denominator is the Market Price of Class A Common Stock as of such date. "Series A Preferred Stock" has the meaning specified in Section 4.1. "Series A Redemption Price" has the meaning specified in Section 4.3(e)(i). "Series B Preferred Stock" has the meaning specified in Section 4.1. "Series C Preferred Stock" has the meaning specified in Section 4.1. "Series D Preferred Stock" has the meaning specified in Section 4.1. "Statutory Liquidation" shall mean the liquidation of the Corporation pursuant to Section 275 of the GCL, as amended. "Stockholders Agreement" means the Stockholders Agreement, dated as of January, 1999, by and among the Corporation, the Initial Holders and the other stockholders of 37 the Corporation named therein, as the same may be amended, modified or supplemented in accordance with the terms thereof, a copy of which is available for inspection by any stockholder at the principal executive offices of the company. "Subsidiary" shall mean, with respect to any Person, a corporation or other entity of which 50% or more of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person. "Tracked Business Available Dividend Amount" shall mean, on any date, the excess (if any) of (i) the fair market value of the total assets of Tracked Subsidiary (including, without limitation, investments held by Tracked Subsidiary), less the total amount of the liabilities of Tracked Subsidiary, in each case as of such date determined in accordance with generally accepted accounting principles, over (ii) the aggregate par value of, or any greater amount determined in accordance with GCL to be capital in respect of, all outstanding shares of the Tracked Common Stock. "Tracked Business Available Liquidation Amount" shall mean, on any date, the fair market value of the total assets of Tracked Subsidiary (including, without limitation, investments held by Tracked Subsidiary, less the total amount of the liabilities of Tracked Subsidiary, in each case as of such date determined in accordance with generally accepted accounting principles. "Tracked Common Stock" has the meaning specified in Section 4.7(a). "Tracked Subsidiary" shall mean Tritel C/F Holding Corp., a Delaware corporation. ARTICLE V So long as the provisions of Section 3.1 of the Stockholders Agreement are in full force and effect, the directors shall be classified with respect to voting by dividing them into three classes, as follows: (a) directors elected pursuant to Section 3.1(b) of the Stockholders Agreement ("Class A Directors"), (ii) directors elected pursuant to Section 3.1(d)(i)(y) of the Stockholders Agreement ("Class B Directors"), and all other directors of the Corporation ("Class C Directors"). Each of the Class A Directors shall have a number of votes equal to a fraction, the numerator of which is two and the denominator of which is the number of directors elected to the Board of Directors pursuant to such Section 3.1(b) and then serving thereon, on all matters requiring the vote or consent of the Board of Directors. Each of the Class B Directors shall have a number of votes equal to a fraction, the numerator of which is three and the denominator of which is the number of directors elected to the Board of Directors pursuant to such Section 3.1(d)(i)(y) and then serving thereon, on all matters requiring the vote or consent of the Board of Directors. Each of the Class C Directors shall have one vote on all matters requiring the vote or consent of the Board of Directors. Election of directors need not be by written ballot. In the 38 event of a conflict between the provisions of this paragraph and the provisions of the Bylaws of the Corporation, the provisions of this paragraph shall control. ARTICLE VI Subject to the separate class vote requirements relating to any class or series of Preferred Stock, the holders of shares of Series C Preferred Stock and Common Stock representing at least two-thirds (2/3) of the votes entitled to be cast for the election of directors of the Corporation, voting together as a single class, in person or by proxy, at a special or annual meeting of stockholders called for the purpose, or by written consent, may amend, alter or repeal this Restated Certificate of Incorporation or the bylaws of the Corporation (the "Bylaws"). ARTICLE VII 7.1 Indemnification. 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 (a "Proceeding"), whether civil, criminal, administrative, or investigative (whether or not by or in the right of the Corporation), by reason of the fact that such person, or a person of whom such person is the legal representative, is or was a director, officer, incorporator, employee, or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, incorporator, employee, partner, trustee, or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (an "Other Entity"), shall be entitled to be indemnified by the Corporation to the full extent then permitted by law against expenses (including counsel fees and disbursements), judgments, fines (including excise taxes assessed on a person with respect to an employee benefit plan), and amounts paid in settlement incurred by him in connection with such Proceeding. Persons who are not Directors or officers of the Corporation may be similarly indemnified in respect of service to the Corporation or to an Other Entity at the request of the Corporation to the extent the Board of Directors at any time specifies that such persons are entitled to the benefits of this Article VII. 7.2 Advancement of Expenses. The Corporation shall, from time to time, reimburse or advance to any Director or officer or other person entitled to indemnification hereunder the funds necessary for payment of expenses, including attorneys' fees and disbursements, incurred in connection with any Proceeding, in advance of the final disposition of such Proceeding; provided, however, that, if (and only if) required by the GCL, such expenses incurred by or on behalf of any Director or officer or other person may be paid in advance of the final disposition of a Proceeding only upon receipt by the Corporation of an undertaking, by or on behalf of such Director or officer (or other person indemnified hereunder), to repay any such amount so advanced if it shall ultimately be determined by final judicial decision from which there is no further right of appeal that such Director, officer or other person is not entitled to be indemnified for such expenses. 39 7.3 Rights Not Exclusive. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article VII shall not be deemed exclusive of any other rights to which a person seeking indemnification or reimbursement or advancement of expenses may have or hereafter be entitled under any statute, this Restated Certificate of Incorporation, the Bylaws, any agreement, any vote of stockholders or disinterested Directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office. 7.4 Continuing Rights. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article VII shall continue as to a person who has ceased to be a Director or officer (or other person indemnified hereunder), shall inure to the benefit of the executors, administrators, legatees and distributees of such person, and in either case, shall inure whether or not the claim asserted is based on matters which antedate the adoption of this Article VII. 7.5 Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation, as a director, officer, employee or agent of an Other Entity, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article VII, the Bylaws or under Section 145 of the GCL or any other provision of law. 7.6 Contract Rights; No Repeal. The provisions of this Article VII shall be a contract between the Corporation, on the one hand, and each Director and officer who serves in such capacity at any time while this Article VII is in effect and any other person indemnified hereunder, on the other hand, pursuant to which the Corporation and each such Director, officer, or other person intend to be legally bound. No repeal or modification of this Article VII shall affect any rights or obligations with respect to any state of facts then or, heretofore or thereafter brought or threatened based in whole or in part upon any such state of facts. 7.7 Enforceability; Burden of Proof. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Article VII shall be enforceable by any person entitled to such indemnification or reimbursement or advancement of expenses in any court of competent jurisdiction. The burden of proving that such indemnification or reimbursement or advancement of expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination prior to the commencement of such action that such indemnification or reimbursement or advancement of expenses is proper in the circumstances nor an actual determination by the Corporation (including its Board of Directors, its independent legal counsel and its stockholders) that such person is not entitled to such indemnification or reimbursement or advancement of expenses 40 shall constitute a defense to the action or create a presumption that such person is not so entitled. Such a person shall also be indemnified for any expenses incurred in connection with successfully establishing his or her right to such indemnification or reimbursement or advancement of expenses, in whole or in part, in any such Proceeding. 7.8 Service at the Request of the Corporation. Any Director or officer of the Corporation serving in any capacity in (a) another corporation of which a majority of the shares entitled to vote in the election of its directors is held, directly or indirectly, by the Corporation or (b) any employee benefit plan of the Corporation or any corporation referred to in clause (a) shall be deemed to be doing so at the request of the Corporation. 7.9 Right to Be Covered by Applicable Law. Any person entitled to be indemnified or to reimbursement or advancement of expenses as a matter of right pursuant to this Article VII may elect to have the right to indemnification or reimbursement or advancement of expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of expenses is sought. Such election shall be made, by a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of expenses is sought; provided, however, that if no such notice is given, the right to indemnification or reimbursement or advancement of expenses shall be determined by the law in effect at the time indemnification or reimbursement or advancement of expenses is sought. ARTICLE VIII No Director of the Corporation shall be liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a Director, provided that this provision does not eliminate the liability of the 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 GCL or (iv) for any transaction from which the Director derived an improper personal benefit. For purposes of the prior sentence, the term "damages" shall, to the extent permitted by law, include without limitation, any judgment, fine, amount paid in settlement, penalty, punitive damages, excise or other tax assessed with respect to an employee benefit plan, or expense of any nature (including, without limitation, counsel fees and disbursements). Each person who serves as a Director of the Corporation while this Article VIII is in effect shall be deemed to be doing so in reliance on the provisions of this Article VIII, and neither the amendment or repeal of this Article VIII, nor the adoption of any provision of this Restated Certificate of Incorporation inconsistent with this Article VIII, shall apply to or have any effect on the liability or alleged liability of any Director of the Corporation for, arising out of, based upon, or in connection with any acts or omissions of such Director occurring prior to such amendment, repeal, or adoption of an inconsistent provision. The provisions of this Article VIII are cumulative and shall be in addition to and independent of any and all other limitations on or eliminations of the liabilities of 41 Directors of the Corporation, as such, whether such limitations or eliminations arise under or are created by any law, rule, regulation, bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise. IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Restated Certificate of Incorporation this 4th day of January, 1999. --------------------------- Name: Title: 42 EX-3.4 6 BYLAWS OF TRITEL, INC. - -------------------------------------------------------------------------------- BYLAWS OF TRITEL, INC. Adopted as of April 23, 1998 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE 1 -- STOCKHOLDERS...................................................1 1.1 Annual Meeting................................................1 1.2 Special Meetings..............................................1 1.3 Notice of Meetings; Waiver....................................1 1.4 Quorum........................................................2 1.5 Voting........................................................2 1.6 Voting by Ballot..............................................2 1.7 Adjournment...................................................2 1.8 Proxies.......................................................2 1.9 Organization; Procedure.......................................3 1.10 Consent of Stockholders in Lieu of Meeting...................3 ARTICLE 2 -- BOARD OF DIRECTORS.............................................3 2.1 General Powers................................................3 2.2 Number and Term of Office.....................................3 2.3 Election of Directors.........................................4 2.4 Annual and Regular Meetings...................................4 2.5 Special Meetings; Notice......................................4 2.6 Quorum; Voting................................................4 2.7 Adjournment...................................................5 2.8 Action Without a Meeting......................................5 2.9 Regulations; Manner of Acting.................................5 2.10 Action by Telephonic Communications..........................5 2.11 Resignation..................................................5 2.12 Removal of Directors.........................................5 2.13 Vacancies and Newly Created Directorships....................5 2.14 Compensation.................................................6 2.15 Reliance on Accounts and Reports, etc........................6 ARTICLE 3 -- EXECUTIVE COMMITTEE AND OTHER COMMITTEES.......................6 3.1 How Constituted...............................................6 3.2 Powers........................................................7 3.3 Quorum; Voting................................................7 3.4 Action without a Meeting......................................7 3.5 Regulations; Manner of Acting.................................7 3.6 Action by Telephonic Communications...........................7 3.7 Resignation...................................................7 3.8 Removal.......................................................7 3.9 Vacancies.....................................................7 i ARTICLE 4 -- OFFICERS.......................................................8 4.1 Titles........................................................8 4.2 Election......................................................8 4.3 Salaries......................................................8 4.4 Removal and Resignation; Vacancies............................8 4.5 Authority and Duties..........................................8 4.6 The Chairman of the Board.....................................8 4.7 The President.................................................9 4.8 Vice President/Chief Operating Officer........................9 4.9 Executive Vice President/General Counsel......................9 4.10 The Vice Presidents.........................................10 4.11 The Secretary...............................................10 4.12 The Treasurer...............................................11 4.13 Additional Officers.........................................11 4.14 Security....................................................12 ARTICLE 5 -- CAPITAL STOCK.................................................12 5.1 Certificates of Stock, Uncertificated Shares.................12 5.2 Signatures; Facsimile........................................12 5.3 Lost, Stolen or Destroyed Certificates.......................12 5.4 Transfer of Stock............................................13 5.5 Record Date..................................................13 5.6 Registered Stockholders......................................13 5.7 Transfer Agent and Registrar.................................13 ARTICLE 6 -- INDEMNIFICATION...............................................13 6.1 Indemnification..............................................13 6.2 Definition...................................................14 ARTICLE 7 -- OFFICES.......................................................14 7.1 Registered Office............................................14 7.2 Other Offices................................................14 ARTICLE 8 -- GENERAL PROVISIONS............................................14 8.1 Dividends....................................................14 8.2 Reserves.....................................................14 8.3 Execution of Instruments.....................................15 8.4 Corporate Indebtedness.......................................15 8.5 Deposits.....................................................15 8.6 Checks.......................................................15 8.7 Sale, Transfer, etc. of Securities...........................15 8.8 Voting as Stockholder........................................16 8.9 Fiscal Year..................................................16 8.10 Seal........................................................16 ii 8.11 Books and Records...........................................16 ARTICLE 9 -- AMENDMENT OF BYLAWS...........................................16 9.1 Amendment....................................................16 ARTICLE 10 -- CONSTRUCTION.................................................16 10.1 Construction................................................16 iii BYLAWS OF TRITEL, INC. ARTICLE 1. STOCKHOLDERS 1.1 Annual Meeting. The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before such meeting shall be held at such place, either within or without the State of Delaware, at 9:00 A.M. on the second Wednesday of each April of each year (or, if such day is a legal holiday, then on the next succeeding business day), or at such other date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting. 1.2 Special Meetings. Special meetings of the stockholders may be called at any time by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Board of Directors. A special meeting shall be called by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Secretary, immediately upon receipt of a written request therefor by stockholders holding in the aggregate not less than 10% of the outstanding shares of the Corporation at the time entitled to vote at any meeting of the stockholders. If such officers or the Board of Directors shall fail to call such meeting within 20 days after receipt of such request, any stockholder executing such request may call such meeting. Any such special meeting of the stockholders shall be held at such place, within or without the State of Delaware, as shall be specified in the notice or waiver of notice thereof. 1.3 Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than 10 nor more than 60 days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the record of stockholders of the Corporation, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address. Such further notice shall be given as may be required by law. Whenever notice is required to be given to stockholders hereunder, a written waiver, signed by a stockholder, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice. The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened. 1.4 Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. 1.5 Voting. Except as set forth in the Certificate of Incorporation, if, pursuant to Section 5.5 of these Bylaws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share outstanding in his name on the books of the Corporation at the close of business on such record date. If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation at the close of business on the day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by law or by the Certificate of Incorporation, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. 1.6 Voting by Ballot. No vote of the stockholders need be taken by written ballot or conducted by inspectors of election, unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting. 1.7 Adjournment. If a quorum is not present at any meeting of the stockholders, the stockholders present in person or by proxy shall have the power to adjourn any such meeting from time to time until a quorum is present. Notice of any adjourned meeting of the stockholders of the Corporation need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of the adjourned meeting, conforming to the requirements of Section 1.3 hereof, shall be given to each stockholder of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting. 1.8 Proxies. Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action without a meeting may, by a written instrument signed by such stockholder or his attorney-in-fact, authorize another person or 2 persons to vote at any such meeting and express such consent or dissent for him by proxy. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary. 1.9 Organization; Procedure. At every meeting of stockholders the presiding officer shall be the Chairman of the Board or, in the event of his absence or disability, the President or, in the event of his absence or disability, a presiding officer chosen by a majority of the stockholders present in person or by proxy. The Secretary, or in the event of his absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as Secretary of the meeting. The order of business and all other matters of procedure at every meeting of stockholders may be determined by such presiding officer. 1.10 Consent of Stockholders in Lieu of Meeting. To the fullest extent permitted by law, whenever the vote of the stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such action may be taken without a meeting, without prior notice and without a vote of stockholders, if the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted shall consent in writing to such corporate action being taken. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not so consented in writing. ARTICLE 2. BOARD OF DIRECTORS 2.1 General Powers. Except as may otherwise be provided by law, by the Certificate of Incorporation or by these Bylaws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation. 2.2 Number and Term of Office. The number of Directors constituting the entire Board of Directors shall be not less than one (1) nor more than ten (10), with the actual number thereof serving from time to time to be determined, within such variable minimum and maximum range, by resolution of the stockholders or the Board of Directors; provided, however, that the Board of Directors may increase or decrease by only thirty percent (30%) or less the number of Directors last approved by the stockholders, and only the stockholders may increase or decrease by more than thirty percent (30%) the number of Directors last approved by the 3 stockholders. After the Corporation has issued any shares, only the stockholders may change the variable range for the size of the Board of Directors or change from a variable-range size of Board of Directors to a fixed size of Board of Directors. Each Director (whenever elected) shall hold office until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. 2.3 Election of Directors. Except as set forth in the Certificate of Incorporation and as otherwise provided in Sections 2.12 and 2.13 of these Bylaws, the Directors shall be elected at each annual meeting of the stockholders. If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient. At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election. 2.4 Annual and Regular Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and hour of such meetings. Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telegram, facsimile or cable, to each Director who shall not have been present at the meeting at which such action was taken, addressed to him at his usual place of business, or shall be delivered to him personally. Notice of such action need not be given to any Director who attends the first regular meeting after such action is taken without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting. 2.5 Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or, in the event of his absence or disability, by the President, at such place (within or without the State of Delaware), date and hour as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the Board of Directors may be called on 24 hours' notice, if notice is given to each Director personally or by telephone or facsimile, or on five days' notice, if notice is mailed to each Director, addressed to him at his usual place of business. Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting, and any business may be transacted thereat. 2.6 Quorum; Voting. At all meetings of the Board of Directors, the presence of a majority of the total authorized number of Directors shall constitute a quorum for the 4 transaction of business. Except as otherwise required by law or the Certificate of Incorporation, the vote of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. 2.7 Adjournment. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.5 shall be given to each Director. 2.8 Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors. 2.9 Regulations; Manner of Acting. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Corporation as the Board of Directors may deem appropriate. The Directors shall act only as a Board, and the individual Directors shall have no power as such. 2.10 Action by Telephonic Communications. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 2.11 Resignation. Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the Chairman of the Board, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery. 2.12 Removal of Directors. Except as set forth in the Certificate of Incorporation, any Director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of such Director, cast at a special meeting of stockholders called for that purpose. Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by the stockholders entitled to vote for the election of the Director so removed. If such stockholders do not fill such vacancy at such meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a meeting), such vacancy may be filled in the manner provided in Section 2.13 of these Bylaws. 2.13 Vacancies and Newly Created Directorships. Except as set forth in the Certificate of Incorporation, if any vacancies shall occur in the Board of Directors, by reason of 5 death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies and newly created directorships may be filled by a majority of the Directors then in office, although less than a quorum. A Director elected to fill a vacancy or a newly created directorship shall hold office until his successor has been elected and qualified or until his earlier death, resignation or removal. Any such vacancy or newly created directorship may also be filled at any time by vote of the stockholders. 2.14 Compensation. The amount, if any, which each Director shall be entitled to receive as compensation for his services as such shall be fixed from time to time by resolution of the Board of Directors. 2.15 Reliance on Accounts and Reports, etc. A member of the Board of Directors, or a member of any Committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or Committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, including without limitation independent certified public accountants and appraisers. ARTICLE 3. EXECUTIVE COMMITTEE AND OTHER COMMITTEES 3.1 How Constituted. The Board of Directors may designate one or more Committees, including an Executive Committee, each such Committee to consist of such number of Directors as from time to time may be fixed by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any such Committee, who may replace any absent or disqualified member or members at any meeting of such Committee. In addition, unless the Board of Directors has so designated an alternate member of such Committee, in the absence or disqualification of a member of such Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Thereafter, members (and alternate members, if any) of each such Committee may be designated at the annual meeting of the Board of Directors. Any such Committee may be abolished or redesignated from time to time by the Board of Directors. Each member (and each alternate member) of any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his successor shall have been designated or until he shall cease to be a Director, or until his earlier death, resignation or removal. 6 3.2 Powers. Each Committee shall have and may exercise such powers of the Board of Directors as may be provided by resolution of the Board, provided, that neither the Executive Committee nor any such other Committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law to be submitted to stockholders for approval or (ii) adopt, amend or repeal any of these Bylaws. Each Committee may be granted by the Board of Directors power to authorize the seal of the Corporation to be affixed to any or all papers which may require it. 3.3 Quorum; Voting. Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of such Committee. 3.4 Action without a Meeting. Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee. 3.5 Regulations; Manner of Acting. Each such Committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time. Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceeding. The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such. 3.6 Action by Telephonic Communications. Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 3.7 Resignation. Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery. 3.8 Removal. Any member (any alternate member) of any Committee may be removed at any time, with or without cause, by resolution adopted by a majority of the whole Board of Directors. 3.9 Vacancies. If any vacancy shall occur in any Committee, by reason of death, resignation, removal or otherwise, the remaining members (and any alternate members) 7 shall continue to act, and any such vacancy may be filled by the Board of Directors or the remaining members of the Committee as provided in Section 3.1 hereof. ARTICLE 4. OFFICERS 4.1 Titles. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, the President, a Vice President/Chief Operating Officer, an Executive Vice President/General Counsel, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors also may elect one or more Assistant Secretaries and Assistant Treasurers in such numbers as the Board of Directors may determine, and shall also elect a Chairman of the Board. Any number of offices may be held by the same person. No officer need be a Director of the Corporation. 4.2 Election. Unless otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors. Each officer shall hold office until his successor has been elected and qualified, or until his earlier death, resignation or removal. 4.3 Salaries. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. 4.4 Removal and Resignation; Vacancies. Any officer may be removed with or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the Chairman of the Board. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. 4.5 Authority and Duties. The officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified in these Bylaws, except that in any event each officer shall exercise such powers and perform such duties as may be required by law. 4.6 The Chairman of the Board. The Chairman of the Board shall preside at all meetings of the stockholders and directors. He shall also perform all duties and exercise all powers usually pertaining to the office of a Chairman of the Board of a corporation. He shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chairman of 8 the Board shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.7 The President. The President shall be the chief executive officer of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the Chairman of the Board, the President shall preside at all meetings of the stockholders and directors. He shall manage and administer the Corporation's business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office of a chief executive officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.8 Vice President/Chief Operating Officer. The Vice President/Chief Operating Officer shall, subject to the direction of the Board of Directors and the President, perform all duties and exercise all powers usually pertaining to the office of a chief operating officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the President, Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The Vice President/Chief Operating Officer shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.9 Executive Vice President/General Counsel. The Executive Vice President/General Counsel shall, subject to the directions of the Board of Directors, have general control and supervision of legal and regulatory policies and operations of the Corporation. He shall also be the chief business development officer of the Corporation and in connection therewith shall perform all duties and exercise all powers usually pertaining to the office of a chief business development officer. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business 9 of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors, other than the President or Vice President/Chief Operating Officer. The Executive Vice President/General Counsel shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.10 The Vice Presidents. Each Vice President shall perform such duties and exercise such powers as may be assigned to him from time to time by the President. In the absence of the President, the duties of the President shall be performed and his powers may be exercised by such Vice President as shall be designated by the President, or failing such designation, such duties shall be performed and such powers may be exercised by each Vice President in the order of their election to that office; subject in any case to review and superseding action by the President. 4.11 The Secretary. The Secretary shall have the following powers and duties: (1) He shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose. (2) He shall cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law. (3) Whenever any Committee shall be appointed pursuant to a resolution of the Board of Directors, he shall furnish a copy of such resolution to the members of such Committee. (4) He shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these Bylaws, and when so affixed he may attest to same. (5) He shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these Bylaws. (6) He shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record. 10 (7) He shall sign (unless the Treasurer, an Assistant Treasurer or Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors. (8) He shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors or the President. 4.12 The Treasurer. The Treasurer shall be the chief financial officer of the corporation and shall have the following powers and duties: (1) He shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and accurate records of all receipts of the Corporation. (2) He shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with Section 8.5 of these Bylaws. (3) He shall cause moneys of the Corporation to be disbursed by checks or drafts (signed as provided in Section 8.6 of these Bylaws) upon the authorized depositories of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed. (4) He shall render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his transactions as Treasurer, and render a full financial report at the annual meeting of the stockholders, if called upon to do so. (5) He shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation. (6) He may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing stock of the Corporation the issuance of which shall have been authorized by the Board of Directors. (7) He shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors, or the President. 4.13 Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be 11 determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him, with or without cause. 4.14 Security. The Board of Directors may direct that the Corporation secure the fidelity of any or all of its officers or agents by bond or otherwise. ARTICLE 5. CAPITAL STOCK 5.1 Certificates of Stock, Uncertificated Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until each certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock in the Corporation represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board, President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form. Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws. 5.2 Signatures; Facsimile. All of such signatures on the certificate may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. 5.3 Lost, Stolen or Destroyed Certificates. The Secretary of the Corporation may cause a new certificate of stock or uncertificated shares in place of any certificate therefor issued by the Corporation, alleged to have been lost, stolen or destroyed, upon delivery to the Secretary of an affidavit of the owner or owners of such certificate, or his or their legal representative setting forth such allegation. The Secretary may require the owner or owners of such lost, stolen or destroyed certificate, or his or their legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated shares. 12 5.4 Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Section 151, 156, 202(a) or 218(a) of the General Corporation Law. Subject to the provisions of the Certificate of Incorporation and these Bylaws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation. 5.5 Record Date. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 5.6 Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interest. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so. 5.7 Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars. ARTICLE 6. INDEMNIFICATION 6.1 Indemnification. The Corporation shall, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons who may serve or who 13 have served at any time as Directors or officers of the Corporation, or who at the request of the Corporation may serve or at any time have served as Directors or officers of another corporation (including subsidiaries of the Corporation) or of any partnership, joint venture, trust or other enterprise, from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law. Such indemnification shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation 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. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person may be entitled under any provision of the Certificate of Incorporation, other Bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. 6.2 Definition. For purposes of this Article, the term "Corporation" shall include constituent corporations referred to in Subsection (h) of Section 145 of the General Corporation Law (or any similar provision of applicable law at the time in effect). ARTICLE 7. OFFICES 7.1 Registered Office. The registered office of the Corporation in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the Corporation's registered agent shall be The Corporation Trust Company. 7.2 Other Offices. The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require. ARTICLE 8. GENERAL PROVISIONS 8.1 Dividends. Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation. 8.2 Reserves. There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its 14 absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve. 8.3 Execution of Instruments. The President, any Executive Vice President, any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors or the President may authorize any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments. 8.4 Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors shall authorize. When so authorized by the Board of Directors, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of any interest thereon, by instruments executed and delivered in the name of the Corporation. 8.5 Deposits. Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors or the President, or by such officers or agents as may be authorized by the Board of Directors or the President to make such determination. 8.6 Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors, the Chairman of the Board, or the President from time to time may determine. 8.7 Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors or by the President, any Vice President, the Secretary or the Treasurer, or any other officers designated by the Board of Directors, the Chairman of the Board, or the President may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment. 15 8.8 Voting as Stockholder. Unless otherwise determined by resolution of the Board of Directors, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders of any corporation in which the Corporation may hold stock, and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons. 8.9 Fiscal Year. The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation's first fiscal year which shall commence on the date of incorporation) and shall end in each case on December 31. 8.10 Seal. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware". The form of such seal shall be subject to alteration by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner. 8.11 Books and Records. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors. ARTICLE 9. AMENDMENT OF BYLAWS 9.1 Amendment. Except as set forth in the Certificate of Incorporation, these Bylaws may be amended, altered or repealed at any regular or special meeting of the stockholders by the holders of shares of Common Stock representing at least two-thirds (2/3) of the votes entitled to be cast if, in the case of a special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting. ARTICLE 10. CONSTRUCTION 10.1 Construction. In the event of any conflict between the provisions of these Bylaws as in effect from time to time and the provisions of the Certificate of Incorporation as in effect from time to time, the provisions of the Certificate of Incorporation shall be controlling. 16 EX-3.5 7 CERTIFICATE OF INCORPORATION OF TRITEL COMMUNICATIONS, INC. Exhibit 3.5 CERTIFICATE OF INCORPORATION OF TRITEL COMMUNICATIONS, INC. * * * * * 1. The name of the corporation is TRITEL COMMUNICATIONS, INC. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the general corporation law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is: Ten (10) and the par value of each of such shares is No Dollars and One Cent ($0.01) amounting in the aggregate to No Dollars and Ten Cents ($0.10). 5. The name and mailing address of each incorporator is as follows: NAME MAILING ADDRESS ---- --------------- M. A. Brzoska 1209 Orange Street, Wilmington, DE 19801 D. J. Murphy 1209 Orange Street, Wilmington, DE 19801 L. J. Vitalo 1209 Orange Street, Wilmington, DE 19801 The name and mailing address of each person who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows: NAME MAILING ADDRESS ---- --------------- William M. Mounger, II 1410 Livingston Lane, Jackson, MS 39213-8003 Jerry M. Sullivan, Jr. 1410 Livingston Lane, Jackson, MS 39213-8003 E. B. Martin, Jr. 1410 Livingston Lane, Jackson, MS 39213-8003 6. The corporation is to have perpetual existence. 1 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the bylaws of the corporation. 8. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (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 General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 29th day of May, 1998. /s/ M. A. Brzoska ----------------------------------- M. A. Brzoska /s/ D. J. Murphy ----------------------------------- D. J. Murphy /s/ L. J. Vitalo ----------------------------------- L. J. Vitalo 2 EX-3.6 8 BYLAWS OF TRITEL COMMUNICATIONS, INC. - -------------------------------------------------------------------------------- BYLAWS OF TRITEL COMMUNICATIONS, INC. Adopted as of May 29, 1998 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE 1 -- STOCKHOLDERS...................................................1 1.1 Annual Meeting................................................1 1.2 Special Meetings..............................................1 1.3 Notice of Meetings; Waiver....................................1 1.4 Quorum........................................................2 1.5 Voting........................................................2 1.6 Voting by Ballot..............................................2 1.7 Adjournment...................................................2 1.8 Proxies.......................................................2 1.9 Organization; Procedure.......................................3 1.10 Consent of Stockholders in Lieu of Meeting...................3 ARTICLE 2 -- BOARD OF DIRECTORS.............................................3 2.1 General Powers................................................3 2.2 Number and Term of Office.....................................3 2.3 Election of Directors.........................................4 2.4 Annual and Regular Meetings...................................4 2.5 Special Meetings; Notice......................................4 2.6 Quorum; Voting................................................4 2.7 Adjournment...................................................5 2.8 Action Without a Meeting......................................5 2.9 Regulations; Manner of Acting.................................5 2.10 Action by Telephonic Communications..........................5 2.11 Resignation..................................................5 2.12 Removal of Directors.........................................5 2.13 Vacancies and Newly Created Directorships....................5 2.14 Compensation.................................................6 2.15 Reliance on Accounts and Reports, etc........................6 ARTICLE 3 -- EXECUTIVE COMMITTEE AND OTHER COMMITTEES.......................6 3.1 How Constituted...............................................6 3.2 Powers........................................................7 3.3 Quorum; Voting................................................7 3.4 Action without a Meeting......................................7 3.5 Regulations; Manner of Acting.................................7 3.6 Action by Telephonic Communications...........................7 3.7 Resignation...................................................7 3.8 Removal.......................................................7 3.9 Vacancies.....................................................7 i ARTICLE 4 -- OFFICERS.......................................................8 4.1 Titles........................................................8 4.2 Election......................................................8 4.3 Salaries......................................................8 4.4 Removal and Resignation; Vacancies............................8 4.5 Authority and Duties..........................................8 4.6 The Chairman of the Board.....................................8 4.7 The President.................................................9 4.8 Vice President/Chief Operating Officer........................9 4.9 Executive Vice President/General Counsel......................9 4.10 The Vice Presidents.........................................10 4.11 The Secretary...............................................10 4.12 The Treasurer...............................................11 4.13 Additional Officers.........................................11 4.14 Security....................................................12 ARTICLE 5 -- CAPITAL STOCK.................................................12 5.1 Certificates of Stock, Uncertificated Shares.................12 5.2 Signatures; Facsimile........................................12 5.3 Lost, Stolen or Destroyed Certificates.......................12 5.4 Transfer of Stock............................................13 5.5 Record Date..................................................13 5.6 Registered Stockholders......................................13 5.7 Transfer Agent and Registrar.................................13 ARTICLE 6 -- INDEMNIFICATION...............................................13 6.1 Indemnification..............................................13 6.2 Definition...................................................14 ARTICLE 7 -- OFFICES.......................................................14 7.1 Registered Office............................................14 7.2 Other Offices................................................14 ARTICLE 8 -- GENERAL PROVISIONS............................................14 8.1 Dividends....................................................14 8.2 Reserves.....................................................14 8.3 Execution of Instruments.....................................15 8.4 Corporate Indebtedness.......................................15 8.5 Deposits.....................................................15 8.6 Checks.......................................................15 8.7 Sale, Transfer, etc. of Securities...........................15 8.8 Voting as Stockholder........................................16 8.9 Fiscal Year..................................................16 8.10 Seal........................................................16 ii 8.11 Books and Records...........................................16 ARTICLE 9 -- AMENDMENT OF BYLAWS...........................................16 9.1 Amendment....................................................16 ARTICLE 10 -- CONSTRUCTION.................................................16 10.1 Construction................................................16 BYLAWS OF TRITEL COMMUNICATIONS, INC. ARTICLE 1. STOCKHOLDERS 1.1 Annual Meeting. The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before such meeting shall be held at such place, either within or without the State of Delaware, at 9:00 A.M. on the second Wednesday of each April of each year (or, if such day is a legal holiday, then on the next succeeding business day), or at such other date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting. 1.2 Special Meetings. Special meetings of the stockholders may be called at any time by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Board of Directors. A special meeting shall be called by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Secretary, immediately upon receipt of a written request therefor by stockholders holding in the aggregate not less than 10% of the outstanding shares of the Corporation at the time entitled to vote at any meeting of the stockholders. If such officers or the Board of Directors shall fail to call such meeting within 20 days after receipt of such request, any stockholder executing such request may call such meeting. Any such special meeting of the stockholders shall be held at such place, within or without the State of Delaware, as shall be specified in the notice or waiver of notice thereof. 1.3 Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than 10 nor more than 60 days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the record of stockholders of the Corporation, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address. Such further notice shall be given as may be required by law. Whenever notice is required to be given to stockholders hereunder, a written waiver, signed by a stockholder, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice. The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened. 1.4 Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. 1.5 Voting. Except as set forth in the Certificate of Incorporation, if, pursuant to Section 5.5 of these Bylaws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share outstanding in his name on the books of the Corporation at the close of business on such record date. If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation at the close of business on the day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by law or by the Certificate of Incorporation, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. 1.6 Voting by Ballot. No vote of the stockholders need be taken by written ballot or conducted by inspectors of election, unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting. 1.7 Adjournment. If a quorum is not present at any meeting of the stockholders, the stockholders present in person or by proxy shall have the power to adjourn any such meeting from time to time until a quorum is present. Notice of any adjourned meeting of the stockholders of the Corporation need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of the adjourned meeting, conforming to the requirements of Section 1.3 hereof, shall be given to each stockholder of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting. 1.8 Proxies. Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action without a meeting may, by a written instrument signed by such stockholder or his attorney-in-fact, authorize another person or 2 persons to vote at any such meeting and express such consent or dissent for him by proxy. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary. 1.9 Organization; Procedure. At every meeting of stockholders the presiding officer shall be the Chairman of the Board or, in the event of his absence or disability, the President or, in the event of his absence or disability, a presiding officer chosen by a majority of the stockholders present in person or by proxy. The Secretary, or in the event of his absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as Secretary of the meeting. The order of business and all other matters of procedure at every meeting of stockholders may be determined by such presiding officer. 1.10 Consent of Stockholders in Lieu of Meeting. To the fullest extent permitted by law, whenever the vote of the stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such action may be taken without a meeting, without prior notice and without a vote of stockholders, if the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted shall consent in writing to such corporate action being taken. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not so consented in writing. ARTICLE 2. BOARD OF DIRECTORS 2.1 General Powers. Except as may otherwise be provided by law, by the Certificate of Incorporation or by these Bylaws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation. 2.2 Number and Term of Office. The number of Directors constituting the entire Board of Directors shall be not less than one (1) nor more than ten (10), with the actual number thereof serving from time to time to be determined, within such variable minimum and maximum range, by resolution of the stockholders or the Board of Directors; provided, however, that the Board of Directors may increase or decrease by only thirty percent (30%) or less the number of Directors last approved by the stockholders, and only the stockholders may increase or decrease by more than thirty percent (30%) the number of Directors last approved by the 3 stockholders. After the Corporation has issued any shares, only the stockholders may change the variable range for the size of the Board of Directors or change from a variable-range size of Board of Directors to a fixed size of Board of Directors. Each Director (whenever elected) shall hold office until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. 2.3 Election of Directors. Except as set forth in the Certificate of Incorporation and as otherwise provided in Sections 2.12 and 2.13 of these Bylaws, the Directors shall be elected at each annual meeting of the stockholders. If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient. At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election. 2.4 Annual and Regular Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and hour of such meetings. Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telegram, facsimile or cable, to each Director who shall not have been present at the meeting at which such action was taken, addressed to him at his usual place of business, or shall be delivered to him personally. Notice of such action need not be given to any Director who attends the first regular meeting after such action is taken without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting. 2.5 Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or, in the event of his absence or disability, by the President, at such place (within or without the State of Delaware), date and hour as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the Board of Directors may be called on 24 hours' notice, if notice is given to each Director personally or by telephone or facsimile, or on five days' notice, if notice is mailed to each Director, addressed to him at his usual place of business. Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting, and any business may be transacted thereat. 2.6 Quorum; Voting. At all meetings of the Board of Directors, the presence of a majority of the total authorized number of Directors shall constitute a quorum for the 4 transaction of business. Except as otherwise required by law or the Certificate of Incorporation, the vote of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. 2.7 Adjournment. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.5 shall be given to each Director. 2.8 Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors. 2.9 Regulations; Manner of Acting. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Corporation as the Board of Directors may deem appropriate. The Directors shall act only as a Board, and the individual Directors shall have no power as such. 2.10 Action by Telephonic Communications. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 2.11 Resignation. Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the Chairman of the Board, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery. 2.12 Removal of Directors. Except as set forth in the Certificate of Incorporation, any Director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of such Director, cast at a special meeting of stockholders called for that purpose. Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by the stockholders entitled to vote for the election of the Director so removed. If such stockholders do not fill such vacancy at such meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a meeting), such vacancy may be filled in the manner provided in Section 2.13 of these Bylaws. 2.13 Vacancies and Newly Created Directorships. Except as set forth in the Certificate of Incorporation, if any vacancies shall occur in the Board of Directors, by reason of 5 death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies and newly created directorships may be filled by a majority of the Directors then in office, although less than a quorum. A Director elected to fill a vacancy or a newly created directorship shall hold office until his successor has been elected and qualified or until his earlier death, resignation or removal. Any such vacancy or newly created directorship may also be filled at any time by vote of the stockholders. 2.14 Compensation. The amount, if any, which each Director shall be entitled to receive as compensation for his services as such shall be fixed from time to time by resolution of the Board of Directors. 2.15 Reliance on Accounts and Reports, etc. A member of the Board of Directors, or a member of any Committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or Committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, including without limitation independent certified public accountants and appraisers. ARTICLE 3. EXECUTIVE COMMITTEE AND OTHER COMMITTEES 3.1 How Constituted. The Board of Directors may designate one or more Committees, including an Executive Committee, each such Committee to consist of such number of Directors as from time to time may be fixed by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any such Committee, who may replace any absent or disqualified member or members at any meeting of such Committee. In addition, unless the Board of Directors has so designated an alternate member of such Committee, in the absence or disqualification of a member of such Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Thereafter, members (and alternate members, if any) of each such Committee may be designated at the annual meeting of the Board of Directors. Any such Committee may be abolished or redesignated from time to time by the Board of Directors. Each member (and each alternate member) of any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his successor shall have been designated or until he shall cease to be a Director, or until his earlier death, resignation or removal. 6 3.2 Powers. Each Committee shall have and may exercise such powers of the Board of Directors as may be provided by resolution of the Board, provided, that neither the Executive Committee nor any such other Committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law to be submitted to stockholders for approval or (ii) adopt, amend or repeal any of these Bylaws. Each Committee may be granted by the Board of Directors power to authorize the seal of the Corporation to be affixed to any or all papers which may require it. 3.3 Quorum; Voting. Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of such Committee. 3.4 Action without a Meeting. Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee. 3.5 Regulations; Manner of Acting. Each such Committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time. Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceeding. The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such. 3.6 Action by Telephonic Communications. Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 3.7 Resignation. Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery. 3.8 Removal. Any member (any alternate member) of any Committee may be removed at any time, with or without cause, by resolution adopted by a majority of the whole Board of Directors. 3.9 Vacancies. If any vacancy shall occur in any Committee, by reason of death, resignation, removal or otherwise, the remaining members (and any alternate members) 7 shall continue to act, and any such vacancy may be filled by the Board of Directors or the remaining members of the Committee as provided in Section 3.1 hereof. ARTICLE 4. OFFICERS 4.1 Titles. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, the President, a Vice President/Chief Operating Officer, an Executive Vice President/General Counsel, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors also may elect one or more Assistant Secretaries and Assistant Treasurers in such numbers as the Board of Directors may determine, and shall also elect a Chairman of the Board. Any number of offices may be held by the same person. No officer need be a Director of the Corporation. 4.2 Election. Unless otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors. Each officer shall hold office until his successor has been elected and qualified, or until his earlier death, resignation or removal. 4.3 Salaries. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. 4.4 Removal and Resignation; Vacancies. Any officer may be removed with or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the Chairman of the Board. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. 4.5 Authority and Duties. The officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified in these Bylaws, except that in any event each officer shall exercise such powers and perform such duties as may be required by law. 4.6 The Chairman of the Board. The Chairman of the Board shall preside at all meetings of the stockholders and directors. He shall also perform all duties and exercise all powers usually pertaining to the office of a Chairman of the Board of a corporation. He shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chairman of 8 the Board shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.7 The President. The President shall be the chief executive officer of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the Chairman of the Board, the President shall preside at all meetings of the stockholders and directors. He shall manage and administer the Corporation's business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office of a chief executive officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.8 Vice President/Chief Operating Officer. The Vice President/Chief Operating Officer shall, subject to the direction of the Board of Directors and the President, perform all duties and exercise all powers usually pertaining to the office of a chief operating officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the President, Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The Vice President/Chief Operating Officer shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.9 Executive Vice President/General Counsel. The Executive Vice President/General Counsel shall, subject to the directions of the Board of Directors, have general control and supervision of legal and regulatory policies and operations of the Corporation. He shall also be the chief business development officer of the Corporation and in connection therewith shall perform all duties and exercise all powers usually pertaining to the office of a chief business development officer. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business 9 of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors, other than the President or Vice President/Chief Operating Officer. The Executive Vice President/General Counsel shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.10 The Vice Presidents. Each Vice President shall perform such duties and exercise such powers as may be assigned to him from time to time by the President. In the absence of the President, the duties of the President shall be performed and his powers may be exercised by such Vice President as shall be designated by the President, or failing such designation, such duties shall be performed and such powers may be exercised by each Vice President in the order of their election to that office; subject in any case to review and superseding action by the President. 4.11 The Secretary. The Secretary shall have the following powers and duties: (1) He shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose. (2) He shall cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law. (3) Whenever any Committee shall be appointed pursuant to a resolution of the Board of Directors, he shall furnish a copy of such resolution to the members of such Committee. (4) He shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these Bylaws, and when so affixed he may attest to same. (5) He shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these Bylaws. (6) He shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record. 10 (7) He shall sign (unless the Treasurer, an Assistant Treasurer or Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors. (8) He shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors or the President. 4.12 The Treasurer. The Treasurer shall be the chief financial officer of the corporation and shall have the following powers and duties: (1) He shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and accurate records of all receipts of the Corporation. (2) He shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with Section 8.5 of these Bylaws. (3) He shall cause moneys of the Corporation to be disbursed by checks or drafts (signed as provided in Section 8.6 of these Bylaws) upon the authorized depositories of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed. (4) He shall render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his transactions as Treasurer, and render a full financial report at the annual meeting of the stockholders, if called upon to do so. (5) He shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation. (6) He may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing stock of the Corporation the issuance of which shall have been authorized by the Board of Directors. (7) He shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors, or the President. 4.13 Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be 11 determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him, with or without cause. 4.14 Security. The Board of Directors may direct that the Corporation secure the fidelity of any or all of its officers or agents by bond or otherwise. ARTICLE 5. CAPITAL STOCK 5.1 Certificates of Stock, Uncertificated Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until each certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock in the Corporation represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board, President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form. Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws. 5.2 Signatures; Facsimile. All of such signatures on the certificate may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. 5.3 Lost, Stolen or Destroyed Certificates. The Secretary of the Corporation may cause a new certificate of stock or uncertificated shares in place of any certificate therefor issued by the Corporation, alleged to have been lost, stolen or destroyed, upon delivery to the Secretary of an affidavit of the owner or owners of such certificate, or his or their legal representative setting forth such allegation. The Secretary may require the owner or owners of such lost, stolen or destroyed certificate, or his or their legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated shares. 12 5.4 Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Section 151, 156, 202(a) or 218(a) of the General Corporation Law. Subject to the provisions of the Certificate of Incorporation and these Bylaws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation. 5.5 Record Date. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 5.6 Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interest. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so. 5.7 Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars. ARTICLE 6. INDEMNIFICATION 6.1 Indemnification. The Corporation shall, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons who may serve or who 13 have served at any time as Directors or officers of the Corporation, or who at the request of the Corporation may serve or at any time have served as Directors or officers of another corporation (including subsidiaries of the Corporation) or of any partnership, joint venture, trust or other enterprise, from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law. Such indemnification shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation 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. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person may be entitled under any provision of the Certificate of Incorporation, other Bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. 6.2 Definition. For purposes of this Article, the term "Corporation" shall include constituent corporations referred to in Subsection (h) of Section 145 of the General Corporation Law (or any similar provision of applicable law at the time in effect). ARTICLE 7. OFFICES 7.1 Registered Office. The registered office of the Corporation in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the Corporation's registered agent shall be The Corporation Trust Company. 7.2 Other Offices. The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require. ARTICLE 8. GENERAL PROVISIONS 8.1 Dividends. Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation. 8.2 Reserves. There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its 14 absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve. 8.3 Execution of Instruments. The President, any Executive Vice President, any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors or the President may authorize any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments. 8.4 Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors shall authorize. When so authorized by the Board of Directors, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of any interest thereon, by instruments executed and delivered in the name of the Corporation. 8.5 Deposits. Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors or the President, or by such officers or agents as may be authorized by the Board of Directors or the President to make such determination. 8.6 Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors, the Chairman of the Board, or the President from time to time may determine. 8.7 Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors or by the President, any Vice President, the Secretary or the Treasurer, or any other officers designated by the Board of Directors, the Chairman of the Board, or the President may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment. 15 8.8 Voting as Stockholder. Unless otherwise determined by resolution of the Board of Directors, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders of any corporation in which the Corporation may hold stock, and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons. 8.9 Fiscal Year. The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation's first fiscal year which shall commence on the date of incorporation) and shall end in each case on December 31. 8.10 Seal. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware". The form of such seal shall be subject to alteration by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner. 8.11 Books and Records. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors. ARTICLE 9. AMENDMENT OF BYLAWS 9.1 Amendment. Except as set forth in the Certificate of Incorporation, these Bylaws may be amended, altered or repealed at any regular or special meeting of the stockholders by the holders of shares of Common Stock representing at least two-thirds (2/3) of the votes entitled to be cast if, in the case of a special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting. ARTICLE 10. CONSTRUCTION 10.1 Construction. In the event of any conflict between the provisions of these Bylaws as in effect from time to time and the provisions of the Certificate of Incorporation as in effect from time to time, the provisions of the Certificate of Incorporation shall be controlling. 16 EX-3.7 9 CERTIFICATE OF INCORPORATION OF TRITEL FINANCE, INC. Exhibit 3.7 CERTIFICATE OF INCORPORATION OF TRITEL FINANCE, INC. * * * * * 1. The name of the corporation is TRITEL FINANCE, INC. 2. The address of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business or purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the general corporation law of Delaware. 4. The total number of shares of stock which the corporation shall have authority to issue is: Ten (10) and the par value of each of such shares is No Dollars and One Cent ($0.01) amounting in the aggregate to No Dollars and Ten Cents ($0.10). 5. The name and mailing address of each incorporator is as follows: NAME MAILING ADDRESS ---- --------------- M. A. Brzoska 1209 Orange Street, Wilmington, DE 19801 D. J. Murphy 1209 Orange Street, Wilmington, DE 19801 L. J. Vitalo 1209 Orange Street, Wilmington, DE 19801 The name and mailing address of each person who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows: NAME MAILING ADDRESS ---- --------------- William M. Mounger, II 1410 Livingston Lane, Jackson, MS 39213-8003 Jerry M. Sullivan, Jr. 1410 Livingston Lane, Jackson, MS 39213-8003 E. B. Martin, Jr. 1410 Livingston Lane, Jackson, MS 39213-8003 6. The corporation is to have perpetual existence. 1 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: To make, alter or repeal the bylaws of the corporation. 8. A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director except for liability (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 General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this Certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 29th day of May , 1998. /s/ M. A. Brzoska ----------------------------------- M. A. Brzoska /s/ D. J. Murphy ----------------------------------- D. J. Murphy /s/ L. J. Vitalo ----------------------------------- L. J. Vitalo 2 EX-3.8 10 BYLAWS OF TRITEL FINANCE, INC. - -------------------------------------------------------------------------------- BYLAWS OF TRITEL FINANCE, INC. Adopted as of May 29, 1998 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE 1 -- STOCKHOLDERS....................................................1 1.1 Annual Meeting.................................................1 1.2 Special Meetings...............................................1 1.3 Notice of Meetings; Waiver.....................................1 1.4 Quorum.........................................................2 1.5 Voting.........................................................2 1.6 Voting by Ballot...............................................2 1.7 Adjournment....................................................2 1.8 Proxies........................................................2 1.9 Organization; Procedure........................................3 1.10 Consent of Stockholders in Lieu of Meeting....................3 ARTICLE 2 -- BOARD OF DIRECTORS..............................................3 2.1 General Powers.................................................3 2.2 Number and Term of Office......................................3 2.3 Election of Directors..........................................4 2.4 Annual and Regular Meetings....................................4 2.5 Special Meetings; Notice.......................................4 2.6 Quorum; Voting.................................................4 2.7 Adjournment....................................................5 2.8 Action Without a Meeting.......................................5 2.9 Regulations; Manner of Acting..................................5 2.10 Action by Telephonic Communications...........................5 2.11 Resignation...................................................5 2.12 Removal of Directors..........................................5 2.13 Vacancies and Newly Created Directorships.....................5 2.14 Compensation..................................................6 2.15 Reliance on Accounts and Reports, etc.........................6 ARTICLE 3 -- EXECUTIVE COMMITTEE AND OTHER COMMITTEES........................6 3.1 How Constituted................................................6 3.2 Powers.........................................................7 3.3 Quorum; Voting.................................................7 3.4 Action without a Meeting.......................................7 3.5 Regulations; Manner of Acting..................................7 3.6 Action by Telephonic Communications............................7 3.7 Resignation....................................................7 3.8 Removal........................................................7 3.9 Vacancies......................................................7 i ARTICLE 4 -- OFFICERS........................................................8 4.1 Titles.........................................................8 4.2 Election.......................................................8 4.3 Salaries.......................................................8 4.4 Removal and Resignation; Vacancies.............................8 4.5 Authority and Duties...........................................8 4.6 The Chairman of the Board......................................8 4.7 The President..................................................9 4.8 Vice President/Chief Operating Officer.........................9 4.9 Executive Vice President/General Counsel.......................9 4.10 The Vice Presidents..........................................10 4.11 The Secretary................................................10 4.12 The Treasurer................................................11 4.13 Additional Officers..........................................11 4.14 Security.....................................................12 ARTICLE 5 -- CAPITAL STOCK..................................................12 5.1 Certificates of Stock, Uncertificated Shares..................12 5.2 Signatures; Facsimile.........................................12 5.3 Lost, Stolen or Destroyed Certificates........................12 5.4 Transfer of Stock.............................................13 5.5 Record Date...................................................13 5.6 Registered Stockholders.......................................13 5.7 Transfer Agent and Registrar..................................13 ARTICLE 6 -- INDEMNIFICATION................................................13 6.1 Indemnification...............................................13 6.2 Definition....................................................14 ARTICLE 7 -- OFFICES........................................................14 7.1 Registered Office.............................................14 7.2 Other Offices.................................................14 ARTICLE 8 -- GENERAL PROVISIONS.............................................14 8.1 Dividends.....................................................14 8.2 Reserves......................................................14 8.3 Execution of Instruments......................................15 8.4 Corporate Indebtedness........................................15 8.5 Deposits......................................................15 8.6 Checks........................................................15 8.7 Sale, Transfer, etc. of Securities............................15 8.8 Voting as Stockholder.........................................16 8.9 Fiscal Year...................................................16 8.10 Seal.........................................................16 ii 8.11 Books and Records............................................16 ARTICLE 9 -- AMENDMENT OF BYLAWS............................................16 9.1 Amendment.....................................................16 ARTICLE 10 -- CONSTRUCTION..................................................16 10.1 Construction.................................................16 iii BYLAWS OF TRITEL FINANCE, INC. ARTICLE 1. STOCKHOLDERS 1.1 Annual Meeting. The annual meeting of the stockholders of the Corporation for the election of directors and for the transaction of such other business as may properly come before such meeting shall be held at such place, either within or without the State of Delaware, at 9:00 A.M. on the second Wednesday of each April of each year (or, if such day is a legal holiday, then on the next succeeding business day), or at such other date and hour, as may be fixed from time to time by resolution of the Board of Directors and set forth in the notice or waiver of notice of the meeting. 1.2 Special Meetings. Special meetings of the stockholders may be called at any time by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Board of Directors. A special meeting shall be called by the Chairman of the Board (or, in the event of his absence or disability, by the President), or by the Secretary, immediately upon receipt of a written request therefor by stockholders holding in the aggregate not less than 10% of the outstanding shares of the Corporation at the time entitled to vote at any meeting of the stockholders. If such officers or the Board of Directors shall fail to call such meeting within 20 days after receipt of such request, any stockholder executing such request may call such meeting. Any such special meeting of the stockholders shall be held at such place, within or without the State of Delaware, as shall be specified in the notice or waiver of notice thereof. 1.3 Notice of Meetings; Waiver. The Secretary or any Assistant Secretary shall cause written notice of the place, date and hour of each meeting of the stockholders, and, in the case of a special meeting, the purpose or purposes for which such meeting is called, to be given personally or by mail, not less than 10 nor more than 60 days before the date of the meeting, to each stockholder of record entitled to vote at such meeting. If such notice is mailed, it shall be deemed to have been given to a stockholder when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the record of stockholders of the Corporation, or, if he shall have filed with the Secretary a written request that notices to him be mailed to some other address, then directed to him at such other address. Such further notice shall be given as may be required by law. Whenever notice is required to be given to stockholders hereunder, a written waiver, signed by a stockholder, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in a written waiver of notice. The attendance of any stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business on the ground that the meeting is not lawfully called or convened. 1.4 Quorum. Except as otherwise required by law or by the Certificate of Incorporation, the presence in person or by proxy of the holders of record of a majority of the shares entitled to vote at a meeting of stockholders shall constitute a quorum for the transaction of business at such meeting. 1.5 Voting. Except as set forth in the Certificate of Incorporation, if, pursuant to Section 5.5 of these Bylaws, a record date has been fixed, every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share outstanding in his name on the books of the Corporation at the close of business on such record date. If no record date has been fixed, then every holder of record of shares entitled to vote at a meeting of stockholders shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation at the close of business on the day next preceding the day on which notice of the meeting is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. Except as otherwise required by law or by the Certificate of Incorporation, the vote of a majority of the shares represented in person or by proxy at any meeting at which a quorum is present shall be sufficient for the transaction of any business at such meeting. 1.6 Voting by Ballot. No vote of the stockholders need be taken by written ballot or conducted by inspectors of election, unless otherwise required by law. Any vote which need not be taken by ballot may be conducted in any manner approved by the meeting. 1.7 Adjournment. If a quorum is not present at any meeting of the stockholders, the stockholders present in person or by proxy shall have the power to adjourn any such meeting from time to time until a quorum is present. Notice of any adjourned meeting of the stockholders of the Corporation need not be given if the place, date and hour thereof are announced at the meeting at which the adjournment is taken, provided, however, that if the adjournment is for more than 30 days, or if after the adjournment a new record date for the adjourned meeting is fixed pursuant to Section 5.5 of these Bylaws, a notice of the adjourned meeting, conforming to the requirements of Section 1.3 hereof, shall be given to each stockholder of record entitled to vote at such meeting. At any adjourned meeting at which a quorum is present, any business may be transacted that might have been transacted on the original date of the meeting. 1.8 Proxies. Any stockholder entitled to vote at any meeting of the stockholders or to express consent to or dissent from corporate action without a meeting may, by a written instrument signed by such stockholder or his attorney-in-fact, authorize another person or 2 persons to vote at any such meeting and express such consent or dissent for him by proxy. No such proxy shall be voted or acted upon after the expiration of three years from the date of such proxy, unless such proxy provides for a longer period. Every proxy shall be revocable at the pleasure of the stockholder executing it, except in those cases where applicable law provides that a proxy shall be irrevocable. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the Secretary. 1.9 Organization; Procedure. At every meeting of stockholders the presiding officer shall be the Chairman of the Board or, in the event of his absence or disability, the President or, in the event of his absence or disability, a presiding officer chosen by a majority of the stockholders present in person or by proxy. The Secretary, or in the event of his absence or disability, the Assistant Secretary, if any, or if there be no Assistant Secretary, in the absence of the Secretary, an appointee of the presiding officer, shall act as Secretary of the meeting. The order of business and all other matters of procedure at every meeting of stockholders may be determined by such presiding officer. 1.10 Consent of Stockholders in Lieu of Meeting. To the fullest extent permitted by law, whenever the vote of the stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such action may be taken without a meeting, without prior notice and without a vote of stockholders, if the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted shall consent in writing to such corporate action being taken. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not so consented in writing. ARTICLE 2. BOARD OF DIRECTORS 2.1 General Powers. Except as may otherwise be provided by law, by the Certificate of Incorporation or by these Bylaws, the property, affairs and business of the Corporation shall be managed by or under the direction of the Board of Directors and the Board of Directors may exercise all the powers of the Corporation. 2.2 Number and Term of Office. The number of Directors constituting the entire Board of Directors shall be not less than one (1) nor more than ten (10), with the actual number thereof serving from time to time to be determined, within such variable minimum and maximum range, by resolution of the stockholders or the Board of Directors; provided, however, that the Board of Directors may increase or decrease by only thirty percent (30%) or less the number of Directors last approved by the stockholders, and only the stockholders may increase or decrease by more than thirty percent (30%) the number of Directors last approved by the 3 stockholders. After the Corporation has issued any shares, only the stockholders may change the variable range for the size of the Board of Directors or change from a variable-range size of Board of Directors to a fixed size of Board of Directors. Each Director (whenever elected) shall hold office until his successor has been duly elected and qualified, or until his earlier death, resignation or removal. 2.3 Election of Directors. Except as set forth in the Certificate of Incorporation and as otherwise provided in Sections 2.12 and 2.13 of these Bylaws, the Directors shall be elected at each annual meeting of the stockholders. If the annual meeting for the election of Directors is not held on the date designated therefor, the Directors shall cause the meeting to be held as soon thereafter as convenient. At each meeting of the stockholders for the election of Directors, provided a quorum is present, the Directors shall be elected by a plurality of the votes validly cast in such election. 2.4 Annual and Regular Meetings. The annual meeting of the Board of Directors for the purpose of electing officers and for the transaction of such other business as may come before the meeting shall be held as soon as possible following adjournment of the annual meeting of the stockholders at the place of such annual meeting of the stockholders. Notice of such annual meeting of the Board of Directors need not be given. The Board of Directors from time to time may by resolution provide for the holding of regular meetings and fix the place (which may be within or without the State of Delaware) and the date and hour of such meetings. Notice of regular meetings need not be given, provided, however, that if the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be mailed promptly, or sent by telegram, facsimile or cable, to each Director who shall not have been present at the meeting at which such action was taken, addressed to him at his usual place of business, or shall be delivered to him personally. Notice of such action need not be given to any Director who attends the first regular meeting after such action is taken without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting. 2.5 Special Meetings; Notice. Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or, in the event of his absence or disability, by the President, at such place (within or without the State of Delaware), date and hour as may be specified in the respective notices or waivers of notice of such meetings. Special meetings of the Board of Directors may be called on 24 hours' notice, if notice is given to each Director personally or by telephone or facsimile, or on five days' notice, if notice is mailed to each Director, addressed to him at his usual place of business. Notice of any special meeting need not be given to any Director who attends such meeting without protesting the lack of notice to him, prior to or at the commencement of such meeting, or to any Director who submits a signed waiver of notice, whether before or after such meeting, and any business may be transacted thereat. 2.6 Quorum; Voting. At all meetings of the Board of Directors, the presence of a majority of the total authorized number of Directors shall constitute a quorum for the 4 transaction of business. Except as otherwise required by law or the Certificate of Incorporation, the vote of a majority of the Directors present at any meeting at which a quorum is present shall be the act of the Board of Directors. 2.7 Adjournment. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting of the Board of Directors to another time or place. No notice need be given of any adjourned meeting unless the time and place of the adjourned meeting are not announced at the time of adjournment, in which case notice conforming to the requirements of Section 2.5 shall be given to each Director. 2.8 Action Without a Meeting. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all members of the Board of Directors consent thereto in writing, and such writing or writings are filed with the minutes of proceedings of the Board of Directors. 2.9 Regulations; Manner of Acting. To the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws, the Board of Directors may adopt such rules and regulations for the conduct of meetings of the Board of Directors and for the management of the property, affairs and business of the Corporation as the Board of Directors may deem appropriate. The Directors shall act only as a Board, and the individual Directors shall have no power as such. 2.10 Action by Telephonic Communications. Members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 2.11 Resignation. Any Director may resign at any time by delivering a written notice of resignation, signed by such Director, to the Chairman of the Board, the President or the Secretary. Unless otherwise specified therein, such resignation shall take effect upon delivery. 2.12 Removal of Directors. Except as set forth in the Certificate of Incorporation, any Director may be removed at any time, either for or without cause, upon the affirmative vote of the holders of a majority of the outstanding shares of stock of the Corporation entitled to vote for the election of such Director, cast at a special meeting of stockholders called for that purpose. Any vacancy in the Board of Directors caused by any such removal may be filled at such meeting by the stockholders entitled to vote for the election of the Director so removed. If such stockholders do not fill such vacancy at such meeting (or in the written instrument effecting such removal, if such removal was effected by consent without a meeting), such vacancy may be filled in the manner provided in Section 2.13 of these Bylaws. 2.13 Vacancies and Newly Created Directorships. Except as set forth in the Certificate of Incorporation, if any vacancies shall occur in the Board of Directors, by reason of 5 death, resignation, removal or otherwise, or if the authorized number of Directors shall be increased, the Directors then in office shall continue to act, and such vacancies and newly created directorships may be filled by a majority of the Directors then in office, although less than a quorum. A Director elected to fill a vacancy or a newly created directorship shall hold office until his successor has been elected and qualified or until his earlier death, resignation or removal. Any such vacancy or newly created directorship may also be filled at any time by vote of the stockholders. 2.14 Compensation. The amount, if any, which each Director shall be entitled to receive as compensation for his services as such shall be fixed from time to time by resolution of the Board of Directors. 2.15 Reliance on Accounts and Reports, etc. A member of the Board of Directors, or a member of any Committee designated by the Board of Directors, shall, in the performance of his duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation's officers or employees, or Committees of the Board of Directors, or by any other person as to matters the member reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, including without limitation independent certified public accountants and appraisers. ARTICLE 3. EXECUTIVE COMMITTEE AND OTHER COMMITTEES 3.1 How Constituted. The Board of Directors may designate one or more Committees, including an Executive Committee, each such Committee to consist of such number of Directors as from time to time may be fixed by the Board of Directors. The Board of Directors may designate one or more directors as alternate members of any such Committee, who may replace any absent or disqualified member or members at any meeting of such Committee. In addition, unless the Board of Directors has so designated an alternate member of such Committee, in the absence or disqualification of a member of such Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Thereafter, members (and alternate members, if any) of each such Committee may be designated at the annual meeting of the Board of Directors. Any such Committee may be abolished or redesignated from time to time by the Board of Directors. Each member (and each alternate member) of any such Committee (whether designated at an annual meeting of the Board of Directors or to fill a vacancy or otherwise) shall hold office until his successor shall have been designated or until he shall cease to be a Director, or until his earlier death, resignation or removal. 6 3.2 Powers. Each Committee shall have and may exercise such powers of the Board of Directors as may be provided by resolution of the Board, provided, that neither the Executive Committee nor any such other Committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the General Corporation Law to be submitted to stockholders for approval or (ii) adopt, amend or repeal any of these Bylaws. Each Committee may be granted by the Board of Directors power to authorize the seal of the Corporation to be affixed to any or all papers which may require it. 3.3 Quorum; Voting. Except as may be otherwise provided in the resolution creating such Committee, at all meetings of any Committee the presence of members (or alternate members) constituting a majority of the total authorized membership of such Committee shall constitute a quorum for the transaction of business. The act of a majority of the members present at any meeting at which a quorum is present shall be the act of such Committee. 3.4 Action without a Meeting. Any action required or permitted to be taken at any meeting of any such Committee may be taken without a meeting, if all members of such Committee shall consent to such action in writing and such writing or writings are filed with the minutes of the proceedings of the Committee. 3.5 Regulations; Manner of Acting. Each such Committee may fix its own rules of procedure and may meet at such place (within or without the State of Delaware), at such time and upon such notice, if any, as it shall determine from time to time. Each such Committee shall keep minutes of its proceedings and shall report such proceedings to the Board of Directors at the meeting of the Board of Directors next following any such proceeding. The members of any such Committee shall act only as a Committee, and the individual members of such Committee shall have no power as such. 3.6 Action by Telephonic Communications. Members of any Committee designated by the Board of Directors may participate in a meeting of such Committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. 3.7 Resignation. Any member (and any alternate member) of any Committee may resign at any time by delivering a written notice of resignation, signed by such member, to the Chairman of the Board or the President. Unless otherwise specified therein, such resignation shall take effect upon delivery. 3.8 Removal. Any member (any alternate member) of any Committee may be removed at any time, with or without cause, by resolution adopted by a majority of the whole Board of Directors. 3.9 Vacancies. If any vacancy shall occur in any Committee, by reason of death, resignation, removal or otherwise, the remaining members (and any alternate members) 7 shall continue to act, and any such vacancy may be filled by the Board of Directors or the remaining members of the Committee as provided in Section 3.1 hereof. ARTICLE 4. OFFICERS 4.1 Titles. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, the President, a Vice President/Chief Operating Officer, an Executive Vice President/General Counsel, one or more Vice Presidents, a Secretary and a Treasurer. The Board of Directors also may elect one or more Assistant Secretaries and Assistant Treasurers in such numbers as the Board of Directors may determine, and shall also elect a Chairman of the Board. Any number of offices may be held by the same person. No officer need be a Director of the Corporation. 4.2 Election. Unless otherwise determined by the Board of Directors, the officers of the Corporation shall be elected by the Board of Directors at the annual meeting of the Board of Directors, and shall be elected to hold office until the next succeeding annual meeting of the Board of Directors. In the event of the failure to elect officers at such annual meeting, officers may be elected at any regular or special meeting of the Board of Directors. Each officer shall hold office until his successor has been elected and qualified, or until his earlier death, resignation or removal. 4.3 Salaries. The salaries of all officers of the Corporation shall be fixed by the Board of Directors. 4.4 Removal and Resignation; Vacancies. Any officer may be removed with or without cause at any time by the Board of Directors. Any officer may resign at any time by delivering a written notice of resignation, signed by such officer, to the Board of Directors or the Chairman of the Board. Unless otherwise specified therein, such resignation shall take effect upon delivery. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise, shall be filled by the Board of Directors. 4.5 Authority and Duties. The officers of the Corporation shall have such authority and shall exercise such powers and perform such duties as may be specified in these Bylaws, except that in any event each officer shall exercise such powers and perform such duties as may be required by law. 4.6 The Chairman of the Board. The Chairman of the Board shall preside at all meetings of the stockholders and directors. He shall also perform all duties and exercise all powers usually pertaining to the office of a Chairman of the Board of a corporation. He shall see that all orders and resolutions of the Board of Directors are carried into effect. The Chairman of 8 the Board shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.7 The President. The President shall be the chief executive officer of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. In the absence of the Chairman of the Board, the President shall preside at all meetings of the stockholders and directors. He shall manage and administer the Corporation's business and affairs and shall also perform all duties and exercise all powers usually pertaining to the office of a chief executive officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The President shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.8 Vice President/Chief Operating Officer. The Vice President/Chief Operating Officer shall, subject to the direction of the Board of Directors and the President, perform all duties and exercise all powers usually pertaining to the office of a chief operating officer of a corporation. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the President, Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors. The Vice President/Chief Operating Officer shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.9 Executive Vice President/General Counsel. The Executive Vice President/General Counsel shall, subject to the directions of the Board of Directors, have general control and supervision of legal and regulatory policies and operations of the Corporation. He shall also be the chief business development officer of the Corporation and in connection therewith shall perform all duties and exercise all powers usually pertaining to the office of a chief business development officer. He shall have the authority to sign, in the name and on behalf of the Corporation, checks, orders, contracts, leases, notes, drafts and other documents and instruments in connection with the business of the Corporation and, together with the Secretary or an Assistant Secretary, conveyances of real estate and other documents and instruments to which the seal of the Corporation is affixed. He shall have the authority to cause the employment or appointment of such employees and agents of the Corporation as the conduct of the business 9 of the Corporation may require, to fix their compensation, and to remove or suspend any employee or agent elected or appointed by the Board of Directors, other than the President or Vice President/Chief Operating Officer. The Executive Vice President/General Counsel shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. 4.10 The Vice Presidents. Each Vice President shall perform such duties and exercise such powers as may be assigned to him from time to time by the President. In the absence of the President, the duties of the President shall be performed and his powers may be exercised by such Vice President as shall be designated by the President, or failing such designation, such duties shall be performed and such powers may be exercised by each Vice President in the order of their election to that office; subject in any case to review and superseding action by the President. 4.11 The Secretary. The Secretary shall have the following powers and duties: (1) He shall keep or cause to be kept a record of all the proceedings of the meetings of the stockholders and of the Board of Directors in books provided for that purpose. (2) He shall cause all notices to be duly given in accordance with the provisions of these Bylaws and as required by law. (3) Whenever any Committee shall be appointed pursuant to a resolution of the Board of Directors, he shall furnish a copy of such resolution to the members of such Committee. (4) He shall be the custodian of the records and of the seal of the Corporation and cause such seal (or a facsimile thereof) to be affixed to all certificates representing shares of the Corporation prior to the issuance thereof and to all instruments the execution of which on behalf of the Corporation under its seal shall have been duly authorized in accordance with these Bylaws, and when so affixed he may attest to same. (5) He shall properly maintain and file all books, reports, statements, certificates and all other documents and records required by law, the Certificate of Incorporation or these Bylaws. (6) He shall have charge of the stock books and ledgers of the Corporation and shall cause the stock and transfer books to be kept in such manner as to show at any time the number of shares of stock of the Corporation of each class issued and outstanding, the names (alphabetically arranged) and the addresses of the holders of record of such shares, the number of shares held by each holder and the date as of which each became such holder of record. 10 (7) He shall sign (unless the Treasurer, an Assistant Treasurer or Assistant Secretary shall have signed) certificates representing shares of the Corporation the issuance of which shall have been authorized by the Board of Directors. (8) He shall perform, in general, all duties incident to the office of secretary and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors or the President. 4.12 The Treasurer. The Treasurer shall be the chief financial officer of the corporation and shall have the following powers and duties: (1) He shall have charge and supervision over and be responsible for the moneys, securities, receipts and disbursements of the Corporation, and shall keep or cause to be kept full and accurate records of all receipts of the Corporation. (2) He shall cause the moneys and other valuable effects of the Corporation to be deposited in the name and to the credit of the Corporation in such banks or trust companies or with such bankers or other depositaries as shall be selected in accordance with Section 8.5 of these Bylaws. (3) He shall cause moneys of the Corporation to be disbursed by checks or drafts (signed as provided in Section 8.6 of these Bylaws) upon the authorized depositories of the Corporation and cause to be taken and preserved proper vouchers for all moneys disbursed. (4) He shall render to the Board of Directors or the President, whenever requested, a statement of the financial condition of the Corporation and of all his transactions as Treasurer, and render a full financial report at the annual meeting of the stockholders, if called upon to do so. (5) He shall be empowered from time to time to require from all officers or agents of the Corporation reports or statements giving such information as he may desire with respect to any and all financial transactions of the Corporation. (6) He may sign (unless an Assistant Treasurer or the Secretary or an Assistant Secretary shall have signed) certificates representing stock of the Corporation the issuance of which shall have been authorized by the Board of Directors. (7) He shall perform, in general, all duties incident to the office of treasurer and such other duties as may be specified in these Bylaws or as may be assigned to him from time to time by the Board of Directors, or the President. 4.13 Additional Officers. The Board of Directors may appoint such other officers and agents as it may deem appropriate, and such other officers and agents shall hold their offices for such terms and shall exercise such powers and perform such duties as may be 11 determined from time to time by the Board of Directors. The Board of Directors from time to time may delegate to any officer or agent the power to appoint subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Any such officer or agent may remove any such subordinate officer or agent appointed by him, with or without cause. 4.14 Security. The Board of Directors may direct that the Corporation secure the fidelity of any or all of its officers or agents by bond or otherwise. ARTICLE 5. CAPITAL STOCK 5.1 Certificates of Stock, Uncertificated Shares. The shares of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution that some or all of any or all classes or series of the stock of the Corporation shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until each certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock in the Corporation represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation, by the Chairman of the Board, President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, representing the number of shares registered in certificate form. Such certificate shall be in such form as the Board of Directors may determine, to the extent consistent with applicable law, the Certificate of Incorporation and these Bylaws. 5.2 Signatures; Facsimile. All of such signatures on the certificate may be a facsimile, engraved or printed, to the extent permitted by law. In case any officer, transfer agent or registrar who has signed, or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue. 5.3 Lost, Stolen or Destroyed Certificates. The Secretary of the Corporation may cause a new certificate of stock or uncertificated shares in place of any certificate therefor issued by the Corporation, alleged to have been lost, stolen or destroyed, upon delivery to the Secretary of an affidavit of the owner or owners of such certificate, or his or their legal representative setting forth such allegation. The Secretary may require the owner or owners of such lost, stolen or destroyed certificate, or his or their legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of any such new certificate or uncertificated shares. 12 5.4 Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares, duly endorsed or accompanied by appropriate evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Within a reasonable time after the transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Section 151, 156, 202(a) or 218(a) of the General Corporation Law. Subject to the provisions of the Certificate of Incorporation and these Bylaws, the Board of Directors may prescribe such additional rules and regulations as it may deem appropriate relating to the issue, transfer and registration of shares of the Corporation. 5.5 Record Date. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. 5.6 Registered Stockholders. Prior to due surrender of a certificate for registration of transfer, the Corporation may treat the registered owner as the person exclusively entitled to receive dividends and other distributions, to vote, to receive notice and otherwise to exercise all the rights and powers of the owner of the shares represented by such certificate, and the Corporation shall not be bound to recognize any equitable or legal claim to or interest in such shares on the part of any other person, whether or not the Corporation shall have notice of such claim or interest. Whenever any transfer of shares shall be made for collateral security, and not absolutely, it shall be so expressed in the entry of the transfer if, when the certificates are presented to the Corporation for transfer or uncertificated shares are requested to be transferred, both the transferor and transferee request the Corporation to do so. 5.7 Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents and registrars, and may require all certificates representing shares to bear the signature of any such transfer agents or registrars. ARTICLE 6. INDEMNIFICATION 6.1 Indemnification. The Corporation shall, to the fullest extent permitted by applicable law from time to time in effect, indemnify any and all persons who may serve or who 13 have served at any time as Directors or officers of the Corporation, or who at the request of the Corporation may serve or at any time have served as Directors or officers of another corporation (including subsidiaries of the Corporation) or of any partnership, joint venture, trust or other enterprise, from and against any and all of the expenses, liabilities or other matters referred to in or covered by said law. Such indemnification shall continue as to a person who has ceased to be a Director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person. The Corporation 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. The indemnification provided by this Article shall not be deemed exclusive of any other rights to which any person may be entitled under any provision of the Certificate of Incorporation, other Bylaw, agreement, vote of stockholders or disinterested Directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. 6.2 Definition. For purposes of this Article, the term "Corporation" shall include constituent corporations referred to in Subsection (h) of Section 145 of the General Corporation Law (or any similar provision of applicable law at the time in effect). ARTICLE 7. OFFICES 7.1 Registered Office. The registered office of the Corporation in the State of Delaware shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, and the Corporation's registered agent shall be The Corporation Trust Company. 7.2 Other Offices. The Corporation may maintain offices or places of business at such other locations within or without the State of Delaware as the Board of Directors may from time to time determine or as the business of the Corporation may require. ARTICLE 8. GENERAL PROVISIONS 8.1 Dividends. Subject to any applicable provisions of law and the Certificate of Incorporation, dividends upon the shares of the Corporation may be declared by the Board of Directors at any regular or special meeting of the Board of Directors and any such dividend may be paid in cash, property, or shares of the Corporation. 8.2 Reserves. There may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its 14 absolute discretion, thinks proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall think conducive to the interest of the Corporation, and the Board of Directors may similarly modify or abolish any such reserve. 8.3 Execution of Instruments. The President, any Executive Vice President, any Vice President, the Secretary or the Treasurer may enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. The Board of Directors or the President may authorize any other officer or agent to enter into any contract or execute and deliver any instrument in the name and on behalf of the Corporation. Any such authorization may be general or limited to specific contracts or instruments. 8.4 Corporate Indebtedness. No loan shall be contracted on behalf of the Corporation, and no evidence of indebtedness shall be issued in its name, unless authorized by the Board of Directors. Such authorization may be general or confined to specific instances. Loans so authorized may be effected at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual. All bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation issued for such loans shall be made, executed and delivered as the Board of Directors shall authorize. When so authorized by the Board of Directors, any part of or all the properties, including contract rights, assets, business or good will of the Corporation, whether then owned or thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or assigned in trust as security for the payment of such bonds, debentures, notes and other obligations or evidences of indebtedness of the Corporation, and of any interest thereon, by instruments executed and delivered in the name of the Corporation. 8.5 Deposits. Any funds of the Corporation may be deposited from time to time in such banks, trust companies or other depositaries as may be determined by the Board of Directors or the President, or by such officers or agents as may be authorized by the Board of Directors or the President to make such determination. 8.6 Checks. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such agent or agents of the Corporation, and in such manner, as the Board of Directors, the Chairman of the Board, or the President from time to time may determine. 8.7 Sale, Transfer, etc. of Securities. To the extent authorized by the Board of Directors or by the President, any Vice President, the Secretary or the Treasurer, or any other officers designated by the Board of Directors, the Chairman of the Board, or the President may sell, transfer, endorse, and assign any shares of stock, bonds or other securities owned by or held in the name of the Corporation, and may make, execute and deliver in the name of the Corporation, under its corporate seal, any instruments that may be appropriate to effect any such sale, transfer, endorsement or assignment. 15 8.8 Voting as Stockholder. Unless otherwise determined by resolution of the Board of Directors, the President or any Vice President shall have full power and authority on behalf of the Corporation to attend any meeting of stockholders of any corporation in which the Corporation may hold stock, and to act, vote (or execute proxies to vote) and exercise in person or by proxy all other rights, powers and privileges incident to the ownership of such stock. Such officers acting on behalf of the Corporation shall have full power and authority to execute any instrument expressing consent to or dissent from any action of any such corporation without a meeting. The Board of Directors may by resolution from time to time confer such power and authority upon any other person or persons. 8.9 Fiscal Year. The fiscal year of the Corporation shall commence on the first day of January of each year (except for the Corporation's first fiscal year which shall commence on the date of incorporation) and shall end in each case on December 31. 8.10 Seal. The seal of the Corporation shall be circular in form and shall contain the name of the Corporation, the year of its incorporation and the words "Corporate Seal" and "Delaware". The form of such seal shall be subject to alteration by the Board of Directors. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced, or may be used in any other lawful manner. 8.11 Books and Records. Except to the extent otherwise required by law, the books and records of the Corporation shall be kept at such place or places within or without the State of Delaware as may be determined from time to time by the Board of Directors. ARTICLE 9. AMENDMENT OF BYLAWS 9.1 Amendment. Except as set forth in the Certificate of Incorporation, these Bylaws may be amended, altered or repealed at any regular or special meeting of the stockholders by the holders of shares of Common Stock representing at least two-thirds (2/3) of the votes entitled to be cast if, in the case of a special meeting only, notice of such amendment, alteration or repeal is contained in the notice or waiver of notice of such meeting. ARTICLE 10. CONSTRUCTION 10.1 Construction. In the event of any conflict between the provisions of these Bylaws as in effect from time to time and the provisions of the Certificate of Incorporation as in effect from time to time, the provisions of the Certificate of Incorporation shall be controlling. 16 EX-4.1 11 INDENTURE Exhibit 4.1 - -------------------------------------------------------------------------------- TRITEL PCS, INC. TRITEL, INC. TRITEL COMMUNICATIONS, INC. TRITEL FINANCE, INC. $372,000,000 12 3/4% SENIOR SUBORDINATED DISCOUNT NOTES DUE 2009 ------------------------------ INDENTURE Dated as of May 11, 1999 ------------------------------ THE BANK OF NEW YORK Trustee ------------------------------ - -------------------------------------------------------------------------------- CROSS-REFERENCE TABLE* Trust Indenture Act Section Indenture Section 310(a)(1)..................................................... 7.10 (a)(2)..................................................... 7.10 (a)(3)..................................................... N.A. (a)(4)..................................................... N.A. (a)(5)..................................................... 7.10 (b)........................................................ 7.10 (c)........................................................ N.A. 311(a)........................................................ 7.11 (b)........................................................ 7.11 (c)........................................................ N.A. 312(a)........................................................ 2.05 (b)........................................................ 11.03 (c)........................................................ 11.03 313(a)........................................................ 7.06 (b)(1)..................................................... 10.03 (b)(2)..................................................... 7.07 (c)........................................................ 7.06;11.02 (d)........................................................ 7.06 314(a)........................................................ 4.03;11.02 (b)........................................................ 10.02 (c)(1)..................................................... 11.04 (c)(2)..................................................... 11.04 (c)(3)..................................................... N.A. (d)........................................................ N.A. (e)........................................................ 11.05 (f)........................................................ N.A. 315(a)........................................................ 7.01 (b)........................................................ 7.05,11.02 (c)........................................................ 7.01 (d)........................................................ 7.01 (e)........................................................ 6.11 316(a) (last sentence)........................................ 2.09 (a)(1)(A).................................................. 6.05 (a)(1)(B).................................................. 6.04 (a)(2)..................................................... N.A. (b)........................................................ 6.07 (c)........................................................ 2.12 317(a)(1)..................................................... 6.08 (a)(2)..................................................... 6.09 (b)........................................................ 2.04 318(a)........................................................ 11.01 (b)........................................................ N.A. (c)........................................................ 11.01 N.A. means not applicable. * This Cross-Reference Table is not part of the Indenture. TABLE OF CONTENTS Page ARTICLE ONE DEFINITIONS AND INCORPORATIONBY 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..........................................24 ARTICLE TWO THE NOTES Section 2.01. Form and Dating................................................25 Section 2.02. Execution and Authentication...................................26 Section 2.03. Registrar and Paying Agent.....................................27 Section 2.04. Paying Agent to Hold Money in Trust............................27 Section 2.05. Holder Lists...................................................27 Section 2.06. Transfer and Exchange..........................................28 Section 2.07. Replacement Notes..............................................42 Section 2.08. Outstanding Notes..............................................42 Section 2.09. Treasury Notes.................................................43 Section 2.10. Temporary Notes................................................43 Section 2.11. Cancellation...................................................43 Section 2.12. Defaulted Interest.............................................44 Section 2.13. CUSIP Numbers..................................................44 ARTICLE THREE REDEMPTION AND PREPAYMENT;SATISFACTION AND DISCHARGE Section 3.01. Notices to Trustee.............................................44 Section 3.02. Selection of Notes to Be Redeemed..............................45 Section 3.03. Notice of Redemption...........................................45 Section 3.04. Effect of Notice of Redemption.................................46 Section 3.05. Deposit of Redemption Price....................................46 Section 3.06. Notes Redeemed in Part.........................................47 Section 3.07. Optional Redemption............................................47 Section 3.08. Mandatory Redemption...........................................48 Section 3.09. Offer to Purchase by Application of Excess Proceeds............48 Section 3.10. Satisfaction and Discharge of Indenture........................50 Section 3.11. Application of Trust Money.....................................51 ARTICLE FOUR COVENANTS Section 4.01. Payment of Notes...............................................51 Section 4.02. Maintenance of Office or Agency................................52 Section 4.03. Reports........................................................52 Section 4.04. Compliance Certificate.........................................53 Section 4.05. Taxes..........................................................54 Section 4.06. Stay, Extension and Usury Laws.................................54 Section 4.07. Restricted Payments............................................54 Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries........................................58 Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.....59 Section 4.10. Asset Sales....................................................63 Section 4.11. Transactions with Affiliates...................................64 Section 4.12. Liens..........................................................66 Section 4.13. Business Activities............................................67 Section 4.14. Corporate Existence............................................67 Section 4.15. Repurchase at the Option of HoldersCChange of Control..........67 Section 4.16. Sale and Leaseback Transactions................................69 Section 4.17. Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries.....................................69 Section 4.18. Limitation on Issuances of Guarantees of Indebtedness by Restricted Subsidiaries.....................................70 Section 4.19. Unrestricted Subsidiaries......................................70 Section 4.20. Payments for Consent...........................................71 Section 4.21. Limitation on other Senior Subordinated Debt...................71 Section 4.22. Additional Subsidiary Guarantees...............................71 Section 4.23. Amendments to Securities Purchase Agreement....................71 ARTICLE FIVE SUCCESSORS Section 5.01. Merger, Consolidation, or Sale of Assets.......................72 Section 5.02. Successor Corporation Substituted..............................73 ARTICLE SIX DEFAULTS AND REMEDIES Section 6.01. Events of Default..............................................73 Section 6.02. Acceleration...................................................75 Section 6.03. Other Remedies.................................................76 Section 6.04. Waiver of Past Defaults........................................77 Section 6.05. Control by Majority............................................77 Section 6.06. Limitation on Suits............................................77 Section 6.07. Rights of Holders of Notes to Receive Payment..................78 Section 6.08. Collection Suit by Trustee.....................................78 Section 6.09. Trustee May File Proofs of Claim...............................78 Section 6.10. Priorities.....................................................79 Section 6.11. Undertaking for Costs..........................................79 ARTICLE SEVEN TRUSTEE Section 7.01. Duties of Trustee..............................................80 Section 7.02. Certain Rights of Trustee......................................81 Section 7.03. Individual Rights of Trustee...................................82 Section 7.04. Trustee's Disclaimer...........................................82 Section 7.05. Notice of Defaults.............................................82 Section 7.06. Reports by Trustee to Holders of the Notes.....................82 Section 7.07. Compensation and Indemnity.....................................83 Section 7.08. Replacement of Trustee.........................................84 Section 7.09. Successor Trustee by Merger, Etc...............................85 Section 7.10. Eligibility; Disqualification..................................85 Section 7.11. Preferential Collection of Claims Against Company..............85 ARTICLE EIGHT LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.......85 Section 8.02. Legal Defeasance and Discharge.................................86 Section 8.03. Covenant Defeasance............................................86 Section 8.04. Conditions to Legal or Covenant Defeasance.....................87 Section 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions.......................88 Section 8.06. Repayment to Company...........................................89 Section 8.07. Reinstatement..................................................89 ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01. Without Consent of Holders of Notes............................89 Section 9.02. With Consent of Holders of Notes...............................90 Section 9.03. Compliance with Trust Indenture Act............................92 Section 9.04. Revocation and Effect of Consents..............................92 Section 9.05. Notation on or Exchange of Notes...............................92 Section 9.06. Trustee to Sign Amendments, Etc................................92 ARTICLE TEN GUARANTEES Section 10.01 Guarantees.....................................................93 Section 10.02. Execution and Delivery of Guarantee...........................94 Section 10.03. Severability..................................................94 Section 10.04. Seniority of Guarantees.......................................94 Section 10.05. Limitation of Guarantors' Liability...........................94 Section 10.06. Guarantors May Consolidate, Etc., on Certain Terms............95 Section 10.07. Releases Following Sale of Assets.............................96 Section 10.08. Release of a Guarantor........................................96 Section 10.09. Benefits Acknowledged.........................................97 ARTICLE ELEVEN SUBORDINATION Section 11.01. Notes Subordinate to Senior Debt...............................97 Section 11.02. Payment by the Company of Proceeds upon Dissolution, Etc.......97 Section 11.03. Suspension of Payment on Notes When Senior Debt of the Company in Default.............................................98 Section 11.04. Payment Over by Guarantors of Proceeds upon Dissolution, Etc............................................................99 Section 11.05. Suspension of Payment on Guarantees When Senior Indebtedness of Guarantor in Default..........................100 Section 11.06. Payment Permitted If No Default...............................100 Section 11.07. Subrogation to Rights of Holders of Senior Debt...............101 Section 11.08. Provisions Solely to Define Relative Rights...................101 Section 11.09. Trustee to Effectuate Subordination...........................101 Section 11.10. No Waiver of Subordination Provisions.........................102 Section 11.11. Notice to Trustee.............................................102 Section 11.12. Reliance on Judicial Order or Certificate of Liquidating Agent.........................................................103 Section 11.13. Rights of Trustee As a Holder of Senior Debt; Preservation of Trustee's Rights...........................................103 Section 11.14. Article Applicable to Paying Agents...........................103 Section 11.15. No Suspension of Remedies.....................................104 Section 11.16. Trust Moneys Not Subordinated.................................104 Section 11.17. Trustee Not Fiduciary for Holders of Senior Debt..............104 Section 11.18. Notice to Holders of Senior Debt..............................104 ARTICLE TWELVE MISCELLANEOUS Section 12.01. Trust Indenture Act Controls .................................104 Section 12.02. Notices ......................................................105 Section 12.03. Communication by Holders of Notes with Other Holders of Notes......................................................106 Section 12.04. Certificate and Opinion as to Conditions Precedent ...........106 Section 12.05. Statements Required in Certificate or Opinion ................106 Section 12.06. Rules by Trustee and Agents ..................................107 Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders..............................................107 Section 12.08. Governing Law ................................................107 Section 12.09. No Adverse Interpretation of Other Agreements ................107 Section 12.10. Successors ...................................................107 Section 12.11. Severability .................................................108 Section 12.12. Counterpart Originals ........................................108 Section 12.13. Table of Contents, Headings, Etc .............................108 EXHIBITS Exhibit A1 FORM OF NOTE Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR i INDENTURE dated as of May 11, 1999 among Tritel PCS, Inc., a Delaware corporation (the "COMPANY"), Tritel, Inc., a Delaware corporation, Tritel Communications, Inc., a Delaware corporation, Tritel Finance, Inc., a Delaware corporation (collectively, the "GUARANTORS"), and The Bank of New York, a New York banking corporation, as trustee (the "TRUSTEE"). The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 12 3/4% Senior Subordinated Discount Notes due 2009 (the "NOTES"): ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. "144A GLOBAL NOTE" means a global note substantially in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount at maturity of the Notes sold in reliance on Rule 144A. "ACCRETED INCREMENT" means (a) if the redemption date occurs before the first Semi-Annual Accrual Date, an amount equal to the product of (1) the Accreted Value for the first Semi-Annual Accrual Date less the original issue price multiplied by (2) a fraction, the numerator of which is the number of days from the Closing Date to the redemption date, using a 360-day year of twelve 30-day months, and the denominator of which is the number of days elapsed from the Closing Date to the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months, or (b) if the redemption date occurs between two Semi-Annual Accrual Dates, an amount equal to the product of (1) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Accrual Date multiplied by (2) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the redemption date, using a 360-day year of twelve 30-day months, and the denominator of which is 180. "ACCRETED VALUE" means, for any particular date of determination (any such date being herein referred to as a "SPECIFIED DATE"), the amount provided below for each $1,000 principal amount at maturity of Notes outstanding: A. If the Specified Date occurs on one of the following dates (each a "SEMI-ANNUAL ACCRUAL DATE"), the Accreted Value will equal the amount set forth below: SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE ------------------------ -------------- November 15, 1999 $ 573.38 May 15, 2000 609.93 November 15, 2000 648.82 May 15, 2001 690.18 November 15, 2001 734.18 May 15, 2002 780.98 November 15, 2002 830.77 May 15, 2003 883.73 November 15, 2003 940.07 May 15, 2004 or thereafter 1,000.00 B. If the Specified Date occurs before the first Semi-Annual Accrual Date, the Accreted Value will equal the sum of (1) the original issue price and (2) an amount equal to the product of (i) the Accreted Value for the first Semi-Annual Accrual Date less the original issue price multiplied by (ii) a fraction, the numerator of which is the number of days from the issue date of the Notes to the Specified Date, using a 360-day year of twelve 30-day months, and the denominator of which is the number of days elapsed from the issue date of the Notes to the first Semi-Annual Accrual Date, using a 360-day year of twelve 30-day months. C. If the Specified Date occurs between two Semi-Annual Accrual Dates, the Accreted Value will equal the sum of (1) the Accreted Value for the Semi-Annual Accrual Date immediately preceding such Specified Date and (2) an amount equal to the product of (i) the Accreted Value for the immediately following Semi-Annual Accrual Date less the Accreted Value for the immediately preceding Semi-Annual Accrual Date multiplied by (ii) a fraction, the numerator of which is the number of days from the immediately preceding Semi-Annual Accrual Date to the Specified Date, using a 360-day year of twelve 30-day months, and the denominator of which is 180. D. If the Specified Date occurs after May 15, 2004, the Accreted Value will equal $1,000. "ACQUIRED DEBT" means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "AFFILIATE" means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "CONTROL," when used with respect to any specified 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 meaning correlative to the foregoing. "AGENT" means any Registrar, Paying Agent or co-registrar. "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Cedel that apply to such transfer or exchange. "ASSET ACQUISITION" means (a) any capital contribution (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) by the Company or any Restricted Subsidiary in any other Person, or any acquisition or purchase of Capital Stock of any other 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 (b) any acquisition by the Company or any Restricted Subsidiary of the assets of any Person which constitute substantially all of an operating unit or line of business of such Person or which is otherwise outside of the ordinary course of business. "ASSET DISPOSITION" means the sale or other disposition by the Company or any of its Restricted Subsidiaries (other than to the Company or another Restricted Subsidiary of the Company) of (i) all or substantially all of the Capital Stock of any Restricted Subsidiary of the Company or (ii) all or substantially all of the assets that constitute a division or line of business of the Company or any of its Restricted Subsidiaries. "ASSET SALE" means: (a) (1) the sale, lease, conveyance or other disposition of any assets or rights other than sales of inventory in the ordinary course of business consistent with past practices; provided that the sale, conveyance or other disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries taken as a whole shall be 3 governed by Section 4.15 hereof and/or Section 5.01 hereof and not by Section 4.10 hereof; and (2) the issuance of Equity Interests by any of the Company's Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries. (b) Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales: (1) any single transaction or series of related transactions that involves assets having a fair market value of less than $5.0 million; (2) any disposition of properties and assets of the Company that is governed by Section 5.01 hereof; (3) a transfer of assets between or among the Company and its Restricted Subsidiaries; (4) transfers of property or assets to an Unrestricted Subsidiary, if permitted under Section 4.07 hereof; (5) the sale or lease of equipment, inventory, accounts receivable or other assets in the ordinary course of business; and (6) any transfer by the Company or a Subsidiary of property or equipment with a fair market value of less than $5.0 million to a Person who is not an Affiliate of the Company in exchange for property or equipment that has a fair market value at least equal to the fair market value of the property or equipment so transferred; provided that, in the event of a transfer described in this clause (6), the Company shall deliver to the Trustee an Officer's Certificate certifying that such exchange complies with this clause (6). "AVERAGE LIFE" means, as of the date of determination with respect to any Indebtedness, the quotient obtained by dividing (a) the sum of the products of (i) the number of years from the date of determination to the date or dates of each successive scheduled principal payment (including, without limitation, any sinking fund requirements) of such Indebtedness multiplied by (ii) the amount of each such principal payment by (b) the sum of all such principal payments. "BANK CREDIT AGREEMENT" means the Amended and Restated Loan Agreement dated as of March 31, 1999 among the Company, Tritel, Inc., Toronto Dominion (Texas), Inc., as administrative agent, and the Banks, as such agreement may be amended, restated, supplemented, refinanced or otherwise modified from time to time. 4 "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. "BANKS" means the banks or other financial institutions that from time to time are lenders under the Bank Credit Agreement. "BENEFICIAL OWNER" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms "BENEFICIALLY OWNS" and "BENEFICIALLY OWNED" shall have a corresponding meaning. "BOARD OF DIRECTORS" means: (1) with respect to a corporation, the board of directors of the corporation; (2) with respect to a partnership, the board of directors of the general partner of the partnership; and (3) with respect to any other Person, the board or committee of such Person serving a similar function. "BROKER-DEALER" has the meaning set forth in the Registration Rights Agreement. "BUSINESS DAY" means any day other than a Legal Holiday. "CAPITAL LEASE OBLIGATION" means, with respect to any Person, an obligation incurred or assumed under or in connection with any capital lease of real or personal property that, in accordance with GAAP, has been recorded as a capitalized lease. "CAPITAL STOCK" means: (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; 5 (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "CASH EQUIVALENTS" means: (1) United States dollars; (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition; (3) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers0 acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any lender party to the Bank Credit Agreement or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thompson Bank Watch Rating of "B" or better; (4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (5) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Ratings Services and in each case maturing within six months after the date of acquisition; and (6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. "CEDEL" means Cedel Bank, S.A. "CHANGE OF CONTROL" means the occurrence of any of the following: (1) for so long as the Voting Preference Common Stock stock of Tritel, Inc. remains outstanding and the Voting Preference Common Stock constitutes 50.1% or more of the combined voting power of all classes of Tritel, Inc.'s outstanding Voting Stock pursuant to the Certificate of Incorporation of Tritel, Inc., a "person" or "group" 6 (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), other than a Permitted Holder, becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person will be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of shares of Voting Preference Common Stock having more than 50% of the total voting power of such shares of Voting Preference Common Stock; (2) if there are no shares of Voting Preference Common Stock outstanding or the Voting Preference Common Stock no longer constitutes 50.1% or more of the combined voting power of all classes of Tritel, Inc.'s outstanding Voting Stock pursuant to the Certificate of Incorporation of Tritel, Inc., a "person" or "group," other than a Permitted Holder, becomes the "beneficial owner" of Voting Stock having more than 50% of the voting power of the total Voting Stock of Tritel, Inc.; (3) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act), except to a Permitted Holder; (4) the adoption of a plan relating to the liquidation or dissolution of the Company; (5) during any consecutive two-year period, individuals who at the beginning of such period constituted the Board of Directors of the Company (together with any new directors whose election to such Board of Directors, or whose nomination for election by the stockholders of the Company was approved by a vote of 66% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of the Company then in office; provided, however, that changes in specific representatives of the existing investors that are entitled to nominate board representatives shall be excluded from consideration for purposes of this clause (5); or (6) Tritel, Inc. ceases to own, directly or indirectly, 100% of the Capital Stock of the Company. "CLOSING DATE" means May 11, 1999. 7 "COMPANY" means Tritel PCS, Inc., a Delaware corporation, and any and all successors thereto. "CONSOLIDATED EBITDA" means, for any period, the sum of, without duplication, Consolidated Net Income for such period, plus (or, in the case of clause (d) below, plus or minus) the following items to the extent included in computing Consolidated Net Income for such period: (a) the Consolidated Interest Expense and preferred stock dividends of the Company and its Restricted Subsidiaries for such period, plus (b) the provision for federal, state, local and foreign income taxes of the Company and its Restricted Subsidiaries for such period, plus (c) the aggregate depreciation and amortization expense of the Company and any of its Restricted Subsidiaries for such period, plus (d) any other non-cash charges for such period, and minus non-cash credits for such period, other than non-cash charges or credits resulting from changes in prepaid assets or accrued liabilities in the ordinary course of business; provided that income tax expense, interest expense and preferred stock dividends, depreciation and amortization expense, and non-cash charges and credits of a Restricted Subsidiary shall be included in Consolidated EBITDA only to the extent (and in the same proportion) that the net income of such Restricted Subsidiary was included in calculating Consolidated Net Income for such period. "CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate amount of (i) interest in respect of Indebtedness (including amortization of original issue discount on any Indebtedness and the interest portion of any deferred payment obligation, calculated in accordance with the effective interest method of accounting; all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financings; the net costs associated with Hedging Obligations; and Indebtedness that is guaranteed or secured by the Company or any of its Restricted Subsidiaries), (ii) the interest portion of Capital Lease Obligations paid, accrued or scheduled to be paid or to be accrued by the Company and its Restricted Subsidiaries during such period and (iii) cash dividends paid on Disqualified Stock by the Company and any Restricted Subsidiary (to any Person other than the Company and its Restricted Subsidiaries). "CONSOLIDATED LEVERAGE RATIO" means, on any Transaction Date, the ratio of (i) the aggregate amount of Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis as of such date to (ii) the product of (x) the aggregate amount of Consolidated EBITDA for the immediately preceding two full fiscal quarters for which internal financial statements are available, taken as one accounting period, multiplied by (y) two. "CONSOLIDATED NET INCOME" means, for any period, the aggregate Net Income (or loss) of the Company and its Restricted Subsidiaries for such period determined in conformity with GAAP; provided that the following items shall be excluded in computing Consolidated Net Income (without duplication): 8 (1) the portion of Net Income (or loss) of any Person (other than the Company or a Restricted Subsidiary), including Unrestricted Subsidiaries, in which the Company or any Restricted Subsidiary has an ownership interest, except to the extent of the amount of dividends or other distributions actually paid to the Company or any Restricted Subsidiary in cash during such period; (2) the Net Income (or loss) of any Person combined with the Company or any Restricted Subsidiary on a "pooling of interests" basis attributable to any period prior to the date of combination; (3) the Net Income of any Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is at the date of determination restricted, directly or indirectly, except to the extent that such Net Income could be paid to the Company or a Restricted Subsidiary thereof by loans, advances, intercompany transfers, principal repayments or otherwise; (4) any gains or losses (on an after-tax basis) attributable to Asset Sales; (5) except for purposes of calculating the amount of Restricted Payments that may be made pursuant to clause (3) of the first paragraph of Section 4.07 hereof, any amount paid or accrued as dividends on Preferred Stock (other than accrued dividends which, pursuant to the terms of the Preferred Stock, will not be payable prior to the first anniversary after the Stated Maturity of the Notes) of the Company or any Restricted Subsidiary owned by Persons other than the Company and any of its Restricted Subsidiaries; and (6) all extraordinary gains and extraordinary losses. "CONSOLIDATED NET WORTH" means, with respect to any specified Person as of any date, the sum of: (1) the consolidated equity of the common stockholders of such Person and its Restricted Subsidiaries as of such date; plus (2) the respective amounts reported on such Person's balance sheet as of such date with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock. "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Company. 9 "CURRENCY AGREEMENTS" means any spot or forward foreign exchange agreements and currency swap, currency option or other similar financial agreements or arrangements entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and designed to protect against or manage exposure to fluctuations in foreign currency exchange rates. "CUSTODIAN" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "DEFAULT" means any event that is, or after notice or passage of time or both, would be an Event of Default. "DEFINITIVE NOTE" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A1 hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "DEPOSITARY" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "DESIGNATED SENIOR DEBT" means: (1) any Indebtedness outstanding under the Bank Credit Agreement; and (2) any other Senior Debt permitted under this Indenture the principal amount of which is $25.0 million or more and that has been designated by the Company's Board of Directors as "DESIGNATED SENIOR DEBT" at the time of its initial issuance in a resolution delivered to the Trustee. "DESIGNATED SENIOR DEBT" of a Subsidiary Guarantor shall have a correlative meaning. "DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 hereof. 10 "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). "EQUITY OFFERING" means a capital contribution to the Company from Tritel, Inc. or a sale by the Company of its Capital Stock (which is not Disqualified Stock) to Tritel, Inc. "EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear system. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXCHANGE NOTES" means the Notes issued in the Exchange Offer pursuant to Section 2.06(f) hereof. "EXCHANGE OFFER" has the meaning set forth in the Registration Rights Agreement. "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the Registration Rights Agreement. "EXISTING INDEBTEDNESS" means up to $41.2 million (book value) in aggregate principal amount of Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Bank Credit Agreement) in existence on the date of this Indenture, until such amounts are repaid. "FCC" means the Federal Communications Commission. "GAAP" means generally accepted accounting principles 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 have been approved by a significant segment of the accounting profession, which are in effect from time to time. "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture. "GLOBAL NOTES" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A1 or A2 hereto, as appropriate, issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof. "GOVERNMENT SECURITIES" means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) 11 obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of Tritel PCS thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as a custodian with respect to any such U.S. Government obligation or a specific payment of principal of or interest on any such U.S. Government obligation held by such custodian for the account of the holder of such depository receipt. However, except as required by law, such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government obligation or the specific payment of principal of or interest on the U.S. Government obligation evidenced by such depository receipt. "GUARANTEE" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner, including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness. "GUARANTEE" means the guarantees of the Notes by the Parent Guarantor and the Subsidiary Guarantors in accordance with the provisions of this Indenture. "GUARANTORS" means the Parent Guarantor and the Subsidiary Guarantors. "HEDGING OBLIGATIONS" means, with respect to any specified Person, the obligations of such Person under: (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and (2) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "HOLDER" means a Person in whose name a Note is registered. "INDEBTEDNESS" means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent, in respect of: (1) borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); (3) banker's acceptances; (4) representing Capital Lease Obligations; 12 (5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or (6) representing any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "INDEBTEDNESS" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person. 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; and (2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "INDENTURE" means this Indenture, as amended or supplemented from time to time. "INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a Global Note through a Participant. "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs. "INVESTMENTS" means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07 hereof. The acquisition by the Company or any Restricted Subsidiary of the Company of a Person that holds an 13 Investment in a third Person shall be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the fair market value of the Investment held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of Section 4.07 hereof. "ISSUE DATE" means the date of original issuance of the Notes. "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. "LICENSE SUBSIDIARY" means Tritel A/B Holding Corp., Tritel C/F Holding Corp., NexCom, Inc., Clearcall, Inc., Global PCS, Inc., Clearwave, Inc., DigiNet PCS, Inc., DigiCom, Inc. and DigiCall, Inc., each a Delaware corporation, and Aircom PCS, Inc. and OvinCom, Inc., each an Alabama corporation, and any other wholly owned Subsidiary of the Company designated as a License Subsidiary under the Bank Credit Agreement; provided that any such Subsidiary will be a License Subsidiary only so long as its sole assets consist of stock of one or more other License Subsidiaries, one or more PCS Licenses and/or cash from senior loans by the Company or any Restricted Subsidiary in order to fund amounts due, substantially contemporaneously, to the FCC or with respect to franchise taxes and other similar payments related to the PCS Licenses, and its sole Indebtedness consists of Indebtedness owed to the FCC attributable to such PCS License or Licenses, amounts owed to the Company or any Restricted Subsidiary under such senior loans, and guarantees of the Bank Credit Agreement. "LIEN" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction. "LIQUIDATED DAMAGES" means all liquidated damages then owing pursuant to Section 5 of the Registration Rights Agreement. "MARKETING AFFILIATE" means any Person which engages in no activity other than the registration, holding, maintenance or protection of trademarks and the licensing thereof. 14 "NET INCOME" means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however: (1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "NET PROCEEDS" means (a) with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations or escrowed funds, but only when received in the form of, or stock or other assets when disposed for, cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary), net of (i) brokerage commissions and other fees and expenses (including fees and expenses of legal counsel and investment banks) related to such Asset Sale, (ii) provisions for all taxes payable as a result of such Asset Sale, (iii) payments made to retire Indebtedness where payment of such Indebtedness is secured by the assets or properties the subject of such Asset Sale, (iv) amounts required to be paid to any Person (other than the Company or any Restricted Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale and (v) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale and (b) with respect to any capital contribution or issuance or sale of Capital Stock as referred to under Section 4.07 hereof, the proceeds of such capital contribution, issuance or sale in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations when received in the form of, or stock or other assets when disposed for, cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted Subsidiary), net of attorney's fees, accountant's fees and brokerage, consultation, underwriting and other fees and expenses actually incurred in connection with such capital contribution, issuance or sale and net of taxes paid or payable as a result thereof. "NON-U.S. PERSON" means a Person who is not a U.S. Person. "NOTES" has the meaning assigned to it in the preamble to this Indenture. 15 "OBLIGATIONS" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "OFFERING" means the offering of the Notes by the Company. "OFFICER" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company by at least two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 12.05 hereof. "OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "PARENT GUARANTEE" means a guarantee of the Notes by the Parent Guarantor in accordance with the provisions of this Indenture. "PARENT GUARANTOR" means Tritel, Inc. and any successors or assigns permitted under this Indenture. "PARTICIPANT" means, with respect to the Depositary, Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel, respectively (and with respect to DTC, shall include Euroclear and Cedel). "PERMITTED BUSINESS" means (i) the delivery or distribution of telecommunications, voice, data or video services or (ii) any business or activity reasonably related or ancillary thereto, including, without limitation, any business conducted by the Company or any Restricted Subsidiary on the Issue Date and the acquisition, holding or exploitation of any license relating to the delivery of the services described in clause (i) of this definition. "PERMITTED HOLDERS" means: 16 (1) each of AT&T Corp., TeleCorp PCS, Inc., Triton PCS, Inc., the institutional equity investors that purchased Series C Preferred Stock of Tritel, Inc. on January 7, 1999 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; (2) William D. Mounger, II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr.; the spouse, descendants and heirs of any of the foregoing persons; any trust existing solely for the benefit of one or more of the foregoing persons; the estate or any executor, administrator, conservator or other legal representative of one or more of the foregoing persons; and any corporation, limited partnership, limited liability company or similar entity, all of the Voting Stock of which is owned by one or more of the foregoing persons; and (3) 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 of the persons identified in clauses (1) or (2) above. "PERMITTED INVESTMENTS" means: (1) Investments in Cash Equivalents; (2) Investments in prepaid expenses, negotiable instruments held for collection and lease, utility and workers' compensation, performance and other similar deposits; (3) loans and advances to employees made in the ordinary course of business; (4) bonds, notes, debentures or other securities received as a result of Asset Sales permitted under Section 4.10 hereof; (5) Investments by the Company or any Restricted Subsidiary in another Person, if as a result of such Investment (i) such other Person becomes a Restricted Subsidiary or (ii) such other Person is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, the Company or a Restricted Subsidiary; (6) Investments by the Company or any of the Restricted Subsidiaries in any one of the other of them; and (7) Investments the sum of which does not exceed $7.5 million at any one time outstanding. 17 "PERMITTED JUNIOR SECURITIES" means: (1) Equity Interests in the Company or any Guarantor; or (2) debt securities that are subordinated to all Senior Debt, and to any debt securities issued in exchange for Senior Debt, to substantially the same extent as, or to a greater extent than, the Notes and the Subsidiary Guarantees are subordinated to Senior Debt under this Indenture. "PERSON" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity. "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated as of the date of this Indenture, by and among the Company and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time. "REGULATION S" means Regulation S promulgated under the Securities Act. "REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global Note or a Regulation S Permanent Global Note, as appropriate. "REGULATION S PERMANENT GLOBAL NOTE" means a permanent global Note in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount at maturity of the Regulation S Temporary Global Note upon expiration of the Restricted Period. "REGULATION S TEMPORARY GLOBAL NOTE" means a temporary global Note in the form of Exhibit A2 hereto bearing the Global Note Legend, the Private Placement Legend and the Temporary Regulation S Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount at maturity of the Notes initially sold in reliance on Rule 903 of Regulation S. 18 "RELATED PARTY" means: (1) any controlling stockholder, 80% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of the Principal; or (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which, consist of any one or more of the Principal and/or such other Persons referred to in the immediately preceding clause (1). "RESPONSIBLE OFFICER," when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the Private Placement Legend. "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private Placement Legend. "RESTRICTED INVESTMENT" means an Investment other than a Permitted Investment. "RESTRICTED PERIOD" means the 40-day restricted period as defined in Regulation S. "RESTRICTED SUBSIDIARY" means any Subsidiary other than an Unrestricted Subsidiary. "RULE 144" means Rule 144 promulgated under the Securities Act. "RULE 144A" means Rule 144A promulgated under the Securities Act. "RULE 903" means Rule 903 promulgated under the Securities Act. "RULE 904" means Rule 904 promulgated the Securities Act. "SEC" means the Securities and Exchange Commission. 19 "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITIES PURCHASE AGREEMENT" means the Securities Purchaser Agreement, dated as of May 20, 1998, by and among Tritel, Inc., Airwave Communications, LLC, Digital PCS, LLC, AT&T Wireless PCS, Inc., the institutional investors named therein purchasing shares of Series C Preferred Stock of Tritel, Inc. and certain members of management named therein, as such agreement may be amended, modified or supplemented from time to time. "SENIOR DEBT" means: (1) all Indebtedness of the Company or any Guarantor outstanding under the Bank Credit Agreement and all Hedging Obligations with respect thereto; (2) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes or any Subsidiary Guarantee; and (3) all Obligations with respect to the items listed in the preceding clauses (1) and (2). Notwithstanding anything to the contrary in the preceding three clauses, Senior Debt shall not include: (1) any liability for federal, state, local or other taxes owed or owing by the Company; (2) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates; (3) any trade payables; or (4) the portion of any Indebtedness that is incurred in violation of this Indenture. "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement as defined in the Registration Rights Agreement. "SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof. 20 "STATED MATURITY" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company that is subordinated in right of payment to the Notes. "SUBSIDIARY" means, with respect to any specified Person: (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by Tritel, Inc. and/or one or more other subsidiaries of Tritel, Inc.; and (2) any partnership (a) the sole general partner or the managing general partner of which is Tritel, Inc. and/or one or more other subsidiaries of Tritel, Inc. or (b) the only general partners of which Tritel, Inc. and/or one or more other subsidiaries of Tritel, Inc. "SUBSIDIARY GUARANTEE" means a guarantee of the Notes by a Restricted Subsidiary in accordance with the provisions of this Indenture. "SUBSIDIARY GUARANTOR" means any Restricted Subsidiary that issues a Subsidiary Guarantee. "TELECOMMUNICATIONS BUSINESS" means (i) the delivery or distribution of telecommunications, voice, data or video services or (ii) any business or activity reasonably related or ancillary thereto, including, without limitation, any business conducted by the Company or any Restricted Subsidiary on the Closing Date and the acquisition, holding or exploitation of any license relating to the delivery of the services described in clause (i) of this definition. "TELECOMMUNICATIONS INDEBTEDNESS" means any credit facility entered into with any vendor or supplier (or any financial institution acting on behalf of such a vendor or supplier); provided that the Indebtedness thereunder is incurred solely for the purpose of (A) financing the cost (including the cost of design, development, site acquisition, construction, integration, handset manufacture or acquisition or microwave relocation) of wireless telecommunications networks or systems or for which the Company or any Restricted Subsidiary 21 has obtained the applicable licenses or authorization to utilize the radio frequencies necessary for the operation of such networks or systems, (B) acquiring the Capital Stock of an entity engaged in the Telecommunications Business and (C) paying fees and expenses incurred in connection therewith. "TEMPORARY REGULATION S LEGEND" means the legend set forth in Section 2.06(h) hereof, which is required to be placed on the Regulation S Temporary Global Note. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (section) (section) 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA. "TOTAL CONSOLIDATED INDEBTEDNESS" means at any date of determination, an amount equal to (i) the accreted value of all Indebtedness, in the case of any Indebtedness issued with original issue discount, plus (ii) the principal amount of all Indebtedness, in the case of any other Indebtedness, of the Company and the Restricted Subsidiaries outstanding as of the date of determination. "TOTAL INVESTED CAPITAL" means, at any time of determination, the sum of, without duplication, (i) $271.5 million, the total amount of equity contributed to Tritel, Inc. as of the Issue Date, plus (ii) irrevocable binding commitments to purchase Capital Stock (other than Disqualified Stock) of Tritel, Inc. existing as of the Issue Date, plus (iii) the aggregate Net Proceeds received by the Company from capital contributions or the issuance or sale of Capital Stock (other than Disqualified Stock but including Capital Stock issued upon the conversion of convertible Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Disqualified Stock)) subsequent to the Issue Date, other than to a Restricted Subsidiary; provided, however, such aggregate net proceeds received pursuant to this clause (iii) shall exclude any amounts included as commitments to purchase Capital Stock in the preceding clause (ii), plus (iv) the aggregate Net Proceeds received by the Company or any Restricted Subsidiary from the sale, disposition or repayment of any Investment made after the Issue Date 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 (v) an amount equal to the consolidated net Investment the Company and/or any of the Restricted Subsidiaries has in any Subsidiary that was designated as an Unrestricted Subsidiary after the Issue Date and redesignated as a Restricted Subsidiary in accordance with Section 4.19 hereof, plus (vi) Total Consolidated Indebtedness, minus (vii) the aggregate amount of all Restricted Payments declared or made on or after the Issue Date. "TRANSACTION DATE" means, with respect to the incurrence of any Indebtedness by the Company or any of its Restricted Subsidiaries, the date such Indebtedness is to be incurred and, with respect to any Restricted Payment, the date such Restricted Payment is to be made. 22 "TRUSTEE" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "UNRESTRICTED GLOBAL NOTE" means a permanent global Note substantially in the form of Exhibit A1 attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend. "UNRESTRICTED SUBSIDIARY" means (a) any Subsidiary of the Company that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution and otherwise complies with Section 4.19 hereof and (b) any Subsidiary of an Unrestricted Subsidiary. Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described in Section 4.07 hereof. "U.S. PERSON" means a U.S. person as defined in Rule 902(o) under the Securities Act. "VOTING STOCK" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. Section 1.02. Other Definitions. Term Defined ---- ------- "AFFILIATE TRANSACTION".............................. 4.11 "ASSET SALE OFFER"................................... 3.09 "AUTHENTICATION ORDER"............................... 2.02 "CHANGE OF CONTROL OFFER"............................ 4.15 "CHANGE OF CONTROL PAYMENT".......................... 4.15 "CHANGE OF CONTROL PAYMENT DATE"..................... 4.15 "COMPUTATION PERIOD"................................. 4.07 23 "COVENANT DEFEASANCE"................................ 8.03 "DTC"................................................ 2.03 "EVENT OF DEFAULT"................................... 6.01 "EXCESS PROCEEDS".................................... 4.10 "INCUR".............................................. 4.09 "LEGAL DEFEASANCE"................................... 8.02 "NON-PAYMENT EVENT OF DEFAULT"....................... 11.03 "OFFER AMOUNT"....................................... 3.09 "OFFER PERIOD"....................................... 3.09 "OFFSHORE TRANSACTION"............................... 2.06 "PAYING AGENT"....................................... 2.03 "PAYMENT BLOCKAGE NOTICE"............................ 11.03 "PAYMENT DEFAULT".................................... 6.01 "PAYMENT EVENT OF DEFAULT"........................... 11.03 "PERMITTED DEBT"..................................... 4.09 "PURCHASE DATE"...................................... 3.09 "QUALIFIED INSTITUTIONAL BUYER"...................... 2.06 "REFERENCE PERIOD"................................... 4.09 "REFINANCING"........................................ 4.09 "REGISTRAR".......................................... 2.03 "RELATED PARTY"...................................... 4.11 "RESALE RESTRICTION TERMINATION DATE"................ 2.06 "RESTRICTED PAYMENTS" 407 "TRUSTEE"............................................ 8.05 "UNITED STATES"...................................... 2.06 Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "INDENTURE SECURITIES" means the Notes; "INDENTURE SECURITY HOLDER" means a Holder of a Note; 24 "INDENTURE TO BE QUALIFIED" means this Indenture; "INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and "OBLIGOR" on the Notes means the Company and any successor obligor upon the Notes. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. Section 1.04. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (c) "or" is not exclusive; (d) words in the singular include the plural, and in the plural include the singular; (e) provisions apply to successive events and transactions; and (f) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. ARTICLE TWO THE NOTES Section 2.01. Form and Dating. (a) General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A1 hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date 25 of its authentication. The Notes shall be issued only in registered form without coupons and only shall be in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. (b) Global Notes. Notes issued in global form shall be substantially in the form of Exhibit A1 or A2 attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A1 attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount at maturity of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount at maturity of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount at maturity of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. (c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Cedel Bank, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of (i) a written certificate from Euroclear and Cedel Bank certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount at maturity of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company. Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary 26 Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes 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 the case may be, in connection with transfers of interest as hereinafter provided. (d) Euroclear and Cedel Procedures Applicable. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Cedel Bank. Section 2.02. Execution and Authentication. One Officer shall sign the Notes for the Company by manual or facsimile signature. The Company's seal shall be reproduced on the Notes and may be in facsimile form. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee shall, upon a written order of the Company signed by one Officer (an "AUTHENTICATION ORDER"), authenticate Notes for original issue up to the aggregate principal amount at maturity stated in paragraph 4 of the Notes. The aggregate principal amount at maturity of Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes 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 an Agent to deal with Holders or an Affiliate of the Company. Section 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("REGISTRAR") and an office or agency where Notes may be presented for payment ("PAYING AGENT"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars 27 and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. Section 2.04. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. Section 2.05. Holder 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 all Holders and shall otherwise comply with TIA (section) 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven 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 the Holders of Notes and the Company shall otherwise comply with TIA (section) 312(a). Section 2.06. Transfer and Exchange. (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or 28 any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary, (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act; or (iii) there shall have occurred and be continuing a Default or Event of Default with respect to the Notes. Upon the occurrence of either of the preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). 29 (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount at maturity of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following: (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof. 30 (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer 31 contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount at maturity equal to the aggregate principal amount at maturity of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration 32 requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount at maturity of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount at maturity. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. (iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: 33 (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount at maturity of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute 34 and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount at maturity. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend. (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. (i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, 35 including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount at maturity of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, and in the case of clause (C) above, the Regulation S Global Note. (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a 36 certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount at maturity of the Unrestricted Global Note. (iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount at maturity of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount at maturity equal to the principal amount at maturity of Definitive Notes so transferred. (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of 37 transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e). (i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or 38 (D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount at maturity equal to the principal amount at maturity of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker-Dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount at maturity equal to the principal amount at maturity of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount at maturity of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount at maturity. Any Notes that remain outstanding after the 39 consummation of the Exchange Offer, and Exchange Notes issued in connection with the Exchange Offer, shall be treated as a single class of securities under this Indenture. (g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) Private Placement Legend. (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. 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 THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH TRITEL PCS, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION 40 REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. OFFERS, SALES OR OTHER TRANSFERS OF THIS SECURITY UNDER (D), (E) AND (F) ABOVE ARE SUBJECT TO THE COMPANY's AND THE TRUSTEE's RIGHT PRIOR TO ANY SUCH OFFERS, SALES OR OTHER TRANSFERS 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. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form: THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. (h) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall bear a legend in substantially the following form: THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. 41 (i) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount at maturity of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. (j) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof). (iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and 42 ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. (ix) Each Holder of a Note agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Note in violation of any provision of this Indenture and/or applicable United States Federal or state securities law. (x) 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 Note (including any transfers between or among Depositary participants or beneficial owners of interest in any Global Note) 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. Section 2.07. Replacement Notes. If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. 43 Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. Section 2.08. Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note. If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount at maturity of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. Section 2.09. Treasury Notes. In determining whether the Holders of the required aggregate Accreted Value of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned shall be so disregarded. Section 2.10. Temporary Notes. Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. 44 Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. Section 2.11. Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of canceled Notes in accordance with its procedures for the disposition of canceled securities in effect as of the date of such disposition (subject to the record retention requirement of the Exchange Act). Certification of the disposition of all canceled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. Section 2.12. Defaulted Interest. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. Section 2.13. CUSIP Numbers. The Company in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee of any change in the "CUSIP" numbers. 45 ARTICLE THREE REDEMPTION AND PREPAYMENT; SATISFACTION AND DISCHARGE Section 3.01. Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 45 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount at maturity of Notes to be redeemed and (iv) the redemption price. Section 3.02. Selection of Notes to Be Redeemed. If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount at maturity thereof to be redeemed. No Notes in amounts of $1,000 or less shall be redeemed in part. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. Section 3.03. Notice of Redemption. Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. The notice shall identify the Notes to be redeemed and shall state: (a) the redemption date; 46 (b) the redemption price; (c) if any Note is being redeemed in part, the portion of the principal amount at maturity of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount at maturity equal to the unredeemed portion shall be issued upon cancellation of the original Note; (d) the name and address of the Paying Agent; (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (h) 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 Notes. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. Section 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. Section 3.05. Deposit of Redemption Price. One Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. 47 If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. Section 3.06. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Company shall issue and the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount at maturity to the unredeemed portion of the Note surrendered. Section 3.07. Optional Redemption. (a) Except as set forth in clause (b) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to May 15, 2004. Thereafter, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount at maturity) set forth below plus accrued interest and Liquidated Damages, if any, thereon, to the applicable redemption date, if redeemed during the twelve-month period beginning on May 15 of the years indicated below (subject to the right of Holders on the relevant record date to receive interest due on the related interest payment date): Year Percentage ---- ---------- 2004 106.375% 2005 104.250% 2006 102.125% 2007 and thereafter 100.000% (b) Notwithstanding the provisions of clause (a) of this Section 3.07, at any time prior to May 15, 2002, the Company may redeem up to 35% of the aggregate principal amount at maturity of the Notes at a redemption price of 112.75% of the Accreted Value thereof as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase, with the net cash proceeds of one or more Equity Offerings; provided that: 48 (1) at least 65% of the aggregate principal amount at maturity of the Notes remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and (2) the redemption must occur within 60 days following the date of the closing of such Equity Offering. Except pursuant to the preceding paragraph, the Notes shall not be redeemable at the Company's option prior to May 15, 2004. (c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. Section 3.08. Mandatory Redemption. The Company shall not be required to make mandatory redemption payments or sinking fund payments with respect to the Notes. Section 3.09. Offer to Purchase by Application of Excess Proceeds. In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders and holders of pari passu Indebtedness to purchase their respective Notes and pari passu Indebtedness (an "ASSET SALE OFFER"), it shall follow the procedures specified below. The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "OFFER PERIOD"). No later than five Business Days after the termination of the Offer Period (the "PURCHASE DATE"), the Company shall purchase the aggregate Accreted Value of Notes and the aggregate principal amount of pari passu Indebtedness required to be purchased pursuant to Section 4.10 hereof (the "OFFER AMOUNT") or, if less than the Offer Amount has been tendered, all Notes and pari passu Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes and pari passu Indebtedness so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note or pari passu Indebtedness is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes or holders who tender pari passu Indebtedness, as the case may be, pursuant to the Asset Sale Offer. 49 Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders and holders of pari passu Indebtedness, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders or holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders and holders of pari passu Indebtedness. The notice, which shall govern the terms of the Asset Sale Offer, shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Note or pari passu Indebtedness not tendered or accepted for payment shall continue to accrete or accrue interest; (d) that, unless the Company defaults in making such payment, any Note or pari passu Indebtedness (or portion thereof) accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or accrue interest after the Purchase Date; (e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only; (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (g) that each Holder and holder of pari passu Indebtedness shall be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth his name, the principal amount at maturity such Holder or holder delivered for purchase and a statement that such Holder or holder is withdrawing his election to have such Note or pari passu Indebtedness purchased; (h) that, if the aggregate Accreted Value of Notes and principal amount of pari passu Indebtedness surrendered by Holders and holders of pari passu Indebtedness exceeds the Offer Amount, the Trustee shall select the Notes and pari passu Indebtedness to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and 50 (i) that Holders or holders whose Notes or pari passu Indebtedness were purchased only in part shall be issued new Notes or evidence of Indebtedness, as the case may be, equal in principal amount at maturity to the unpurchased portion of the Notes or pari passu Indebtedness surrendered (or transferred by book-entry transfer). On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes and pari passu Indebtedness (or portions thereof) tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes and pari passu Indebtedness tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes and pari passu Indebtedness (or portions thereof) were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder and holder of pari passu Indebtedness an amount equal to the purchase price of Notes or pari passu Indebtedness tendered by such Holder or holder, as the case may be, and accepted by the Company for purchase, and the Company shall promptly issue a new Note or evidence of Indebtedness. The Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount at maturity equal to any unpurchased portion of the Note surrendered. Any Note or pari passu Indebtedness not so accepted shall be promptly mailed or delivered by the Company to the respective holder or holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. Section 3.10. Satisfaction and Discharge of Indenture. This Indenture shall be discharged and shall cease to be of further effect as to all Notes issued thereunder, and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (a) all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or (b) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the making of a notice of redemption or otherwise or will become due and payable within one year and the 51 Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Liquidated Damages, if any, and accrued interest to the date of maturity or redemption; (2) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company is a party or by which the Company or any Guarantor is bound; (3) the Company has paid or caused to be paid all sums payable by it under this Indenture; and (4) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be. In addition, the Company must deliver an Officers' Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied. Section 3.11. Application of Trust Money. All money deposited with the Trustee pursuant to Section 3.10 shall be held in trust and applied by it, in accordance with the provisions of the Notes 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 (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law. ARTICLE FOUR COVENANTS Section 4.01. Payment of Notes. The Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, 52 if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest, and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. Section 4.02. Maintenance of Office or Agency. The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an agent of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 of this Indenture. Section 4.03. Reports. (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company shall furnish to the Holders of Notes, within the time periods specified in the SEC's rules and regulations (i) all quarterly and annual financial 53 information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report thereon by the Company's certified independent accountants and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. Following the consummation of the exchange offer contemplated by the Registration Rights Agreement, whether or not required by the SEC, the Company shall file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. (b) For so long as any Notes remain outstanding, the Company shall furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. (c) Notwithstanding the preceding paragraphs (a) and (b), the Company may substitute reports of Tritel, Inc. for its reports so long as Tritel, Inc. is permitted (or would be permitted in the view of Tritel, Inc.'s independent accountants) under applicable rules, regulations and policies of the SEC to file such reports with the SEC in lieu of filing the reports. (d) The Company shall provide to the Trustee on a timely basis such information as the Trustee requires to enable the Trustee to prepare and file any form required to be submitted by the Company with the Internal Revenue Service and the Holders of the Notes relating to original issue discount, including, without limitation, Form 1099-OID or any successor form. Section 4.04. Compliance Certificate. (a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has 54 occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article Four or Article Five hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. Section 4.05. Taxes. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. Section 4.06. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, 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 has been enacted. Section 4.07. Restricted Payments. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, take any of the following actions on or prior to December 31, 2002: 55 (1) declare or pay any dividend on, or make any distribution to holders of, any shares of the Capital Stock of the Company or any Restricted Subsidiary, other than (a) dividends or distributions payable solely in Equity Interests (other than Disqualified Stock); or (b) dividends or distributions by a Restricted Subsidiary payable to the Company or another Restricted Subsidiary; (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any Affiliate of the Company (other than any Restricted Subsidiary of the Company); (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness, except a payment of interest or principal at the Stated Maturity thereof; or (4) make any Restricted Investment (all such payments and other actions set forth in and not included from clauses (1) through (4) above are collectively referred to as "RESTRICTED PAYMENTS"). At any time after December 31, 2002, the Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment unless at the time of, and immediately after giving effect to, the proposed Restricted Payment: (1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Debt) pursuant to the first paragraph of Section 4.09 hereof; and (3) immediately after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments declared or made on or after the Issue Date would not exceed an amount equal to the sum of: (a) (i) Consolidated EBITDA accrued during the period (treated as one accounting period) from January 1, 2003 to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (the "COMPUTATION PERIOD") less (ii) 1.5 times Consolidated Interest Expense accrued during the Computation Period; plus 56 (b) the aggregate Net Proceeds received by the Company either (x) as capital contributions to the Company after the Issue Date or (y) from the issue or sale (other than to a Subsidiary of the Company) of its Equity Interests (other than Disqualified Stock) on or after the Issue Date (excluding proceeds of any Equity Offering that are used to redeem Notes pursuant to Section 3.07 hereof); plus (c) the aggregate Net 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 Issue Date 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 (d) the aggregate Net Proceeds received by the Company from the issuance (other than to a Subsidiary of the Company) on or after the Issue Date of its Equity Interests (other than Disqualified Stock) upon the conversion of, or exchange for, Indebtedness of the Company. For purposes of determining the amount expended for Restricted Payments, property other than cash will be valued at its fair market value as determined by the Board of Directors of the Company, whose good faith determination shall be conclusive. Notwithstanding the foregoing and so long as no Default or Event of Default (except with respect to clauses (1), (2), (3) and (4) below) has occurred and is continuing or would be caused thereby, the preceding provisions shall not prohibit, whether the relevant event occurs before or after December 31, 2002: (1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of this Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of the Company in exchange for, or out of the Net Proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock); (3) the purchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Indebtedness in exchange for, or out of the Net Proceeds of a substantially concurrent issuance and sale (other than to a Subsidiary) of, Equity Interests (other than Disqualified Stock) of the Company; 57 (4) the purchase, redemption, defeasance or other acquisition or retirement for value of Subordinated Indebtedness in exchange for, or out of the Net Proceeds of a substantially concurrent issuance or sale (other than to a Restricted Subsidiary) of, Subordinated Indebtedness, so long as the Company or a Restricted Subsidiary would be permitted to refinance such original Subordinated Indebtedness with such new Subordinated Indebtedness pursuant to clause (11) of the definition of "PERMITTED DEBT" under Section 4.09 hereof; (5) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount of such Subordinated Indebtedness in the event of a change of control in accordance with provisions similar to Section 4.15; provided that, prior to or simultaneously with such repurchase, the Company has made the Change of Control Offer as provided in Section 4.15 with respect to the Notes and has repurchased all Notes validly tendered for payment in connection with such Change of Control Offer; (6) the purchase, redemption, acquisition, cancellation or other retirement for value of shares of Capital Stock of the Company, options on any such shares or related stock appreciation rights or similar securities held by officers or employees or former officers or employees (or their estates or beneficiaries under their estates) or by any employee benefit plan, upon death, disability, retirement or termination of employment or pursuant to the terms of any employee benefit plan or any other agreement under which such shares of stock or related rights were issued; provided that (i) the aggregate cash consideration paid for such purchase, redemption, acquisition, cancellation or other retirement of such shares of Capital Stock after the Issue Date does not exceed $2 million in any fiscal year and (ii) any unused amount in any 12-month period may be carried forward to one or more future periods; (7) make payments to Tritel, Inc. 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 Tritel, Inc. and its consolidated subsidiaries; (8) make payments to Tritel, Inc. to reimburse Tritel, Inc. for its out-of-pocket operating and administrative expenses attributable to the Company, provided this reimbursement may not exceed $1.0 million in any fiscal year; and (9) payments not otherwise permitted by clauses (1) through (8) of this paragraph in an amount not to exceed $10 million. 58 The actions described in clauses (2), (3), (5), (6) and (9) of this paragraph shall be Restricted Payments that shall be permitted to be taken in accordance with this paragraph but shall reduce the amount that would otherwise be available for Restricted Payments under clause (3) of the first paragraph of this Section 4.07 and the actions described in clauses (1), (4), (7) and (8) of this paragraph shall be Restricted Payments that shall be permitted to be taken in accordance with this paragraph and shall not reduce the amount that would otherwise be available for Restricted Payments under clause (3) of the first paragraph of this Section 4.07. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this Section 4.07 shall be determined by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.07 were computed, together with a copy of any fairness opinion or appraisal required by this Indenture. For the purpose of making any calculations under this Section 4.07, (i) if a Restricted Subsidiary is designated an Unrestricted Subsidiary, the Company shall be deemed to have made an Investment in amount equal to the fair market value of the net assets of such Subsidiary at the time of such designation as determined by the Board of Directors of the Company, whose good faith determination shall be conclusive, and (ii) any property transferred to or from an Unrestricted Subsidiary shall be valued at fair market value at the time of such transfer, as determined by the Board of Directors of the Company, whose good faith determination shall be conclusive. If the aggregate amount of all Restricted Payments calculated under the foregoing provision includes an Investment in an Unrestricted Subsidiary or other Person that thereafter becomes a Restricted Subsidiary, the aggregate amount of all Restricted Payments calculated under the foregoing provision shall be reduced by the lesser of (x) the net asset value of such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and (y) the initial amount of such Investment. If an Investment resulted in the making of a Restricted Payment, the aggregate amount of all Restricted Payments calculated under the foregoing provision shall be reduced by the amount of any net reduction in such Investment (resulting from the payment of interest or dividends, loan repayment, transfer of assets or otherwise), to the extent such net reduction is not included in the Company's Consolidated Net Income; provided that the total amount by which the aggregate amount of all Restricted Payments may be reduced may not exceed the lesser of (x) the cash proceeds received by the Company and its Restricted Subsidiaries in connection with such net reduction and (y) the initial amount of such Investment. 59 Section 4.08. Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to: (1) pay dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the Company or any of its Restricted Subsidiaries; (2) pay any Indebtedness owed to the Company or any other Restricted Subsidiary; (3) make loans or advances to the Company or any of its Restricted Subsidiaries; or (4) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries. However, the preceding restrictions shall not apply to encumbrances or restrictions existing under or by reason of: (1) Existing Indebtedness as in effect on the date of this Indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such Existing Indebtedness, as in effect on the date of this Indenture; (2) any agreement or other instrument of a Person acquired by the Company or any Restricted Subsidiary in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; (3) with respect to a Restricted Subsidiary, imposed pursuant to an agreement that has been entered into for the sale or disposition of all or substantially all of the Company's Capital Stock in, or substantially all the assets of, such Restricted Subsidiary in compliance with Section 4.10 hereof; 60 (4) any such customary encumbrance or restriction contained in a security document creating a Lien permitted under this Indenture to the extent relating to the property or asset subject to such Lien (including, without limitation, customary restrictions relating to assets securing any Telecommunications Indebtedness or the Bank Credit Agreement under the applicable security documents); or (5) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices. Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "INCUR") any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and its Subsidiary Guarantors may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if: after giving pro forma effect to such incurrence (including the application of the net proceeds therefrom), (i) the Consolidated Leverage Ratio would be less than or equal to (A) 7.0 to 1.0, if the Indebtedness is to be incurred prior to May 15, 2004 or (B) 6.0 to 1.0, if the Indebtedness is to be incurred on or after May 15, 2004, or (ii) in the case of any incurrence of Indebtedness prior to May 15, 2004, Total Consolidated Indebtedness would be equal to or less than 75% of Total Invested Capital. In making the foregoing calculation, (A) pro forma effect shall be given to any Indebtedness to be incurred or repaid on such date; (B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions that occur during the four fiscal quarters for which financial statements of the Company are available immediately prior to such Transaction Date (the "REFERENCE PERIOD") or thereafter and on or prior to the Transaction Date as if they had occurred and such proceeds had been applied on the first day of such Reference Period; (C) pro forma effect shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into the Company or any Restricted Subsidiary during such Reference Period or subsequent to such period and on or prior to the Transaction Date and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period; provided that to the extent that clause (B) or (C) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based upon the four full fiscal quarters immediately preceding the 61 Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed for which financial information is available; and (D) the aggregate amount of Indebtedness outstanding as of the Transaction Date shall be deemed to include the total amount of funds outstanding and/or available under any revolving credit facilities of the Company or its Restricted Subsidiaries. The first paragraph of this Section 4.09 shall not prohibit the incurrence of any and all of the following items of Indebtedness (collectively, "PERMITTED DEBT"): (1) Indebtedness of the Company or any Restricted Subsidiary under the Bank Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $600.0 million (and any guarantees of such Indebtedness by a Restricted Subsidiary); (2) Indebtedness of the Company or any Restricted Subsidiary outstanding on the Issue Date, other than Indebtedness described under clause (1) above or (15) below but including Indebtedness then owed to the FCC; (3) Telecommunications Indebtedness; (4) Indebtedness represented by the Notes and any Subsidiary Guarantee; (5) Subordinated Indebtedness owed by the Company to any Restricted Subsidiary or Indebtedness owed by any Restricted Subsidiary to the Company or any other Restricted Subsidiary (provided that, in each case, such Indebtedness is held by the Company or such Restricted Subsidiary); (6) Obligations of the Company or any Restricted Subsidiary entered into in the ordinary course of business (a) pursuant to Hedging Obligations relating to Indebtedness of the Company or a Restricted Subsidiary otherwise permitted under this Indenture that are entered into for the purpose of protecting against fluctuations in interest rates in respect of such Indebtedness and not for speculative purposes, or (b) pursuant to Currency Agreements entered into by the Company or any of its Restricted Subsidiaries in respect of its (x) assets or (y) obligations, as the case may be, denominated in a foreign currency; (7) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets, including, without limitation, shares of Capital Stock; 62 (8) Acquired Debt of a Person, other than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary or the acquisition of assets from such Person, as the case may be, provided that the Company on a pro forma basis could incur $1.00 of additional Indebtedness (other than Permitted Debt) pursuant to the first paragraph of this Section 4.09; (9) Guarantees by any Restricted Subsidiary made in accordance with the provisions of Section 4.18 hereof; (10) Indebtedness of the Company not permitted by any other clause of this definition, in an aggregate principal amount not to exceed $50 million at any one time outstanding; (11) any renewals, extensions, substitutions, refinancings or replacements (each, for purposes of this clause, a "REFINANCING") of any outstanding Indebtedness, other than Indebtedness incurred pursuant to clause (1), (3), (5), (6), (7), (9), (10), (12), (13) or (14) of this definition, including any successive refinancings thereof, so long as (a) any such new Indebtedness is in a principal amount that does not exceed the principal amount so refinanced, plus the amount of any premium required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness refinanced or the amount of any premium reasonably determined by the Company as necessary to accomplish such refinancing, plus the amount of the expenses of the Company incurred in connection with such refinancing, (b) in the case of any refinancing of Subordinated Indebtedness, such new Indebtedness is made subordinate to the Notes at least to the same extent as the Indebtedness being refinanced and has a final maturity date after the maturity date of the Notes, (c) such refinancing Indebtedness does not have an Average Life less than the Average Life of the Indebtedness being refinanced and has a final maturity date later than the Indebtedness being refinanced, or permit redemption at the option of the holder earlier than the earliest date of redemption at the option of the holder, of the Indebtedness being refinanced and (d) such Indebtedness is incurred either by the Company or any Restricted Subsidiary who is the obligor on the Indebtedness being refinanced; (12) Capital Lease Obligations of the Company or any Restricted Subsidiary with respect to the leasing by the Company or any Restricted Subsidiary of tower sites, telephone and computer systems, operating facilities and, in each case, equipment that is a fixture thereto; provided that such Capital Lease Obligations shall not exceed $25 million in aggregate principal amount at any time outstanding; (13) Indebtedness of the Company or a Restricted Subsidiary represented by letters of credit for the account of the Company or a Restricted Subsidiary to provide security for workers' compensation claims, payment obligations for self insurance or similar requirements in the ordinary course of business; 63 (14) 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; and (15) Indebtedness of a Restricted Subsidiary to the FCC in respect of PCS licenses in an aggregate face amount not to exceed $75 million at any time. The Company shall not incur any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of the Company unless such Indebtedness is also contractually subordinated in right of payment to the Notes on substantially identical terms; provided, however, that no Indebtedness of the Company shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of the Company solely by virtue of being unsecured. For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (15) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this Section 4.09. Section 4.10. Asset Sales. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value (as determined at the time a legally binding agreement is entered into with respect to such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; (2) such fair market value is determined by the Company's Board of Directors and evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee; and (3) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents or like-kind property in a like-kind exchange pursuant to Section 1031 of the Internal Revenue Code, as amended. For purposes of this provision, each of the following shall be deemed to be cash: 64 (a) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet), of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and (b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are contemporaneously (subject to ordinary settlement periods) converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion). Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds at its option: (1) to permanently repay or prepay any then outstanding Indebtedness under the Bank Credit Agreement, other senior Indebtedness of the Company or Indebtedness of any Restricted Subsidiary; or (2) to invest in properties or assets that replace the properties and assets that are the subject of such Asset Sale or in properties or assets that will be used in the business of the Company or any Restricted Subsidiary (or enter into a legally binding agreement to do so). If any such legally binding agreement to invest such Net Proceeds is terminated, then the Company may, within 90 days of such termination or within 12 months after such Asset Sale, whichever is later, apply or invest such Net Proceeds (or enter into another legally binding agreement to do so, which closes within 16 months of such Asset Sale) as provided in clause (1) or (2) (without regard to the parenthetical contained in clause (2)) of the immediately preceding paragraph. Pending the final application of any such Net Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraphs shall constitute "EXCESS PROCEEDS." When the aggregate amount of Excess Proceeds exceeds $15.0 million, the Company shall make an offer ("ASSET SALE Offer") to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. 65 The offer price in any Asset Sale Offer shall be equal to 100% of Accreted Value plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and shall be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the Accreted Value of the Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis based on the Accreted Value of the Notes and such other pari passu Indebtedness tendered. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sales provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue of such conflict. Section 4.11. Transactions with Affiliates. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an "AFFILIATE TRANSACTION"), unless: (1) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and (2) the Company delivers to the Trustee: (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this Section 4.11 and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $25.0 million, an opinion as to the fairness to the Holders of such Affiliate 66 Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. The following items shall not be deemed to be Affiliate Transactions and, therefore, shall not be subject to the provisions of the prior paragraph: (1) any employment or consulting agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Restricted Subsidiary; (2) transactions between or among the Company and/or its Restricted Subsidiaries; (3) transactions with a Person that is an Affiliate of the Company solely because the Company owns an Equity Interest in such Person; (4) payment of reasonable directors fees, expenses and indemnification to Persons who are not otherwise Affiliates of the Company; (5) sales of Equity Interests (other than Disqualified Stock) to Affiliates of the Company; (6) Restricted Payments that are permitted by Section 4.07 hereof; (7) transactions with AT&T Corp. 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; (8) 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 of 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; (9) 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 67 Subsidiary, as applicable, than those available from such Related Party to unaffiliated third parties; (10) 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; (11) 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 (12) up to $2.5 million of loans from the Company to Airwave Communications, LLC and Digital PCS, LLC to fund the payment of certain litigation-related expenses and contingent liabilities, pursuant to the secured promissory note agreement in effect on the Issue Date. Section 4.12. 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 Notes or the applicable Subsidiary Guarantee, as the case may be, or is Subordinated Indebtedness, upon any of their property or assets, now owned or hereafter acquired, unless all payments due under this 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 Debt 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. Section 4.13. Business Activities. The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than a Permitted Business. Section 4.14. Corporate Existence. Subject to Article Five hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the 68 respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. Section 4.15. Repurchase at the Option of HoldersC Change of Control. (a) Upon the occurrence of a Change of Control, the Company shall make an offer (a "CHANGE OF CONTROL OFFER") to each Holder to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price in cash equal to 101% of the Accreted Value as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase, if such redemption occurs prior to May 15, 2004, or 101% of the Accreted Value as of the date of purchase, together with accrued and unpaid interest and Liquidated Damages, if any, if such redemption date occurs on or after May 15, 2004 (the "CHANGE OF CONTROL PAYMENT"). Within ten days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating: (i) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment; (ii) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the "CHANGE OF CONTROL PAYMENT DATE"); (iii) that any Note not tendered will continue to accrue interest; (iv) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (v) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date; (vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount at maturity of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and (vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount at maturity to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $1,000 in principal amount at maturity or an integral multiple thereof. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change 69 of Control. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.15, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.15 by virtue of such conflict. In the event that at the time of any Change of Control the terms of the Bank Credit Agreement restrict or prohibit the repurchase of Notes pursuant to this covenant, then prior to the mailing of the notice to each Holder provided for in the prior paragraph but in any event within 30 days following any Change of Control, the Company shall either: (1) repay in full all amounts outstanding under the Bank Credit Agreement or offer to repay in full all amounts outstanding under the Bank Credit Agreement and repay the amounts due to each Bank who has accepted such offer; or (2) obtain the requisite consent under the agreements governing the Bank Credit Agreement to permit the repurchase of the Notes as provided for in the prior paragraph. (b) On the Change of Control Payment Date, the Company shall, to the extent lawful: (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer; (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount at maturity of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount at maturity to any unpurchased portion of the Notes surrendered by such Holder, if any; provided that each such new Note shall be in a principal amount at maturity of $1,000 or an integral multiple thereof. 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 Section 4.15 and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. 70 Section 4.16. Sale and Leaseback Transactions The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company or any Restricted Subsidiary may enter into a sale and leaseback transaction if: (1) the lease is for a period, including renewal rights, of not in excess of three years; (2) the lease secures or relates to industrial revenue or pollution control bonds; (3) the transaction is between the Company and a Restricted Subsidiary or between Restricted Subsidiaries; or (4) the Company or such Restricted Subsidiary, within 12 months after the sale or transfer of any assets or properties is completed, applies an amount not less than the net proceeds received from such sale in accordance with clause (1) or (2) of the second paragraph of Section 4.10 hereof. Section 4.17. Limitation on Issuances and Sales of Equity Interests in Restricted Subsidiaries. The Company (a) shall not permit any Restricted Subsidiary to issue any Capital Stock (other than to the Company or a Restricted Subsidiary) and (b) shall not permit any Person (other than the Company or a Restricted Subsidiary) to own any Capital Stock of any Restricted Subsidiary; provided, however, that this Section 4.17 shall not prohibit (i) the sale or other disposition of all, but not less than all, of the issued and outstanding Capital Stock of any Restricted Subsidiary owned by the Company or any Restricted Subsidiary in compliance with the other provisions of this Indenture or (ii) the ownership by directors of directors' qualifying shares or the ownership by foreign nationals of Capital Stock of any Restricted Subsidiary, to the extent mandated by applicable law. Section 4.18. Limitation on Issuances of Guarantees of Indebtedness by Restricted Subsidiaries. The Company shall not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of the Company unless (a) such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, and (b) with respect to any guarantee of Subordinated Indebtedness by a Restricted Subsidiary, any such guarantee is subordinated to such Restricted Subsidiary's guarantee with respect to the Notes at least to the same extent as such Subordinated Indebtedness is subordinated to the Notes, provided that the foregoing provision shall not be applicable to 71 (i) any guarantee by any Restricted Subsidiary that existed at the time such person became a Restricted Subsidiary and was not incurred in connection with, or in contemplation of, such person becoming a Restricted Subsidiary or (ii) the Bank Credit Agreement. Any guarantee by a Restricted Subsidiary of the Notes pursuant to the preceding paragraph may provide by its terms that it will be automatically and unconditionally released and discharged upon (i) any sale, exchange or transfer to any person not an Affiliate of the Company of all of the Company's and the Restricted Subsidiaries' Capital Stock in, or all or substantially all the assets of, such Restricted Subsidiary (which sale, exchange or transfer is not prohibited by this Indenture) or (ii) the release or discharge of the guarantee that resulted in the creation of such guarantee of the Notes, except a discharge or release by or as a result of payment under such guarantee. Section 4.19. Unrestricted Subsidiaries. The Board of Directors of the Company may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as (1) neither the Company nor any Restricted Subsidiary is directly or indirectly liable for any Indebtedness of such Subsidiary, (2) no default with respect to any Indebtedness of such Subsidiary would permit (upon notice, lapse of time or otherwise) any holder of any other Indebtedness of the Company or any Restricted Subsidiary to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity, (3) any Investment in such Subsidiary made as result of designating such Subsidiary an Unrestricted Subsidiary will not violate the provisions of Section 4.07 hereof, (4) neither the Company nor any Restricted Subsidiary has a contract, agreement, arrangement, understanding or obligation of any kind, whether written or oral, with such Subsidiary other than those that might be obtained at the time from persons who are not Affiliates of the Company and (5) neither the Company nor any Restricted Subsidiary has any obligation (a) to subscribe for additional shares of Capital Stock or other equity interest in such Subsidiary or (b) to maintain or preserve such Subsidiary's financial condition or to cause such Subsidiary to achieve certain levels of operating results. Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing a board resolution with such Trustee giving effect to such designation. The Board of Directors of the Company may designate any Unrestricted Subsidiary as a Restricted Subsidiary if immediately after giving effect to such designation, there would be no Default or Event of Default and the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the first paragraph of Section 4.09 hereof. Section 4.20. Payments for Consent. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions 72 of the Indenture or the Notes, unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Section 4.21. Limitation on other Senior Subordinated Debt. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any of its Senior Debt and senior in any respect in right of payment to the Notes. No Subsidiary Guarantor shall incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to its Senior Debt and senior in any respect in right of payment to such Guarantor's Subsidiary Guarantee. Section 4.22. Additional Subsidiary Guarantees. If the Company or any of its Restricted Subsidiaries acquires or creates another Restricted Subsidiary after the Issue Date, then that newly acquired or created Restricted Subsidiary must become a Subsidiary Guarantor and execute a supplemental indenture satisfactory to the Trustee; provided that the Company shall not cause any License Subsidiary to become a Subsidiary Guarantor unless such License Subsidiary incurs Indebtedness other than Indebtedness in respect of the Bank Credit Agreement or Indebtedness to the FCC. Each new Subsidiary Guarantee shall have the same terms as the Subsidiary Guarantees described in Section 10.01 hereof. Section 4.23. Amendments to Securities Purchase Agreement. The Company shall cause Tritel, Inc. not to amend, modify or waive, or refrain from enforcing, any provision of the Securities Purchase Agreement in any manner that would delay the closing thereunder of Tritel, Inc.'s preferred stock to a date later than September 30, 1999 or would cause the net cash proceeds from the sale of Tritel, Inc.'s preferred stock to be less than $49.7 million. The Company shall also cause Tritel, Inc. to make a capital contribution to it of the net cash proceeds from such sale. ARTICLE FIVE SUCCESSORS Section 5.01. Merger, Consolidation, or Sale of Assets. The Company may not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets 73 of the Company and its Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person; unless: (1) either (a) the Company is the surviving corporation, or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (2) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee; (3) immediately after giving effect to such transaction or series of transactions on a pro forma basis (and treating any obligation of the Company or a Restricted Subsidiary in connection with or as a result of such transaction as having been incurred as of the time of such transaction), no Default or Event of Default exists; (4) The Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition shall have been made: (a) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction; and (b) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the first paragraph of Section 4.09 hereof. (5) if any of the property or assets of the Company or any of its Restricted Subsidiaries would thereupon become subject to any Lien, the provisions of Section 4.12 are complied with; and (6) The Company or the Person formed by or surviving any such consolidation or merger (if other than the Company) shall have delivered to the Trustee an officers' certificate and an opinion of counsel, each stating that such transaction complies with the terms of the Indenture. 74 Section 5.02. Successor Corporation Substituted. Upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of all of substantially all of the properties and assets of the Company in accordance with Section 5.01 hereof in which the Company is not the continuing obligor under this Indenture, the Person formed by or surviving any such consolidation or merger (if other than the Company) shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, with the same effect as if such successor had been named as the Company herein. When a successor assumes all the obligations of its predecessor under this Indenture and the Notes, the predecessor shall be released from those obligations; provided that in the case of a transfer by lease, the predecessor shall not be released from the payment of principal and interest on the Notes. ARTICLE SIX DEFAULTS AND REMEDIES Section 6.01. Events of Default. An "EVENT OF DEFAULT" occurs if: (1) the Company defaults for 30 days in the payment when due of interest on, or Liquidated Damages with respect to, the Notes; (2) the Company defaults in the payment when due of principal of, or premium, if any, on the Notes; (3) the Company or any of its Restricted Subsidiaries fails to comply with any of the provisions of Section 4.07, 4.09, 4.10, 4.15 or 5.01 hereof; (4) the Company or any of its Restricted Subsidiaries fails to comply with any other agreement in this Indenture for 30 days after notice to the Company; (5) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, if that default (a) is caused by a failure to pay principal of, or interest or premium, if any, on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (b) results in the 75 acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $15.0 million or more; (6) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted Subsidiaries and such judgment or judgments remain unpaid or undischarged or are not stayed for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such unpaid or undischarged judgments exceeds $15.0 million; (7) any holder or holders (or any Person acting on any such holder's behalf) of any Indebtedness in excess of $15.0 million in the aggregate of the Company or any Restricted Subsidiary shall, subsequent to the occurrence of a default with respect to such Indebtedness, notify the Trustee of the intended sale or disposition of any assets of the Company or any Restricted Subsidiary that have been pledged to or for the benefit of such Person to secure such Indebtedness or shall commence proceedings, or take action to retain in satisfaction of any such Indebtedness, or to collect on, seize, dispose of or apply, any such assets of the Company or any Restricted Subsidiary pursuant to the terms of any agreement or instrument evidencing any such Indebtedness of the Company or any Restricted Subsidiary or in accordance with applicable law; (8) the Parent Guarantee or any Subsidiary Guarantee issued by a Significant Subsidiary ceases to be in full force and effect or is declared null and void or the Parent Guarantor or any Subsidiary Guarantor that is a Significant Subsidiary denies that it has any further liability under its Guarantee, or gives notice to such effect (other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with this Indenture), and such condition has continued for a period of 30 days after written notice of such failure requiring the Guarantor and the Company to remedy the same has been given (x) to the Company by the Trustee or (y) to the Company and the Trustee by the holders of 25% in aggregate Accreted Value of the Notes then outstanding; (9) the Company or any Restricted Subsidiary that constitutes a Significant Subsidiary pursuant to or within the meaning of 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 all or substantially all of its property, 76 (d) makes a general assignment for the benefit of its creditors, or (e) generally is not paying its debts as they become due; or (10) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (a) is for relief against the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case; (b) appoints a custodian of the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or (c) orders the liquidation of the Company or any of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, and the order or decree remains unstayed and in effect for 60 consecutive days. Section 6.02. Acceleration. If any Event of Default (other than an Event of Default specified in clause (9) or (10) of Section 6.01 hereof with respect to the Company, any Restricted Subsidiary that constitutes a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) all outstanding Notes shall become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Accreted Value of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. The Holders of a majority in aggregate Accreted Value of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of interest or Liquidated Damages on, or the principal of, the Notes that has become due solely because of the acceleration) have been cured or waived. 77 If any Event of Default occurs by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company or any Restricted Subsidiary with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default occurs prior to May 15 , 2004, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to such date, then, upon acceleration of the Notes, an additional premium shall also become and be immediately due and payable in an amount, for each of the years beginning on May15 of the years set forth below, as set forth below (expressed as a percentage of the Accreted Value of the Notes on the date of payment that would otherwise be due but for the provisions of this sentence): YEAR PERCENTAGE ---- ---------- 1999.......................................... 112.750% 2000.......................................... 111.475 2001.......................................... 110.200 2002.......................................... 108.925 2003.......................................... 107.650 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, premium, if any, interest, and Liquidated Damages, if any, with respect to, the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note 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. All remedies are cumulative to the extent permitted by law. Section 6.04. Waiver of Past Defaults. Holders of not less than a majority in aggregate Accreted Value of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of interest or Liquidated Damages on, or the principal of, the Notes (including in connection with an offer to purchase) (provided, however, that the Holders of a majority in aggregate Accreted Value of the then outstanding 78 Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. Section 6.05. Control by Majority. Holders of a majority in aggregate Accreted Value of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest or Liquidated Damages) if it determines that withholding notice is in their interest. Section 6.06. Limitation on Suits. A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: (1) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default; (2) the Holders of at least 25% in aggregate Accreted Value of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (3) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity 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 and, if requested, the provision of indemnity; and (5) during such 60-day period the Holders of a majority in aggregate Accreted Value of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. 79 Section 6.07. Rights of Holders of Notes to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium, if any, interest on, and Liquidated Damages, if any, with respect to, the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), 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 Section 6.01(1) or (2) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium, if any, interest, and Liquidated Damages, if any, remaining unpaid on the Notes and interest on overdue principal and premium, if any, and, to the extent lawful, interest and Liquidated Damages, if any, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized to 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 (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company or any Guarantor (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such 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 to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights 80 of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium, if any, interest and Liquidated Damages, if any, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, interest, and Liquidated Damages, if any, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 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 a 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 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than ten percent in aggregate Accreted Value of the then outstanding Notes. ARTICLE SEVEN TRUSTEE Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of 81 care and skill in its 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: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) 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 liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) 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 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. 82 Section 7.02. Certain Rights of Trustee. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. (g) 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, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. (h) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of such event is sent to the Trustee in accordance with Section 12.02 hereof, and such notice references the Notes; and 83 (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may become a creditor of, or otherwise deal with, the Company, any Guarantor or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. 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 Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. Section 7.05. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. Section 7.06. Reports by Trustee to Holders of the Notes. Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA (Section) 313(a) (but if no event described in TIA (Section) 313(a) has occurred within the twelve months 84 preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA (section) 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA (section) 313(c). A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA (Section) 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange or any delisting thereof. Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the Company and the Trustee shall from time to time agree in writing. 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 promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. To secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the compensation for the 85 services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. The Trustee shall comply with the provisions of TIA (section) 313(b)(2) to the extent applicable. Section 7.08. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in aggregate Accreted Value of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in aggregate Accreted Value of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least ten percent in aggregate Accreted Value of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. 86 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 Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. Section 7.09. Successor Trustee by Merger, Etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA (section) 310(a)(1), (2) and (5). The Trustee is subject to TIA (section) 310(b). Section 7.11. Preferential Collection of Claims Against Company. The Trustee is subject to TIA (section) 311(a), excluding any creditor relationship listed in TIA (section) 311(b). A Trustee who has resigned or been removed shall be subject to TIA (section) 311(a) to the extent indicated therein. ARTICLE EIGHT LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 87 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article Eight. Section 8.02. Legal Defeasance and Discharge. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, or interest or premium and Liquidated Damages, if any, on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes under Article Two and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith and (d) this Article Eight. Subject to compliance with this Article Eight, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. Section 8.03. Covenant Defeasance. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from its obligations under the covenants contained in Sections 4.07 through 4.23 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. 88 Section 8.04. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: (1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, noncallable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest premium and Liquidated Damages, if any, on the outstanding Notes on the stated maturity or on the applicable redemption date, as the case may be; (2) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming 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 Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal 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 Legal Defeasance had not occurred; (3) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes 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; (4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or insofar as Sections 6.01(9) or 6.01(10) hereof are concerned, at any time in the period ending on the 91st day after the date of deposit; (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound; 89 (6) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that, assuming no intervening bankruptcy of the Company between the date of deposit and the 91st day following the deposit and assuming that no Holder is an "insider" of the Company under applicable bankruptcy law, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (7) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and (8) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. Section 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "TRUSTEE") pursuant to Section 8.04 hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. 90 Section 8.06. Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01. Without Consent of Holders of Notes. Notwithstanding Section 9.02 of this Indenture, the Company and the Trustee may amend or supplement this Indenture or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; 91 (b) to provide for uncertificated Notes in addition to or in place of certificated Notes; (c) to evidence the succession of another person to the Company or any other obligor on the Notes and to provide for the assumption of the Company's obligations to the Holders of the Notes by a successor to the Company pursuant to Article Five hereof; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder of the Note; or (e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Section 9.02. With Consent of Holders of Notes. Except as provided below in this Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture and the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate Accreted Value of the Notes then outstanding voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided, that unless such consent shall have become 92 effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): (1) reduce the Accreted Value of Notes whose Holders must consent to an amendment, supplement or waiver; (2) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes (other than provisions relating to Sections 4.10 and 4.15); (3) reduce the rate of or change the time for payment of interest on any Note; (4) waive a Default or Event of Default in the payment of principal of or interest or premium or Liquidated Damages, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate Accreted Value of the Notes and a waiver of the payment default that resulted from such acceleration); 93 (5) make any Note payable in money other than that stated in the Notes; (6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest or premium or Liquidated Damages, if any, on the Notes; (7) waive a redemption payment with respect to any Note (other than a payment required by Section 4.10 or Section 4.15 hereof); or (8) make any change in the preceding amendment and waiver provisions. Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in a amended or supplemental Indenture that complies with the TIA as then in effect. Section 9.04. Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. Section 9.05. Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.06. Trustee to Sign Amendments, Etc. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or 94 supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. ARTICLE TEN GUARANTEES Section 10.01. Guarantees. Each Guarantor hereby jointly and severally, fully, unconditionally and irrevocably guarantees the Notes and obligations of the Company hereunder and thereunder, and guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee on behalf of such Holder, that: (a) the principal of (and premium and Liquidated Damages, if any) and interest on the Notes shall be paid in full when due, whether at Stated Maturity, by acceleration, call for redemption or otherwise (including, without limitation, the amount that would become due but for the operation of the automatic stay under Section 362(a) of the Federal Bankruptcy Code), together with interest on the overdue principal, if any, and interest on any overdue interest, to the extent lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder shall be paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or of any such other obligations, the same shall be paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Each of the Guarantees shall be a guarantee of payment and not of collection. Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby waives the benefits of diligence, presentment, demand for payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company or any other Person, protest, notice and all demands whatsoever and covenants that the Guarantee of such Guarantor shall not be discharged as to any Note except by complete performance of the obligations contained in such Note and such Guarantee or as provided for in this Indenture. Each of the Guarantors hereby agrees that, in the event of a default in payment of principal (or premium or Liquidated Damages, if any) or interest on such Note, whether at its Stated Maturity, by 95 acceleration, call for redemption, purchase or otherwise, legal proceedings may be instituted by the Trustee on behalf of, or by, the Holder of such Note, subject to the terms and conditions set forth in this Indenture, directly against each of the Guarantors to enforce such Guarantor's Guarantee without first proceeding against the Company or any other Guarantor. Each Guarantor agrees that if, after the occurrence and during the continuance of an Event of Default, the Trustee or any of the Holders are prevented by applicable law from exercising their respective rights to accelerate the maturity of the Notes, to collect interest on the Notes, or to enforce or exercise any other right or remedy with respect to the Notes, such Guarantor shall pay to the Trustee for the account of the Holders, upon demand therefor, the amount that would otherwise have been due and payable had such rights and remedies been permitted to be exercised by the Trustee or any of the Holders. If any Holder or the Trustee is required by any court or otherwise to return to the Company or any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or any Guarantor, any amount paid by any of them to the Trustee or such Holder, the Guarantee of each of the Guarantors, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, as between each Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six hereof for the purposes of the Guarantee of such Guarantor, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any acceleration of such obligations as provided in Article Six hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of the Guarantee of such Guarantor. Section 10.02. Execution and Delivery of Guarantee. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee set forth in this Indenture on behalf of the Guarantors. Section 10.03. Severability. In case any provision of any Guarantee 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. Section 10.04. Seniority of Guarantees. The Obligations of each Guarantor under its Guarantee pursuant to this Article Ten shall be junior and subordinated to any Senior Debt of such Guarantor on the same basis as the Notes are junior and subordinated to Senior Debt of the Company. For the purposes of the 96 foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Guarantors only at such times as they may receive and/or retain payments in respect of the Notes pursuant to this Indenture, including Article Eleven hereof. Section 10.05. Limitation of Guarantors' Liability. Each Guarantor and by its acceptance hereof each Holder confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law or the provisions of its local law relating to fraudulent transfer or conveyance. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor under its Guarantee shall be limited to the maximum amount that will not, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee, result in the obligations of such Guarantor under its Guarantee constituting a fraudulent transfer or conveyance. Section 10.06. Guarantors May Consolidate, Etc., on Certain Terms. Except as otherwise provided in Section 10.07 hereof, a Guarantor may not sell or otherwise dispose of all or substantially all of its assets, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person unless: (1) immediately after giving effect to such transaction, no Default or Event of Default exists; and (2) either: (a) the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under this Indenture, its Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture and appropriate collateral documents satisfactory to the Trustee; or (b) the Net Proceeds of any such sale or other disposition of a Subsidiary Guarantor are applied in accordance with the provisions of Section 4.10 hereof. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the 97 Trustee and satisfactory in form to the Trustee, of the Guarantee and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. All the Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Guarantees had been issued at the date of the execution hereof. Except as set forth in Articles Four and Five hereof, and notwithstanding clauses (1) and (2) above, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. Section 10.07. Releases Following Sale of Assets. Any Guarantor shall be released and relieved of any obligations under its Guarantee, (1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Company, if the Guarantor applies the Net Proceeds of that sale or other disposition in accordance with the provisions of Section 4.10 hereof; or (2) in connection with any sale of all of the Capital Stock of a Guarantor to a Person that is not (either before or after giving effect to such transaction) a Subsidiary of the Company, if the Company applies the Net Proceeds of that sale in accordance with the provisions of Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Guarantee. Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article Ten. Section 10.08. Release of a Guarantor. (a) Any Guarantor that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary in accordance with the terms of this Indenture shall, at such time, be deemed automatically and unconditionally released and discharged of its obligations under its Guarantee without any further action on the part of the Trustee or any Holder of the Notes. The Trustee shall deliver an appropriate instrument evidencing such release upon receipt of the Company's request for such release accompanied by an Officers' Certificate 98 certifying as to the compliance with this Section 10.08. Any Guarantor not so released shall remain liable for the full amount of principal of and interest on the Notes as provided in its Guarantee. (b) In the event the Banks release or terminate a guarantee by Tritel, Inc. or a Subsidiary Guarantor of all the obligations under the Bank Credit Agreement, except a release or termination by or as a result of payment in full of all Obligations under the Bank Credit Agreement, Tritel, Inc. or such Subsidiary Guarantor, as the case may be, shall be automatically and unconditionally released and discharged from all of its obligations under its Guarantee. Section 10.09. Benefits Acknowledged. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that its guarantee and waivers pursuant to its Guarantee are knowingly made in contemplation of such benefits. ARTICLE ELEVEN SUBORDINATION Section 11.01. Notes Subordinate to Senior Debt. 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 Debt that, to the extent and in the manner hereinafter set forth in this Article, the Indebtedness represented by the Notes and the payment of the principal of (and premium and Liquidated Damages, if any) and interest on each and all of the Notes 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 Debt, whether outstanding on the date of this Indenture or thereafter incurred; provided, however, that the Notes, the Indebtedness represented thereby and the payment of the principal of (and premium and Liquidated Damages, if any) and interest on the Notes in all respects shall rank equally with, or prior to, all existing and future unsecured indebtedness (including, without limitation, Indebtedness) of the Company that is subordinated to Senior Debt. Section 11.02. 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: 99 (1) the holders of Senior Debt of the Company shall be entitled to receive payment in full in cash of all Obligations due in respect of such Senior Debt (including interest after the commencement of any such proceeding, whether or not allowed, at the rate specified in the applicable Senior Debt) before the Holders will be entitled to receive any payment with respect to the Notes, (except that Holders may receive and retain Permitted Junior Securities and payments made from the trust described in Section 8.04 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 Notes (other than a payment in Permitted Junior Securities and from the trust described in Section 8.04 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 Debt of the Company, and upon the written request of the holders of Senior Debt of the Company, the Trustee or the Holder, as the case may be, shall deliver the amounts in trust to the holders of Senior Debt 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 Five 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 Five. Section 11.03. Suspension of Payment on Notes When Senior Debt of the Company in Default. (a) Unless Section 11.02 shall be applicable, the Company shall not make any payment upon or in respect of the Notes (except in Permitted Junior Securities and from the trust described in Section 8.04 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 Debt occurs and is continuing beyond any applicable period of grace (a "PAYMENT EVENT OF DEFAULT"), or 100 (ii) any other default occurs and is continuing (a "NON-PAYMENT EVENT OF DEFAULT") on any series of Designated Senior Debt which permits holders of that series of Designated Senior Debt 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 Debt. (b) Payments on the Notes 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 Debt 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 Notes 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 Blockage Notice, unless such default has been cured or waived for a period of not less than 90 days. Section 11.04. 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 Debt of such Guarantor shall be entitled to receive indefeasible payment in full in cash of all Obligations due in respect of such Senior Debt (including interest after the commencement of any such proceeding, whether nor not allowed, at the rate specified in the applicable Senior Debt) before the Holders will be entitled to receive any payment with respect to the respective Guarantee, and until all Obligations with respect to Senior Debt of such Guarantor and Senior Debt 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 Debt (except that Holders may receive and retain Permitted Junior Securities and payments made from the trust described in Section 8.04 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 101 Notes (other than a payment in Permitted Junior Securities and from the trust described in Section 8.04 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 Debt of such Guarantor, and upon the written request of the holders of Senior Debt of such Guarantor, the Trustee or the Holder, as the case may be, shall deliver the amounts in trust to the holders of Senior Debt 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 11.05. Suspension of Payment on Guarantees When Senior Indebtedness of Guarantor in Default. (a) Unless Section 11.04 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 Debt of such Guarantor or Designated Senior Debt of the Company occurs and is continuing beyond any applicable period of grace from Debt, or (ii) any Non-payment Event of Default occurs and is continuing with respect to Designated Senior Debt of such Guarantor or Designated Senior Debt of the Company which permits holders of the Designated Senior Debt of such Guarantor or Designated Senior Debt of the Company as to which such default relates to accelerate its maturity and the Trustee receives a Payment Blockage Notice from the Company or the respective holders of such Designated Senior Debt. (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 102 Blockage Notice is received, unless the maturity of any Designated Senior Debt 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 11.06. Payment Permitted If No Default. Nothing contained in this Article or elsewhere in this Indenture, in any of the Notes 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 11.02 or 11.04 under the conditions described in Section 11.03 or 11.05, from making payments at any time of principal of (and premium and Liquidated Damages, if any, on) or interest on the Notes or under a Guarantee, as applicable. Section 11.07. Subrogation to Rights of Holders of Senior Debt. Subject to the payment in full of all Senior Debt, 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 Debt of the Company or such Guarantor to the same extent as the Notes or the Guarantees are subordinated and which is entitled to like rights of subrogation) to the rights of the holders of such Senior Debt to receive payments and distributions of cash, property and securities applicable to the Senior Debt until the principal of (and premium, if any) and interest on the Notes shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders of Senior Debt 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 Debt by Holders or the Trustee, shall, as among the Company, the Guarantors, their respective creditors other than holders of Senior Debt, and the Holders of the Notes, be deemed to be a payment or distribution by the Company or any Guarantor to or on account of the Senior Debt. Section 11.08. 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 Notes on the one hand and the holders of Senior 103 Debt on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the Notes 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 Notes 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 Debt; 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 Debt. Section 11.09. Trustee to Effectuate Subordination. Each Holder of a Note 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 11.10. No Waiver of Subordination Provisions. (a) No right of any present or future holder of any Senior Debt 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 Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders of the Notes, 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 Debt, 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 Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (2) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (3) release any Person liable in any manner for the collection of Senior Debt; and (4) exercise or refrain from exercising any rights against the Company, any Guarantor and any other Person. Section 11.11. Notice to Trustee. 104 (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 Notes. 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 Notes, 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 Note), 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. (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 Debt (or a representative therefor) to establish that such notice has been given by a holder of Senior Debt (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 Debt 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 Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article 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 11.12. 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 Debt and other indebtedness of the Company, the amount thereof or payable thereon, the 105 amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article. Section 11.13. Rights of Trustee As a Holder of Senior Debt; 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 Debt which may at any time be held by it, to the same extent as any other holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. Section 11.14. 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 11.13 shall not apply to the Company or any Affiliate of the Company if it or such Affiliate acts as Paying Agent. Section 11.15. 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 Notes pursuant to Article 6 or to pursue any rights or remedies hereunder or under applicable law, except as provided in Article 6. Section 11.16. Trust Moneys Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from cash or the proceeds of Government Securities held in trust under Article Eight hereof by the Trustee (or other qualifying trustee) and which were deposited in accordance with the terms of Article Eight hereof and not in violation of Section 11.03 hereof for the payment of principal of (and premium, if any) and interest on the Notes shall not be subordinated to the prior payment of any Senior Debt 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 Debt or any other creditor of the Company. Section 11.17. Trustee Not Fiduciary for Holders of Senior Debt. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt and shall not be liable to any such holders if it shall in good faith mistakenly pay 106 over or distribute to Holders or to the Company or to any other Person cash, property or securities to which any holders of Senior Debt shall be entitled by virtue of this Article or otherwise. With respect to the holders of Senior Debt, 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 Debt shall be read into this Indenture against the Trustee. Section 11.18. Notice to Holders of Senior Debt. The Company shall promptly notify holders of its Senior Debt if payment of the Notes is accelerated in accordance with Article Six because of an Event of Default. ARTICLE TWELVE MISCELLANEOUS Section 12.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA (section) 318(c), the imposed duties shall control. Section 12.02. Notices. Any notice or communication by the Company or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company or the Guarantors: Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attention: James H. Neeld, IV With a copy to: Brown & Wood LLP One World Trade Center New York, NY 10048 Attention: Michael A. King 107 If to the Trustee: The Bank of New York Corporate Trust Administration, Floor 21W 101 Barclay Street New York, NY 10286 The Company, the Guarantors or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA (section) 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. Section 12.03. Communication by Holders of Notes with Other Holders of Notes. Holders may communicate pursuant to TIA (section) 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA (section) 312(c). Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: 108 (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. Section 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA (section) 314(a)(4)) shall comply with the provisions of TIA (section) 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) 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; (c) a statement that, in the opinion of such Person, he or she 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 satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. Section 12.06. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator or stockholder of the Company, as such, shall have any liability for any obligations of the Company under the Notes, the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and 109 release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws. Section 12.08. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES 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 12.09. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 12.10. Successors. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. Section 12.11. Severability. In case any provision in this Indenture or in the Notes 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. Section 12.12. Counterpart 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. Section 12.13. Table of Contents, Headings, Etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 110 SIGNATURES Dated as of May 11, 1999 Attest: TRITEL PCS, INC. By: ------------------------------- Name: Name: Title Title: Attest: TRITEL, INC. By: ------------------------------- Name: Name: Title Title: Attest: TRITEL COMMUNICATIONS , INC. By: ------------------------------- Name: Name: Title Title: Attest: TRITEL FINANCE, INC. By: ------------------------------- Name: Name: Title Title: Attest: THE BANK OF NEW YORK By: ------------------------------- Authorized Signatory Name: Date: Title: EXHIBIT A1 [Face of Note] THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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. THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. 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 THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH TRITEL PCS, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, A1-1 (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. OFFERS, SALES OR OTHER TRANSFERS OF THIS SECURITY UNDER (D), (E) AND (F) ABOVE ARE SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFERS, SALES OR OTHER TRANSFERS 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. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A1-2 CUSIP ___________ No. __ $__________ TRITEL PCS, INC. 12 3/4% Senior Subordinated Discount Notes due 2009 The following information is supplied for purposes of Sections 1273 and 1275 of the Internal Revenue Code: Issue Date: May 11, 1999 Yield to maturity for period from Issue Date to May 15, 2009: 12 3/4%, compounded semi-annually on May 15 and November 15, commencing May 11, 1999 (computed without giving effect to the additional payments of interest in the event the issuer fails to commence the exchange offer, cause the registration statement to be declared effective or consummate the exchange offer, each as described on the reverse hereof) Original issue discount under Section 1273 of the Internal Revenue Code (for each $1,000 principal amount at maturity): $1,099.25 Issue Price (for each $1,000 principal amount at maturity): $538.28 Tritel PCS, Inc., a Delaware corporation (the "Company," which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to _____________, or its registered assigns, the principal sum of _____________ ($_________) on May 15, 2009. Interest Payment Dates: May 15 and November 15, commencing November 15, 2004. Record Dates: May 1 and November 1. Tritel, Inc., a Delaware corporation, Tritel Communications, Inc., a Delaware corporation, and Tritel Finance, Inc., a Delaware corporation (collectively, the "Guarantors," which term includes any successors under the Indenture hereinafter referred to and any Subsidiary of the Company that provides a Guarantee pursuant to the Indenture), have jointly and severally, fully and unconditionally guaranteed the payment of principal of, premium and Liquidated Damages, if any, and interest on the Notes. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A1-3 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers. TRITEL PCS, INC. By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: This is one of the 12 3/4% Senior Subordinated Discount Notes due 2009 described in the within-mentioned Indenture. Dated: May 11, 1999 THE BANK OF NEW YORK as Trustee By: --------------------------------- Authorized Signatory A1-4 [Reverse Side of Note] TRITEL PCS, INC. 12 3/4% Senior Subordinated Discount Notes due 2009 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. The Company promises to pay interest on the principal amount at maturity of this Note at 12 3/4% per annum from November 15, 2004, until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. No interest shall be paid or accrued on the Notes prior to May 15, 2004. Thereafter, the Company shall pay interest and Liquidated Damages, if any, semi-annually in arrears on May 15 and November 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 15, 2004; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be November 15, 2004. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the May 1 or November 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose in The City of New York maintained for such purposes, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Restricted Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of May 11, 1999 ("Indenture") between the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code (section) (section) 77aaa77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a A1-5 statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are senior subordinated obligations of the Company limited to $200 million in aggregate principal amount at maturity. 5. OPTIONAL REDEMPTION. (a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to May 15, 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount at maturity) set forth below plus accrued and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on of the years indicated below (subject to the right of Holder on the relevant record date to receive interest due on the related Interest Payment Date): Year Percentage ---- ---------- 2004........................................ 106.375% 2005........................................ 104.250% 2006........................................ 102.125% 2007 and thereafter......................... 100.000% (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to May 15, 2002, the Company may redeem up to 35% of the aggregate principal amount at maturity of the Notes with proceeds of one or more Equity Offerings at a redemption price of 112.75% of the Accreted Value thereof as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase; provided that: (1) at least 65% of the aggregate principal amount at maturity of the Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Restricted Subsidiaries); and (2) the redemption must occur within 60 days following the date of the closing of such Equity Offering. 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. A1-6 7. REPURCHASE AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company shall be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the Accreted Value as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase, if such redemption occurs prior to May 15, 2004, or 101% of the Accreted Value as of the date of purchase, together with accrued and unpaid interest and Liquidated Damages, if any, if such redemption date occurs on or after May 15, 2004 (the "Change of Control Payment"). Within ten days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. (b) When the aggregate amount of Excess Proceeds from one or more Asset Sales exceeds $15.0 million, the Company shall commence an offer ("Asset Sale Offer") pursuant to Section 3.09 of the Indenture to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100% of Accreted Value plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and shall be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the Accreted Value of the Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis based on the Accreted Value of the Notes and such other pari passu Indebtedness tendered. Holders of Notes that are the subject of an offer to purchase shall receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. No Notes of $1,000 or less shall be redeemed in part. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not A1-7 exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed. 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to evidence the succession of another Person to the Company or any other Obligor on the Notes and to provide for the assumption of the Company's obligations to Holders of the Notes in case of a merger or consolidation or sale of all or substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. 12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest or Liquidated Damages on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes; (iii) failure by the Company or the Company's Restricted Subsidiaries to comply with Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or the Company's Restricted Subsidiaries for 30 days after notice to the Company to comply with certain other agreements in the Indenture or the Notes; (v) default under certain other agreements relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) notice to the Trustee of an intended sale of disposition of certain properties securing Indebtedness that is in default; (viii) the Guarantee ceases to be in full force and effect or is declared null and void and such condition has continued for a period of 30 days after written notice of such failure has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% of the aggregate Accreted Value of the then outstanding Notes; and (ix) certain events of bankruptcy or insolvency with respect to the Company or any of its Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Accreted Value of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes shall become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate Accreted Value of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the A1-8 payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate Accreted Value of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. GUARANTEES. The Company's obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors, as provided in Article Ten of the Indenture. 14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder, of the Company or any Subsidiary, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 16. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of May 11, 1999, between the Company and the parties named on the signature pages thereof (the "Registration Rights Agreement"). 19. 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 Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. A1-9 The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attention: James H. Neeld, IV A1-10 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to: ----------------------------------- (Insert assignee's legal name) - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint to transfer this Note 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 face of this Note) Signature Guarantee*: ---------------------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A1-11 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: [ ] Section 4.10 [ ] Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $ ----------------- Date: ----------------- Your Signature: ------------------------------- (Sign exactly as your name appears on the face of this Note) Tax Identification No.: ----------------------- Signature Guarantee*: ----------------------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A1-12 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Principal Amount at Amount of Decrease in Amount of Increase in Maturity Signature of Principal Amount at Principal Amount at of this Global Note Authorized Officer Maturity Maturity Following such of Trustee or Date of Exchange of this Global Note of this Global Note decrease (or increase) Note Custodian - ---------------- ------------------- ------------------- ---------------------- --------------
A1-13 EXHIBIT A2 [Face of Note] THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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. THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. 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 THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 903 OR 904 OF REGULATION S, (2) AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER A2-1 OF THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS SECURITY) OR THE LAST DAY ON WHICH TRITEL PCS, INC. (THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY OR ANY PREDECESSOR OF THIS SECURITY AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAWS (THE "RESALE RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT 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 TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, PURSUANT TO RULE 904 OF REGULATION S, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. OFFERS, SALES OR OTHER TRANSFERS OF THIS SECURITY UNDER (D), (E) AND (F) ABOVE ARE SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFERS, SALES OR OTHER TRANSFERS 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. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A2-2 CINS ___________ No. __ $__________ TRITEL PCS, INC. 12 3/4% Senior Subordinated Discount Notes due 2009 The following information is supplied for purposes of Sections 1273 and 1275 of the Internal Revenue Code: Issue Date: May 11, 1999 Yield to maturity for period from Issue Date to May 15, 2009: 12 3/4%, compounded semi-annually on May 15 and November 15, commencing May 11, 1999 (computed without giving effect to the additional payments of interest in the event the issuer fails to commence the exchange offer, cause the registration statement to be declared effective or consummate the exchange offer, each as described on the reverse hereof) Original issue discount under Section 1273 of the Internal Revenue Code (for each $1,000 principal amount at maturity): $1,099.25 Issue Price (for each $1,000 principal amount at maturity): $538.28 Tritel PCS, Inc., a Delaware corporation (the "Company," which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to ______________, or its registered assigns, the principal sum of ____________ ($__________) on May 15, 2009. Interest Payment Dates: May 15 and November 15, commencing November 15, 2004. Record Dates: May 1 and November 1. Tritel, Inc., a Delaware corporation, Tritel Communications, Inc., a Delaware corporation, and Tritel Finance, Inc., a Delaware corporation (collectively, the "Guarantors," which term includes any successors under the Indenture hereinafter referred to and any Subsidiary of the Company that provides a Guarantee pursuant to the Indenture), have jointly and severally, fully and unconditionally guaranteed the payment of principal of, premium and Liquidated Damages, if any, and interest on the Notes. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] A2-3 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers. TRITEL PCS, INC. By: --------------------------------- Name: Title: By: --------------------------------- Name: Title: This is one of the 12 3/4% Senior Subordinated Discount Notes due 2009 described in the within-mentioned Indenture. Dated: May 11, 1999 THE BANK OF NEW YORK as Trustee By: --------------------------------- Authorized Signatory A2-4 [Reverse Side of Regulation S Temporary Global Note] TRITEL PCS, INC. 12 3/4% Senior Subordinated Discount Notes due 2009 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. The Company promises to pay interest on the principal amount at maturity of this Note at 12 3/4% per annum from November 15, 2004, until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. No interest shall be paid or accrued on the Notes prior to May 15, 2004. Thereafter, the Company shall pay interest and Liquidated Damages, if any, semi-annually in arrears on May 15 and November 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 15, 2004; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be November 15, 2004. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. Until this Regulation S Temporary Global Note is exchanged for one or more Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest hereon; until so exchanged in full, this Regulation S Temporary Global Note shall in all other respects be entitled to the same benefits as other Senior Subordinated Discount Notes under the Indenture. 2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the May 1 or November 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose in The City of New York maintained for such purposes, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change A2-5 any Paying Agent or Registrar without notice to any Holder. The Company or any of its Restricted Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of May 11, 1999 ("Indenture") between the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code (section) (section) 77aaa77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are senior subordinated obligations of the Company limited to $200 million in aggregate principal amount at maturity. 5. OPTIONAL REDEMPTION. (a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to May 15, 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount at maturity) set forth below plus accrued and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on of the years indicated below (subject to the right of Holder on the relevant record date to receive interest due on the related Interest Payment Date): Year Percentage ---- ---------- 2004......................................... 106.375% 2005......................................... 104.250% 2006......................................... 102.125% 2007 and thereafter.......................... 100.000% (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to May 15, 2002, the Company may redeem up to 35% of the aggregate principal amount at maturity of the Notes with proceeds of one or more Equity Offerings at a redemption price of 112.75% of the Accreted Value thereof as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase; provided that: (1) at least 65% of the aggregate principal amount at maturity of the Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Restricted Subsidiaries); and (2) the redemption must occur within 60 days following the date of the closing of such Equity Offering. 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. A2-6 7. REPURCHASE AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company shall be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the Accreted Value as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase, if such redemption occurs prior to May 15, 2004, or 101% of the Accreted Value as of the date of purchase, together with accrued and unpaid interest and Liquidated Damages, if any, if such redemption date occurs on or after May 15, 2004 (the "Change of Control Payment"). Within ten days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. (b) When the aggregate amount of Excess Proceeds from one or more Asset Sales exceeds $15.0 million, the Company shall commence an offer ("Asset Sale Offer") pursuant to Section 3.09 of the Indenture to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100% of Accreted Value plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and shall be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the Accreted Value of the Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis based on the Accreted Value of the Notes and such other pari passu Indebtedness tendered. Holders of Notes that are the subject of an offer to purchase shall receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. No Notes of $1,000 or less shall be redeemed in part. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay A2-7 any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed. This Regulation S Temporary Global Note is exchangeable in whole or in part for one or more Global Notes only (i) on or after the termination of the 40-day restricted period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global Note for one or more Global Notes, the Trustee shall cancel this Regulation S Temporary Global Note. 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to evidence the succession of another Person to the Company or any other Obligor on the Notes and to provide for the assumption of the Company's obligations to Holders of the Notes in case of a merger or consolidation or sale of all or substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. 12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest or Liquidated Damages on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes; (iii) failure by the Company or the Company's Restricted Subsidiaries to comply with Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or the Company's Restricted Subsidiaries for 30 days after notice to the Company to comply with certain other agreements in the Indenture or the Notes; (v) default under certain other agreements relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) notice to the Trustee of an intended sale of disposition of certain properties securing Indebtedness that is in default; (viii) the Guarantee ceases to be in full force and effect or is declared null and void and such condition has continued for a period of 30 days after written notice of such failure has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% of the aggregate Accreted Value of the then outstanding Notes; and (ix) certain events of bankruptcy or insolvency with respect to the Company or any of its Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at A2-8 least 25% in aggregate Accreted Value of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes shall become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate Accreted Value of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate Accreted Value of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. GUARANTEES. The Company's obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors, as provided in Article Ten of the Indenture. 14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder, of the Company or any Subsidiary, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 16. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of May 11, 1999, between the Company and the parties named on the signature pages thereof (the "Registration Rights Agreement"). A2-9 19. 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 Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attention: James H. Neeld, IV A2-10 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to: ----------------------------------- (Insert assignee's legal name) - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint to transfer this Note 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 face of this Note) Signature Guarantee*: ---------------------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A2-11 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: G Section 4.10 G Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $ ----------------- Date: ----------------- Your Signature: ------------------------------- (Sign exactly as your name appears on the face of this Note) Tax Identification No.: ----------------------- Signature Guarantee*: ----------------------------- * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A2-12 SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE The following exchanges of a part of this Regulation S Temporary Global Note for an interest in another Global Note or of other Restricted Global Notes for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount at Amount of Decrease in Amount of Increase in Maturity Signature of Principal Amount at Principal Amount at of this Global Note Authorized Officer Maturity Maturity Following such of Trustee or Date of Exchange of this Global Note of this Global Note decrease (or increase) Note Custodian - ---------------- ------------------- ------------------- ---------------------- --------------
A2-13 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 [Registrar address block] Re: ___% Senior Subordinated Discount Notes due 2009 Reference is hereby made to the Indenture, dated as of _________________ (the "Indenture"), among Tritel PCS, Inc., as issuer (the "Company"), the Guarantors and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ___________________ (the "Transferor") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount at maturity of $___________ in such Note[s] or interests (the "Transfer"), to ___________________________ (the "Transferee"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. [ ] Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 2. [ ] Check if Transferee will take delivery of a beneficial interest in the Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such B-1 Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Permanent Global Note, the Regulation S Temporary Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 3. [ ] Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) [ ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) [ ] such Transfer is being effected to the Company or a subsidiary thereof; or (c) [ ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or (d) [ ] such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a B-2 copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Definitive Notes and in the Indenture and the Securities Act. 4. [ ] Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note. (a) [ ] Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (b) [ ] Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (c) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. ------------------------------- [Insert Name of Transferor] B-3 By: --------------------------------- Name: Title: Dated: --------------------------------- B-4 ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (a) OR (b)] (a) [ ] a beneficial interest in the: (i) [ ] 144A Global Note (CUSIP __________); or (ii) [ ] Regulation S Global Note (CUSIP __________); or (iii) [ ] IAI Global Note (CUSIP __________); or (b) [ ] a Restricted Definitive Note. 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) [ ] a beneficial interest in the: (i) [ ] 144A Global Note (CUSIP __________); or (ii) [ ] Regulation S Global Note (CUSIP __________); or (iii) [ ] IAI Global Note (CUSIP __________); or (iv) [ ] Unrestricted Global Note (CUSIP __________); or (b) [ ] a Restricted Definitive Note; or (c) [ ] an Unrestricted Definitive Note, in accordance with the terms of the Indenture. B-5 EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 [Registrar address block] Re: ___% Senior Subordinated Discount Notes due 2009 (CUSIP ____________) Reference is hereby made to the Indenture, dated as of _________________ (the "Indenture"), among Tritel PCS, Inc., as issuer (the "Company"), the Guarantors and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. __________________________ (the "Owner") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount at maturity of $____________ in such Note[s] or interests (the "Exchange"). In connection with the Exchange, the Owner hereby certifies that: 1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note (a) [ ] Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (b) [ ] Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend C-1 are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (c) [ ] Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (d) [ ] Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes (a) [ ] Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount at maturity, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. (b) Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of C-2 EXHIBIT C the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. C-3 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. ------------------------------- [Insert Name of Transferor] By: ---------------------------- Name: Title: Dated: ---------------------------- C-4 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 [Registrar address block] Re: ___% Senior Subordinated Discount Notes due 2009 Reference is hereby made to the Indenture, dated as of _________________ (the "Indenture"), among Tritel PCS, Inc., as issuer (the "Company"), the Guarantors and The Bank of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $____________ aggregate principal amount at maturity of: (a) [ ] a beneficial interest in a Global Note, or (b) [ ] a Definitive Note, we confirm that: 1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act"). 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global D-1 Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and 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 Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. ------------------------------------ [Insert Name of Accredited Investor] By: --------------------------------- Name: Title: Dated: --------------------------------- D-2 EX-4.2 12 REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT DATED AS OF MAY 11, 1999 BY AND AMONG TRITEL PCS, INC., ISSUER, TRITEL, INC., TRITEL COMMUNICATIONS, INC., TRITEL FINANCE, INC., Guarantors AND NATIONSBANC MONTGOMERY SECURITIES LLC BARCLAYS CAPITAL INC. TD SECURITIES (USA) INC. BNY CAPITAL MARKETS, INC. CIBC OPPENHEIMER CORP. CREDIT LYONNAIS SECURITIES (USA) INC. This Registration Rights Agreement (this "AGREEMENT") is made and entered into as of May 11, 1999, by and among Tritel PCS, Inc., a Delaware corporation (the "COMPANY"), Tritel, Inc., a Delaware corporation, Tritel Communications, Inc., a Delaware corporation, and Tritel Finance, Inc., a Delaware corporation (each, a "GUARANTOR" and, collectively, the "GUARANTORS"), and NationsBanc Montgomery Securities LLC, Barclays Capital Inc., TD Securities (USA) Inc., BNY Capital Markets, Inc., CIBC Oppenheimer Corp. and Credit Lyonnais Securities (USA) Inc. (each, an "INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom has agreed to purchase the Company's 12 3/4% Senior Subordinated Discount NOTES due 2009 (the "NOTES") pursuant to the Purchase Agreement (as defined below). This Agreement is made pursuant to the Purchase Agreement, dated May 6, 1999 (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in Section 5 of the Purchase Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to them under the Indenture, dated as of May 11, 1999, entered into by and among the Company, the Guarantors and The Bank of New York, as Trustee, relating to the Notes and the Exchange Notes (the "INDENTURE"). The parties hereby agree as follows: Section 1. Definitions. As used in this Agreement, the following capitalized terms shall have the following meanings: ACT: The Securities Act of 1933, as amended. AFFILIATE: As defined in Rule 144 of the Act. BROKER-DEALER: Any broker or dealer registered under the Exchange Act. CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture. CLOSING DATE: The date hereof. COMMISSION: The Securities and Exchange Commission. CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes of this Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Exchange Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange Offer Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the period required pursuant to Section 3(b) hereof and (c) the delivery by the Company to the Registrar under the Indenture of Exchange Notes in the same aggregate principal amount as the aggregate principal amount of Notes tendered by Holders thereof pursuant to the Exchange Offer. CONSUMMATION DEADLINE: As defined in Section 3(b) hereof. EFFECTIVENESS DEADLINE: As defined in Sections 3(a) and 4(a) hereof. EXCHANGE ACT: The Securities Exchange Act of 1934, as amended. EXCHANGE NOTES: The Company's 12 3/4% Senior Subordinated Discount Notes due 2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as contemplated by Section 4 hereof. EXCHANGE OFFER: The exchange and issuance by the Company of a principal amount of Exchange Notes (which shall be registered pursuant to the Exchange Offer Registration Statement) equal to the outstanding principal amount of Notes that are tendered by Holders thereof in connection with such exchange and issuance. EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement relating to the Exchange Offer, including the related Prospectus. EXEMPT RESALES: The transactions in which the Initial Purchasers propose to sell the Notes to certain "qualified institutional buyers," as such term is defined in Rule 144A under the Act and pursuant to Regulation S under the Act. FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof. HOLDERS: As defined in Section 2 hereof. PROSPECTUS: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended, modified or supplemented by any prospectus supplement and ---------- by all other amendments thereto, including post-effective amendments, and all materials incorporated by reference into such Prospectus. RECOMMENCEMENT DATE: As defined in Section 6(d) hereof. REGISTRATION DEFAULT: As defined in Section 5 hereof. REGISTRATION STATEMENT: Any registration statement of the Company and the Guarantors relating to (a) an Exchange Offer or (b) the registration for resale of Transfer 2 Restricted Securities pursuant to the Shelf Registration Statement, in each case, (i) that is filed pursuant to the provisions of this Agreement and (ii) including the Prospectus included therein, all amendments and supplements thereto (including post-effective amendments) and all exhibits and materials incorporated by reference therein. REGULATION S: Regulation S promulgated under the Act. RULE 144: Rule 144 promulgated under the Act. SHELF REGISTRATION STATEMENT: As defined in Section 4 hereof. SUSPENSION NOTICE: As defined in Section 6(d) hereof. TIA: The Trust Indenture Act of 1939 as in effect on the date of the Indenture. TRANSFER RESTRICTED SECURITIES: Each (a) Note, until the earliest to occur of (i) the date on which such Note is exchanged in the Exchange Offer for an Exchange Note by a Holder other than a Broker-Dealer, (ii) following the exchange by a broker-dealer in the Exchange Offer of a Note for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker-dealer on or prior to the date of such sale a copy of the Prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Note has been effectively registered under the Act and disposed of in accordance with a Shelf Registration Statement (and the purchasers thereof have been issued Exchange Notes), or (iv) the date on which such Note is distributed to the public pursuant to Rule 144 under the Act or is saleable pursuant to Rule 144(k) under the Act (or similar provisions then in effect) and (b) Exchange Note held by a Broker-Dealer until the date on which such Exchange Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including the delivery of the Prospectus contained therein). Section 2. Holders. A Person is deemed to be a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such Person owns Transfer Restricted Securities. Section 3. Registered Exchange Offer. (a) Unless the Exchange Offer shall not be permitted by applicable federal law (after the procedures set forth in Section 6(a)(i) hereof have been complied with), the Company and the Guarantors shall (i) cause the Exchange Offer Registration Statement to be filed with the Commission as soon as practicable after the Closing Date, but in no event later than 60 days after the Closing Date (such 60th day being the "FILING DEADLINE"), (ii) use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 210 days after the Closing Date (such 210th day being the "EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause it to become effective, (B) file, if applicable, a 3 post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Exchange Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting (i) registration of the Exchange Notes to be offered in exchange for the Notes that are Transfer Restricted Securities and (ii) resales of Exchange Notes by any Broker-Dealer that tendered into the Exchange Offer Notes that such Broker-Dealer acquired for its own account as a result of market making activities or other trading activities (other than Notes acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) hereof. (b) The Company and the Guarantors shall use their respective reasonable best efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Exchange Notes and Guarantees shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their respective reasonable best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days thereafter (such 30th day being the "CONSUMMATION DEADLINE"), unless a longer period is required by the federal securities laws. (c) The Company shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Broker-Dealer who holds Transfer Restricted Securities that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities (other than Notes acquired directly from the Company or any Affiliate of the Company), may exchange such Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of Distribution" section shall also contain all other information with respect to such sales by such Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted Securities held by any such Broker-Dealer, except to the extent required by the Commission as a result of a change in policy, rules or regulations after the date of this Agreement. See the Shearman & Sterling no-action letter (available July 2, 1993). Because any such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of any Exchange Notes received by such Broker-Dealer in the Exchange Offer, the Company and the Guarantors shall permit the use of the Prospectus 4 contained in the Exchange Offer Registration Statement by such Broker-Dealer to satisfy such prospectus delivery requirement through the Consummation Deadline and thereafter as provided in the remainder of this paragraph. To the extent necessary to ensure that the prospectus contained in the Exchange Offer Registration Statement is available for sales of Exchange Notes by any Broker-Dealer that acquired Exchange Notes as a result of market-making or similar activities such that the Broker-Dealer would be required to deliver a prospectus under the Act upon a subsequent sale or other disposition of the Exchange Notes, the Company and the Guarantors agree to use their respective reasonable best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(a) and 6(c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission, as announced from time to time, for a period of one year (as extended due to events specified in Section 6(c)(i) hereof) from the Consummation Deadline or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold pursuant thereto. The Company and the Guarantors shall provide sufficient copies of the latest version of such Prospectus to such Broker-Dealers, promptly upon request, and in no event later than one day after the date of such request, at any time during such period. Section 4. Shelf Registration. (a) Shelf Registration. If (i) the Exchange Offer is not permitted by applicable law (after the Company and the Guarantors have complied with the procedures set forth in Section 6(a)(i) hereof) or (ii) if any Holder of Transfer Restricted Securities shall notify the Company in writing prior to the 20th day following the Consummation Deadline that (A) such Holder was prohibited by law or Commission policy from participating in the Exchange Offer, (B) such Holder may not resell the Exchange Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and holds Notes acquired directly from the Company or any of its Affiliates, then the Company and the Guarantors shall: (x) cause to be filed, on or prior to 30 days after the earlier of (1) the date on which the Company determines that the Exchange Offer Registration Statement need not or cannot be filed as a result of clause (a)(i) above and (2) the date on which the Company receives the notice specified in clause (a)(ii) above, (such earlier date, the "FILING DEADLINE"), a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities, and (y) shall use their respective reasonable best efforts to cause such Shelf Registration Statement to become effective on or prior to 90 days after the Filing Deadline for the Shelf Registration Statement (such 90th day being the "EFFECTIVENESS DEADLINE"). If, after the Company and the Guarantors filed an Exchange Offer Registration Statement that satisfies the requirements of Section 3(a) hereof, the Company and the Guarantors are required to file and make effective a Shelf Registration Statement solely because the Exchange Offer is not permitted under applicable federal law (i.e., clause (a)(i) above), then the 5 filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above; provided that, in such event, the Company and the Guarantors shall remain obligated to meet the Effectiveness Deadline set forth in clause (y) above. To the extent necessary to ensure that the Shelf Registration Statement is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a) and the other securities required to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and the Guarantors shall use their respective reasonable best efforts to keep any Shelf Registration Statement required by this Section 4(a) continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(b) and 6(c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission, as announced from time to time, for a period of at least two years (as extended due to events specified in Section 6(c)(i) hereof) following the Closing Date, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Shelf Registration Statement have been sold pursuant thereto. (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508, as applicable, of Regulation S-K of the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to liquidated damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such information. Each selling Holder agrees to furnish promptly additional information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. Section 5. Liquidated Damages. If (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline, (ii) any such Registration Statement has not been declared effective by the Commission on or prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not been Consummated on or prior to the Consummation Deadline, (iv) the Shelf Registration Statement is declared effective but thereafter, pending the announcement of a material corporate transaction, the Company issues a notice that the Shelf Registration Statement is unusable, or such notice is required under applicable securities laws to be issued by the Company, and, during the period specified in Section 4(a) hereof, the aggregate number of days in any consecutive twelve-month period for which all such notices are issued or required to be issued exceeds 45 days, or (v) the Exchange Offer Registration Statement is filed and declared effective but thereafter shall cease to be effective or fail to be usable for its intended purpose without being succeeded immediately by a post-effective amendment to such Exchange Offer Registration Statement that cures such failure and that is itself declared effective immediately (each such event referred to in clauses (i) 6 through (v), a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly and severally agree to pay to each Holder of Transfer Restricted Securities affected thereby liquidated damages in an amount equal to $.05 per week per $1,000 in principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues for the first 90-day period immediately following the occurrence of such Registration Default. The amount of the liquidated damages shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages for all Registration Defaults of $.25 per week per $1,000 in principal amount of Transfer Restricted Securities; provided that the Company and the Guarantors shall in no event be required to pay liquidated damages for more than one Registration Default at any given time. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or made usable in the case of (iv) or (v) above, as applicable, the liquidated damages payable with respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii), (iv) or (v), as applicable, shall cease. All accrued liquidated damages shall be paid to the Holders entitled thereto, in the manner provided for the payment of interest in the Indenture, on each Interest Payment Date, as more fully set forth in the Indenture and the Notes. Notwithstanding the fact that any securities for which liquidated damages are due cease to be Transfer Restricted Securities, all obligations of the Company and the Guarantors to pay accrued liquidated damages with respect to such securities shall survive until such time as such obligations with respect to such securities shall have been satisfied in full. Section 6. Registration Procedures. (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall (x) comply with all applicable provisions of Section 6(c) hereof, (y) use their respective reasonable best efforts to effect such exchange and to permit the resale of Exchange Notes by any Broker-Dealer that tendered in the Exchange Offer Notes that such Broker-Dealer acquired for its own account as a result of its market-making activities or other trading activities (other than Notes acquired directly from the Company or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof, and (z) comply with all of the following provisions: (i) If, following the date hereof there has been announced a change in Commission policy with respect to exchange offers such as the Exchange Offer, that in 7 the reasonable opinion of counsel to the Company raises a substantial question as to whether the Exchange Offer is permitted by applicable federal law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Transfer Restricted Securities. The Company and the Guarantors hereby agree to pursue the issuance of such a decision to the Commission staff level. In connection with the foregoing, the Company and the Guarantors hereby agree to take all such other actions as may be requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation (A) participating in telephonic conferences with the Commission, (B) delivering to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursuing a resolution (which need not be favorable) by the Commission staff. (ii) As a condition to its participation in the Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company and the Guarantors (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any Person to participate in, a distribution of the Exchange Notes to be issued in the Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course of business. As a condition to its participation in the Exchange Offer, each Holder using the Exchange Offer to participate in a distribution of the Exchange Notes shall acknowledge and agree that if the resales are of Exchange Notes obtained by such Holder in exchange for Notes acquired directly from the Company or an Affiliate thereof, it (1) could not, under Commission policy as in effect on the date of this Agreement, rely on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5, 1991), as interpreted in the Commission's letter to Shearman & Sterling, dated July 2, 1993, and similar no-action letters (including, if applicable, any no-action letter obtained pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Act in connection with a secondary resale transaction and that such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K. (iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in 8 reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988) and Morgan Stanley and Co., Inc. (available June 5, 1991), as interpreted in the Commission's letter to Shearman & Sterling, dated July 2, 1993, and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Exchange Notes to be received in the Exchange Offer and that, to the best of the Company's and each Guarantor's information and belief, each Holder participating in the Exchange Offer is acquiring the Exchange Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above, if applicable. (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Company and the Guarantors shall: (i) comply with all of the provisions of Section 6(c) hereof and use their respective reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and pursuant thereto, the Company and the Guarantors will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods specified and otherwise in accordance with the provisions hereof, and (ii) issue, upon the request of any Holder or purchaser of Notes covered by any Shelf Registration Statement contemplated by this Agreement, Exchange Notes having an aggregate principal amount equal to the aggregate principal amount of Notes sold pursuant to the Shelf Registration Statement and surrendered to the Company for cancellation; the Company shall register Exchange Notes on the Shelf Registration Statement for this purpose and issue the Exchange Notes to the purchaser(s) of securities subject to the Shelf Registration Statement in the names as such purchaser(s) shall designate. (c) General Provisions. In connection with any Registration Statement and any related Prospectus required by this Agreement, the Company and the Guarantors shall: (i) use their respective reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the 9 period specified in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement curing such defect, and, if Commission review is required, use their respective reasonable best efforts to cause such amendment to be declared effective as soon as practicable; (ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as the case may be; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii) advise each Holder promptly and, if requested by such Holder, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, 10 the Company and the Guarantors shall use their respective reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv) subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) hereof shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (v) furnish to each Holder in connection with such exchange or sale, if any, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which such Holders shall reasonably object within five Business Days after the receipt thereof. A Holder shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein not misleading or fails to comply with the applicable requirements of the Act; (vi) promptly, prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to each Holder in connection with such exchange or sale, if any, make the Company's and the Guarantors' representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such Holders may reasonably request; (vii) make available, at reasonable times, for inspection by each Holder and any attorney or accountant retained by such Holder, all financial and other records, pertinent corporate documents of the Company and the Guarantors and cause the Company's and the Guarantors' officers, directors and employees to supply all information reasonably requested by any such Holder, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; 11 (viii) if requested by any Holder in connection with such exchange or sale, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holders may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Transfer Restricted Securities; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (ix) furnish to each Holder in connection with such exchange or sale, without charge, at least one copy of the Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (x) deliver to each Holder, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent to the use (in accordance with applicable law, rules, regulations and orders) of the Prospectus and any amendment or supplement thereto by each selling Holder in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; (xi) upon the request of any Holder, enter into such agreements (including underwriting agreements) and make such representations and warranties and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any applicable Registration Statement contemplated by this Agreement as may be reasonably requested by any Holder in connection with any sale or resale pursuant to any applicable Registration Statement. In such connection, the Company and the Guarantors shall: (A) upon the request of any Holder furnish (or in the case of paragraphs (2) and (3) below, use its reasonable best efforts to cause to be furnished) to each Holder, upon Consummation of the Exchange Offer or upon the effectiveness of the Shelf Registration Statement, as the case may be: (1) a certificate, dated such date, signed on behalf of the Company and each Guarantor by (x) the Chairman of the Board, Chief Executive Officer or President and (y) the Chief Financial Officer or Chief Accounting Officer of the Company and such Guarantor, confirming, as of the date thereof, the matters set forth in Section 5(g) of the Purchase Agreement and such other similar matters as such Holders may reasonably request; 12 (2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantors covering matters similar to those set forth in paragraph (c) of Section 5 of the Purchase Agreement and Exhibit B thereto and such other matter as such Holder may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing (relying as to materiality to the extent such counsel deems appropriate upon the statements of officers and other representatives of the Company and the Guarantors) and without independent check or verification, no facts came to such counsel's attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation of the Exchange Offer, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted 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. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, the notes and schedules thereto and other financial data and statistical data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and (3) a customary comfort letter, dated the date of Consummation of the Exchange Offer, or as of the date of effectiveness of the Shelf Registration Statement, as the case may be, from the Company's independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in 13 connection with underwritten public offerings, and covering the matters set forth in the comfort letters delivered pursuant to Section 5(a) of the Purchase Agreement; and (B) deliver such other documents and certificates as may be reasonably requested by the selling Holders to evidence compliance with the matters covered in clause (A) above and with any customary conditions contained in any agreement entered into by the Company and the Guarantors pursuant to this clause (xi); (xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders and their counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided, however, that neither the Company nor any Guarantor shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xiii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such Transfer Restricted Securities in such denominations and such names as the selling Holders may request at least two Business Days prior to any sale of such Transfer Restricted Securities; (xiv) use their respective reasonable best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xii) above; (xv) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with certificates for the Transfer Restricted Securities which are in a form eligible for deposit with the Depository Trust Company; 14 (xvi) otherwise use their respective reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of Rule 158 under the Act); (xvii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA and execute and use its reasonable best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; (xviii) following the Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, whether or not required by the Commission, file a copy of all of the following information and reports 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 securities analysts and prospective investors upon request: (A) 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 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants; and (B) all current reports that would be required to file such reports. (xix) the Company and the Guarantors will be deemed not to have used their reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if the Company or any of the Guarantors takes any action that would, or omits to take any action which omission would, result in any such Registration Statement not being declared effective or in the Holders of Transfer Restricted Securities covered thereby not being able to exchange or offer and sell such Transfer Restricted Securities during that period as and to the extent contemplated hereby, unless (A) such action is required by applicable law or (B) such action is taken by the Company and the Guarantors in good faith and for valid business reasons (but not including avoidance of the Company's or the Guarantors', as applicable, obligations hereunder), including a 15 material corporate transaction, as long as the Company and the Guarantors promptly comply with the requirements of Section 6(c)(iv) hereof, if applicable. (d) Restrictions on Holders. Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice referred to in Section 6(c)(iii)(C) hereof or any notice from the Company of the existence of any fact or the happening of any event of the kind described in Section 6(c)(iii)(D) hereof or, in the case of the Shelf Registration, the Company shall issue a notice pending the announcement of a material corporate transaction that the Shelf Registration Statement is unusable (in each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until (i) such Holder has received copies of the supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice hereby agrees that it will either (i) destroy any Prospectuses, other than permanent file copies, then in such Holder's possession which have been replaced by the Company with more recently dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of the Suspension Notice. The time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by a number of days equal to the number of days in the period from and including the date of delivery of the Suspension Notice to the Recommencement Date. Section 7. Registration Expenses. (a) All expenses incident to the Company's and the Guarantors' performance of or compliance with this Agreement will be borne, jointly and severally, by the Company and the Guarantors, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses; (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Exchange Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company and the Guarantors, as well as the Holders of Transfer Restricted Securities (which counsel for the Holders shall be chosen by the Holders of a majority of the outstanding Transfer Restricted Securities); (v) all application and filing fees in connection with listing the Exchange Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance); (vii) all rating agency fees, if any; and (viii) all fees and expenses relating to the qualification of the Indenture under the applicable securities laws. 16 The Company will, in any event, bear its and the Guarantors' internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors. (b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities who are tendering Notes into the Exchange Offer and/or selling or reselling Notes or Exchange Notes pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Shearman & Sterling, unless another firm shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. Section 8. Indemnification. (a) The Company and the Guarantors agree, jointly and severally, to indemnify and hold harmless the Initial Purchasers, each Holder and each Person, if any, who controls such Initial Purchasers or Holder (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), including, with respect to such Initial Purchasers or Holder or controlling person, their respective directors, agents, officers and employees, from and against: (i) any and all loss, liability, claim, damage, expense and action whatsoever, joint or several, as incurred, to which such Holder, Initial Purchasers or controlling person or any such director, agent, officer or employee may become subject under the Securities Act, the Exchange Act or other federal or state statutory law or regulation, or at common law or otherwise, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment or supplement thereto), including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) any and all loss, liability, claim, damage, expense or action whatsoever, joint or several, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, provided that (subject to Section 8(d) hereof) any such settlement is effected with the written consent of the Company and/or any Guarantor; (iii) in whole or in part upon any failure of the Company or any Guarantor to perform its obligations hereunder or under law; (iv) any act or failure to act or any alleged act or failure to act by any such Holder, Initial Purchaser or controlling person, or their respective directors, agents, officers and employees, in connection 17 with, or relating in any manner to, the exchange or sale of Transfer Restricted Securities contemplated hereby, and which is included as part of or referred to in any and all losses, claims, damages, liabilities, expenses or actions arising out of or based upon any matter covered by clause (i) or (ii) above, provided that neither the Company nor any Guarantor shall be liable under this Section 8(a) to the extent that a court of competent jurisdiction shall have determined by a final judgment that such loss, claim, damage, liability, expense or action resulted directly from any such acts or failures to act undertaken or omitted to be taken by such Holder, underwriter or controlling person, or their respective directors, agents, officers and employees, through its gross negligence or willful misconduct; or (v) any and all expenses whatsoever, joint or severeal, as incurred (including the fees and disbursements of counsel chosen by any indemnified party, subject to the limitations in Section 8(c) below), reasonably incurred in investigating, preparing or defending against any litigation or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraphs (i) through (iv) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage, expense or action to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company and the Guarantors by the Initial Purchasers or such Holder expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto); and provided, further, that the Company and the Guarantors shall not be liable to the Initial Purchasers or any Holder, or their respective directors, agents, officers, employees or any person controlling such Initial Purchasers or Holder, with respect to any such untrue statement or alleged untrue statement or omission or alleged omission made in any preliminary Prospectus to the extent that the Company and the Guarantors shall sustain the burden of proving that any such loss, liability, claim, damage, expense or action resulted from the fact that the Initial Purchaser or any Holder sold the Notes to a person to whom such Initial Purchaser or Holder failed to send or give, at or prior to the written confirmation of the sale of such Notes, a copy of the final Prospectus (as amended or supplemented) if the Company and the Guarantors have previously furnished copies thereof to the Initial Purchasers and the Holders (sufficiently in advance of the Closing Date to allow for distribution of the final Prospectus in a timely manner) and complied with their obligations under Sections 3(c) hereof and 3(b) of the Purchase Agreement and the loss, liability, claim, damage, expense or action of the Initial Purchasers or any Holder resulted from an untrue statement or omission or alleged untrue statement or omission of a material fact contained in or omitted from such preliminary Prospectus (as amended or supplemented) which was corrected in the final Prospectus (as amended or supplemented). The indemnity agreement set forth in this Section 8(a) shall be in addition to any liabilities that the Company or any Guarantor may otherwise have. In the event of an underwritten offering, as contemplated by Section 6 herein, the Company and the Guarantors will also indemnify the underwriters, if any, selling brokers, dealers and similar securities industry professionals participating in the distribution, their officers, directors, agents 18 and employees to the same extent as provided above with respect to the indemnification of the Holders, if requested in connection with any Registration Statement. (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors, and their respective directors, agents, officers and employees, and each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company or the Guarantors to the same extent as the foregoing indemnity from the Company and the Guarantors set forth in clause (a) above, but only with reference to information relating to such Holder furnished in writing to the Company by such Holder expressly for use in any Registration Statement. In no event shall any Holder, its directors, agents, officers, employees or any Person who controls such Holder be liable or responsible for any amount in excess of the amount by which the total amount received by such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages that such Holder, its directors, agents, officers, employees or any Person who controls such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party for contribution or otherwise than under the indemnity agreement contained in this Section 8 or to the extent it is not prejudiced as a proximate result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in and, to the extent that it shall elect, jointly with all other indemnifying parties similarly notified, by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that a conflict may arise between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and otherwise to participate in the defense of such action on behalf of such indemnified party. Upon receipt of notice from the indemnifying party to such indemnified party of such indemnifying party's election so to assume the defense of such action and approval by the indemnified party's election so to assume the defense of such action and approval by the indemnified party's counsel, the indemnifying party will not be liable to such indemnified party under this Section 8 for any legal or other expenses 19 subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel (together with local counsel), approved by the indemnifying party (the Company and/or any Guarantor in the case of Section 8(a) hereof and a majority of the Holders in the case of Section 8(b) hereof), representing the indemnified parties who are parties to such action) or (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action, in each of which cases the fees and expenses of counsel shall be at the expense of the indemnifying party. The indemnifying party under this Section 8 shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss, claim, damage, liability, expense or action by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by this Section 8(c), the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnified party shall, without the prior written consent of the indemnified party, effect any settlement, compromise or consent to the entry of judgment in any pending or threatened action, suit or proceeding in respect of which any indemnified party is or could have been a party and indemnity was or could have been sought hereunder by such indemnified party, unless such settlement, compromise or consent includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such action, suit or proceeding. (d) If the indemnification provided for in this Section 8 is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities, expenses or actions referred to therein, then each indemnifying party shall contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a result of any losses, claims, damages, liabilities, expenses or actions referred to therein (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from their sale of Transfer Restricted Securities 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 the Guarantors, on the one hand, and the Holders, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities, expenses or actions, as well as any other relevant equitable considerations. The relative fault of the Company 20 and the Guarantors, on the one hand, and the Holders, on the other hand, shall be determined by reference to, among other things, whether any such 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 or the Guarantors, on the one hand, or the Holders, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities, expenses or actions referred to above shall be deemed to include, subject to the limitations set forth in Section 8(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The Company, the Guarantors and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities, expenses or actions 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 matter, including any action that could have given rise to such losses, claims, damages, liabilities, expenses or actions. Notwithstanding the provisions of this Section 8, no Holder, or its directors, agents, officers, employees or any Person, if any, who controls such Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total received by such Holder with respect to the sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages which such Holder has otherwise been required to pay by reason of such 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 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' obligations to contribute pursuant to this Section 8(d) are several, in proportion to the respective principal amount of Transfer Restricted Securities held by each Holder hereunder, and not joint. Section 9. Reports and Rule 144A. The Company and each Guarantor agree with each Holder, for so long as any Transfer Restricted Securities remain outstanding (i) whether or not required by the Commission, the Company shall furnish to the Holders of Notes, within the time periods specified in the Commission's rules and regulations, (A) 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 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants, and (B) all current reports that would be required 21 to be filed with the Commission on Form 8-K if the Company were required to file such reports and (ii) to make available, upon the request of any Holder, to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A. Section 10. Miscellaneous. (a) Remedies. The Company and the Guarantors acknowledge and agree that any failure by the Company and/or the Guarantors to comply with their respective obligations under Sections 3 and 4 hereof may result in material irreparable injury to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any Guarantor will, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Company nor any Guarantor has previously entered into any agreement granting any registration rights with respect to its securities to any Person. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's and the Guarantors' securities under any agreement in effect on the date hereof. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 10(c)(i), the Company has obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, the Company has obtained the written consent of the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose Transfer Restricted Securities are being tendered pursuant to the Exchange Offer, and that does not affect directly or indirectly the rights of other Holders whose Transfer Restricted Securities are not being tendered pursuant to such Exchange Offer, may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities subject to such Exchange Offer. (d) Third Party Beneficiary. The Holders shall be third party beneficiaries to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements 22 directly to the extent they may deem such enforcement necessary or advisable to protect its rights or the rights of the Holders hereunder. (e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telecopier, or air courier guaranteeing overnight delivery: (1) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and (2) if to the Company or the Guarantors: Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Telecopier No.: (601) 936-6045 Attention: James H. Neeld, IV With a copy to: Brown & Wood LLP One World Trade Center New York, NY 10048 Telecopier No.: (212) 839-5599 Attention: Michael A. King, Esq. All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address specified in the Indenture. (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted Securities in any 23 manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits hereof. (g) Counterparts. This Agreement may be executed in any number of counterparts 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. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF. (j) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. TRITEL PCS, INC. By: ------------------------------------------- Name: Title: TRITEL, INC. By: ------------------------------------------- Name: Title: TRITEL COMMUNICATIONS, INC. By: ------------------------------------------- Name: Title: TRITEL FINANCE, INC. By: ------------------------------------------- Name: Title: NATIONSBANC MONTGOMERY SECURITIES LLC By: ------------------------------------------- Name: Title: BARCLAYS CAPITAL INC. By: ------------------------------------------- Name: Title: TD SECURITIES (USA) INC. By: ------------------------------------------- Name: Title: BNY CAPITAL MARKETS, INC. By: ---------------------------- Name: Title: CIBC WORLD MARKETS CORP., FORMERLY CIBC OPPENHEIMER CORP. By: ------------------------------------------- Name: Title: CREDIT LYONNAIS SECURITIES (USA) INC. By: ------------------------------------------- Name: Title: EX-4.4 13 FORM OF NOTE FOR 12 3/4% SENIOR SUBORDINATED DISCOUNT NOTES Exhibit 4.4 Form of Registered Note [Face of Note] THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS 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. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 1 CUSIP ___________ No. __ $__________ TRITEL PCS, INC. 12 3/4% Senior Subordinated Discount Notes due 2009 The following information is supplied for purposes of Sections 1273 and 1275 of the Internal Revenue Code: Issue Date: May 11, 1999 Yield to maturity for period from Issue Date to May 15, 2009: 12 3/4%, compounded semi-annually on May 15 and November 15, commencing May 11, 1999 (computed without giving effect to the additional payments of interest in the event the issuer fails to commence the exchange offer, cause the registration statement to be declared effective or consummate the exchange offer, each as described on the reverse hereof) Original issue discount under Section 1273 of the Internal Revenue Code (for each $1,000 principal amount at maturity): $1,099.25 Issue Price (for each $1,000 principal amount at maturity): $538.28 Tritel PCS, Inc., a Delaware corporation (the "Company," which term includes any successor under the Indenture hereinafter referred to), for value received, promises to pay to ______________, or its registered assigns, the principal sum of ____________ ($__________) on May 15, 2009. Interest Payment Dates: May 15 and November 15, commencing November 15, 2004. Record Dates: May 1 and November 1. Tritel, Inc., a Delaware corporation, Tritel Communications, Inc., a Delaware corporation, and Tritel Finance, Inc., a Delaware corporation (collectively, the "Guarantors," which term includes any successors under the Indenture hereinafter referred to and any Subsidiary of the Company that provides a Guarantee pursuant to the Indenture), have jointly and severally, fully and unconditionally guaranteed the payment of principal of, premium and Liquidated Damages, if any, and interest on the Notes. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 2 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by its duly authorized officers. TRITEL PCS, INC. By: ------------------------------ Name: Title: By: ------------------------------ Name: Title: This is one of the 12 3/4% Senior Subordinated Discount Notes due 2009 described in the within-mentioned Indenture. Dated: May 11, 1999 THE BANK OF NEW YORK as Trustee By: __________________________________ Authorized Signatory 3 [Reverse Side of Note] TRITEL PCS, INC. 12 3/4% Senior Subordinated Discount Notes due 2009 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. The Company promises to pay interest on the principal amount at maturity of this Note at 12 3/4% per annum from November 15, 2004, until maturity and shall pay the Liquidated Damages, if any, payable pursuant to Section 5 of the Registration Rights Agreement referred to below. No interest shall be paid or accrued on the Notes prior to May 15, 2004. Thereafter, the Company shall pay interest and Liquidated Damages, if any, semi-annually in arrears on May 15 and November 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from May 15, 2004; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be November 15, 2004. Interest shall be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company shall pay interest on the Notes (except defaulted interest) and Liquidated Damages, if any, to the Persons who are registered Holders of Notes at the close of business on the May 1 or November 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes shall be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose in The City of New York maintained for such purposes, or, at the option of the Company, payment of interest and Liquidated Damages, if any, may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds shall be required with respect to principal of and interest, premium and Liquidated Damages, if any, on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the Trustee under the Indenture, shall act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Restricted Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of May 11, 1999 (the "Indenture") between the Company, the Guarantors and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.C.A. ss.ss. 77aaa et seq.). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a 4 statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are senior subordinated obligations of the Company limited to ____ million in aggregate principal amount at maturity. 5. OPTIONAL REDEMPTION. (a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to May 15, 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount at maturity) set forth below plus accrued and Liquidated Damages, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on of the years indicated below (subject to the right of Holder on the relevant record date to receive interest due on the related Interest Payment Date): Year Percentage 2004........................ 106.375 % 2005........................ 104.250% 2006........................ 102.125% 2007 and thereafter......... 100.000% (b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to May 15, 2002, the Company may redeem up to 35% of the aggregate principal amount at maturity of the Notes with proceeds of one or more Equity Offerings at a redemption price of 112.75% of the Accreted Value thereof as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase; provided that: (1) at least 65% of the aggregate principal amount at maturity of the Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Restricted Subsidiaries); and (2) the redemption must occur within 60 days following the date of the closing of such Equity Offering. 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. 5 7. REPURCHASE AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company shall be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the Accreted Value as of the Semi-Annual Accrual Date next preceding the date of purchase, plus the Accreted Increment as of such date of purchase, if such redemption occurs prior to May 15, 2004, or 101% of the Accreted Value as of the date of purchase, together with accrued and unpaid interest and Liquidated Damages, if any, if such redemption date occurs on or after May 15, 2004 (the "Change of Control Payment"). Within ten days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the date specified in such notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures required by the Indenture and described in such notice. (b) When the aggregate amount of Excess Proceeds from one or more Asset Sales exceeds $15.0 million, the Company shall commence an offer ("Asset Sale Offer") pursuant to Section 3.09 of the Indenture to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100% of Accreted Value plus accrued and unpaid interest and Liquidated Damages, if any, to the date of purchase, and shall be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the Accreted Value of the Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis based on the Accreted Value of the Notes and such other pari passu Indebtedness tendered. Holders of Notes that are the subject of an offer to purchase shall receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. No Notes of $1,000 or less shall be redeemed in part. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not 6 exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed. 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class, and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in aggregate Accreted Value of the then outstanding Notes voting as a single class. Without the consent of any Holder of a Note, the Indenture or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to evidence the succession of another Person to the Company or any other Obligor on the Notes and to provide for the assumption of the Company's obligations to Holders of the Notes in case of a merger or consolidation or sale of all or substantially all of the Company's assets, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. 12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest or Liquidated Damages on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes; (iii) failure by the Company or the Company's Restricted Subsidiaries to comply with Section 4.07, 4.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure by the Company or the Company's Restricted Subsidiaries for 30 days after notice to the Company to comply with certain other agreements in the Indenture or the Notes; (v) default under certain other agreements relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) notice to the Trustee of an intended sale of disposition of certain properties securing Indebtedness that is in default; (viii) the Guarantee ceases to be in full force and effect or is declared null and void and such condition has continued for a period of 30 days after written notice of such failure has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of 25% of the aggregate Accreted Value of the then outstanding Notes; and (ix) certain events of bankruptcy or insolvency with respect to the Company or any of its Subsidiaries. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Accreted Value of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes shall become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate Accreted Value of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate Accreted Value of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of 7 Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. GUARANTEES. The Company's obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, by the Guarantors, as provided in Article Ten of the Indenture. 14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 15. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder, of the Company or any Subsidiary, as such, shall not have any liability for any obligations of the Company under the Notes or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 16. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of May 11, 1999, between the Company and the parties named on the signature pages thereof (the "Registration Rights Agreement"). 19. 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 Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: 8 Tritel PCS, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attention: James H. Neeld, IV 9 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to:__________________________________ (Insert assignee's legal name) - ------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint________________________________________________________ to transfer this Note 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 face of this Note) Signature Guarantee*:________________________ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 10 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: [ ] Section 4.10 [ ] Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $__________________________ Date:__________________ Your Signature:___________________________________________________ (Sign exactly as your name appears on the face of this Note) Tax Identification No.:___________________________ Signature Guarantee*:_________________________ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). 11 SCHEDULE OF EXCHANGES OF INTERESTS IN THE NOTE The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Date of Exchange Amount of Decrease in Amount of Increase in Principal Amount at Maturity Signature of Principal Amount at Maturity Principal Amount at Maturity of this Global Note Authorized Officer of this Global Note of this Global Note Following such of Trustee or decrease (or increase) Note Custodian
EX-21 14 SUBSIDIARIES OF TRITEL PCS, INC. Exhibit 21 Subsidiaries of Tritel PCS, Inc. Tritel Communications, Inc. Tritel Finance, Inc. Tritel A/B Holding Corp. Tritel C/F Holding Corp. AirCom PCS, Inc. ClearCall, Inc. ClearWave, Inc. DigiCall, Inc. DigiCom, Inc. DigiNet PCS, Inc. Global PCS, Inc. NexCom, Inc. QuinCom, Inc. EX-99.1 15 FORM OF LETTER OF TRANSMITTAL Exhibit 99.1 FORM OF LETTER OF TRANSMITTAL TRITEL PCS, INC. OFFER TO EXCHANGE ITS 12 3/4% NOTES DUE 2009 WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 FOR ANY AND ALL OF ITS OUTSTANDING 12 3/4% NOTES DUE 2009 PURSUANT TO THE PROSPECTUS DATED , 1999 - ------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 1999, UNLESS THE OFFER IS EXTENDED. - ------------------------------------------------------------------------------- The Exchange Agent for the Exchange Offer is: THE BANK OF NEW YORK The Bank of New York 101 Barclay Street, 21W New York, New York 10286 Attn: Corporate Trust Administration To confirm by Telephone or for Information: (212) Attn.: Facsimile Transmissions: (212) 815-5915 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 DOES NOT CONSTITUTE A VALID DELIVERY. 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 them in the Prospectus (as defined below). This Letter of Transmittal is to be completed by holders of Old Notes (as defined below) either if Old Notes are to be forwarded herewith or if tenders of Old Notes are to be made by book-entry transfer to an account maintained by The Bank of New York (the "Exchange Agent") at The Depository Trust Company ("DTC") pursuant to the procedures set forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus. Holders of Old Notes whose certificates (the "Certificates") for such Old Notes are not immediately available or who cannot deliver their Certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus) or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. SEE INSTRUCTION 1. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY ALL TENDERING HOLDERS COMPLETE THIS BOX:
- ----------------------------------------------------------------------------------------------------------------------------------- DESCRIPTION OF OLD NOTES TENDERED - ----------------------------------------------------------------------------------------------------------------------------------- If blank, please print Name and Address of Old Notes Tendered Registered Holder (Attach additional list if necessary) - ----------------------------------------------------------------------------------------------------------------------------------- Principal Amount Certificate Principal Amount of of Old Notes Tendered Number(s)* Old Notes (if less than all)** ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------ Total Amount Tendered: - -----------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders. ** Old Notes may be tendered in whole or in part in denominations of $1,000 and integral multiples thereof. All Old Notes held shall be deemed tendered unless a lesser number is specified in this column. (BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY) [ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution ________________________________________ DTC Account Number ________________ Transaction Code Number _________ [ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: Name of Registered Holder(s)_____________________________________________ Window Ticket Number (if any)____________________________________________ Date of Execution of Notice of Guaranteed Delivery_______________________ Name of Institution which Guaranteed Delivery____________________________ IF GUARANTEED DELIVERY IS TO BE MADE BY BOOK-ENTRY TRANSFER: Name of Tendering Institution DTC Account Number _____________________ Transaction Code Number________ [ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE. [ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: _________________________________________________________________________ Address:_______________________________________________________________________ Ladies and Gentlemen: The undersigned hereby tenders to Tritel PCS, Inc., a Delaware corporation (the "Company"), the above described aggregate principal amount of the Company's 12 3/4% Notes due 2009 (the "Old Notes") in exchange for a like aggregate principal amount of the Company's 12 3/4% Notes due 2009 (the "New Notes") which have been registered under the Securities Act of 1933 (the "Securities Act"), upon the terms and subject to the conditions set forth in the Prospectus dated , 1999 (as the same may be amended or supplemented from time to time, the "Prospectus") receipt of which is acknowledged, and in this Letter of Transmittal (which, together with the Prospectus, constitute the "Exchange Offer"). Subject to and effective upon the acceptance for exchange of all or any portion of the Old Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to or upon the order of the Company all right, title and interest in and to such Old Notes as are being tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent is also acting as agent of the Company in connection with the Exchange Offer) with respect to the tendered Old Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), subject only to the right of withdrawal described in the Prospectus, to (i) deliver Certificates for Old Notes to the Company together with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, upon receipt by the Exchange Agent, as the undersigned's agent, of the New Notes to be issued in exchange for such Old Notes, (ii) present Certificates for such Old Notes for transfer, and to transfer the Old Notes on the books of the Company, and (iii) receive for the account of the Company all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms and conditions of the Exchange Offer. THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE OLD NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE, THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE OLD NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD NOTES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE EXCHANGE OFFER. The name(s) and address(es) of the registered holder(s) of the Old Notes tendered hereby should be printed above, if they are not already set forth above, as they appear on the Certificates representing such Old Notes. The Certificate number(s) and the Old Notes that the undersigned wishes to tender should be indicated in the appropriate boxes above. If any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any reason, or if Certificates are submitted for more Old Notes than are tendered or accepted for exchange, certificates for such nonexchanged or nontendered Old Notes will be returned (or, in the case of Old Notes tendered by book-entry transfer, such Old Notes will be credited to an account maintained at DTC), without expense to the tendering holder, promptly following the expiration or termination of the Exchange Offer. The undersigned understands that tenders of Old Notes pursuant to any one of the procedures described in "The Exchange Offer--Procedures for Tendering" in the Prospectus and in the instructions hereto will, upon the Company's acceptance for exchange of such tendered Old Notes, constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Old Notes tendered hereby. Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby directs that the New Notes be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Old Notes, that such New Notes be credited to the account indicated above maintained at DTC. If applicable, substitute Certificates representing Old Notes not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Old Notes, will be credited to the account indicated above maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery Instructions," please deliver New Notes to the undersigned at the address shown below the undersigned's signature. By tendering Old Notes and executing this Letter of Transmittal, the undersigned hereby represents and agrees that (i) the undersigned is not an "affiliate" of the Company, (ii) any New Notes to be received by the undersigned are being acquired in the ordinary course of its business, (iii) the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of New Notes to be received in the Exchange Offer, and (iv) if the undersigned is not a Broker-Dealer, the undersigned is not engaged in, and does not intend to engage in, a distribution (within the meaning of the Securities Act) of such New Notes. By tendering Old Notes pursuant to the Exchange Offer and executing this Letter of Transmittal, a holder of Old Notes which is a Broker-Dealer represents and agrees, consistent with certain interpretive letters issued by the staff of the Division of Corporation Finance of the Securities and Exchange Commission to third parties, that (a) such Old Notes held by the Broker-Dealer are held only as a nominee, or (b) such Old Notes were acquired by such Broker-Dealer for its own account as a result of market-making activities or other trading activities and it will deliver the Prospectus (as amended or supplemented from time to time) meeting the requirements of the Securities Act in connection with any resale of such New Notes (provided that, by so acknowledging and by delivering a Prospectus, such Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act). See "The Exchange Offer--Purpose of the Exchange Offer" in the Prospectus. The Company has agreed that, subject to the provisions of the Registration Rights Agreement, the Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer (as defined below) in connection with resales of New Notes received in exchange for Old Notes, where such Old Notes were acquired by such Participating Broker-Dealer for its own account as a result of market-making activities or other trading activities, for a period ending 90 days after the Expiration Date (subject to extension under certain limited circumstances described in the Prospectus) or, if earlier, when all such New Notes have been disposed of by such Participating Broker-Dealer. However, a Participating Broker-Dealer who intends to use the Prospectus in connection with the resale of New Notes received in exchange for Old Notes pursuant to the Exchange Offer must notify the Company, or cause the Company to be notified, on or prior to the Expiration Date, that it is a Participating Broker-Dealer. Such notice may be given in the space provided herein for that purpose or may be delivered to the Exchange Agent at the address set forth in the Prospectus under "The Exchange Offer--Exchange Agent." In that regard, each Broker-Dealer who acquired Old Notes for its own account as a result of market-making or other trading activities (a "Participating Broker-Dealer"), by tendering Old Notes and executing this Letter of Transmittal, agrees that, upon receipt of notice from the Company of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the Registration Rights Agreement, such Participating Broker-Dealer will suspend the sale of New Notes pursuant to the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to the Participating Broker-Dealer or the Company has given notice that the sale of the New Notes may be resumed, as the case may be. If the Company gives such notice to suspend the sale of the New Notes, it shall extend the 90-day period referred to above during which Participating Broker-Dealers are entitled to use the Prospectus in connection with the resale of New Notes by the number of days during the period from and including the date of the giving of such notice to and including the date when Participating Broker-Dealers shall have received copies of the supplemented or amended Prospectus necessary to permit resales of the New Notes or to and including the date on which the Company has given notice that the sale of New Notes may be resumed, as the case may be. Holders of Old Notes whose Old Notes are accepted for exchange will not receive accrued interest on such Old Notes for any period from and after the last Interest Payment Date to which interest has been paid or duly provided for on such Old Notes prior to the original issue date of the New Notes or, if no such interest has been paid or duly provided for, will not receive any accrued interest on such Old Notes, and the undersigned waives the right to receive any interest on such Old Notes accrued from and after such Interest Payment Date or, if no such interest has been paid or duly provided for, from and after , 1999. All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. Except as stated in the Prospectus, this tender is irrevocable. - ------------------------------------------------------------------------------- HOLDER(S) SIGN HERE (SEE INSTRUCTIONS 2, 5 AND 6) (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) (NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2) Must be signed by registered holder(s) exactly as name(s) appear(s) on Certificate(s) for the Old Notes hereby tendered or on a security position listing, or by any person(s) authorized to become the registered holder(s) by endorsements and documents transmitted herewith (including such opinions of counsel, certifications and other information as may be required by the Company or the Trustee for the Old Notes to comply with the restrictions on transfer applicable to the Old Notes). If signature is by an attorney-in-fact, executor, administrator, trustee, guardian, officer of a corporation or another acting in a fiduciary capacity or representative capacity, please set forth the signer's full title. See Instruction 5. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Date _______________________, 1999 Name(s) ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (PLEASE PRINT) Address ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number ------------------------------------------------ - ------------------------------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTIONS 2 AND 5) Authorized Signature ---------------------------------------------------------- Name -------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (PLEASE PRINT) Date , 1999 ----------------------- Capacity or Title ------------------------------------------------------------- Name of Firm ------------------------------------------------------------------ Address ----------------------------------------------------------------------- - ------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number ------------------------------------------------ SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6) (SEE INSTRUCTIONS 1, 5 AND 6) To be completed ONLY if the To be completed ONLY if New New Notes are to be issued in Notes are to be sent to someone the name of someone other than other than the registered holder the registered holder of the Old of the Old Notes whose name(s) Notes whose name(s) appear(s) above. appear(s) above, or to such registered holder(s) at an address other than that shown above. Issue New Notes to: Mail New Notes to: Name_______________________________ Name_____________________________ (PLEASE PRINT) (PLEASE PRINT) Address____________________________ Address__________________________ ___________________________________ _________________________________ (INCLUDE ZIP CODE) (INCLUDE ZIP CODE) (TAXPAYER IDENTIFICATION OR (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.) SOCIAL SECURITY NO.) INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a) Certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus. Certificates, or timely confirmation of a book-entry transfer of such Old Notes into the Exchange Agent's account at DTC, as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at one of its addresses set forth herein on or prior to the Expiration Date. Old Notes may be tendered in whole or in part in the principal amount of $1,000 and integral multiples thereof. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver their Old Notes, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may tender their Old Notes by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer --Guaranteed Delivery Procedures" in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Company, must be received by the Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates (or a book-entry confirmation (as defined in the Prospectus)) representing all tendered Old Notes, in proper form for transfer, together with a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within five New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer-- Guaranteed Delivery Procedures" in the Prospectus. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent, and must include a guarantee by an Eligible Institution in the form set forth in such Notice. For Old Notes to be properly tendered pursuant to the Guaranteed Delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As used herein and in the Prospectus, "Eligible Institution" means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association. THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. The Company will not accept any alternative, conditional or contingent tenders. Each tendering holder, by execution of a Letter of Transmittal (or facsimile thereof), waives any right to receive any notice of the acceptance of such tender. 2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required if: (i) this Letter of Transmittal is signed by the registered holder (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of the Old Notes) of Old Notes tendered herewith, unless such holder(s) has (have) completed either the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" above, or (ii) such Old Notes are tendered for the account of a firm that is an Eligible Institution. In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 5. 3. INADEQUATE SPACE. If the space provided in the box captioned "Description of Old Notes" is inadequate, the Certificate number(s) and/or the principal amount of Old Notes and any other required information should be listed on a separate signed schedule which is attached to this Letter of Transmittal. 4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be accepted only in the principal amount of $1,000 and integral multiples thereof. If less than all the Old Notes evidenced by any Certificate submitted are to be tendered, fill in the principal amount of Old Notes which are to be tendered in the box entitled "Principal Amount of Old Notes Tendered (if less than all)." In such case, new Certificate(s) for the remainder of the Old Notes that were evidenced by your old Certificate(s) will only be sent to the holder of the Old Note, promptly after the Expiration Date. All Old Notes represented by Certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written, telegraphic, telex or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth above or in the prospectus on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered Old Notes to be withdrawn, the aggregate principal amount of Old Notes to be withdrawn, and (if Certificates for Old Notes have been tendered) the name of the registered holder of the Old Notes as set forth on the Certificate for the Old Notes, if different from that of the person who tendered such Old Notes. If Certificates for the Old Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such Certificates for the Old Notes, the tendering holder must submit the serial numbers shown on the particular Certificates for the Old Notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Old Notes tendered for the account of an Eligible Institution. If Old Notes have been tendered pursuant to the procedures for book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering", the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Old Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of Old Notes may not be rescinded. Old Notes properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or prior to the Expiration Date by following any of the procedures described in the Prospectus under "The Exchange Offer--Procedures for Tendering." All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company, in its sole discretion, whose determination shall be final and binding on all parties. Neither the Company, any affiliates or assigns of the Company, the Exchange Agent nor any other person shall be under any duty to give any notification of the irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Old Notes which have been tendered but which are withdrawn will be returned to the holder thereof without cost to such holder promptly after withdrawal. 5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder of the Old Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Certificate(s) without alteration, enlargement or any change whatsoever. If any of the Old Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any of the Old Notes tendered hereby are registered in different name(s) on several Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of Certificates. 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 must submit proper evidence satisfactory to the Company, in its sole discretion, of such persons' authority to so act. When this Letter of Transmittal is signed by the registered owner(s) of the Old Notes listed and transmitted hereby, no endorsement(s) of Certificate(s) or separate bond power(s) are required unless New Notes are to be issued in the name of a person other than the registered holder(s). Signature(s) on such Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Old Notes listed, the Certificates must be endorsed or accompanied by appropriate bond powers, signed exactly as the name or names of the registered owner(s) appear(s) on the Certificates, and also must be accompanied by such opinions of counsel, certifications and other information as the Company or the Trustee for the Old Notes may require in accordance with the restrictions on transfer applicable to the Old Notes. Signatures on such Certificates or bond powers must be guaranteed by an Eligible Institution. 6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Notes are to be issued in the name of a person other than the signer of this Letter of Transmittal, or if New Notes are to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Certificates for Old Notes not exchanged will be returned by mail or, if tendered by book-entry transfer, by crediting the account indicated above maintained at DTC. See Instruction 4. 7. IRREGULARITIES. The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Old Notes, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for, may, in the view of counsel to the Company, be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive any of the conditions of the Exchange Offer set forth in the Prospectus under "Exchange Offer--Conditions" or any conditions or irregularity in any tender of Old Notes of any particular holder whether or not similar conditions or irregularities are waived in the case of other holders. The Company's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Old Notes will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Neither the Company, any affiliates or assigns of the Company, the Exchange Agent, nor any other person shall be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification. 8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth on the front of this Letter of Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained from the Exchange Agent or from your broker, dealer, commercial bank, trust company or other nominee. 9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income tax law, a holder whose tendered Old Notes are accepted for exchange is required to provide the Exchange Agent with such holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the Exchange Agent is not provided with the correct TIN, the Internal Revenue Service (the "IRS") may subject the holder or other payee to a $50 penalty. In addition, payments to such holders or other payees with respect to Old Notes exchanged pursuant to the Exchange Offer may be subject to 31% backup withholding. The box in Part 2 of the Substitute Form W-9 may be checked if the tendering holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 2 is checked, the holder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 2 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Exchange Agent will withhold 31% of all payments made prior to the time a properly certified TIN is provided to the Exchange Agent. The Exchange Agent will retain such amounts withheld during the 60-day period following the date of the Substitute Form W-9. If the holder furnishes the Exchange Agent with its TIN within 60 days after the date of the Substitute Form W-9, the amounts retained during the 60-day period will be remitted to the holder and no further amounts shall be retained or withheld from payments made to the holder thereafter. If, however, the holder has not provided the Exchange Agent with its TIN within such 60-day period, amounts withheld will be remitted to the IRS as backup withholding. In addition, 31% of all payments made thereafter will be withheld and remitted to the IRS until a correct TIN is provided. The holder is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the registered owner of the Old Notes or of the last transferee appearing on the transfers attached to, or endorsed on, the Old Notes. If the Old Notes are registered in more than one name or are not 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. Certain holders (including, among others, corporations, financial institutions and certain foreign persons) may not be subject to these backup withholding and reporting requirements. Such holders should nevertheless complete the attached Substitute Form W-9 below, and write "exempt" on the face thereof, to avoid possible erroneous backup withholding. A foreign person may qualify as an exempt recipient by submitting a properly completed IRS Form W-8, signed under penalties of perjury, attesting to that holder's exempt status. Please consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which holders are exempt from backup withholding. Backup withholding is not an additional U.S. Federal income tax. Rather, the U.S. Federal income tax liability of a person 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. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s) representing Old Notes have been lost, destroyed or stolen, the holder should promptly notify the Exchange Agent. The holder will then be instructed as to the steps that must be taken in order to replace the Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Certificate(s) have bee followed. 11. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, New Notes are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Old Notes tendered, or if a transfer tax is imposed for any reason other than the exchange of Old Notes in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered holder or any other person) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering holder. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE. TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS (See Instruction 9) - ------------------------------------------------------------------------------- PAYER'S NAME: TRITEL PCS, INC. - ------------------------------------------------------------------------------- SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) AND CERTIFICATION PART 1--PLEASE PROVIDE YOUR TIN Social security number or IN THE BOX AT RIGHT AND CERTIFY Employer identification number BY SIGNING AND DATING BELOW. ________________________________ - ------------------------------------------------------------------------------- CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT: PART 2-- (1) the number shown on this form is my correct Awaiting TIN taxpayer identification number (or I am willing for a number to be issued to me), (2) I am not subject to backup withholding either because (i) I am exempt from backup withholding, (ii) I have not been notified by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified me that I am no longer subject to backup withholding, and (3) any other information provided on this form is true and correct. SIGNATURE ______________________ DATE ___________ - ------------------------------------------------------------------------------- You must cross out item (iii) in Part (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return and you have not been notified by the IRS that you are no longer subject to backup withholding. - ------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. - ------------------------------------------------------------------------------- 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 (1) 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 (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 31% of all payments made to me on account of the New Notes shall be retained until I provide a taxpayer identification number to the Exchange Agent and that, if I do not provide my taxpayer identification number within 60 days, such retained amounts shall be remitted to the Internal Revenue Service as backup withholding and 31% of all reportable payments made to me thereafter will be withheld and remitted to the Internal Revenue Service until I provide a taxpayer identification number. Signature_______________________________ Date_______________________________ - ------------------------------------------------------------------------------- EX-99.2 16 FORM OF NOTICE OF GUARANTEED DELIVERY Exhibit 99.2 FORM OF NOTICE OF GUARANTEED DELIVERY FOR TENDER OF 12 3/4% NOTES DUE 2009 OF TRITEL PCS, INC. This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) if (i) certificates for the Company's (as defined below) 12 3/4% Notes due 2009 (the "Old Notes") are not immediately available, (ii) Old Notes, the Letter of Transmittal and all other required documents cannot be delivered to The Bank of New York (the "Exchange Agent") on or prior to the Expiration Date (as defined in the Prospectus referred to below) or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight courier or mail, or transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange Offer--Procedures for Tendering" in the Prospectus. The Exchange Agent for the Exchange Offer is: THE BANK OF NEW YORK The Bank of New York 101 Barclay Street, 21W New York, New York 10286 Attn: Corporate Trust Administration To Confirm by Telephone or for Information: (212) ________ Attn:________________ Facsimile Transmissions: (212) 815-5915 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 WILL NOT CONSTITUTE A VALID 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. THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. Ladies and Gentlemen: The undersigned hereby tenders to Tritel PCS, Inc., a Delaware corporation (the "Company"), upon the terms and subject to the conditions set forth in the Prospectus dated , 1999 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Procedures for Tendering." Aggregate Principal Amount Tendered:____ Name(s) of Registered Holder(s):____ Certificate No(s). (if available):______ Address(es):________________________ ____________________________________ If Old Notes will be tendered by book-entry transfer, provide the ____________________________________ following information: Area Code and Telephone Number(s):__ DTC Account Number:___________________ Signature(s):_______________________ Date:_________________________________ ____________________________________ GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker, government securities dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association (each, an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the Old Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Old Notes to the Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and any other required documents within five [New York Stock Exchange] trading days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver the Letter(s) of Transmittal and the Old Notes tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. Name of Firm:_____________________ ___________________________ (Authorized Signature) Address:__________________________ Title:_____________________ __________________________________ Name:______________________ __________________________________ (Please type or print) (Zip Code) Area Code and Telephone Number:___ Date:______________________ NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS. EX-99.3 17 FORM OF EXCHANGE AGENT AGREEMENT Exhibit 99.3 ___________, 1999 FORM OF EXCHANGE AGENT AGREEMENT The Bank of New York 101 Barclay Street, Floor 21 West New York, New York 10286 Attention: Corporate Trust Trustee Administration Ladies and Gentlemen: Tritel PCS, Inc., a Delaware corporation (the "Company") proposes to make an offer (the "Exchange Offer") to exchange all of its outstanding 12 3/4% Senior Subordinated Discount Notes Due 2009 (the "Old Securities") for its 12 3/4% Senior Subordinated Discount Notes Due 2009 (the "New Securities"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus, dated ___________ (the "Prospectus"), proposed to be distributed to all record holders of the Old Securities. The Old Securities and the New Securities are collectively referred to herein as the "Securities". The Company hereby appoints The Bank of New York to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to The Bank of New York. The Exchange Offer is expected to be commenced by the Company on or about _____________. The Letter of Transmittal accompanying the Prospectus (or in the case of book-entry securities, the Automated Tender Offer Program ("ATOP") of the Book-Entry Transfer Facility (as defined below)) is to be used by the holders of the Old Securities to accept the Exchange Offer and contains instructions with respect to the delivery of certificates for Old Securities tendered in connection therewith. The Exchange Offer shall expire at 5:00 p.m., New York City time, on _________ or on such subsequent date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the Exchange Offer from time to time and may extend the Exchange Offer from time to time and may extend the Exchange Offer by giving oral (promptly confirmed in writing) or written notice to you before 9:00 a.m., New York City time, on the business day following the previously scheduled Expiration Date. The Company expressly reserves the right to amend or terminate the Exchange Offer, and not to accept for exchange any Old Securities not theretofore accepted for exchange, upon the occurrence of any of the conditions of the Exchange Offer specified in the Prospectus under the caption "The Exchange Offer -- Conditions". The Company will give oral (promptly confirmed in writing) or written notice of any amendment, termination or nonacceptance to you as promptly as practicable. In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions: 1. You will perform such duties and only such duties as are specifically set forth in the section of the Prospectus captioned "The Exchange Offer" or as specifically set forth herein; provided, however, -------- ------- that in no way will your general duty to act in good faith be discharged by the foregoing. 2. You will establish a book-entry account with respect to the Old Securities at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Old Securities by causing the Book-Entry Transfer Facility to transfer such Old Securities into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer. 3. You are to examine each of the Letters of Transmittal and certificates for Old Securities (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Old Securities to ascertain whether: (i) the Letters of Transmittal and any such other documents are duly executed and properly completed in accordance with instructions set forth therein; and (ii) the Old Securities have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or any of the certificates for Old Securities are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be reasonably necessary or advisable to cause such irregularity to be corrected. 4. With the approval of the [President], [Senior Vice President], [Executive Vice President], or any [Vice President] of the Company (such approval, if given orally, to be promptly confirmed in writing) or any other party designated in writing, by such an officer, you are authorized to waive any irregularities in connection with any tender of Old Securities pursuant to the Exchange Offer. -2- 5. Tenders of Old Securities may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer -- Procedures for Tendering", and Old Securities shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this Section 5, Old Securities which the [President], [Senior Vice President], [Executive Vice President], or any [Vice President] of the Company shall approve as having been properly tendered shall be considered to be properly tendered (such approval, if given orally, shall be promptly confirmed in writing). 6. You shall advise the Company with respect to any Old Securities received subsequent to the Expiration Date and accept its instructions with respect to disposition of such Old Securities. 7. You shall accept tenders: (a) in cases where the Old Securities are registered in two or more names only if signed by all named holders; (b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and (c) from persons other than the registered holder of Old Securities, provided that customary transfer requirements, including payment of any applicable transfer taxes, are fulfilled. You shall accept partial tenders of Old Securities where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Securities to the registrar for split-up and return any untendered Old Securities to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer. 8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice, if given orally, to be promptly confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Old Securities properly tendered and you, on behalf of the Company, will exchange such Old Securities for New Securities and cause such Old Securities to be cancelled. Delivery of New Securities will be made on behalf of the Company by you at the rate of $1,000 principal amount of New Securities for each $1,000 principal amount of the corresponding series of Old Securities tendered promptly after notice (such notice if given orally, to be promptly confirmed in writing) of acceptance of said Old Securities by the Company; provided, however, that in all cases, Old Securities tendered pursuant to the Exchange Offer will be exchanged only after timely receipt by you of certificates for -3- such Old Securities (or confirmation of book-entry transfer into your account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature guarantees and any other required documents. You shall issue New Securities only in denominations of $1,000 or any integral multiple thereof. 9. Tenders pursuant to the Exchange Offer are irrevocable, except that, subject to the terms and upon the conditions set forth in the Prospectus and the Letter of Transmittal, Old Securities tendered pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. 10. The Company shall not be required to exchange any Old Securities tendered if any of the conditions set forth in the Exchange Offer are not met. Notice of any decision by the Company not to exchange any Old Securities tendered shall be given (if given orally, to be promptly confirmed in writing) by the Company to you. 11. If, pursuant to the Exchange Offer, the Company does not accept for exchange all or part of the Old Securities tendered because of an invalid tender, the occurrence of certain other events set forth in the Prospectus under the caption "The Exchange Offer -- Conditions" or otherwise, you shall as soon as practicable after the expiration or termination of the Exchange Offer return those certificates for unaccepted Old Securities (or effect appropriate book-entry transfer), together with any related required documents and the Letters of Transmittal relating thereto that are in your possession, to the persons who deposited them. 12. All certificates for reissued Old Securities, unaccepted Old Securities or for New Securities shall be forwarded by first-class mail. 13. You are not authorized to pay or offer to pay any concessions, commissions or solicitation fees to any broker, dealer, bank or other persons or to engage or utilize any person to solicit tenders. 14. As Exchange Agent hereunder you: (a) shall not be liable for any action or omission to act unless the same constitutes your own gross negligence, willful misconduct or bad faith, and in no event shall you be liable to a securityholder, the Company or any third party for special, indirect or consequential damages, or lost profits, arising in connection with this Agreement. (b) shall have no duties or obligations other than those specifically set forth herein or as may be subsequently agreed to in writing between you and the Company; -4- (c) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness of any of the certificates or the Old Securities represented thereby deposited with you pursuant to the Exchange Offer, and will not be required to and will make no representation as to the validity, value or genuineness of the Exchange Offer; (d) shall not be obligated to take any legal action hereunder which might in your judgment involve any expense or liability, unless you shall have been furnished with indemnity satisfactory to you; (e) may conclusively rely on and shall be protected in acting in reliance upon any certificate, instrument, opinion, notice, letter, telegram or other document or security delivered to you and believed by you to be genuine and to have been signed or presented by the proper person or persons; (f) may act upon any tender, statement, request, document, agreement, certificate or other instrument whatsoever not only as to its due execution and validity and effectiveness of its provisions, but also as to the truth and accuracy of any information contained therein, which you shall in good faith believe to be genuine or to have been signed or presented by the proper person or persons; (g) may conclusively rely on and shall be protected in acting upon written or oral instructions from any authorized officer of the Company; (h) may consult with counsel of your selection with respect to any questions relating to your duties and responsibilities and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by you hereunder in good faith and in accordance with the advice or opinion of such counsel; and (i) shall not advise any person tendering Old Securities pursuant to the Exchange Offer as to the wisdom of making such tender or as to the market value or decline or appreciation in market value of any Old Securities. 15. You shall take such action as may from time to time be requested by the Company (and such other action as you may deem appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms as may be approved from time to time by the Company, to all persons requesting such documents and to accept and comply with telephone requests for information relating to the Exchange Offer, provided that such information shall relate only to the procedures for accepting (or withdrawing from) the Exchange Offer. The Company will furnish you with copies of such documents on your request. All other requests for information relating to the Exchange Offer shall be directed to the Company, Attention: Corporate Secretary. -5- 16. You shall advise by facsimile transmission _____, the _____ of the Company (at the facsimile number _____), and such other person or persons as the Company may request, daily (and more frequently during the week immediately preceding the Expiration Date if requested) up to and including the Expiration Date, as to the number of Old Securities which have been tendered pursuant to the Exchange Offer and the items received by you pursuant to this Agreement, separately reporting and giving cumulative totals as to items properly received and items improperly received. In addition, you will also inform, and cooperate in making available to, the Company or any such other person or persons upon oral request made from time to time prior to the Expiration Date of such other information as they may reasonably request. Such cooperation shall include, without limitation, the granting by you to the Company and such person as the Company may request of access to those persons on your staff who are responsible for receiving tenders, in order to ensure that immediately prior to the Expiration Date the Company shall have received information in sufficient detail to enable it to decide whether to extend the Exchange Offer. You shall prepare a final list of all persons whose tenders were accepted, the aggregate principal amount of Old Securities tendered, the aggregate principal amount of Old Securities accepted and deliver said list to the Company. 17. Letters of Transmittal and Notices of Guaranteed Delivery shall be stamped by you as to the date and, after the expiration of the Exchange Offer, the time, of receipt thereof and shall be preserved by you for a period of time at least equal to the period of time you preserve other records pertaining to the transfer of securities. You shall dispose of unused Letters of Transmittal and other surplus materials by returning them to the Company. 18. For services rendered as Exchange Agent hereunder, you shall be entitled to such compensation as set forth on Schedule I attached hereto. The provisions of this section shall survive the termination of this Agreement. 19. You hereby acknowledge receipt of the Prospectus and the Letter of Transmittal. Any inconsistency between this Agreement, on the one hand, and the Prospectus and the Letter of Transmittal (as they may be amended from time to time), on the other hand, shall be resolved in favor of the latter two documents, except with respect to your duties, liabilities and indemnification as Exchange Agent. 20. The Company covenants and agrees to fully indemnify and hold you harmless against any and all loss, liability, cost or expense, including attorneys' fees and expenses, incurred without gross negligence or willful misconduct on your part, arising out of or in connection with any act, omission, delay or refusal made by you in reliance upon any signature, endorsement, assignment, certificate, order, request, notice, instruction or other instrument or document believed by you to be valid, genuine and sufficient and in accepting any tender or effecting any transfer of Old Securities believed by you in good faith to be authorized, and in delaying or refusing in good faith to accept -6- any tenders or effect any transfer of Old Securities. In each case, the Company shall be notified by you, by letter or facsimile transmission, of the written assertion of a claim against you or of any other action commenced against you, promptly after you shall have received any such written assertion or shall have been served with a summons in connection therewith. The Company shall be entitled to participate at its own expense in the defense of any such claim or other action and, if the Company so elects, the Company shall assume the defense of any suit brought to enforce any such claim. In the event that the Company shall assume the defense of any such suit, the Company shall not be liable for the fees and expenses of any additional counsel thereafter retained by you, so long as the Company shall retain counsel satisfactory to you to defend such suit, and so long as you have not determined, in your reasonable judgment, that a conflict of interest exists between you and the Company. The provisions of this section shall survive the termination of this Agreement. 21. You shall arrange to comply with all requirements under the tax laws of the United States, including those relating to missing Tax Identification Numbers, and shall file any appropriate reports with the Internal Revenue Service. 22. You shall deliver or cause to be delivered, in a timely manner to each governmental authority to which any transfer taxes are payable in respect of the exchange of Old Securities, the Company's check in the amount of all transfer taxes so payable; provided, however, that you shall reimburse the Company for amounts refunded to you in respect of your payment of any such transfer taxes, at such time as such refund is received by you. 23. This Agreement and your appointment as Exchange Agent hereunder shall be construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely within such state, and without regard to conflicts of law principles, and shall inure to the benefit of, and the obligations created hereby shall be binding upon, the successors and assigns of each of the parties hereto. 24. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same agreement. 25. In case any provision of this Agreement 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. 26. This Agreement shall not be deemed or construed to be modified, amended, rescinded, cancelled or waived, in whole or in part, except by a written instrument signed by a duly authorized representative of the party to be charged. This Agreement may not be modified orally. -7- 27. Unless otherwise provided herein, all notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing) and shall be given to such party, addressed to it, at its address or telecopy number set forth below: If to the Company: Tritel Pcs, Inc. 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Facsimile: __________________ Attention: Corporate Secretary If to the Exchange Agent: The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Facsimile: (212) 815-5915 Attention: Corporate Trust Trustee Administration 28. Unless terminated earlier by the parties hereto, this Agreement shall terminate 90 days following the Expiration Date. Notwithstanding the foregoing, Sections 18 and 20 shall survive the termination of this Agreement. Upon any termination of this Agreement, you shall promptly deliver to the Company any certificates for Securities, funds or property then held by you as Exchange Agent under this Agreement. 29. This Agreement shall be binding and effective as of the date hereof. -8- Please acknowledge receipt of this Agreement and confirm the arrangements herein provided by signing and returning the enclosed copy. Tritel PCS, Inc. By:________________________________ Name: E.B. Martin, Jr. Title: Executive Vice President, Treasurer and Chief Financial Officer Accepted as of the date first above written: THE BANK OF NEW YORK, as Exchange Agent By:___________________________ Name: Title: SCHEDULE I COMPENSATION OF EXCHANGE AGENT: [$5,000] PLUS $500 PER EXTENSION OF OFFER PLUS OUT-OF POCKET EXPENSES, INCLUDING WITHOUT LIMITATION, LEGAL FEES AND EXPENSES. -----END PRIVACY-ENHANCED MESSAGE-----