-----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, N77bQv8low9Izn6BjSW8wN9AC1Mfkq47SJmNjjsd4hhZx2Jr1P5zq6qqMF5Berd0 jjmN/7Vou6UuU35RHae+lQ== 0000950136-99-001196.txt : 19990913 0000950136-99-001196.hdr.sgml : 19990913 ACCESSION NUMBER: 0000950136-99-001196 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 35 FILED AS OF DATE: 19990910 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRITEL PCS INC CENTRAL INDEX KEY: 0001088384 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 640896438 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-82509 FILM NUMBER: 99708878 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/A SEC ACT: SEC FILE NUMBER: 333-82509-01 FILM NUMBER: 99708879 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/A SEC ACT: SEC FILE NUMBER: 333-82509-02 FILM NUMBER: 99708880 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/A SEC ACT: SEC FILE NUMBER: 333-82509-03 FILM NUMBER: 99708881 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/A 1 REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 9, 1999 REGISTRATION NO. 333-82509 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- AMENDMENT NO. 1 TO 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.)
--------------- 111 E. CAPITOL STREET, SUITE 500, JACKSON, MISSISSIPPI 39201 ATTENTION: CORPORATE SECRETARY (601) 914-8000 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices) --------------- JAMES H. NEELD, IV, ESQ. TRITEL PCS, INC. 111 E. CAPITOL STREET, SUITE 500 JACKSON, MISSISSIPPI 39201 (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(3) - -------------------------------------------------------------------------------------------------------------------------- Guarantees of 12.75% Senior Subordinated Discount Notes due 2009 -- -- -- (4)
- -------------------------------------------------------------------------------- (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) Previously paid. (4) 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 SEPTEMBER 9, 1999 [GRAPHIC OMITTED] PROSPECTUS 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 extend 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 10 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 PCS'S, TRITON'S, TELECORP'S AND AT&T'S AND OTHER ROAMING PARTNER'S NETWORKS] TABLE OF CONTENTS
PAGE ----- Prospectus Summary ............................. 1 Risk Factors ................................... 9 Information Regarding Forward-Looking Statements .................................. 19 Where You Can Find More Information ............ 19 Use of Proceeds ................................ 20 Capitalization ................................. 21 Selected Consolidated Financial Data ........... 22 Management's Discussion and Analysis ........... 24 Organization of Tritel and Tritel PCS .......... 33 Business ....................................... 34 Government Regulation .......................... 54 Joint Venture Agreements with AT&T Wireless .................................... 67
PAGE ----- Management ..................................... 76 Certain Relationships and Related Transactions ................................ 83 Principal Stockholders ......................... 87 Description of Certain Indebtedness ............ 89 The Exchange Offer ............................. 92 Description of the Notes ....................... 103 Description of Capital Stock ................... 140 Certain Federal Income Tax Considerations .............................. 144 Plan of Distribution ........................... 149 Legal Matters .................................. 149 Experts ........................................ 149 Index to Financial Statements .................. F-1
--------------------- Market data used throughout this prospectus is based on our good faith estimates. Our 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. - ---------- * 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. TRITEL PCS We are a development stage enterprise formed to develop wireless PCS telecommunications markets in the south-central United States. Our PCS licenses cover approximately 14.0 million people, or Pops, in contiguous markets in the states of Alabama, Georgia, Kentucky, Mississippi and Tennessee. As a member of the AT&T Wireless Network, we are the exclusive provider to AT&T Wireless of mobile wireless PCS services in virtually all of our markets. Our agreements with AT&T Wireless and certain affiliates allow us to use the AT&T brand name and logo together with the SunCom name, our regional brand name. 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 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. 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 to distinguish ourselves from other wireless service providers in our markets. Distribute through Company Stores. Our distribution strategy will focus principally on direct distribution through company-owned retail stores. 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. 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. Capitalize on Management Expertise and Local Market Presence. We intend to leverage our management's experience in order to create strong ties with subscribers and their communities. 1 FINANCING PLAN AND USE OF PROCEEDS We estimate 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. The following table highlights our projected sources and uses of capital from inception through December 31, 2001:
AMOUNT (DOLLARS IN MILLIONS) ---------------------- SOURCES: Bank facility ............................................. $ 462.3 Senior subordinated discount notes ........................ 200.2 Government financing ...................................... 47.5 Cash equity ............................................... 163.4 Non-cash equity ........................................... 157.9 --------- Total sources ............................................ $ 1,031.3 ========= USES: Acquisition of PCS licenses and intangible assets ......... $ 192.9 Capital expenditures ...................................... 529.9 Cash interest and fees .................................... 134.4 Working capital ........................................... 174.1 --------- Total uses ............................................... $ 1,031.3 =========
2 TRITEL CORPORATE STRUCTURE [GRAPHIC OMITTED] 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 Senior Bank Guarantor of Senior Bank Bank Debt Bank Debt Debt and High Yield Debt Debt and High Yield Debt Five License Four License Subsidiaries Subsidiaries Hold FCC A- and Hold FCC C- and B- Block Licenses F- Block Licenses Guarantors of Senior Issuers of FCC Debt Bank Debt and Guarantors of Senior Bank Debt
We are a Delaware corporation. Our principal executive offices are located at 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201, and our telephone number is (601) 914-8000. 3 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. 4 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. 5 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. 6 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. 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; 7 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 June 30, 1999, you would have been effectively subordinated to $63.8 million of total liabilities of our subsidiaries. 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." 8 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 ARE A DEVELOPMENT STAGE COMPANY; WE HAVE NOT YET BEGUN COMMERCIAL PCS 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 strain our financial resources and result in operating losses and negative cash flows until at earliest 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 June 30, 1999 of $105 million, primarily for capital expenditures for the network buildout. 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. 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. OUR HIGHLY LEVERAGED CAPITAL STRUCTURE LIMITS OUR ABILITY TO OBTAIN ADDITIONAL FINANCING AND COULD ADVERSELY AFFECT OUR BUSINESS IN SEVERAL OTHER WAYS 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 $105 million of these funds as of June 30, 1999. 9 We are highly leveraged. As of June 30, 1999, we had $445.1 million of total indebtedness outstanding, including debt owed to the FCC, which was carried on our books at $41.4 million as of June 30, 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 $203.7 million of the original notes at their accreted value. This indebtedness represented approximately 69.3% of our total capitalization at that date. At that date, we also had $69.1 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. 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. 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 have been recorded in our financial statements in accordance with generally accepted accounting principles at its estimated fair market value of $41.4 million as of June 30, 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 $1.1 million as of June 30, 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: o 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, o 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. 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 10 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. Our ability to pay interest on the 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 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. ADDITIONAL FUNDING MAY BE REQUIRED BUT UNAVAILABLE TO US 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. 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 build out these markets ourself. 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. BECAUSE OUR RELATIONSHIP WITH AT&T WIRELESS MAY BE TERMINATED IN CERTAIN CIRCUMSTANCES, WE MAY LOSE, AMONG OTHER THINGS, THE RIGHT TO USE THE AT&T BRAND NAME 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. AT&T Wireless can 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 11 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. OUR RELATIONSHIP WITH AT&T WIRELESS MAY RESULT IN A CONFLICT OF INTEREST 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 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. 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. 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. BECAUSE WE DEPEND ON EQUIPMENT AND SERVICE VENDORS TO BUILD OUT OUR PCS NETWORK, WE CANNOT BE CERTAIN THAT OUR PCS NETWORK WILL BE BUILT OUT IN A TIMELY AND COST-EFFECTIVE MANNER 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 our PCS operations on schedule. Because of our 12 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. 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 in commercial quantities. Other manufacturers are expected to supply tri-mode handsets in commercial quantities 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 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 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. In many cases, we will be required to obtain zoning variances and other governmental approvals or permits. In addition, because of concern over radiofrequency emissions and tower appearance, local governments, including one city within our markets, Knoxville, Tennessee, affecting approximately four 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 TECHNOLOGY CHOSEN BY US MAY BECOME OBSOLETE 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. 13 OUR DIGITAL PCS TECHNOLOGY MAY NOT GAIN CUSTOMER ACCEPTANCE Three standards are currently 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. 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. It is anticipated that CDMA-based PCS providers will own licenses covering virtually all of the United States population. Other PCS providers have deployed GSM technology in many of our markets. GSM is the prevalent standard in Europe. It is possible that 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 a 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. Separately, 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. 14 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 FCC LICENSES MAY BE REVOKED UNDER CERTAIN CIRCUMSTANCES 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. 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. 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. 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. Foreign Ownership Limitations. 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. BECAUSE WE FACE BROAD AND EVOLVING GOVERNMENT REGULATION WE MAY HAVE TO MODIFY OUR BUSINESS PLANS OR OPERATIONS IN THE FUTURE 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. 15 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 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. IF WE FAIL TO SATISFY FCC CONTROL GROUP REQUIREMENTS WE MAY LOSE OUR C- AND F-BLOCK LICENSES To retain the C- and F-Block licenses and the favorable government financing granted to us, we must maintain our designated entity status as an entrepreneur and small business or very small business. To maintain all of the benefits of our designated entity status, our control group 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. OUR SUBSIDIARIES' GUARANTEES OF THE NOTES MAY BE VOID UNDER CERTAIN CIRCUMSTANCES 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 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 16 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 June 30, 1999, the total liabilities of these subsidiaries would have been approximately $63.8 million. BECAUSE A SIGNIFICANT PORTION OF OUR ASSETS ARE INTANGIBLE THEY MAY HAVE LITTLE VALUE UPON A LIQUIDATION Our assets consist primarily of intangible assets, principally 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 $259.6 million attributable to Tritel's common stock as of June 30, 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." 17 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. AN ACTIVE TRADING MARKET FOR THE NOTES MAY NOT DEVELOP. 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. 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 Portal 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. 18 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. We make no representation, warranty (express or implied) or assurance as to the completeness or accuracy of these projections and, accordingly, neither express 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., 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201, Attention: Corporate Secretary. 19 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, Inc. 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 million for cash interest and to cover financing fees and expenses, o approximately $192.9 million for acquisition of PCS licenses and intangible assets, and o approximately $174.1 million for working capital, including operating cash flow losses. 20 CAPITALIZATION The following table sets forth the consolidated capitalization of Tritel, Inc. as of June 30, 1999. The following table should be read in conjunction with Tritel, Inc.'s consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus.
JUNE 30, 1999 --------------- (IN THOUSANDS) Cash, cash equivalents and restricted cash .................................... $ 398,262 ========= Long-term debt: Bank facility(a) ............................................................. $ 200,000 FCC debt(b) .................................................................. 41,430 Senior Subordinated Discount Notes ........................................... 203,656 --------- Total long-term debt ...................................................... 445,086 --------- Series A 10% redeemable convertible preferred stock(c) ........................ 90,668 Adjustment to fair value ...................................................... (21,559) --------- Total Series A redeemable preferred stock(d) .............................. 69,109 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 ........... 124,912 --------- Series D Preferred Stock, 46,374 shares issued and outstanding ............ 46,374 Adjustment to fair value .................................................. (11,278) --------- Total Series D preferred stock(d) ....................................... 35,096 --------- Common Stock, par value -- $.01 per share; authorized 3,040,009 shares; 40,705 shares issued and outstanding ....................................... -- Deficit accumulated during the development stage ............................. (31,914) --------- Total stockholders' equity ................................................. 128,094 ========= Total capitalization ...................................................... $ 642,289 =========
- ---------- (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. (c) See Note 10 to the Consolidated Financial Statements. (d) See the Consolidated Balance Sheets and related Notes. 21 SELECTED CONSOLIDATED FINANCIAL DATA The following selected financial data for the periods indicated have been derived from the Consolidated Financial Statements of Tritel, Inc. which statements, except for the six-month periods ended June 30, 1998 and 1999, the related balance sheet data as of June 30, 1999 and the period from inception to June 30, 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 six months ended June 30, 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 CUMULATIVE AMOUNTS SIX MONTHS AMOUNTS SINCE INCEPTION, ENDED SINCE INCEPTION, AT DECEMBER 31, JUNE 30, AT JUNE 30, ------------------ ------------------------ ----------------- 1998 1998 1999 1999 ------------------ ----------- ------------ ----------------- (DOLLARS IN THOUSANDS) STATEMENTS OF OPERATIONS DATA: Revenues ...................... $ -- $ -- $ -- $ -- --------- -------- --------- --------- Operating expenses: Plant expenses ................ 2,047 111 3,946 5,993 General and administrative..... 9,672 1,616 7,204 16,876 Other operating expenses ...... 855 33 5,122 5,977 --------- -------- --------- --------- Total operating expense ...... 12,574 1,760 16,272 28,846 --------- -------- --------- --------- Operating loss ................ (12,574) (1,760) (16,272) (28,846) Interest income ............... 230 27 5,332 5,562 Interest expense and financing cost ............... (722) -- (7,334) (8,056) --------- -------- --------- --------- Loss before extraordinary item and income taxes ....... (13,066) (1,733) (18,274) (31,340) Extraordinary item -- Loss on return of spectrum..... (2,414) -- -- (2,414) --------- -------- --------- --------- Loss before income taxes...... (15,480) (1,733) (18,274) (33,754) Income tax benefit ............ -- -- 6,036 6,036 --------- -------- --------- --------- Net loss ..................... $ (15,480) $ (1,733) $ (12,238) $ (27,718) ========= ======== ========= =========
22
DECEMBER 31, JUNE 30, ------------------------------------------------------- ---------- 1995 1996 1997 1998 1999 -------- ---------- ----------- ----------------- ---------- (DOLLARS IN THOUSANDS) BALANCE SHEET DATA: Cash and cash equivalents .......................... $ 400 $ 32 $ 1,763 $ 846 $393,101 Other current assets ............................... 4,501 5,000 285 960 2,631 Property and equipment, net ........................ -- 10 13 13,816 60,686 FCC licensing costs ................................ 40 62,503 99,425 71,466 (1) 158,893 Intangible assets .................................. -- -- -- -- 38,857 Other assets ....................................... 3 186 1,027 1,933 42,877 ------ ------- -------- --------- -------- Total assets ....................................... $4,944 $67,731 $102,513 $ 89,021 $697,045 ====== ======= ======== ========= ======== Total current liabilities .......................... $3,425 $ 8,553 $ 8,425 $ 32,911 $ 7,345 Long-term debt ..................................... -- 53,504 77,200 51,599 (2) 445,086 Other non-current liabilities ...................... -- -- 8,126 6,494 47,411 Total Series A redeemable preferred stock .......... -- -- -- -- 69,109 Total stockholders' equity (deficit) ............... 1,519 5,674 8,762 (1,983) 128,094 ------ ------- -------- --------- -------- Total liabilities and stockholders' equity ......... $4,944 $67,731 $102,513 $ 89,021 $697,045 ====== ======= ======== ========= ======== OTHER FINANCIAL DATA: Ratio of earnings to fixed charges ................. -- -- -- -- --
- ---------- (1) See Note 5 to the consolidated financial statements. (2) See Note 8 to the consolidated financial statements. 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 $6.4 million and $28.8 million for the six-month periods ended June 30, 1998 and 1999. 23 MANAGEMENT'S DISCUSSION AND ANALYSIS The following discussion and analysis of the financial condition and results of operations of Tritel PCS and Tritel, Inc. should be read in conjunction with the consolidated financial statements and notes thereto of Tritel, Inc., 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 developing PCS markets in the south-central United States. Tritel PCS's PCS licenses cover approximately 14.0 million Pops 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 virtually all of 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 activities, 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. 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 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 the national AT&T Wireless and regional SunCom 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 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 has stabilized recently, management believes that some deterioration in ARPU will continue. While 24 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 and costs per gross added subscriber. 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. Tritel PCS will also focus resources on a proactive subscriber retention program, strict credit policies and alternative methods of payment for credit-challenged customers. However, Tritel PCS expects PCS churn rates to be higher than historical trends due to the increase in number of competitors and expanded marketbase. OPERATING EXPENSES Tritel PCS's operating expenses 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 SIX-MONTH PERIODS ENDED JUNE 30, 1998 AND JUNE 30, 1999 Tritel PCS's net loss was $1.7 million for the six months ended June 30, 1998, as compared to a net loss of $12.2 million for the six months ended June 30, 1999. Tritel PCS expects to launch commercial service in some markets in the third quarter of 1999, and until that time will have no revenue. The expenses incurred to date primarily relate to developing an infrastructure and hiring staffing to support the future services Tritel PCS will provide. Operating Expenses Plant expenses were $111,000 and $3.9 million for the six months ended June 30, 1998 and 1999, respectively. Plant expenses include primarily the cost of engineering and operating staff devoted to the oversight of the design and implementation of Tritel PCS's network site lease expenses and construction site office expenses. 25 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. Tritel PCS expects plant expense to increase during the remainder of 1999 as it begins commercial operation of its network in various markets. General and administrative expenses include primarily the cost of administrative salaries and benefits, administrative office expenses, legal, accounting and other professional fees, property taxes and other general office expenses. General and administrative expenses increased from $1.6 million for the six month period ended June 30, 1998 to $7.2 million for the six-month period ended June 30, 1999. The increase was due primarily to increased staffing in various departments, including information technology, billing and customer care, accounting, human resources and other administrative functions, incurred in the preparation for commercial launch of Tritel PCS's network in 1999. Sales and marketing expenses include primarily the cost of sales and marketing salaries and benefits, local sales office expenses, and advertising and promotional expenses. Sales and marketing expenses increased from $20,000 in the first half of 1998 to $2.7 million for the same period 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 sales offices and retail store locations. Tritel PCS expects to incur significant selling and marketing costs during the remainder of 1999 primarily related to sales commissions, promotional events and advertising incurred in connection with market launches in 1999. Depreciation and amortization expenses were $13,000 for the six-month period ended June 30, 1998, compared to $2.4 million for the six-month period ended June 30, 1999. The 1999 expenses related primarily to the amortization of Tritel PCS's roaming and license agreements with AT&T Wireless and the SunCom trademark, as well as the depreciation of computer hardware, software, furniture, fixtures, and office equipment. Non-Operating Income and Expenses Interest income increased from $27,000 for the six-month period ended June 30, 1998 to $5.3 million for the six-month period ended June 30, 1999. This significant increase was a result of Tritel PCS's investment of the cash received from equity investors of $113.6 million, advances under its bank facility of $200.0 million and gross proceeds from the sale of senior subordinated discount notes of approximately $200.2 million. Tritel PCS's short-term cash investments consist primarily of U.S. Government securities with a dollar-weighted average maturity of 90 days or less. Financing costs were $2.2 million for the six-month period ended June 30, 1999. These costs were associated with the January 1999 conversion by Digital PCS of debt to equity in Airwave Communications. Interest expense was $5.1 million for the six-months ended June 30, 1999 and consisted of interest on debt in excess of the amount capitalized for the purpose of completing the network buildout. All interest for the six months ended June 30, 1998 was capitalized because all debt for that period was applied to the network buildout. For the six months ended June 30, 1999, Tritel PCS recorded a deferred income tax benefit of $6.0 million. No valuation allowance was considered necessary for this deferred tax asset, principally due to the existence of a deferred tax liability which was recorded upon the closing of the AT&T transaction on January 7, 1999. Prior to this date, the predecessor company was a limited liability corporation and was not subject to income taxes. 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. 26 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. Non-Operating Income and Expenses Interest expense, net of interest income, for 1998 was $722,000. The interest expense related to licenses retained by Digital PCS. During July 1998, Tritel PCS recorded an extraordinary loss of $2.4 million on the forgiveness of debt related to the return of C-Block spectrum 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 for the period from inception through the end of 2001, assuming substantial completion of the Tritel PCS network buildout to cover 80% of the Pops in the aggregate by the end of 2001, will total approximately $1.0 billion. Tritel PCS estimates those capital requirements will be met as follows: Bank facility $ 462.3 Senior subordinated discount notes 200.2 Government financing 47.5 Cash equity 163.4 Non-cash equity 157.9 ---------- Total estimated capital requirements $ 1,031.3 ========== 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. The bank facility provides for: o a $250 million reducing revolving credit facility maturing on June 30, 2007, o a $100 million term credit facility maturing on June 30, 2007, and o 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. Tritel PCS estimates that $462.3 million of the $550 million bank facility will be drawn through the end of 2001 for capital requirements. The terms of the bank facility will permit Tritel PCS, subject to certain terms and 27 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 or other corporate purposes. As of June 30, 1999, Tritel PCS could have borrowed up to a total of approximately $550 million pursuant to the terms of the bank facility. See "Description of Certain Indebtedness -- Bank Facility." On May 11, 1999, Tritel PCS issued senior subordinated discount notes with a principal amount at maturity of $372.0 million. These notes were issued at a substantial discount from their principal amount at maturity for proceeds of $200.2 million. No interest will be paid or accrued on the notes prior to May 15, 2004. Thereafter, the notes will bear interest at the stated rate. The notes mature on May 15, 2009. Airwave Communications and Digital PCS received preferential financing from the U.S. Government for the C and F-Block licenses, which were contributed to Tritel, Inc. in exchange for Series C Preferred Stock. As a result, Tritel, Inc. is obligated to pay $47.5 million to the U.S. Government under the terms of preferential financing terms. The debt relating to the C-Block licenses requires interest only payments for the first six years of the term and then principal and interest payments in years seven through ten. The debt relating to the F-Block licenses requires interest only payments for the first two years of the term and then principal and interest payments in years three through ten. In connection with the consummation of the joint venture with AT&T Wireless, Tritel, Inc. 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. Additionally, on January 7, 1999, Tritel, Inc. received $14.2 million of cash in exchange for the issuance of Series C Preferred Stock from Airwave Communications and Digital PCS. Non-cash equity consists of: o Series A Preferred Stock and Series D Preferred Stock valued at $137.0 million issued to AT&T Wireless on January 7, 1999 in exchange for the licenses it contributed and for entering into exclusivity, license and roaming agreements, o Series C Preferred Stock valued at $18.3 million issued to Airwave Communications and Digital PCS on January 7, 1999 in exchange for the net assets it contributed, and o Series C Preferred Stock valued at $2.6 million issued to Central Alabama Partnership on January 7, 1999 in exchange for the net assets it contributed. Tritel PCS believes that the proceeds from the senior subordinated discount notes, 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. 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. As stated above, 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. Tritel PCS estimates those capital requirements will be applied as follows: 28 Acquisition of PCS licenses and exclusivity, license and roaming agreements $ 192.9 Capital expenditures 529.9 Cash interest and fees 134.4 Working capital 174.1 ---------- Total estimated use of capital $ 1,031.3 ========== Tritel, Inc. has applied $192.9 million in capital for the acquisition of the PCS licenses and the agreements with AT&T Wireless relating to exclusivity, license and roaming. This amount includes the acquisition of PCS licenses from AT&T Wireless, Central Alabama Partnership, Airwave Communications and Digital PCS. The cash portion of this capital requirement of $14.7 million was paid by Airwave Communications and Digital PCS as a downpayment on the purchase of the C and F-Block licenses. Management estimates that capital expenditures associated with the buildout will total approximately $529.9 million from inception through the end of 2001, including a commitment to purchase a minimum of $300 million in equipment and services from Ericsson. Costs associated with the network buildout include switches, base stations, towers and antennae, radiofrequency engineering, cell site acquisition and construction, and microwave relocation. 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, unforeseen delays, cost overruns, unanticipated expenses, regulatory expenses, engineering design changes and other technological risks. As of June 30, 1999, Tritel, Inc. had expended $50.7 million in capital expenditures. Tritel, Inc. estimates that cash interest and fees through 2001 will total $134.4 million, including fees relating to the offering of the senior subordinated discount notes. This amount represents interest and fees on the senior bank facility and interest on the preferential financing from the U.S. Government for the C and F-Block licenses. Cash interest will not be paid on the senior subordinated discount notes until 2004. As of June 30, 1999, Tritel, Inc. has paid $15.6 million for interest and fees and has incurred fees of approximately $9 million relating to the offering of the senior subordinated discount notes. During May 1999, Tritel PCS notified Digital PCS of its intent to exercise its option to purchase from Digital PCS licenses covering an additional 2.0 million Pops for approximately $15 million, which will consist of $3.0 million of Series C Preferred Stock and the assumption of $12 million of FCC debt. These licenses will be transferred to Tritel PCS after approval by the FCC. Tritel PCS has committed to grant an option to AT&T Wireless or its designee for the purchase of these licenses. If AT&T Wireless does not exercise its option to purchase these licenses and Tritel PCS decides to build out the markets, Tritel PCS would require additional capital, probably including both debt and equity of at least $110 million for additional capital expenditures and to cover operating cash flow losses and working capital requirements. However, Tritel PCS can not buildout and operate these markets using the AT&T brand name without permission from AT&T. In summary, from the inception of the Airwave Communications and Digital PCS through June 30, 1999, Tritel PCS has used $27.5 million in operating activities. Those activities have consisted mainly of plant expenses, general and administrative expenses and sales and marketing expenses totalling over $26 million. Additionally, net interest expense during that same period by Tritel PCS totaled almost $2.5 million. Also for that period, Tritel PCS has used over $84 million in investing activities. The investing activities have consisted of over $50 million spent so far on property and equipment, about $14.7 million spent to obtain FCC licenses, $7.5 million loaned to ABC Wireless to obtain licenses for Tritel PCS and $10.5 million in interest on the debt to finance the FCC licenses and the network buildout. Tritel PCS has received almost $509.7 million in cash from financing activities. $400.2 million has been received to date from the bank facility and the senior subordinated discount 29 notes. Additionally, Tritel PCS and its predecessor companies, Airwave Communications and Digital PCS, have received $115.6 million in capital, net of costs, from the sale of preferred stock and membership interests in the predecessor companies. 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, or the FCC will approve the disaggregation of the spectrum and the transfer to Tritel PCS of a portion of the licenses so that the total held by Tritel PCS does not exceed 45 MHz. 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 disagregation 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 30 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. RECENTLY ISSUED ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information ("FAS 131"). FAS 131 requires that a public business enterprise report financial and descriptive information about its reportable operating segments. The statement defines operating segments as components of enterprises about which separate financial information in available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Tritel PCS adopted SFAS 131 and determined that there are no separate reportable segments, as defined by the standard. In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("FAS 133"). FAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. FAS 133 will significantly change the accounting treatment of derivative instruments and, depending upon the underlying risk management strategy, these accounting changes could affect future earnings, assets, liabilities, and shareholders' equity. Tritel, Inc. and Tritel PCS are closely monitoring the deliberations of the FASB's derivative implementation task force. With the issuance of Statement of Financial Accounting Standards No. 137, Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133, which delayed the effective date of FAS 133, Tritel, Inc. and Tritel PCS will be required to adopt FAS 133 on January 1, 2001. Presently, Tritel, Inc. and Tritel PCS have not yet quantified the impact that the adoption will have on the consolidated financial statements of Tritel, Inc. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Tritel PCS is exposed to market risk from changes in interest rates which could impact results of operations. Tritel PCS manages interest rates through a combination of fixed and variable rate debt. Tritel PCS has entered into interest rate swap agreements as a risk management tool, not for speculative purposes. See Note 23 of Notes to Consolidated Financial Statements. At June 30, 1999 Tritel PCS has $200 million of Term B Notes under its bank facility, which carried a rate of 9.45%; $372 million of the original senior subordinated discount notes, due 2009; $38.0 million of 7%, discounted to yield 10%, debt to the FCC, due in quarterly installments from 2003 to 2006; and $9.5 million of 61/8%, discounted to yield 10%, debt to the FCC, due in quarterly installments from 2000 to 2008. Tritel PCS's senior subordinated discount notes and FCC debt are fixed interest rate and as a result Tritel PCS is less sensitive to market rate fluctuations. However, Tritel PCS's Term B Notes outstanding and other amounts available to Tritel PCS under its bank facility agreement are variable interest rate. Beginning in May 1999, Tritel PCS entered into interest rate swap agreements with 31 notional amounts totaling $200 million to manage its interest rate risk under the bank facility. The swap agreements establish a fixed effective rate of 9.05% on the current balance outstanding under the bank facility through the earlier of March 31, 2002 or the date on which Tritel PCS achieves operating cash flow breakeven. Market risk, due to potential fluctuations in interest rates, is inherent in swap agreements. The following table provides information about Tritel PCS's market risk exposure associated with changing interest rates on its fixed rate debt at maturity value of the debt (dollars in millions):
EXPECTED MATURITY -------------------------------------------------------------------------- 1999 2000 2001 2002 2003 Thereafter Total ---- ---- ---- ---- ---- -------- --- Long-term fixed rate debt -- $ 0.9 $ 1.0 $ 1.1 $ 9.7 $ 406.8 $ 419.5 Average interest rate -- 6.1% 6.1% 6.1% 6.9% 12.2% --
Collectively, Tritel PCS's fixed rate debt has a carrying value of $245.1 million at June 30, 1999. The carrying amount of fixed rate debt is believed to approximate fair value because a portion of such debt was discounted to reflect a market interest rate at inception and the remaining portion of fixed rate debt was issued in May 1999 and therefore approximates fair value due to its recent issuance. Tritel PCS is also exposed to the impact of interest rate changes on it's short-term cash investments, consisting of U.S. Treasury obligations and certain other investments with the highest credit ratings or fully guaranteed or insured by the U.S. government, all of which have average maturities of three months or less. As with all investments, these short-term investments carry a degree of interest rate risk. Tritel PCS is not exposed to fluctuations in currency exchange rates since its operations are entirely within the United States. 32 ORGANIZATION OF TRITEL, INC. AND TRITEL PCS Prior to January 7, 1999, Tritel, Inc.'s operations were conducted through Airwave Communications, formerly Mercury PCS, LLC, and Digital PCS, formerly Mercury PCS II, LLC. Airwave Communications was formed in July 1995 by Messrs. Mounger, Martin and Sullivan who are officers and directors of Tritel, Inc. and Tritel PCS, and various other investors as a small business, as defined by the FCC, 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, as defined by the FCC, 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, Inc. was formed as a Delaware corporation in 1998. On May 20, 1998, Tritel, Inc., 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, Inc. 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, Inc. 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, Inc. 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, Inc. has received cash and non-cash equity funding and irrevocable commitments totaling $321.3 million. 33 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 34 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, 35 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, consisting of 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, 36 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 37 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. 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. 38 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. 39 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 participates 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 40 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(SM) 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. - ---------- (SM) "Digital OneRate" is a registered service mark of AT&T Corp. 41 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 42 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. 43 NETWORK BUILDOUT Tritel PCS has begun its initial buildout, including the radiofrequency 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 3rd Quarter 1999 719,500 Louisville and Lexington, KY 4th Quarter 1999 2,341,800 Nashville and Clarksville, TN / 4th Quarter 1999 1,936,500 Hopkinsville, KY Knoxville, TN 4th Quarter 1999 1,074,000 Chattanooga and Cleveland, TN / 4th Quarter 1999 760,800 Dalton, GA Huntsville and Decatur, AL 4th Quarter 1999 639,200 Montgomery, AL 1st Quarter 2000 475,300 Birmingham, AL 2nd Quarter 2000 1,297,800 Mobile, AL 2nd Quarter 2000 653,900 Tupelo, MS 2nd Half 2000 312,500 Tuscaloosa, AL 2nd Half 2000 253,100 Meridian, MS 2nd Half 2000 205,900 Hattiesburg, MS 2nd Half 2000 181,000 Anniston, AL 2nd Half 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 Radiofrequency Design. Two radiofrequency engineering firms, Galaxy Personal Communications Services, Inc., a wholly owned subsidiary of World Access, Inc., for the Mississippi, Alabama, Georgia and eastern Tennessee sites, and Wireless Facilities, Inc., for the Nashville, Tennessee and the Louisville and Lexington, Kentucky sites, are performing the initial radiofrequency design for the network. Based upon their engineering designs, Galaxy and Wireless Facilities 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 radiofrequency 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. 44 After Galaxy and Wireless Facilities 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 Wireless Facilities 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. Tritel PCS has engaged Wireless Facilities to relocate the microwave paths that currently use its bandwidth. Under its arrangement with Tritel PCS, Wireless Facilities 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 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 Network Operations Center's function is to monitor the network on a real-time basis for, among other things, alarm monitoring, power outages, tower lighting problems and traffic patterns. Tritel PCS plans to build and operate its own Network Operations Center at its switch facilities in Jackson, Mississippi by 2001. 45 Interconnection. Tritel PCS's digital PCS network will connect to the landline telephone system through local exchange carriers. Tritel PCS has entered into an interconnection agreement 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. 46 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 GSM 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 CDMA 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 --
47
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 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 and 48 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. 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, 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%. 49 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. Tritel PCS believes that wireless telecommunications penetration rates will increase as prices fall and 50 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. 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. 51 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. 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 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, 52 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 June 30, 1999, Tritel PCS had 219 employees, including 59 in technical operations, 68 in marketing and sales operations, 33 in customer operations, 17 in management information systems, 14 in human resources and 28 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. Other Proceedings 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. 53 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, 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, or 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 54 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. These proceedings were significantly affected by the 1996 Act and FCC rulemakings conducted pursuant to the 1996 Act. 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 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 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 Public Safety Answering Point with the location of the mobile caller within a radius of 125 meters. The FCC proceeding implementing these requirements is ongoing and these 55 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 radiofrequency 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 also known as the Wiretap Act, which is under the purview of the Department of Justice. The Wiretap Act is designed to ensure that law enforcement can conduct authorized wiretaps of communications utilizing advanced technologies. Adherence to The Wiretap Act 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 The Wiretap Act with the FCC. Full implementation of The Wiretap Act'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 radiofrequency 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. 56 STATE AND LOCAL REGULATION The scope of state regulatory authority covers such matters as the terms and conditions of interconnection between local exchange carriers 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 local exchange carriers 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 major trading areas and basis trading areas. The FCC awarded A- and B-Block licenses in 51 major trading areas. The C-, D-, E- and F-Block spectrum were allocated on the basis of 493 smaller basis trading areas. 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. 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 the downpayment required following the close of the D-, E- and F-Block auctions. On January 30, 57 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. 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 local exchange carriers 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. 58 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 local exchange carriers. 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 a local exchange carrier. Local exchange carriers designated as incumbents, 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 local exchange carriers 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. The 1996 Act establishes a framework for state commissions to mediate and arbitrate negotiations between incumbent local exchange carriers 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 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 local exchange carriers from subsidizing telemessaging services, including voice mail, voice storage/retrieval, live operator service, and related ancillary services) from their telephone exchange service or exchange access and from discriminating in favor of its own telemessaging operations. CONDITIONS ON REGIONAL BELL OPERATING COMPANIES 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 and their affiliates must provide access and interconnection to one or more unaffiliated competing providers of telephone exchange service. Regional Bell Operating Companies 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 regional Bell Operating Companies must offer on a non-discriminatory basis, include: interconnection and unbundled access; access to poles, ducts, 59 conduits and rights-of-way owned or controlled by regional Bell Operating Companies; 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. REGIONAL BELL OPERATING COMPANIES COMMERCIAL MOBILE JOINT MARKETING The regional Bell Operating Companies 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 radiofrequency 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 radiofrequency 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 local exchange carriers are required to enter into reciprocal compensation arrangements with all CMRS providers for the transport and termination of traffic between local exchange carrier 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 60 Cost. The proxy rates for CMRS-to-local exchange carrier interconnection would result in significant savings when compared with rates that CMRS providers, principally cellular carriers, have been paying to local exchange carriers 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 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 a local exchange carrier'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. 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 total of approximately $25 million for microwave relocation. Tritel PCS has completed the microwave relocation for all 1999 launch cities and does not expect any delays to scheduled service launches in 2000. 61 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. 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 and (b) less than $500 million in total assets at the time it filed its application to qualify for the C-Block auction on FCC Form 175. Airwave Communications filed its Form 175 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 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, Inc. fails to meet the ongoing entrepreneurs requirements, the FCC could revoke Tritel's PCS licenses, require Tritel, Inc. to restructure in order to come into compliance with the relevant regulation, fine Tritel, Inc., or take other enforcement actions, including imposing the unjust enrichment penalties. Although Tritel, Inc. 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, Inc. SMALL BUSINESS REQUIREMENTS An entity that meets the entrepreneurs requirements may also receive certain preferential financing terms if it meets certain other 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 Form 175. 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, Inc.'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, Inc. 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, Inc. to restructure in order to come into compliance with the relevant regulation, fine Tritel, Inc. or take other enforcement actions, including imposing unjust 62 enrichment penalties. Although Tritel, Inc. 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, Inc. 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 that meets certain 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: o an established group of investors meeting certain financial qualifications 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 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 Form 175 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, Inc.'s Restated Certificate of Incorporation provides that outstanding shares of capital stock of Tritel, Inc. shall always be subject to redemption by action of the Board of Directors of Tritel, Inc. 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, Inc. or any of its subsidiaries. Although Tritel, Inc. believes that it has taken sufficient steps to meet the control group requirements, there can be no assurance that Tritel, Inc. 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. 63 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, Inc.'s total equity on a fully diluted basis and may not vote more than 25% of the voting interests. Although Tritel, Inc. believes that it currently complies with the entrepreneurs requirements and the small business requirements, there can be no assurance that Tritel, Inc.'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 rights. On specified issues, such as those for which the holders of Tritel, Inc.'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, Inc.'s lenders or investors as affiliates of Tritel, Inc. for purposes of determining Tritel, Inc.'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 World Trade Organization, 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 World Trade Organization 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 World Trade Organization 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, Inc. were to exceed 25% in the future, the FCC could revoke Tritel PCS's licenses, require Tritel, Inc. to restructure its ownership to come into compliance with the foreign ownership rules or impose other penalties. Further, Tritel, Inc.'s Restated Certificate of Incorporation enables Tritel, Inc. 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, Inc.'s ability to attract additional equity financing from entities that are, or are owned by, non-U.S. entities. 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 64 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. 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, Inc. 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, Inc.'s investors or Tritel, Inc. itself will continue to satisfy these requirements during the term of any PCS license granted to its license subsidiaries or that Tritel, Inc. will be able to successfully implement divestiture or other mechanisms included in Tritel, Inc.'s Restated Certificate of Incorporation that are designed to ensure compliance with FCC rules. Any non-compliance with FCC rules could subject Tritel, Inc. to penalties, including a fine or revocation of its PCS licenses. 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, Inc. wishes to make any change in ownership structure during the initial license term involving the de facto or de jure control of Tritel, Inc., 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. 65 ADDITIONAL REQUIREMENTS As a C- and F-Block licensee, Tritel, Inc. 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 its 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, Inc.'s licenses, re-auction them, and subject Tritel, Inc. 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. 66 JOINT VENTURE AGREEMENTS WITH AT&T WIRELESS On May 20, 1998, Tritel, Inc., 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 and certain members of management entered into the Securities Purchase Agreement which provided for the formation of the Tritel, Inc.-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, Inc. or one or more wholly-owned subsidiaries of Tritel in exchange for shares of Tritel, Inc.'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, Inc. 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, Inc. 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, Inc. 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. Tritel, Inc. agreed not to engage in any activity which constitutes an ineligible business activity within the meaning of the regulations under the Small Business Investment Company Act. In addition, Tritel, Inc. 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 Small Business Investment Company Act. 67 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, Inc., provide or arrange for debt or equity financing for Tritel, Inc. or provide services to or otherwise assist Tritel, Inc. 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, Inc. has entered into the AT&T Wireless Network Membership License Agreement with AT&T Corp. and its affiliates, including AT&T Wireless. Under the License Agreement, Tritel, Inc. 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, 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, Inc.'s PCS licenses. AT&T has retained the unimpaired right to use the AT&T licensed marks in Tritel, Inc.'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, Inc.'s markets a right or license to use the AT&T licensed marks, except to a person that is a reseller of Tritel, Inc.'s services, a person acting as Tritel, Inc.'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, Inc.'s markets. Tritel, Inc. 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, Inc.'s service meets AT&T's high quality standards, Tritel, Inc. 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, Inc.: 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, Inc.'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, Inc.'s Pops, unless the failure is the result of AT&T's actions or inactions; 68 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; 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, Inc. 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, Inc. by providing notice to Tritel, Inc. However, no such termination may occur during the initial term. If Tritel, Inc. 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, Inc.'s licensed territory, and (d) with respect to which AT&T Wireless has given notice to Tritel, Inc. 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, Inc. 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, Inc. 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 69 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. 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, Inc. and AT&T Wireless also have entered into a roaming administration service agreement to allow Tritel, Inc. 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, Inc. in accordance with the applicable intercarrier roaming services agreements and to make available to Tritel, Inc. 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, Inc.'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, Inc. 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 have entered into a Stockholders' Agreement with Tritel, Inc. o to provide for the management of Tritel, Inc.; o to impose certain restrictions on the sale, transfer or other disposition of the securities of Tritel; and 70 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, Inc. 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, Inc. 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. 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, Inc. or any subsidiary; o a merger or consolidation of Tritel, Inc. or any subsidiary; o the offering of any securities of Tritel, Inc. or any subsidiary other than as contemplated by the Securities Purchase Agreement; o the hiring or termination of any executive officer of Tritel, Inc.; 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, Inc. 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, defined in the Stockholders' Agreement, beneficially owned by such stockholder on or prior to an initial public offering, or IPO, of Tritel, Inc.'s common stock, 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, Inc. 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 71 shares of Class A Voting Common Stock beneficially owned by such stockholder relative to the total number of Class A Voting Common Stock outstanding. This 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 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 (1) pursuant to an underwritten registration, (2) pursuant to Rule 144 under the Securities Act or (3) 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, Inc. 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 331/3% 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. 72 Tritel, Inc. 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, Inc. determines that a Demand Registration would interfere with any pending or contemplated material transaction, Tritel, Inc. may defer such Demand Registration subject to certain limitations. Piggyback Registration Rights. If Tritel, Inc. proposes to register any shares of Class A Voting Common Stock with the Securities and Exchange Commission under the Securities Act, Tritel, Inc. 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, Inc.'s markets. However, if Tritel, Inc. 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, Inc. 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, Inc.'s markets, for an equivalent number of shares of Series B Preferred. Tritel, Inc. 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, Inc. 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, Inc. cell sites. Concurrently, AT&T Wireless has agreed to, among other things: o assist Tritel, Inc. in obtaining discounts from AT&T Wireless equipment vendors; o refrain from soliciting for employment Tritel, Inc.'s personnel for a limited period; and o permit Tritel, Inc. to co-locate certain cell sites in locations holding AT&T Wireless cell sites. 73 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, Inc. 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, Inc. 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. Long Distance Agreement Tritel, Inc. and AT&T Wireless Services, Inc. have entered into a Long Distance Agreement which provides that Tritel, Inc. 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, Inc.'s continuing affiliation with AT&T Wireless, and will be resold to Tritel, Inc.'s customers. Under the Long Distance Agreement, Tritel, Inc. must meet a yearly minimum traffic volume commitment which is to be negotiated between Tritel, Inc. and AT&T Wireless. If the minimum traffic volume commitment is not met by Tritel, Inc., 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, Inc., 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, Inc.'s subsidiaries to enter into agreements and to conduct Tritel, Inc.'s operations, and direction that certain PCS licenses be transferred to Tritel, Inc.'s subsidiaries by AT&T Wireless, Airwave Communications, Digital PCS and Central Alabama Partnership. Resale Agreement Tritel, Inc. 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, Inc.'s licenses, each, referred to as a reseller, to purchase access to and usage of Tritel, Inc.'s wireless telecommunications services for resale to its subscribers. Tritel, Inc. 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, Inc. 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, Inc. or the reseller; o the failure of either the reseller or Tritel, Inc. to pay any sum owed to the other at the time such amount comes due; o the failure of the reseller or Tritel, Inc. to perform or observe any other material term, condition, or covenant to be performed by it under the Resale Agreement; 74 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, Inc. 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 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, Inc. will have no further obligation to provide the reseller access to and usage of Tritel, Inc.'s PCS services. 75 MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The executive officers and directors of Tritel, Inc., and their ages, at July 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 ............ 49 Director and President Jerry M. Sullivan, Jr. ....... 40 Director, Executive Vice President and Chief Operating Officer E.B. Martin, Jr. ............. 43 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 David A. Jones, Jr. .......... 41 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 July 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 July 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 ............... 49 President Jerry M. Sullivan, Jr. .......... 40 Director, Executive Vice President and Chief Operating Officer E.B. Martin, Jr. ................ 43 Director, Executive Vice President, Treasurer and Chief Financial Officer T. Clark Akers .................. 42 Senior Vice President-External Affairs Timothy Burnette ................ 43 Senior Vice President-Engineering and Technical Operations Keith Halford ................... 48 Senior Vice President-Marketing Kirk Hughes ..................... 39 Senior Vice President-Information Systems Doug McQueen .................... 38 Senior Vice President-Market Operations James H. Neeld, IV .............. 39 Senior Vice President-General Counsel and Secretary Karlen Turbeville ............... 40 Senior Vice President-Finance
76 William M. Mounger, II. Mr. Mounger has served as Chief Executive Officer of Tritel, Inc. and Mercury Communications since 1998 and 1990, respectively. In addition, Mr. Mounger served as President of Tritel, Inc. 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, Inc. 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, Inc. 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. Mr. Sullivan also represents Tritel, Inc. in the Personal Communications Industry Association, 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, Inc. 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, Inc. 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. 77 Alexander P. Coleman. Mr. Coleman has served as a Director of Tritel, Inc. 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, Inc. 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, Inc. 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, Inc. 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. David A. Jones, Jr. Mr. Jones has served as a Director of Tritel, Inc. since July 1999. Mr. Jones is a founder and the Chairman and Managing Director of Chrysalis Ventures, LLC, a venture capital firm. Prior to founding Chrysalis Ventures, LLC in 1994, Mr. Jones was an attorney in private practice. Mr. Jones is also a director of Humana Inc., Mid-America Bancorp and High Speed Access Corp. H. Lee Maschmann. Mr. Maschmann has served as a Director of Tritel, Inc. 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, Inc. 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, Inc. 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. 78 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, Inc.'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, Inc. will do business. 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, Inc.'s TDMA IS-136 PCS network. Prior to joining Tritel, Inc., 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, Inc.'s overall marketing strategy. Prior to joining Tritel, Inc., 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, Inc.'s management information systems and support. Prior to joining Tritel, Inc. 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, Inc.'s regional managers. Prior to becoming Senior Vice President-Market Operations, Mr. McQueen was Vice President-Regional Manager with Tritel, Inc. from 1997 and General Manager of Mercury Communications's Madisonville, Kentucky 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. 79 The Bylaws of Tritel, Inc. 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 designate four members, each of whom must be an officer of Tritel, Inc. 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, Inc.'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, Inc. for services rendered during fiscal year 1998 by its chief executive officer and its four most highly compensated executive officers. Mr. Arnett became President in January 1999 and was not an employee of Tritel, Inc. 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 80 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, Inc. has 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, Inc. employees, will be reimbursed for out-of-pocket expenses in connection with attendance at meetings. EMPLOYMENT AGREEMENTS Tritel, Inc. 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, Inc.; o by the executive officer, at any time for "Good Reason," as defined in the employment agreements, upon written notice to Tritel, Inc.; o by Tritel, Inc., 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, Inc., upon the executive officer's "Disability," as defined in the employment agreements, upon written notice to the executive officer; o by Tritel, Inc., immediately in the event of an uncured breach of the Management Agreement by the Manager, as defined below; and o by Tritel, Inc., if Tritel, Inc. 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, Inc. 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, 81 eleven-fifteenths (11/15) of Class A Common. The employment agreements provide for repurchase by Tritel, Inc. of each executive officer's non-vested stock upon the occurrence of specified events and allow 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, Inc., solicit employees of Tritel, Inc. and on the disclosure of confidential information of Tritel, Inc. 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, Inc., 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, Inc.'s 1999 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, Inc. ("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, Inc. and its subsidiaries, provided, however that incentive stock options may only be granted to employees. As of June 30, 1999, no options have been issued under the Stock Option Plan. As of June 30, 1999, 11,395 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, 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, Inc., 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, Inc.'s best interest. 1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS Tritel, Inc.'s 1999 Stock Option Plan for Non-employee Directors 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, Inc. to non-employee directors of Tritel, Inc. As of June 30, 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. 82 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS TRANSFER OF LICENSES TO TRITEL, INC. As part of the joint venture transactions, Tritel, Inc. 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, Inc. 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, Inc., 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 1.5 million Pops in New Mexico and Texas. Tritel, Inc. 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. These licenses will be transferred to Tritel PCS upon approval by the FCC. Tritel PCS subsequently committed to grant to AT&T Wireless or its designee 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, Inc. 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. In order to obtain AT&T Wireless's consent to exercise its option with Digital PCS, Tritel, Inc. 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, Inc. and its subsidiaries shall only engage in specified permitted activities related to the licenses or the territories covered by the 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, Inc. 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, Inc. 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, Inc. based on a valuation of Tritel, Inc.'s stock at that time. 83 MANAGEMENT AGREEMENT Tritel, Inc. 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, Inc. and its business, all subject to Tritel, Inc.'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, Inc. 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, Inc., Mercury Communications has subcontracted to Tritel, Inc. the back-office management functions associated with managing Alaska-3's cellular market. For the services provided by Tritel, Inc., Mercury Communications pays a monthly fee in the amount of $14,250. During 1997 and 1998, Tritel, Inc. 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, Inc. Tritel, Inc. 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, Inc. became employees of Tritel, Inc. During April 1997, Tritel, Inc. 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 June 30, 1999. RELATIONSHIP WITH MERCURY WIRELESS MANAGEMENT, INC. Mercury Wireless Management, Inc., a company wholly owned by Messrs. Martin, Mounger and Sullivan, provides management and marketing services to communications tower owners, including municipalities. Mercury Wireless Management has contracted to provide such services to the City of Jackson, Mississippi. Under the City of Jackson contract, Mercury Wireless Management receives a percentage of rentals generated from the leasing of the facilities managed by Mercury Wireless Management. Tritel, Inc. has entered into various leases to co-locate its equipment on certain towers owned by the City of Jackson and managed by Mercury Wireless Management. 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, Inc.'s employees perform certain services on behalf of Mercury Wireless Management, and Mercury Wireless Management reimburses Tritel, Inc. 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, Inc. 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 Wireless Facilities. RELATIONSHIP WITH AT&T WIRELESS Tritel, Inc. 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, 84 Roaming 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, Inc.'s Board of Directors, Ann K. Hall and H. Lee Maschmann. RELATIONSHIP WITH TELECORP PCS AND TRITON PCS Tritel, Inc. 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, Inc.'s directors, serve as directors of TeleCorp PCS. Mr. Anderson also serves as a director of Triton PCS. Tritel, Inc. 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, Inc. 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, Inc., 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, Inc. 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, Inc.'s bank facility. Tritel, Inc. intends to enter into an interest rate swap agreement with Barclays Bank PLC. RELATIONSHIP WITH CASH EQUITY INVESTORS Tritel, Inc. and the cash equity investors have entered into an Investors Stockholders' Agreement to provide for certain rights with respect to the management of Tritel, Inc., and to provide for certain restrictions with respect to the sale, transfer or other disposition of Tritel, Inc. 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, Inc. 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 assigns. In addition, if a cash equity investor desires to Transfer any or all of its shares of the capital stock of Tritel, Inc. to an affiliate or affiliated successor, then the cash equity investor must first offer all of 85 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, Inc. 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, Inc. 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, Inc., is also of counsel to Young, Williams, Henderson & Fuselier, P.A. 86 PRINCIPAL STOCKHOLDERS The following table sets forth certain information with respect to beneficial ownership of Tritel, Inc.'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, Inc. to own beneficially more than 5% of any class of Tritel, Inc.'s voting securities, o each of Tritel, Inc.'s directors, o each of the named executive officers and o all directors and executive officers of Tritel, Inc. 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, Inc. 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, Inc. 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, Inc. 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, Inc., 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, Inc.'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, Inc.'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. Unless otherwise indicated, the address of each person named below is c/o Tritel, Inc., 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201. 87
COMMON STOCK --------------------------------------------------------------------- CLASS A CLASS C VOTING PREFERENCE COMMON COMMON COMMON ------------------------ ------------------------ ------------------- NAME NUMBER % NUMBER % NUMBER % - ----------------------------------- ------------- ---------- ------------- ---------- -------- ---------- AT&T Wireless(2) .................. -- -- -- -- -- -- Conseco, Inc.(4) .................. -- -- -- -- -- -- Dresdner Kleinwort Benson Private Equity Partners L.P.(5) ................. -- -- -- -- -- -- Triune PCS, LLC(6) ................ -- -- -- -- -- -- Entergy Wireless Corporation(7) ................... -- -- -- -- -- -- MF Financial(8) ................... -- -- -- -- -- -- Airwave Communications, LLC(9) ........................... -- -- -- -- -- -- William M. Mounger, II(9)(10) ..... 5,961.36 16.8% 1,725.56 33.3% 3.0 33.3% Jerry M. Sullivan, Jr.(9) ......... 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 -- -- -- -- William S. Arnett ................. 4,069.54 11.6 -- -- -- -- All officers and directors as a group ............................ 33,551.82 100.0% 5,176.68 100.0% 9.0 100.0% PREFERRED STOCK ----------------------------- PERCENTAGE SERIES C OF TOTAL ----------------------------- VOTING NAME NUMBER %(1) POWER(2) - ----------------------------------- ------------------ ---------- ----------- AT&T Wireless(2) .................. 46,374.10(3) 20.1% 8.8% Conseco, Inc.(4) .................. 50,000.00 27.1 9.5 Dresdner Kleinwort Benson Private Equity Partners L.P.(5) ................. 30,000.00 16.3 5.7 Triune PCS, LLC(6) ................ 24,139.04 13.1 4.6 Entergy Wireless Corporation(7) ................... 20,000.00 10.9 3.8 MF Financial(8) ................... 10,000.00 5.4 1.9 Airwave Communications, LLC(9) ........................... 32,392.36 17.6 6.1 William M. Mounger, II(9)(10) ..... 2,000.00 1.1 18.2 Jerry M. Sullivan, Jr.(9) ......... -- -- 17.8 E.B. Martin, Jr. .................. -- -- 17.8 Karlen Turbeville ................. -- -- * William S. Arnett ................. -- -- * All officers and directors as a group ............................ 2,000.00 1.1% 56.8%
- ---------- * Represents less than 1%. (1) 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, Inc. held by all persons in the table assumes AT&T Wireless has converted its Series D Preferred Stock. (2) Address is: 5000 Carillon Point, Kirkland, WA 98033. (3) 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. (4) These shares are held through Washington National Insurance Company and United Presidential Life Insurance Company. Address is: 11825 North Pennsylvania Street, Carmel, IN 46032. (5) Address is: 75 Wall Street, 24th Floor, New York, NY 10005. (6) Address is: 4770 Baseline Road, Suite 380, Boulder, CO 80303. (7) On April 26, 1999, Entergy Wireless Company notified Tritel, Inc. and the stockholders of Tritel, Inc. 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, Inc. under the Stockholders' Agreement and the Investors Stockholders' Agreement. Entergy has advised Tritel, Inc. that its decision to sell its shares reflects a shift in its strategic focus. Tritel, Inc. 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. (8) Address is: 73 Treemont Street, Suite 13, Boston, MA 02108. (9) 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, Inc. owned by Airwave Communications. (10) Mr. Mounger controls Trillium PCS, LLC, which owns 2,000 shares of Series C Preferred Stock. 88 DESCRIPTION OF CERTAIN INDEBTEDNESS GOVERNMENT DEBT Because Tritel, Inc. 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, Inc. 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, Inc. 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, Inc. 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. 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 among Tritel PCS, as borrower, Tritel, Inc., 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 June 30, 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%. 89 As of June 30, 1999, Tritel PCS could have borrowed up to a total of approximately $550 million pursuant to the terms of 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, Inc., 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, Inc.'s equity subscription agreements. In addition, the bank facility is secured by upstream guarantees from Tritel, Inc. PCS's direct and indirect subsidiaries, both present and future, and a downstream guarantee from Tritel, Inc. The bank facility contains various covenants that restrict the ability of Tritel, Inc. 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 90 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. 91 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 noteholders, 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 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. 92 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; 93 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 noteholders 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. 94 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 noteholders will be the collection of these liquidated damages. All liquidated damages payable because a Registration Default occurred will be payable to the outstanding notesholders 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 noteholders 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 noteholders 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. 95 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 noteholders 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 noteholders. 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 noteholder 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 96 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 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 97 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 98 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. 99 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; 100 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 noteholders. 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; 101 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. 102 DESCRIPTION OF THE NOTES You can find the definitions of certain terms used in this description below 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 between Tritel PCS, the parent and subsidiary guarantors and The Bank of New York, as 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 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, Inc., 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, Inc., Tritel PCS and the Subsidiary Guarantors held 77.4% of Tritel, Inc.'s consolidated assets as of June 30, 1999. 103 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 June 30, 1999, Tritel PCS had $200.0 million of Senior Debt outstanding and non-guarantor Subsidiaries had $41.4 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. 104 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. 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, 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, will be automatically and unconditionally released and discharged from all of its obligations under its Guarantee. 105 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. 106 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. "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. 107 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 108 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 109 (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. 110 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: 111 (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 112 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; so long as, 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, 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 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, 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 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. 113 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, so long as 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. However, 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, so long as 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; 114 (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; (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; 115 (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, so long as 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; (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. However, 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, so long as 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: 116 (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. 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; 117 (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 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, so long as 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: 118 (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; (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, so long as 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. 119 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 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, 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's preferred stock to be less than $49.7 million. Tritel PCS will also cause Tritel, Inc. 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, so long as 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 120 (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 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 SEC, so long as any notes are outstanding, Tritel PCS will furnish to the Holders of notes, within the time periods specified in the SEC's rules and regulations: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC 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 SEC 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 SEC, Tritel PCS will 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. 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, Inc., for its reports so long as Tritel, Inc. is permitted under applicable rules, regulations and policies of the SEC to file such reports with the SEC 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; 121 (2) default in payment when due of the principal of, or premium, if any, on the notes; (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. 122 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 123 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. 124 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: 125 (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., 111 E. Capitol Street, Suite 500, Jackson, Mississippi 39201, 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 will be deposited on the Closing Date 126 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 127 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. 128 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. 129 "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 130 (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, 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. "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, so long as 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; 131 (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, 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 Restated Certificate of Incorporation of Tritel, Inc., 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, Inc.'s outstanding Voting Stock pursuant to the Restated 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 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 2/3% 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. 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 132 items to the extent included in computing Consolidated Net Income for such period: (a) the 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, so long as 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, so long as 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 133 (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. "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, Inc. or a sale by Tritel PCS of its Capital Stock, which is not Disqualified Stock, to Tritel, Inc. "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. 134 "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 135 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 136 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, Inc. 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, 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 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; 137 (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. "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, 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 are 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 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, so long as 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. 138 "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, Inc. as of the Issue Date, plus (b) irrevocable binding commitments to purchase Capital Stock, other than Disqualified Stock, of Tritel, Inc. existing as of the Issue Date, plus (c) the aggregate Net Proceeds received by Tritel PCS 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. 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. 139 DESCRIPTION OF CAPITAL STOCK The following summary of certain provisions of the capital stock of Tritel, Inc. 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, Inc., dated January 4, 1999 (the "Restated Certificate of Incorporation") and by the provisions of applicable law. GENERAL The authorized capital stock of Tritel, Inc., 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, Inc. 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, Inc.. The Series A Preferred Stock is redeemable, in whole but not in part, at the option of Tritel, Inc. 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, Inc., 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. 140 Tritel, Inc. 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, Inc.; o the Series B Preferred Stock is redeemable at any time at the option of Tritel, Inc.; o the Series B Preferred Stock may be issued by Tritel, Inc. 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, Inc. No Series B Preferred Stock has been issued by Tritel, Inc. 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, Inc.'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, Inc. Upon any liquidation, dissolution or winding up of Tritel, Inc., 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, Inc., 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, Inc. 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, Inc. 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, Inc. 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, 141 (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, Inc.'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 61/2% 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, Inc. 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, Inc.; o rights on liquidation, dissolution or winding up of Tritel, Inc. 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 662/3% or more of the Class A Common Stock, Tritel, Inc. 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; 142 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 662/3% or more of the Class A Common Stock, such conversion will be allowed by Tritel, Inc. at the option of the holders of the Tracked Common Stock. Tritel, Inc. 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, Inc.'s directors to Tritel, Inc. or its stockholders to the fullest extent permitted by the Delaware statute. Specifically, the directors of Tritel, Inc. 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, Inc. 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, Inc. and its stockholders. 143 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 144 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. 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. 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 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 145 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 would otherwise be required to withhold tax receives either (1) a statement (an "Owner's Statement") 146 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, o furnishes an incorrect taxpayer identification number, 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 taxpayer identification number 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 rules described above. The New Regulations attempt to unify certification requirements and modify 147 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" 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 applicable high yield discount obligations 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. 148 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 registered 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 and the guarantors of the notes 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. 149 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 June 30, 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 six month periods ended June 30, 1998 and 1999 (unaudited) and the period from July 27, 1995 (inception) to June 30, 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 six-month period ended June 30, 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 six month period ended June 30, 1999 (unaudited), the period from July 27, 1995 (inception) to June 30, 1999 (unaudited) .......................................................... F-6 Notes to Consolidated Financial Statements .......................................... F-9
In accordance with Securities and Exchange Commission Staff Accounting Bulletin 53, the financial statements of Tritel, Inc. and Predecessor Company are included herein. Tritel PCS, Inc. is a wholly-owned subsidiary of Tritel, Inc. and Tritel, Inc. fully and unconditionally guarantees the Senior Subordinated Discount Notes issued by Tritel PCS, Inc. Separate financial statements of Tritel PCS, Inc. and Subsidiary Guarantors are not included. However, condensed financial data for Tritel PCS, Inc. and Subsidiary Guarantors is included in Note 17 to the financial statements. The Subsidiary Guarantors are wholly-owned subsidiaries of Tritel, PCS, Inc. and their guarantees are on a full, unconditional, joint and several basis with other guarantor subsidiaries. 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 JUNE 30, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
DECEMBER 31, -------------------------- JUNE 30, 1997 1998 1999 ASSETS ----------- ------------ ------------ (UNAUDITED) Current assets: ................................................... Cash and cash equivalents ........................................ $ 1,763 846 390,305 Restricted cash .................................................. -- -- 2,796 Due from affiliates .............................................. 275 241 1,508 Prepaid expenses and other current assets ........................ 10 719 1,123 -------- --- ------- Total current assets ............................................ 2,048 1,806 395,732 Restricted cash ................................................... -- -- 5,161 Property and equipment, net ....................................... 13 13,816 60,686 FCC licensing costs ............................................... 99,425 71,466 158,893 Intangible assets, net of amortization of $1,753 in 1999 .......... -- -- 38,857 Deferred charges, net of amortization of $347 in 1997, $348 in 1998 and $775 in 1999 ................................................. 1,027 1,933 29,938 Note receivable ................................................... -- -- 7,550 Other assets ...................................................... -- -- 228 -------- ------ ------- Total assets .................................................... $102,513 89,021 697,045 ======== ====== ======= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Notes payable .................................................... $ 5,000 22,405 -- Accounts payable, accrued expenses and interest .................. 3,425 10,506 7,345 -------- ------ ------- Total current liabilities ....................................... 8,425 32,911 7,345 -------- ------ ------- Non-current liabilities: Long-term debt ................................................... 77,200 51,599 445,086 Note payable to related party .................................... 5,700 6,270 -- Accrued interest and dividends payable ........................... 2,426 224 4,347 Deferred credit -- vendor discount ............................... -- -- 15,000 Deferred income taxes ............................................ -- -- 28,064 -------- ------ ------- Total non-current liabilities ................................... 85,326 58,093 492,497 -------- ------ ------- Total liabilities ............................................... 93,751 91,004 499,842 -------- ------ ------- Series A 10% redeemable convertible preferred stock ............... -- -- 90,668 Adjustment to fair value .......................................... -- -- (21,559) -------- ------ ------- Total Series A redeemable preferred stock ....................... -- -- 69,109 -------- ------ ------- Stockholders' equity: Preferred stock, authorized 1,500,000 shares: Series C, outstanding 184,233 shares at June 30, 1999 ........... -- -- 183,165 Subscription receivable for Series C preferred stock ............ -- -- (49,746) Stock issuance costs ............................................ -- -- (8,507) -------- ------ ------- Total Series C preferred stock ................................. -- -- 124,912 -------- ------ ------- Series D, outstanding 46,374 shares at June 30, 1999 ............ -- -- 46,374 Adjustment to fair value ........................................ -- -- (11,278) -------- ------ ------- Total Series D preferred stock ................................. -- -- 35,096 -------- ------ ------- Net preferred stock ............................................ -- -- 160,008 -------- ------ ------- Common stock, 30 shares issued and outstanding at December 31, 1998 ............................................................. -- -- -- Common stock issued and outstanding at June 30, 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 -- Deficit accumulated during the development stage .................. (4,735) (15,480) (31,914) -------- ------- ------- Total stockholders' equity (deficit) ........................... 8,762 (1,983) 128,094 -------- ------- ------- Total liabilities and stockholders' equity ..................... $102,513 89,021 697,045 ======== ======= =======
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 SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
YEARS ENDED DECEMBER 31, ----------------------------------- 1996 1997 1998 ----------- ----------- ----------- Revenues ............................ $ -- -- -- -------- -- -- Operating expenses: Plant expenses ..................... 4 104 1,939 General and administrative ......... 1,481 3,123 4,947 Sales and marketing ................ 5 28 452 Depreciation and amortization ...... 2 20 348 -------- ----- ----- 1,492 3,275 7,686 -------- ----- ----- Operating loss ...................... (1,492) (3,275) (7,686) Interest income ..................... 31 121 77 Financing cost ...................... -- -- -- Interest expense .................... -- -- (722) -------- ------ ------ Loss before extraordinary item and income taxes ................ (1,461) (3,154) (8,331) Extraordinary item - Loss on return of spectrum ......... -- -- (2,414) -------- ------ ------ Loss before income taxes ......... (1,461) (3,154) (10,745) Income tax benefit .................. -- -- -- -------- ------ ------- Net loss ......................... $ (1,461) (3,154) (10,745) ======== ====== ======= CUMULATIVE AMOUNTS SINCE SIX-MONTHS CUMULATIVE INCEPTION ENDED AMOUNTS AT JUNE 30, SINCE INCEPTION, DECEMBER 31, ------------------------ AT JUNE 30, 1998 1998 1999 1999 -------------- ----------- ------------ ----------------- (UNAUDITED) (UNAUDITED) Revenues ............................ -- -- -- -- -- -- -- -- Operating expenses: Plant expenses ..................... 2,047 111 3,946 5,993 General and administrative ......... 9,672 1,616 7,204 16,876 Sales and marketing ................ 485 20 2,724 3,209 Depreciation and amortization ...... 370 13 2,398 2,768 ----- ----- ----- ------ 12,574 1,760 16,272 28,846 ------ ----- ------ ------ Operating loss ...................... (12,574) (1,760) (16,272) (28,846) Interest income ..................... 230 27 5,332 5,562 Financing cost ...................... -- -- (2,230) (2,230) Interest expense .................... (722) -- (5,104) (5,826) ------- ------ ------- ------- Loss before extraordinary item and income taxes ................ (13,066) (1,733) (18,274) (31,340) Extraordinary item - Loss on return of spectrum ......... (2,414) -- -- (2,414) ------- ------ ------- ------- Loss before income taxes ......... (15,480) (1,733) (18,274) (33,754) Income tax benefit .................. -- -- 6,036 6,036 ------- ------ ------- ------- Net loss ......................... (15,480) (1,733) (12,238) (27,718) ======= ====== ======= =======
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 SIX-MONTH PERIOD ENDED JUNE 30, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
PREFERRED PREFERRED STOCK STOCK PREFERRED ISSUANCE SUBSCRIPTION STOCK COSTS RECEIVABLE ----------- ----------- -------------- Balance at July 27, 1995 ................. $ -- -- -- Contributed capital, net of expenses of $25 ..................................... -- -- -- Conversion of debt to members' equity .................................. -- -- -- Net loss ................................. -- -- -- --------- -- -- Balance at December 31, 1995 ............. -- -- -- Contributed capital, net of expenses of $40 ..................................... -- -- -- Conversion of debt to members' equity .................................. -- -- -- Net loss ................................. -- -- -- --------- -- -- Balance at December 31, 1996 ............. -- -- -- Contributed capital, net of expenses of $148..................................... -- -- -- Conversion of debt to members' equity .................................. -- -- -- Net loss ................................. -- -- -- --------- -- -- Balance at December 31, 1997 ............. -- -- -- Net loss ................................. -- -- -- --------- -- -- Balance at December 31, 1998 ............. -- -- -- Unaudited: Conversion of debt to members' equity in Predecessor Company ......... -- -- -- Series C Preferred Stock issued to Predecessor Company, including distribution of assets and liabilities ........................... 17,193 -- -- Series C Preferred Stock issued in exchange for cash and receivable....... 163,370 -- (49,746) Payment of preferred stock issuance costs ................................. -- (8,507) -- Series C Preferred Stock issued to Central Alabama in exchange for net assets ............................ 2,602 -- -- Series D Preferred Stock issued to AT&T Wireless in exchange for licenses and other agreements ......... 46,374 -- -- Adjustment to fair value of Series D Preferred Stock ....................... (11,278) -- -- Accrual of dividends on Series A redeemable preferred stock ............. -- -- -- Accretion of discount on Series A redeemable preferred stock ............ -- -- -- Net loss ................................ -- -- -- --------- ------ ------- Balance at June 30, 1999 ................ $ 218,261 (8,507) (49,746) ========= ====== ======= DEFICIT ACCUMULATED MEMBERS' DURING AND COMMON CONTRIBUTED DEVELOPMENT STOCKHOLDERS' STOCK CAPITAL STAGE EQUITY -------- ------------- ------------- -------------- Balance at July 27, 1995 ................. -- -- -- -- Contributed capital, net of expenses of $25 ..................................... -- 1,150 -- 1,150 Conversion of debt to members' 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 members' 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 to members' equity .................................. -- 805 -- 805 Net loss ................................. -- -- (3,154) (3,154) -- ----- ------ ------ Balance at December 31, 1997 ............. -- 13,497 (4,735) 8,762 Net loss ................................. -- -- (10,745) (10,745) -- ------ ------- ------- Balance at December 31, 1998 ............. -- 13,497 (15,480) (1,983) Unaudited: Conversion of debt to members' equity in Predecessor Company ......... -- 8,976 -- 8,976 Series C Preferred Stock issued to Predecessor Company, including distribution of assets and liabilities ........................... -- (22,473) 576 (4,704) Series C Preferred Stock issued in exchange for cash and receivable....... -- -- -- 113,624 Payment of preferred stock issuance costs ................................. -- -- -- (8,507) Series C Preferred Stock issued to Central Alabama in exchange for net assets ............................ -- -- -- 2,602 Series D Preferred Stock issued to AT&T Wireless in exchange for licenses and other agreements ......... -- -- -- 46,374 Adjustment to fair value of Series D Preferred Stock ....................... -- -- -- (11,278) Accrual of dividends on Series A redeemable preferred stock ............. -- -- (4,347) (4,347) Accretion of discount on Series A redeemable preferred stock ............ -- -- (425) (425) Net loss ................................ -- -- (12,238) (12,238) -- ------- ------- ------- Balance at June 30, 1999 ................ -- -- (31,914) 128,094 == ======= ======= =======
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 SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UANUDITED) (AMOUNTS IN THOUSANDS)
YEARS ENDED 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 Deferred income taxes ............... -- -- -- 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 -- Purchase of trademark .................. -- -- -- 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) -------- -------- ------- (continued) CUMULATIVE CUMULATIVE AMOUNTS SIX-MONTHS AMOUNTS SINCE ENDED SINCE INCEPTION, JUNE 30, INCEPTION, AT DECEMBER 31, ------------------------- AT JUNE 30, 1998 1998 1999 1999 ----------------- ------------- ----------- ------------- (UNAUDITED) (UNAUDITED) Cash flows from operating activities: Net loss ............................... (15,480) (1,733) (12,238) (27,718) 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 13 2,398 2,768 Deferred income taxes ............... -- -- (6,036) (6,036) Changes in operating assets and liabilities: Due from affiliates ................ (241) 21 (190) (431) Accrued interest receivable ........ (24) (7) (336) (360) Other receivables .................. (168) -- (833) (1,001) Prepaid expenses ................... (185) -- (589) (774) Accounts payable and accrued expenses ................. 271 654 3,171 3,442 Other liabilities .................. -- -- 237 237 Due to affiliates .................. -- -- -- -- ------- -------- ------ ------- Net cash used in operating activities ...................... (13,043) (1,052) (14,416) (27,459) ------- -------- ------ ------- Cash flows from investing activities: Purchase of property and equipment (5,986) (11) (44,687) (50,673) 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 Purchase of trademark .................. -- -- (325) (325) Advance under note receivable .......... -- -- (7,550) (7,550) Capitalized interest on debt used to obtain licenses ...................... (4,644) -- (1,625) (6,269) Capitalized interest on network construction ......................... -- -- (4,271) (4,271) Capitalized direct costs incurred to obtain licenses ...................... (99) -- -- (99) ------- -------- ------- ------- Net cash used in investing activities ......................... (25,491) (11) (58,458) (83,949) ------- -------- ------- ------- (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 SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
YEARS ENDED DECEMBER 31, ---------------------------------- 1996 1997 1998 --------- ----------- ------------ 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 ............. -- -- -- Proceeds from senior subordinated discount notes ......................... -- -- -- Repayments of notes payable to related parties ........................ (100) (300) -- Repayments of notes payable .............. (625) (5,900) (21,300) Payment of preferred stock issuance costs .................................. -- -- -- Payment of debt issuance costs and other deferred charges ................. (20) (1,251) (951) Proceeds from vendor discount ............ -- -- -- Issuance of preferred stock .............. -- -- -- Capital contributions, net of related expenses ............................... 3,910 5,437 -- ----- ------ ------- Net cash provided by (used in) financing activities ................. 9,365 8,686 16,454 ----- ------ ------- Net increase (decrease) in restricted cash, cash and cash equivalents .......... (368) 1,731 (917) Restricted cash and cash equivalents at beginning of period ...................... 400 32 1,763 ----- ------ ------- Restricted cash and cash equivalents at end of period ............................ $ 32 1,763 846 ======= ====== ======= (continued) CUMULATIVE CUMULATIVE AMOUNTS SIX-MONTHS AMOUNTS SINCE ENDED SINCE INCEPTION, JUNE 30, INCEPTION, AT DECEMBER 31, ------------------------ AT JUNE 30, 1998 1998 1999 1999 ----------------- ----------- ------------ ----------- (UNAUDITED) (UNAUDITED) Cash flows from financing activities: Proceeds from notes payable to related parties ........................ 9,100 -- -- 9,100 Proceeds from notes payable .............. 50,230 500 -- 50,230 Proceeds from long-term debt ............. -- -- 200,000 200,000 Proceeds from senior subordinated discount notes ......................... -- -- 200,240 200,240 Repayments of notes payable to related parties ........................ (400) -- -- (400) Repayments of notes payable .............. (27,825) -- (22,100) (49,925) Payment of preferred stock issuance costs .................................. -- -- (8,507) (8,507) Payment of debt issuance costs and other deferred charges ................. (2,222) (641) (27,966) (30,188) Proceeds from vendor discount ............ -- -- 15,000 15,000 Issuance of preferred stock .............. -- -- 113,623 113,623 Capital contributions, net of related expenses ............................... 10,497 -- -- 10,497 ------- ---- ------- ------- Net cash provided by (used in) financing activities ................. 39,380 (141) 470,290 509,670 ------- ---- ------- ------- Net increase (decrease) in restricted cash, cash and cash equivalents .......... 846 (1,204) 397,416 398,262 Restricted cash and cash equivalents at beginning of period ...................... -- 1,763 846 -- ------- ------ ------- ------- Restricted cash and cash equivalents at end of period ............................ 846 559 398,262 398,262 ======= ====== ======= ======= (continued)
F-7 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 SIX MONTH PERIODS ENDED JUNE 30, 1998 AND 1999 (UNAUDITED) AND THE PERIOD FROM JULY 27, 1995 (INCEPTION) TO JUNE 30, 1999 (UNAUDITED) (AMOUNTS IN THOUSANDS)
CUMULATIVE CUMULATIVE AMOUNTS SIX-MONTHS AMOUNTS YEARS ENDED SINCE ENDED SINCE DECEMBER 31, INCEPTION, JUNE 30, INCEPTION, ---------------------------- AT DECEMBER 31, -------------------- AT JUNE 30, 1996 1997 1998 1998 1998 1999 1999 ---------- -------- -------- ----------------- -------- ----------- ----------- (UNAUDITED) (UNAUDITED) Supplementary Information: Cash paid for interest, net of amounts capitalized.................. $ -- -- -- -- -- 5,104 5,104 ======= ====== == ====== == ===== ====== 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 4,621 455 16,921 ======= ====== ===== ====== ===== === ====== 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 -- 8,976 11,976 ======= ====== ===== ====== ===== ===== ====== 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 ======= ====== ====== ====== ===== ====== ====== Preferred stock issued in exchange for assets and liabilities .................... $ -- -- -- -- -- 123,575 123,575 ======= ====== ====== ====== ===== ======= ======= Preferred stock issued in exchange for stock subscription receivable ............ $ -- -- -- -- -- 49,746 49,746 ======= ====== ====== ====== ===== ======= ======= Distribution of assets and liabilities to predecessor company ................ $ -- -- -- -- (4,704) (4,704) ======= ====== ====== ====== ===== ======= =======
See accompanying notes to consolidated financial statements F-8 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. Tritel's 1998 activities consisted of $1.5 million in capital expenditures and $32,000 in net loss. On January 7, 1999, the Predecessor Companies transferred substantially all of their assets and liabilities at historical cost to Tritel in exchange for 18,262 shares of Series C Preferred Stock in Tritel. Tritel is controlled by the controlling shareholders of the Predecessor Companies. Tritel will continue the activities of the Predecessor Companies 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. In exchange for the contributed assets, AT&T Wireless received 90,668 shares of Series A Preferred Stock and 46,374 shares of Series D Preferred Stock in Tritel with a stated value of $137,042,000. This transaction was accounted for as an asset acquisition 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 2,602 shares of Series C 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 14,130 shares of Series C Preferred Stock with a stated value of $14,130,000 to the Predecessor Companies in exchange for cash. Additionally, Tritel issued 149,239 shares of Series C Preferred Stock with a stated value of $149,239,000 to certain private investors in exchange for cash and stock subscriptions receivable. These transactions are further described in Note 18. F-9 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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. The January 7, 1999 stock transactions described above are summarized as follows:
STATED CARRYING SHARES VALUE AMOUNT ---------- ------------ --------- (AMOUNTS IN THOUSANDS) Series A Preferred issued to AT&T Wireless ......................... 90,668 $ 90,668 $ 68,684 Series D Preferred issued to AT&T Wireless ......................... 46,374 46,374 35,096 ------ -------- -------- Total to AT&T Wireless in exchange for contributed assets .......... 137,042 137,042 103,780 ------- -------- -------- Series C Preferred issued to Airwave Communications ................ 14,427 14,427 10,973 Series C Preferred issued to Digital PCS ........................... 3,835 3,835 6,220 ------- -------- -------- Total to Predecessor Companies in exchange for contributed assets... 18,262 18,262 17,193 ------- -------- -------- Series C Preferred issued to Central Alabama Partnership ........... 2,602 2,602 2,602 Series C Preferred issued to Predecessor Companies for cash ........ 14,130 14,130 14,130 Series C Preferred issued to certain private investors ............. 149,239 149,239 149,239 ------- -------- -------- Total .............................................................. 321,275 $321,275 $286,944 ======= ======== ========
(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 F-10 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 June 30, 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. 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) RECENTLY ISSUED ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information ("FAS 131"). FAS 131 requires that a public business enterprise report financial and descriptive information about its reportable operating segments. The statement defines operating segments as components of enterprises about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company adopted SFAS 131 and determined that there are no separate reportable segments, as defined by the standard. F-11 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities ("FAS 133"). FAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. FAS 133 will significantly change the accounting treatment of derivative instruments and, depending upon the underlying risk management strategy, these accounting changes could affect future earnings, assets, liabilities, and shareholders' equity. The Company is closely monitoring the deliberations of the FASB's derivative implementation task force. With the issuance of Statement of Financial Accounting Standards No. 137, Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133, which delayed the effective date of FAS 133, the Company will be required to adopt FAS 133 on January 1, 2001. Presently, the Company has not yet quantified the impact that the adoption will have on its consolidated financial statements. (I) INTERIM FINANCIAL STATEMENTS The unaudited condensed consolidated financial statements of the Company as of June 30, 1999 and for the six-month periods ended June 30, 1998 and 1999 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements presented in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the condensed consolidated interim financial statements include all adjustments, consisting of normal recurring items, necessary to fairly present the results of operations, financial position and cash flows for the periods presented. The results of operations for an interim period are not necessarily indicative of the results of operations that may be expected for the complete fiscal year. (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. F-12 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, 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. During May 1999, the Company obtained high yield debt in amounts necessary to cover additional planned cash needs. There can be no assurance that such funds will be adequate to complete the buildout of the Company's PCS network. Under those circumstances, the Company could be required to change its plans relating to the buildout of the network. (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 $7,957,000 at June 30, 1999 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, ---------------------- JUNE 30, 1997 1998 1999 --------- ---------- ------------ (UNAUDITED) (DOLLARS IN THOUSANDS) Furniture and fixtures ....................... $17 1,779 3,695 Network construction and development ......... -- 11,416 45,117 Leasehold improvements ....................... -- 728 3,676 ---- ------ ------ 17 13,923 52,488 Less accumulated depreciation ................ (4) (107) (782) Deposits on equipment ........................ -- -- 8,980 ----- ------ ------ $13 13,816 60,686 ===== ====== ======
(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 $59,799,000 and $30,676,000, respectively. F-13 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 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 June 30, 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. F-14 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (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. 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 $10,416,000 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 June 30, 1999, the following is a schedule of future minimum principal payments of the Company's FCC debt due within five years and thereafter: F-15 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.)
DECEMBER 31, 1998 JUNE 30, 1999 ------------------------ ----------------------- (DOLLARS IN THOUSANDS) (UNAUDITED) (DOLLARS IN THOUSANDS) December 31, 1999 ............ $ -- June 30, 2000 .......... $ 443 December 31, 2000 ............ 2,494 June 30, 2001 .......... 974 December 31, 2001 ............ 2,975 June 30, 2002 .......... 1,035 December 31, 2002 ............ 3,162 June 30, 2003 .......... 5,296 December 31, 2003 ............ 10,535 June 30, 2004 .......... 10,010 Thereafter ................... 40,946 Thereafter ............. 29,717 -------- -------- 60,112 47,475 Less unamortized discount (8,513) (6,045) -------- -------- Total ....................... $ 51,599 $ 41,430 ======== ========
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 June 30, 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 Predecessor 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 Predecessor 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 F-16 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) paid but instead was converted into $8,976,000 of members' equity in the Predecessor Company on January 7, 1999. The $2,230,000 preferred return to the investor was accounted for as a financing cost during the period ended June 30, 1999. The interest accrued at the contractual rate was capitalized during the accrual period. Subsequent to the conversion of debt into members' equity and as described in Note 1(a), the Predecessor Company transferred certain assets and liabilities to Tritel in exchange for preferred stock in Tritel. (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. 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 F-17 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) divided by the total number of shares of Series C Preferred Stock held by that stockholder plus (2) declared but unpaid dividends on the Series C Preferred Stock, if any, plus (3) an amount equal to interest on the invested amount at the rate of 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. The number of shares the holder will receive upon conversion will be determined by dividing the aforementioned liquidation preference by the conversion price in effect at the time of conversion. The conversion price currently in effect is $1,000. 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. The Company also issued 14,130 shares of Series C Preferred Stock with a stated value of $14,130,000 to the Predecessor Company on January 7, 1999 in exchange for cash of $14,130,000. In the same transaction, the Company also issued 149,239 shares of Series C Preferred Stock with a stated value of $149,239,000 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; F-18 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 fair 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"), 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 F-19 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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. (11) INCOME TAXES On January 7, 1999 the Company recorded a deferred tax liability of $34,100,000 primarily related to the difference in asset bases on the assets acquired from AT&T Wireless. Because the Predecessor Company was a nontaxable entity, the results presented below relate solely to the six-month period ended June 30, 1999. Components of income tax benefit for the six-month period ended June 30, 1999 are as follows:
SIX MONTHS ENDED JUNE 30, 1999 ------------------------------------ CURRENT DEFERRED TOTAL --------- ---------- ----------- (UNAUDITED) (DOLLARS IN THOUSANDS) Federal ............. $ -- (5,234) (5,234) State ............... -- (802) (802) -------- ------ ------ $ -- (6,036) (6,036) ======== ====== ======
F-20 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) Actual tax expense differs from the "expected" tax benefit using the federal corporate rate of 35% as follows:
JUNE 30, 1999 ----------------------- (UNAUDITED) (DOLLARS IN THOUSANDS) Computed "expected" tax benefit ................................ $ (6,396) Reduction (increase) resulting from: State income taxes, net of federal income tax benefit ......... (594) Nontaxable loss of Predecessor Company ........................ 954 --------- $ (6,036) =========
The tax effects of temporary differences that give rise to significant portions of the deferred tax liability at June 30, 1999 are as follows:
JUNE 30, 1999 ----------------------- (UNAUDITED) (DOLLARS IN THOUSANDS) Deferred tax assets: Net operating loss carryforward .................................. $ 4,138 Tax basis of capitalized start-up costs in excess of book basis .. 12,206 Discount accretion in excess of tax basis ........................ 1,306 -------- Total gross deferred tax assets ................................ 17,650 -------- Deferred tax liabilities: Intangible assets book basis in excess of tax basis .............. 15,122 FCC licenses book basis in excess of tax basis ................... 20,212 Capitalized interest book basis in excess of tax basis ........... 7,694 Discount accretion book basis in excess of tax basis ............. 2,309 Other ............................................................ 377 -------- Total gross deferred tax liabilities ........................... 45,714 -------- Net deferred tax liability ..................................... $ 28,064 ========
At June 30, 1999, the Company has net operating loss carryforwards for federal income tax purposes of $10,277,000 which are available to offset future federal taxable income, if any, through 2019. There was no valuation allowance for the gross deferred tax asset at June 30, 1999, principally due to the existence of a deferred tax liability which was recorded upon the closing of the AT&T Wireless transaction on January 7, 1999. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considered the scheduled reversal of deferred tax liabilities in making this assessment. Based upon anticipated future taxable income over the periods in which the deferred tax assets are realizable, management believes it is more likely than not the Company will realize the benefits of these deferred tax assets. F-21 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) (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 1995, the Predecessor Company had a notes payable agreement with Mercury Southern, LLC, a member of the Predecessor Company, whereby Mercury Southern, LLC loaned the Predecessor Company $3,000,000. During 1995, 1996 and 1997, the notes payable converted to members' equity at the face amount of the principal. As of December 31, 1997, this note was fully converted to members' equity. 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. 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. F-22 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 at June 30, 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 $17,367,000, 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. The Predecessor Company is holding such assets and liabilities but is not currently developing the PCS markets. Of the assets retained by the Predecessor Company, Tritel was granted an option to acquire certain PCS licenses for 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. During May 1999, Tritel notified the Predecessor Company of its intent to exercise this option. Such licenses will be transferred to Tritel after approval by the FCC. Tritel has committed to grant an option to AT&T Wireless or its designee for the purchase of such licenses. (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 $14,000 and $1,519,000 for the six month periods ended June 30, 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. F-23 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 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 F-24 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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) SENIOR SUBORDINATED DISCOUNT NOTES On May 11, 1999, Tritel PCS, Inc. ("Tritel PCS"), a wholly-owned subsidiary of the Company, issued unsecured senior subordinated discount notes with a principal amount at maturity of $372,000,000. Such notes were issued at a discount from their principal amount at maturity for proceeds of $200.2 million. No interest will be paid or accrued on the notes prior to May 15, 2004. Thereafter, Tritel PCS will be required to pay interest semiannually at 12 3/4% per annum beginning on November 15, 2004 until maturity of the notes on May 15, 2009. The notes are unconditionally guaranteed on a joint and several basis by the Company and by Tritel Communications, Inc. and Tritel Finance, Inc., both of which are wholly-owned subsidiaries of Tritel PCS. The notes are subordinated in right of payment to amounts outstanding under the Company's $550 million senior bank facility ("Bank Facility") and to any future subordinated indebtedness of Tritel PCS or the guarantors. Tritel PCS entered into a registration rights agreement with the initial purchasers of the notes whereby Tritel PCS agreed to file a registration statement with the SEC to register the notes within 60 days after the issue date of the notes. The indenture governing the notes limit, among other things, the Company's ability to incur additional indebtedness, pay dividends, sell or exchange assets, repurchase its stock, or make investments. The following condensed consolidating financial statements as of and for the six-month period ended June 30, 1999 are presented for Tritel, Tritel PCS, those subsidiaries of Tritel PCS who serve as guarantors and those subsidiaries who do not serve as guarantors of the senior subordinated discount notes. F-25 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) CONDENSED CONSOLIDATING BALANCE SHEET AS OF JUNE 30, 1999
TRITEL GUARANTOR TRITEL, INC. PCS, INC. SUBSIDIARIES -------------- ----------- -------------- (AMOUNTS IN THOUSANDS) Current assets: Cash and cash equivalents ..................... $ 0 388,526 4,575 Other current assets .......................... 1,324 21 1,286 Intercompany receivables ...................... 695 75,071 5,401 --------- ------- ----- Total current assets ......................... 2,019 463,618 11,262 Restricted cash ................................ 0 5,161 0 Property and equipment, net .................... 0 0 60,686 Licenses and other intangibles ................. 38,857 0 0 Deferred charges ............................... 0 29,938 0 Notes receivable ............................... 0 7,500 50 Investment in subsidiaries ..................... 175,655 92,369 0 Other long-term assets ......................... 0 228 0 --------- ------- ------ Total assets ................................. $ 216,531 598,814 71,998 ========= ======= ====== Current liabilities: Accounts payable, accrued expenses and other current liabilities .................... $ 0 1,103 5,183 Intercompany payables ......................... 823 3,390 75,071 --------- ------- ------ Total current liabilities .................... 823 4,493 80,254 Non-current liabilities: Long-term debt ................................ 0 403,656 0 Accrued interest and dividends payable ........ 4,347 0 0 Deferred credit ............................... 0 15,000 0 Deferred income taxes ......................... 14,158 10 (5,504) --------- ------- ------ Total liabilities ............................ 19,328 423,159 74,750 --------- ------- ------ Series A redeemable convertible preferred stock ......................................... 90,668 0 0 Adjustment to fair value ....................... (21,559) 0 0 --------- ------- ------ 69,109 0 0 --------- ------- ------ Stockholders' equity ........................... 128,094 175,655 (2,752) --------- ------- ------ Total liabilities and equity ................. $ 216,531 598,814 71,998 ========= ======= ====== NON-GUARANTOR SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------------- -------------- ------------- (AMOUNTS IN THOUSANDS) Current assets: Cash and cash equivalents ..................... 0 0 393,101 Other current assets .......................... 0 0 2,631 Intercompany receivables ...................... 0 (81,167) 0 - ------- ------- Total current assets ......................... 0 (81,167) 395,732 Restricted cash ................................ 0 0 5,161 Property and equipment, net .................... 0 0 60,686 Licenses and other intangibles ................. 158,893 0 197,750 Deferred charges ............................... 0 0 29,938 Notes receivable ............................... 0 0 7,550 Investment in subsidiaries ..................... 0 (268,024) 0 Other long-term assets ......................... 0 0 228 ------- -------- ------- Total assets ................................. 158,893 (349,191) 697,045 ======= ======== ======= Current liabilities: Accounts payable, accrued expenses and other current liabilities .................... 1,059 0 7,345 Intercompany payables ......................... 1,883 (81,167) 0 ------- -------- ------- Total current liabilities .................... 2,942 (81,167) 7,345 Non-current liabilities: Long-term debt ................................ 41,430 0 445,086 Accrued interest and dividends payable ........ 0 0 4,347 Deferred credit ............................... 0 0 15,000 Deferred income taxes ......................... 19,400 0 28,064 ------- -------- ------- Total liabilities ............................ 63,772 (81,167) 499,842 ------- -------- ------- Series A redeemable convertible preferred stock ......................................... 0 0 90,668 Adjustment to fair value ....................... 0 0 (21,559) ------- -------- ------- 0 0 69,109 ------- -------- ------- Stockholders' equity ........................... 95,121 (268,024) 128,094 ------- -------- ------- Total liabilities and equity ................. 158,893 (349,191) 697,045 ======= ======== =======
F-26 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE SIX-MONTHS ENDED JUNE 30, 1999
TRITEL GUARANTOR TRITEL, INC. PCS, INC. SUBSIDIARIES -------------- ----------- -------------- (AMOUNTS IN THOUSANDS) Revenues ................................... $ 0 0 0 -------- - - Operating expenses: Plant expenses ............................ 0 0 3,946 General and administrative ................ 2 44 7,156 Sales and marketing ....................... 0 0 2,724 Depreciation and amortization ............. 1,753 0 645 -------- -- ----- 1,755 44 14,471 -------- -- ------ Operating loss ............................. (1,755) (44) (14,471) Interest income ............................ 77 5,174 81 Financing cost ............................. 0 0 (2,230) Interest expense ........................... 0 (5,104) 0 -------- ----- ------- Income (loss) before income taxes ......... (1,678) 26 (16,620) Income tax benefit (expenses) .............. 542 (10) 5,504 -------- ------ ------- Net income (loss) .......................... $ (1,136) 16 (11,116) ======== ====== ======= NON-GUARANTOR SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------------- -------------- ------------- (AMOUNTS IN THOUSANDS) Revenues ................................... 0 0 0 - ---- - Operating expenses: Plant expenses ............................ 0 0 3,946 General and administrative ................ 2 0 7,204 Sales and marketing ....................... 0 0 2,724 Depreciation and amortization ............. 0 0 2,398 - ---- ----- 2 0 16,272 - ---- ------ Operating loss ............................. (2) 0 (16,272) Interest income ............................ 0 0 5,332 Financing cost ............................. 0 0 (2,230) Interest expense ........................... 0 0 (5,104) --- ---- ------- Income (loss) before income taxes ......... (2) 0 (18,274) Income tax benefit (expenses) .............. 0 0 6,036 --- ---- ------- Net income (loss) .......................... (2) 0 (12,238) ==== ==== =======
F-27 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE SIX-MONTHS ENDED JUNE 30, 1999
TRITEL GUARANTOR TRITEL, INC. PCS, INC. SUBSIDIARIES -------------- ----------- -------------- (AMOUNTS IN THOUSANDS) Net cash provided by (used in) operating activities ........................................ $ (94) 880 (14,946) ---------- ----- ------- Cash flows from investing activities: Capital expenditures .............................. 0 0 (44,687) Purchase of a trademark ........................... (325) 0 0 Advance under notes receivable .................... 0 (7,500) (50) Investment in subsidiaries ........................ (69,386) 69,386 0 Capitalized interest on debt used to obtain licenses ......................................... 0 0 0 Capitalized interest on network construction....... 0 0 (4,271) ---------- ------ ------- Net cash provided by (used in) investing activities ........................................ (69,711) 61,886 (49,008) ---------- ------ ------- Cash flows from financing activities: Proceeds from long term debt ...................... 0 200,000 0 Proceeds from senior subordinated debt ............ 0 200,240 0 Repayments of notes payable ....................... (22,100) 0 0 Payment of debt issuance costs & other deferred charges ................................. (22,198) (14,275) 0 Intercompany receivable/payable ................... 480 (70,044) 67,683 Proceeds from vendor discount ..................... 0 15,000 0 Issuance of preferred stock ....................... 113,623 0 0 ---------- ------- ------- Net cash provided by financing activities .......... 69,805 330,921 67,683 ---------- ------- ------- Net increase (decrease) in restricted cash, cash and cash equivalents .............................. 0 393,687 3,729 Restricted cash, cash and cash equivalents at beginning of period ............................... 0 0 846 ---------- ------- ------- Restricted cash, cash and cash equivalents at end of period ..................................... $ 0 393,687 4,575 ========== ======= ======= NON-GUARANTOR SUBSIDIARIES ELIMINATIONS CONSOLIDATED -------------- -------------- ------------- (AMOUNTS IN THOUSANDS) Net cash provided by (used in) operating activities ........................................ (256) 0 (14,406) ---- ----- ------ Cash flows from investing activities: Capital expenditures .............................. 0 0 (44,687) Purchase of a trademark ........................... 0 0 (325) Advance under notes receivable .................... 0 0 (7,550) Investment in subsidiaries ........................ 0 0 0 Capitalized interest on debt used to obtain licenses ......................................... (1,625) 0 (1,625) Capitalized interest on network construction....... 0 0 (4,271) ------ ----- ------- Net cash provided by (used in) investing activities ........................................ (1,625) 0 (58,458) ------ ----- ------- Cash flows from financing activities: Proceeds from long term debt ...................... 0 0 200,000 Proceeds from senior subordinated debt ............ 0 0 200,240 Repayments of notes payable ....................... 0 0 (22,100) Payment of debt issuance costs & other deferred charges ................................. 0 0 (36,473) Intercompany receivable/payable ................... 1,881 0 0 Proceeds from vendor discount ..................... 0 0 15,000 Issuance of preferred stock ....................... 0 0 113,623 ------ ----- ------- Net cash provided by financing activities .......... 1,881 0 470,290 ------ ----- ------- Net increase (decrease) in restricted cash, cash and cash equivalents .............................. 0 0 397,416 Restricted cash, cash and cash equivalents at beginning of period ............................... 0 0 846 ------ ----- ------- Restricted cash, cash and cash equivalents at end of period ..................................... 0 0 398,262 ====== ===== =======
As of December 31, 1998, Tritel PCS held assets totaling $1.5 million and the Predecessor Companies held assets totaling $87.5 million. Consolidating schedules for those entities for 1998 and prior periods would provide no meaningful data since the assets of the Predecessor Companies and Tritel, Inc. have been distributed among the subsidiaries of Tritel, Inc. during 1999 and their ownership in prior periods, as well as the corporate structure, does not correspond with the current circumstances. (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 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 F-28 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 estimated fair value of the FCC licenses was $97,880,000 with an estimated useful life of 40 years. The following table summarizes the transaction with AT&T Wireless: Assets acquired from AT&T Wireless, at fair value: PCS Licenses ......................................................... $ 97,880,000 License Agreement .................................................... 31,000,000 Roaming Agreement .................................................... 10,000,000 ------------- Gross Assets Acquired .............................................. 138,880,000 Deferred income tax liability assumed relating to above assets ........ (35,100,000) ------------- Net Assets Acquired ................................................ $ 103,780,000 ------------- Series A Preferred stock issued to AT&T Wireless ...................... $ 68,684,000 Series D Preferred stock issued to AT&T Wireless ...................... 35,096,000 ------------- $ 103,780,000 =============
The Series A and Series D Preferred Stock were recorded at a discount from their stated value for the excess of the stated value of the stock over the fair value of the net assets acquired. The Series A Preferred Stock issued by the Company is further described in Note 22 and the Series D Preferred Stock is further described in Note 10. 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 F-29 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 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 an estimated fair value of $31,000,000 and will be amortized on a straight-line basis over the ten-year term of the agreement. (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 F-30 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 estimated fair value of the Roaming Agreement is $10,000,000, which will be amortized on a straight-line basis over the 20-year term of the agreement. (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. F-31 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 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. F-32 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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
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). Such interest rate hedging contracts are further described in Note 23. 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 F-33 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 June 30, 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. 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 June 30, 1999, 11,395 restricted 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. F-34 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) 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 June 30, 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. The number of shares the holder will receive upon conversion will be the liquidation preference per share divided by the market price of Class A Common Stock times the number of shares of Series A Preferred Stock to be converted. 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 fair value of assets, net of deferred income taxes, received from AT&T Wireless. The discount will be accreted using the interest method, so that the carrying amount will equal the redemption amount on January 15, 2019. Each periodic accretion to increase the carrying amount of the stock will be offset by a charge to accumulated deficit. 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. (23) INTEREST RATE SWAP AGREEMENTS Interest rate swap agreements are entered into by the Company to manage interest rate exposure. These are contractual agreements between counterparties to exchange interest streams based on F-35 TRITEL, INC. AND PREDECESSOR COMPANIES (DEVELOPMENT STAGE COMPANIES) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ALL INFORMATION SUBSEQUENT TO DECEMBER 31, 1998 IS UNAUDITED.) notional principal amounts over a set period of time. Interest rate swap agreements normally involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. The notional or principal amount does not represent the amount at risk, but is used only as a basis for determining the actual interest cash flows to be exchanged related to the interest rate contracts. Market risk, due to potential fluctuations in interest rates, is inherent in swap agreements. As of June 30, 1999, the Company was a party to interest rate swap agreements with a total notional amount of $200 million. The agreements establish a fixed effective rate of 9.05% on the current balance outstanding under the Bank Facility through the earlier of March 31, 2002 or the date on which the Company achieves operating cash flow breakeven. F-36 The map on the opposite page is not intended to be an exact representation of Tritel PCS's wireless service area. [inside back cover] [map of Tritel PCS's wireless service footprint] [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 12 3/4% 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. 10.1.1 Stockholders' Agreement by and among AT&T Wireless PCS Inc., Cash Equity Investors, Management Stockholders, and Tritel, Inc. dated January 7, 1999. 10.1.2 First Amendment to Stockholders' Agreement dated August 27, 1999. 10.2 Investors Stockholders' Agreement by and among Tritel, Inc., Washington National Insurance Company, United Presidential Life Insurance Company, Dresdner Kleinwort Benson Private Equity Partners LP, Toronto Dominion Investments, Inc., Entergy Wireless Corporation, General Electric Capital Corporation, Triune PCS, LLC, FCA Venture Partners II, L.P., Clayton Associates LLC, Trillium PCS, LLC, Airwave Communications, LLC, Digital PCS, LLC, and The Stockholders Named Herein dated January 7, 1999. 10.3 AT&T Wireless Services Network Membership License Agreement between AT&T Corp. and Tritel, Inc. dated January 7, 1999. 10.4 Intercarrier Roamer Service Agreement between AT&T Wireless Services, Inc. and Tritel, Inc. dated January 7, 1999. 10.5 Amended and Restated Agreement between Telecorp Communications, Inc., Triton PCS, Inc., Tritel Communications, Inc. and Affiliate License Co., L.L.C. dated April 16, 1999. 10.6 Form of Employment Agreement. 10.7 Tritel, Inc. 1999 Stock Option Plan, effective January 7, 1999. 10.8 Form of Restricted Stock Agreements pursuant to the Tritel, Inc. 1999 Stock Option Plan. 10.9 Tritel Inc. 1999 Stock Option Plan for Nonemployee Directors, effective January 7, 1999. 10.10 Amended and Restated Loan Agreement among Tritel Holding Corp., Tritel, Inc., The Financial Institutions Signatory Hereto, and Toronto Dominion (Texas), Inc. dated March 31, 1999. 10.11 First Amendment to Amended and Restated Loan Agreement among Tritel Holding Corp., Tritel, Inc., The Financial Institutions Signatory Hereto, and Toronto Dominion (Texas), Inc. dated April 21, 1999. 10.12 Master Lease Agreement between Tritel Communications, Inc. and Crown Communication Inc. dated October 30, 1998. 10.13 Master Lease Agreement between Signal One, LLC and Tritel Communications, Inc. dated December 31, 1998. 10.14 Management Agreement between Tritel Management, LLC and Tritel, Inc. dated January 1, 1999. 10.15 Master Antenna Site Lease No. D41 between Pinnacle Towers Inc. and Tritel Communications, Inc. dated October 23, 1998. 10.16 Security Agreement between Mercury PCS LLC and the Federal Communications Commission, dated September 17, 1996.
II-4
EXHIBIT NUMBER EXHIBIT DESCRIPTION - ---------- ------------------------------------------------------------------------------------------ 10.17 Installment Payment Plan Note made by Mercury PCS, LLC in favor of the Federal Communications Commission in the amount of $42,525,211.95, dated October 9, 1996. 10.18 First Modification of Installment Payment Plan Note for Broadband PCS F Block by and between Mercury PCS II, L.L.C. and the Federal Communications Commission, dated July 2, 1998, effective as of July 31, 1998. 10.19 Letter Agreement by and between Tritel Communications, Inc. and Wireless Facilities, Inc., dated July 28, 1998, referring to service agreements covering certain RF Engineering Services applicable to certain FCC licenses currently owned or to be acquired by Tritel.* 10.20 Letter Agreement by and between Tritel Communications, Inc. and H.S.I. GeoTrans Wireless, dated July 2, 1998, referring to a service agreement covering certain Site Acquisition Services applicable to certain FCC licenses owned or to be acquired by Tritel. 10.21 Services Agreement by and between Tritel Communications, Inc. and Galaxy Personal Communications Services, Inc., which is a wholly owned subsidiary of World Access, Inc., dated as of June 1, 1998. 10.22 Services Agreement by and between Tritel Communications, Inc. and Galaxy Personal Communications Services, Inc., which is a wholly-owned subsidiary of World Access, Inc., dated as of August 27, 1998. 10.23 Agreement by and between BellSouth Telecommunications, Inc. and Tritel Communications, Inc., effective as of March 16, 1999. 10.24 Agreement for Project and Construction Management Services between Tritel Communications, Inc. and Tritel Finance, Inc. and Bechtel Corporation, dated November 24, 1998. 10.25 Services Agreement by and between Tritel Communications, Inc. and Spectrasite Communications, Inc., dated as of July 28, 1998. 10.26 Acquisition Agreement Ericsson CMS 8800 Cellular Mobile Telephone System by and between Tritel Finance, Inc. and Tritel Communications, Inc. and Ericsson Inc., made and effective as of December 30, 1998. 10.27 Securities Purchase Agreement by and among AT&T Wireless PCS Inc., TWR Cellular, Inc., Cash Equity Investors, Mercury PCS, LLC, Mercury PCS II, LLC, Management Stockholders and Tritel, Inc., dated as of May 20, 1998. 10.28 Closing Agreement by and among AT&T Wireless PCS, Inc., TWR Cellular, Inc., Cash Equity Investors, Airwave Communications, LLC, Digital PCS, LLC, Management Stockholders, Mercury Investor Indemnitors and Tritel, Inc., dated as of January 7, 1999. 10.29 Master Build To Suit And Lease Agreement between Tritel Communications, Inc., a Delaware corporation and American Tower, L.P., a Delaware limited partnership.* 10.30 Master Build To Suit And Lease Agreement between Tritel Communications, Inc. and SpectraSite Communications, Inc.* 10.31 Master Build To Suit Services And License Agreement between Tritel Communications, Inc. and Crown Communication Inc.* 10.32 Master Build To Suit And Lease Agreement by and between Tritel Communications, Inc. and SBA Towers, Inc.*
II-5
EXHIBIT NUMBER EXHIBIT DESCRIPTION - --------- -------------------------------------------------------------------------------------- 10.33 Master Lease Agreement between Tritel Communications, Inc. and BellSouth I.* 10.34 Master Lease Agreement between Tritel Communications, Inc. and BellSouth II.* 10.35 Consent to Exercise of Option between Tritel, Inc., AT&T Wireless PCS, Inc., TWR Cellular, Inc. and Management Stockholders dated May 20, 1999. 10.36 License Purchase Agreement between Digital PCS, LLC and Tritel, Inc. dated as of May 20, 1999. 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 KPMG Peat Marwick LLP. 24+ Powers of Attorney (included on the signature page of the initial filing 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.
- ---------- + Previously filed. * 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. II-6 (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 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-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this amendment to the 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 September 9, 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 Pursuant to the requirements of the Securities Act of 1933, as amended, this amendment to the registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE - --------------------------- ----------------------------------------------- ------------------ * - ------------------------- Chairman of the Board, Chief Executive Officer William M. Mounger, II and President September 9, 1999 /s/ E.B. Martin, Jr. Executive Vice President, Treasurer, Chief - ------------------------- Financial Officer and Director September 9, 1999 E.B. Martin, Jr. * Senior Vice President -- Finance (Principal - ------------------------- Accounting Officer) September 9, 1999 Karlen Turbeville
* By: /s/ E.B. Martin, Jr. ---------------------------- E.B. Martin, Jr. Attorney-in-Fact II-8 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 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). 4.4+ Form of Note for 12 3/4% 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. 10.1.1 Stockholders' Agreement by and among AT&T Wireless PCS Inc., Cash Equity Investors, Management Stockholders, and Tritel, Inc. dated January 7, 1999. 10.1.2 First Amendment to Stockholders' Agreement dated August 27, 1999. 10.2 Investors Stockholders' Agreement by and among Tritel, Inc., Washington National Insurance Company, United Presidential Life Insurance Company, Dresdner Kleinwort Benson Private Equity Partners LP, Toronto Dominion Investments, Inc., Entergy Wireless Corporation, General Electric Capital Corporation, Triune PCS, LLC, FCA Venture Partners II, L.P., Clayton Associates LLC, Trillium PCS, LLC, Airwave Communications, LLC, Digital PCS, LLC, and The Stockholders Named Herein dated January 7, 1999 10.3 AT&T Wireless Services Network Membership License Agreement between AT&T Corp. and Tritel, Inc. dated January 7, 1999. 10.4 Intercarrier Roamer Service Agreement between AT&T Wireless Services, Inc. and Tritel, Inc. dated January 7, 1999. 10.5 Amended and Restated Agreement between Telecorp Communications, Inc., Triton PCS, Inc., Tritel Communications, Inc. and Affiliate License Co., L.L.C. dated April 16, 1999. 10.6 Form of Employment Agreement. 10.7 Tritel, Inc. 1999 Stock Option Plan, effective January 7, 1999. 10.8 Form of Restricted Stock Agreements pursuant to the Tritel, Inc. 1999 Stock Option Plan.
EXHIBIT NUMBER EXHIBIT DESCRIPTION PAGE - --------- -------------------------------------------------------------------------------- ----- 10.9 Tritel Inc. 1999 Stock Option Plan for Nonemployee Directors, effective January 7, 1999. 10.10 Amended and Restated Loan Agreement among Tritel Holding Corp., Tritel, Inc., The Financial Institutions Signatory Hereto, and Toronto Dominion (Texas), Inc. dated March 31, 1999. 10.11 First Amendment to Amended and Restated Loan Agreement among Tritel Holding Corp., Tritel, Inc., The Financial Institutions Signatory Hereto, and Toronto Dominion (Texas), Inc. dated April 21, 1999. 10.12 Master Lease Agreement between Tritel Communications, Inc. and Crown Communication Inc. dated October 30, 1998. 10.13 Master Lease Agreement between Signal One, LLC and Tritel Communications, Inc. dated December 31, 1998. 10.14 Management Agreement between Tritel Management, LLC and Tritel, Inc. dated January 1, 1999. 10.15 Master Antenna Site Lease No. D41 between Pinnacle Towers Inc. and Tritel Communications, Inc. dated October 23, 1998. 10.16 Security Agreement between Mercury PCS LLC and the Federal Communications Commission, dated September 17, 1996. 10.17 Installment Payment Plan Note made by Mercury PCS, LLC in favor of the Federal Communications Commission in the amount of $42,525,211.95, dated October 9, 1996. 10.18 First Modification of Installment Payment Plan Note for Broadband PCS F Block by and between Mercury PCS II, L.L.C. and the Federal Communications Commission, dated July 2, 1998, effective as of July 31, 1998. 10.19 Letter Agreement by and between Tritel Communications, Inc. and Wireless Facilities, Inc., dated July 28, 1998, referring to service agreements covering certain RF Engineering Services applicable to certain FCC licenses currently owned or to be acquired by Tritel.* 10.20 Letter Agreement by and between Tritel Communications, Inc. and H.S.I. GeoTrans Wireless, dated July 2, 1998, referring to a service agreement covering certain Site Acquisition Services applicable to certain FCC licenses owned or to be acquired by Tritel. 10.21 Services Agreement by and between Tritel Communications, Inc. and Galaxy Personal Communications Services, Inc., which is a wholly owned subsidiary of World Access, Inc., dated as of June 1, 1998. 10.22 Services Agreement by and between Tritel Communications, Inc. and Galaxy Personal Communications Services, Inc., which is a wholly-owned subsidiary of World Access, Inc., dated as of August 27, 1998. 10.23 Agreement by and between BellSouth Telecommunications, Inc. and Tritel Communications, Inc., effective as of March 16, 1999. 10.24 Agreement for Project and Construction Management Services between Tritel Communications, Inc. and Tritel Finance, Inc. and Bechtel Corporation, dated November 24, 1998. 10.25 Services Agreement by and between Tritel Communications, Inc. and Spectrasite Communications, Inc., dated as of July 28, 1998.
EXHIBIT NUMBER EXHIBIT DESCRIPTION PAGE - ------------ --------------------------------------------------------------------------------- ----- 10.26 Acquisition Agreement Ericsson CMS 8800 Cellular Mobile Telephone System by and between Tritel Finance, Inc. and Tritel Communications, Inc. and Ericsson Inc., made and effective as of December 30, 1998. 10.27 Securities Purchase Agreement by and among AT&T Wireless PCS Inc., TWR Cellular, Inc., Cash Equity Investors, Mercury PCS, LLC, Mercury PCS II, LLC, Management Stockholders and Tritel, Inc., dated as of May 20, 1998. 10.28 Closing Agreement by and among AT&T Wireless PCS, Inc., TWR Cellular, Inc., Cash Equity Investors, Airwave Communications, LLC, Digital PCS, LLC, Management Stockholders, Mercury Investor Indemnitors and Tritel, Inc., dated as of January 7, 1999. 10.29 Master Build To Suit And Lease Agreement between Tritel Communications, Inc., a Delaware corporation and American Tower, L.P., a Delaware limited partnership.* 10.30 Master Build To Suit And Lease Agreement between Tritel Communications, Inc. and SpectraSite Communications, Inc.* 10.31 Master Build To Suit Services And License Agreement between Tritel Communications, Inc. and Crown Communication Inc.* 10.32 Master Build To Suit And Lease Agreement by and between Tritel Communications, Inc. and SBA Towers, Inc.* 10.33 Master Lease Agreement between Tritel Communications, Inc. and BellSouth I.* 10.34 Master Lease Agreement between Tritel Communications, Inc. and BellSouth II.* 10.35 Consent to Exercise of Option between Tritel, Inc., AT&T Wireless PCS, Inc., TWR Cellular, Inc. and Management Stockholders dated May 20, 1999. 10.36 License Purchase Agreement between Digital PCS, LLC and Tritel, Inc. dated as of May 20, 1999. 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 KPMG Peat Marwick LLP. 24+ Powers of Attorney (included on the signature page of the initial filing 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.
- ---------- + Previously Filed. * To be filed by amendment. EX-5.1 2 OPINION OF BROWN & WOOD LLP EXHIBIT 5.1 [Letterhead Of Brown & Wood LLP Appears Here] September 9, 1999 Tritel PCS, Inc. 111 E. Capitol Street Suite 500 Jackson, MS 39201 Re: Tritel PCS, Inc. Registration Statement on Form S-4 (File No. 333-82509) ----------------------------- Ladies and Gentlemen: We have acted as counsel to Tritel PCS, Inc., a Delaware corporation (the "Company"), in connection with the registration of $372,000,000 aggregate principal amount at maturity of 12 3/4% Senior Subordinated Discount Notes due 2009 (the "Exchange Notes") under the Securities Act of 1933, as amended (the "Act"), by the "Company, and the related guarantees (the "Guarantees") of the Exchange Notes issued by subsidiaries (the "Guarantors") of the Company on Form S-4 filed with the Securities and Exchange Commission on July 8, 1999 (File No. 333-82509), as amended by Amendment No. 1 filed with the Commission on September 9, 1999 (collectively, the "Registration Statement"). The Exchange Notes will be issued pursuant to an indenture (the "Indenture"), dated as of May 1, 1999, among the Company, the Guarantors and The Bank of New York, as trustee (the "Trustee"). The Exchange Notes will be issued in exchange for the Company's outstanding 12 3/4% Senior Subordinated Discount Notes due 2009 (the "Old Notes") on the terms set forth in the prospectus contained in the Registration Statement and the Letter of Transmittal filed as an exhibit thereto. Tritel PCS, Inc. September 7, 1999 Page 2 This opinion is being delivered in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not otherwise defined herein have the meaning ascribed to them in the Registration Statement. In our capacity as counsel in connection with such registration, we are familiar with the proceedings taken by the Company and the Guarantors in connection with the authorization of the Exchange Notes and the Guarantees and proceedings proposed to be taken in connection with the issuance of the Exchange Notes and the Guarantees, respectively, and for the purposes of this opinion, have assumed such proceedings will be timely completed in the manner presently proposed. In addition, we have also examined originals or copies, certified or otherwise identified to our satisfaction, of such other documents and instruments as we have deemed appropriate for the opinions contained herein. To the extent we deemed appropriate, we have relied as to certain factual matters on oral or written statements of officers or directors of the Company and the Guarantors. We have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such copies. Based upon the foregoing, and subject to the other assumptions, qualifications and limitations set forth herein, we are of the opinion that when the Registration Statement, as finally amended (including all necessary post-effective amendments) has become effective under the Act and upon issuance thereof in the manner described in the Registration Statement: Tritel PCS, Inc. September 7, 1999 Page 3 1. The Exchange Notes, when executed by the Company and authenticated by the Trustee in the manner provided in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) in exchange for the Old Notes in accordance with the terms of the Indenture, will be valid and binding obligations of the Company, and will be entitled to the benefits of the Indenture. 2. Each of the Guarantees, when executed in accordance with the terms of the Indenture and upon due execution by the Company and authentication by the Trustee of the Exchange Notes in the manner provided in the Indenture (assuming the due authorization, execution and delivery of the Indenture by the Trustee) in exchange for the Old Notes in accordance with the terms of the Indenture, will be valid and binding obligations of the respective Guarantors, and will be entitled to the benefits of the Indenture. We are members of the Bar of the State of New York, and we express no opinion as to the laws of any jurisdiction other than the laws of the State of New York, the General Corporation Law of the State of Delaware and the federal laws of the United States of America. We are not expressing any opinion with respect to matters arising under or governed by the Communications Act, the 1996 Act, or the rules and regulations of the FCC promulgated thereunder. We consent to the filing this opinion as an exhibit to the Registration Statement and to the reference to our firm contained under the heading "Legal Matters." In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission promulgated thereunder. The opinions expressed herein are given as of the date hereof, and we undertake no obligation to supplement this letter if any applicable laws change after the date hereof or if we become aware of any facts that might change the opinions expressed herein after the date hereof or for any other reason. Very truly yours, /s/ Brown & Wood LLP EX-10.1.1 3 STOCKHOLDER'S AGREEMENT Exhibit 10.1.1 - -------------------------------------------------------------------------------- STOCKHOLDERS' AGREEMENT by and among AT&T WIRELESS PCS INC., CASH EQUITY INVESTORS, MANAGEMENT STOCKHOLDERS, and TRITEL, INC. dated as of January 7, 1999 - -------------------------------------------------------------------------------- TABLE OF CONTENTS -----------------
Page ---- 1. Certain Definitions.........................................................................2 2. Restated Certificate and Restated By-Laws..................................................13 3. Management of Company......................................................................13 3.1 Board of Directors.................................................................13 3.2 Removal; Filling of Vacancies......................................................15 3.3 Initial Directors..................................................................16 3.4 Compensation and Reimbursement.....................................................16 3.5 Business of the Company............................................................16 3.6 Required Votes.....................................................................16 3.7 Transactions between the Company and the Stockholders or their Affiliates..........18 3.8 Board Committees...................................................................18 3.9 Voting Agreements and Voting Trusts................................................18 3.10 Additional Capital Contributions...................................................18 3.11 Board Materials....................................................................19 4. Transfers of Shares........................................................................19 4.1 General............................................................................19 4.2 Right of First Offer...............................................................22 4.3 Rights of Inclusion................................................................23 4.4 Right of First Negotiation.........................................................25 4.5 Additional Conditions to Permitted Transfers.......................................26 4.6 Representations and Warranties.....................................................27 4.7 Stop-Transfer......................................................................27 5. Registration Rights........................................................................27 6. Disqualifying Transactions.................................................................40 6.1 Company Conversion Rights..........................................................40 6.2 Joint Marketing Right..............................................................41 7. Additional Rights and Covenants............................................................42 7.1 Financial Statements...............................................................42 7.2 Purchase Right.....................................................................42 7.3 Access.............................................................................43 7.4 Merger, Sale or Liquidation of the Company.........................................44 7.5 Wholly-Owned Subsidiaries..........................................................45 7.6 Amendments of the Restated Certificate and By-Laws.................................45 7.7 Confidentiality....................................................................45 7.8 IPO Date...........................................................................46 7.9 AT&T Retained Licenses.............................................................46 7.10 Regulatory Cooperation.............................................................46 7.11 Permitted Transactions.............................................................47 7.12 Covenant of Holders of Class C Common Stock........................................47 7.13 Additional Florida POPs............................................................48 8. Operating Arrangements.....................................................................48 8.1 Construction of Company Systems....................................................48 8.2 Service Features...................................................................49 8.3 Quality Standards..................................................................49 8.4 No Change of Business..............................................................49 8.5 Preferred Provider.................................................................50 8.6 Exclusivity........................................................................51 8.7 Other Business; Duties; Etc........................................................52 8.8 Acknowledgments and Termination of Exclusivity.....................................53 8.9 Equipment, Discounts and Roaming...................................................53 8.10 Intentionally Omitted..............................................................54 8.11 Resale Agreements..................................................................54 8.12 Non-Solicitation...................................................................55 8.13 Co-Location........................................................................55 8.14 Billing............................................................................55 9. After-Acquired Shares; Recapitalization....................................................55 9.1 After Acquired Shares; Recapitalization............................................55 9.2 Amendment of Restated Certificate..................................................56 10. Share Certificates.........................................................................56 10.1 Restrictive Endorsements; Replacement Certificates.................................56 11. Equitable Relief...........................................................................57 12. Miscellaneous..............................................................................57 12.1 Notices............................................................................57 12.2 Entire Agreement; Amendment; Consents..............................................58 12.3 Term...............................................................................59 12.4 Survival...........................................................................60 12.5 Waiver.............................................................................61 12.6 Obligations Several................................................................61 12.7 Governing Law......................................................................61 12.8 Dispute Resolution.61 12.9 Benefit and Binding Effect; Severability...........................................64 12.10 Amendment of By-Laws...............................................................64 12.11 Authorized Agent of AT&T PCS.......................................................64 12.12 FCC Approval.......................................................................64 12.13 Expenses...........................................................................64 12.14 Attorneys' Fees....................................................................64 12.15 Headings...........................................................................65 12.16 Counterparts.......................................................................65
Schedules Schedule I Cash Equity Investors Schedule II Management Stockholders Schedule III Equity Capitalization Schedule IV Core Features Schedule V Minimum Build-Out Plan Schedule VI PCS Territory Schedule VII Quality and Reporting Standards Schedule VIII Initial Directors Schedule IX Capital Budgets Schedule X Voting Agreements Schedule XI Critical Network Elements Exhibits Exhibit A Restated By-Laws Exhibit B Restated Certificate - -------------------------------------------------------------------------------- STOCKHOLDERS' AGREEMENT ----------------------- STOCKHOLDERS' AGREEMENT, dated as of January 7, 1999 (this "Agreement"), by and among AT&T WIRELESS PCS INC., a Delaware corporation (together with its Affiliated Successors, "AT&T PCS"), TWR CELLULAR, INC., a Maryland corporation (together with its Affiliated Successors, "TWR Cellular"), the investors listed on Schedule I) (individually, each a "Cash Equity Investor" and, collectively, with any of its Affiliated Successors, the "Cash Equity Investors"), MERCURY PCS, LLC, a Mississippi limited liability company ("Mercury I"), Mercury PCS II, LLC, a Mississippi limited liability ("Mercury II"), the individuals listed on Schedule II (individually, each a "Management Stockholder" and, collectively, the "Management Stockholders"), and TRITEL, INC., a Delaware corporation (the "Company"). Each of the foregoing Persons, together with all other Persons who, in connection with a Transfer (as hereinafter defined) are required to become a party to this Agreement (other than the Company), or with the consent of the Board of Directors (as hereinafter defined) are issued shares of Company Stock and are required as a condition of such issuance to become a party to this Agreement, are sometimes referred to herein, individually, as a "Stockholder" and, collectively, as the "Stockholders." RECITALS -------- WHEREAS, the authorized capital stock of the Company consists of: (a) 3,040,009 shares of common stock, par value $0.01 per share ("Common Stock"), including (i) 1,500,000 shares of Class A Voting Common Stock, par value $0.01 per share ("Class A Voting Common Stock"), of which 35,518.76 shares are issued and outstanding, (ii) 1,500,000 shares of Class B Non-Voting Common Stock, par value $0.01 per share ("Class B Non-Voting Common Stock") of which no shares are issued and outstanding (iii) 10,000 shares of Class C Common Stock, par value $.01 per share ("Class C Common Stock"), of which 5,176.68 shares are issued and outstanding, (iv) 30,000 shares of Class D Common Stock, par value $.01 per share ("Class D Common Stock"), of which no shares are issued and outstanding, and (v) nine shares designated as Voting Preference Stock, par value $0.01 per share ("Voting Preference Stock"), all of which shares are issued and outstanding; and (b) 1,500,000 shares of Preferred Stock, par value $0.01 per share ("Preferred Stock"), including (i) 200,000 shares designated Series A Convertible Preferred Stock, par value $0.01 per share ("Series A Preferred Stock"), of which 90,668.33 shares are issued and outstanding, (ii) 300,000 shares designated Series B Preferred Stock, par value $0.01 per share ("Series B Preferred Stock"), of which no shares are issued and outstanding, (iii) 500,000 shares designated Series C Convertible Preferred Stock, par value $0.01 per share ("Series C Preferred Stock"), of which 184,233.35 shares are issued and outstanding, and (iv) 100,000 shares designated Series D Convertible Preferred Stock, par value $0.01 per share ("Series D Preferred Stock"), of which 46,374.10 shares are issued and outstanding; and WHEREAS, the shares of Class A Voting Common Stock and Series C Preferred Stock (on an as converted basis) as a class represent 49.9% of the voting power of the Company and the shares of Voting Preference Stock as a class represent 50.1% of the voting power of the Company; and WHEREAS, each Stockholder is the registered owner of the respective shares of Class A Voting Common Stock, Class B Non-Voting Common Stock, Series A Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Class C Common Stock, Class D Common Stock and Voting Preference Stock set forth opposite its name on Schedule III; and WHEREAS, the parties desire to enter into this Agreement in order to provide for the management of the Company and to impose certain restrictions with respect to the sale, transfer or other disposition of Common Stock on the terms and conditions hereinafter set forth; and NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, the parties agree as follows: 1. Certain Definitions. "Adopted Service Features" shall mean the Core Service Features and additional service features that are adopted by the Company's PCS Systems in accordance with the terms of Section 8.2. "Advice" shall have the meaning set forth in Section 5(d)(xvii). "Affiliate" shall mean, with respect to any Person other than a natural person, any other Person that, either directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with such Person and, with respect to any natural Person, any trust for the exclusive benefit of such natural Person and/or any member of such natural Person's Immediate Family in which such Person is the sole trustee thereof; provided, however, for purposes of Section 8.6, "Affiliate" shall not include (x) Persons who conduct business in the Territory in whom a Cash Equity Investor or any of their respective Affiliates has made an investment or holds securities on the date hereof in the ordinary course of their business, or any such Person who conducts business in the Territory in whom a Cash Equity Investor or any of their respective Affiliates makes an investment after the date hereof if such Cash Equity Investor or Affiliate thereof controls such Person on a temporary basis where reasonably necessary to protect its investment, or any person who serves as an officer, director or is a partner of any such Person who is affiliated with a Cash Equity Investor, or (y) The Toronto Dominion Bank. As used in this Agreement, "control", "controlled" or "controlling" shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. "Affiliated Successor" shall mean, with respect to any Person, an Affiliate thereof that is a transferee or a successor in interest to any or all of such Person's Company Stock and that is required to become a party to this Agreement in accordance with the terms hereof; provided, however, that, for purposes of Section 4, with respect to any Cash Equity Investor, "Affiliated Successor" shall also include partners, limited partners or members of a Cash Equity Investor that are transferees of Series C Preferred Stock or Common Stock pursuant to distributions in accordance with the partnership agreement or operating agreement of such Cash Equity Investor. "Arbitration Rules" shall have the meaning set forth in Section 12.8(d). 2 "AT&T Licensee" shall mean any Person that owns FCC licenses to provide Commercial Mobile Radio Service, which Person is authorized to provide any such services using the phrase "Member, AT&T Wireless Services Network" or other service marks of AT&T Corp. "AT&T PCS" shall have the meaning set forth in the preamble. "AT&T Contributed Licenses" shall have the meaning assigned to such term in the Securities Purchase Agreement. "AT&T Corp." shall mean AT&T Corp., a Delaware corporation. "AT&T Retained Licenses" shall have the meaning assigned to such term in the Securities Purchase Agreement. "AWS" shall mean AT&T Wireless Services, Inc., a Delaware corporation. "Beneficially Own" shall have the meaning set forth in Rule 13d-3 of the Exchange Act. "Board of Directors" shall mean the Board of Directors of the Company. "BTA" shall mean a geographic area established by the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition, pp. 38-39, as modified by the FCC to form the initial geographic area of license for the C, D, E and F blocks of broadband PCS spectrum as defined in Section 24.202 of the FCC's rules. "Business" shall mean the business of (a) owning, constructing and operating systems to provide Company Communications Services on frequencies licensed to the Company for Commercial Mobile Radio Services pursuant to the AT&T Contributed Licenses, the Mercury Licenses, PCS Licenses acquired pursuant to the Option Agreement, Permitted Florida MSAs and Permitted Cellular Licenses, (b) providing to end-users and resellers, solely within the Territory, Company Communications Services available on such systems, (c) providing in connection with such Company Communications Services, solely within the Territory, the Adopted Service Features and (subject to the immediately following sentence) telecommunications services incidental or ancillary to such Company Communications Services (including, by way of example, bundling additional telecommunications services with Company Communications Services), and (d) marketing and offering the services and features described in clauses (b) and (c) within the Territory, including advertising such services and features using broadcast and other media, so long as such advertising extends beyond the Territory only when and to the extent necessary to reach customers and potential customers in the Territory. The activities described in clauses (a) and (b) shall be the indispensable requisite, and primary business, of the Company and, to the extent the Company provides telecommunications services incidental or ancillary thereto, the Company and its Subsidiaries shall be only the agent or reseller for the provider thereof and shall not own or lease the facilities used to provide such services, except that (i) the Company may own or lease facilities that, in the aggregate, do not have a purchase price to the Company and its Subsidiaries in excess of $10 million, and the Company may be a facilities-based provider of services using such facilities, and (ii) after completion of the Minimum Build-Out Plan and certification that Company Systems meet the 3 TDMA Quality Standards, the amount of $10 million set forth in clause (i) hereof shall be increased to $100 million. "Cash Equity Investors" shall have the meaning set forth in the preamble. "Cash Equity Loan" shall have the meaning assigned to such term in the Securities Purchase Agreement. "Cellular System" shall mean a cellular mobile radio telephone system constructed and operated in a "metropolitan statistical area" as defined by the FCC or a "rural service area" as defined by the FCC (or any successor territorial designation or subdivision thereof authorized by the FCC) exclusively using the 824 MH to 849 MH and the 869 MH3 to 894 MH3 frequencies pursuant to a License therefor issued by the FCC. "Cellular Territory" shall mean the geographic area in respect of which the Company acquires Permitted Cellular Licenses or Permitted Florida RSAs. "Class A Voting Common Stock" shall have the meaning set forth in the first recital. "Class B Non-Voting Common Stock" shall have the meaning set forth in the first recital. "Class C Common Stock" shall have the meaning set forth in the first recital. "Class D Common Stock" shall have the meaning set forth in the first recital. "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. "Common Stock" shall have the meaning set forth in the first recital. "Company" shall have the meaning set forth in the preamble. "Company Asset Sale" shall have the meaning set forth in Section 7.4(a). "Company Communications Services" shall mean mobile wireless telecommunications services (including the transmission of voice, data, image or other messages or content) provided solely within the Territory, initiated or terminated using TDMA and frequencies licensed by the FCC, to or from subscriber equipment that is capable of usage during routine movement throughout the area covered by a cell site and routine handing-off between cell sites, and is either intended for such usage or is temporarily fixed to a specific location on a short-term basis (e.g., a bank of wireless telephones temporarily installed during a special event of limited duration). Without limiting the foregoing, Company Communications Services shall include wireless office services if such services comply with this definition. Company Communications Services shall also include the transmissions between the Company's cell sites and the Company's switch or switches in the Territory, handing-off transmissions at the Company's switch or switches for termination by other carriers, and receiving transmissions to the Company's customers handed-off at the Company's switch or switches, in each case for the purpose of facilitating Company Communications Services described in the first sentence. 4 "Company Merger" shall have the meaning set forth in Section 7.4(a). "Company Sale Notice" shall have the meaning set forth in Section 6.2(a). "Company Stock" shall mean the Series A Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Voting Preference Stock, the Class A Voting Common Stock, Class B Non-Voting Common Stock, the Class C Common Stock and the Class D Common Stock. "Company Systems" shall mean the systems owned and operated by the Company and its Subsidiaries to provide Company Communications Services in the Territory. "Confidential Information" shall have the meaning assigned to such term in Section 7.7(a). "Core Service Features" shall mean the service features set forth on Schedule IV. "CPR" shall have the meaning set forth in Section 12.8(c). "Demand Notice" shall have the meaning set forth in Section 5(a)(i). "Demand Registration" shall have the meaning set forth in Section 5(a)(i). "Demanding Stockholders" shall have the meaning set forth in Section 5(a)(i). "Dispute" shall have the meaning set forth in Section 12.8(a). "Disqualifying Transaction" shall mean a merger, consolidation, asset acquisition or disposition, or other business combination involving AT&T Corp. (or its Affiliates) and another Person, which other Person (together with its Affiliates but before giving effect to such merger, consolidation, asset acquisition or disposition or other business combination) (a) derives from telecommunications businesses annual revenues in excess of five billion dollars (based on its most recently ended fiscal year), (b) derives less than one-third of its aggregate revenues from the provision of wireless telecommunications (based on its most recently ended fiscal year for which such information is available), (c) owns FCC Licenses to offer (and does offer) mobile wireless telecommunications services (excluding for purposes of this clause (c) FCC Licenses to offer enhanced special mobile radio services) serving more than 25% of the POPs within the Territory, and (d) with respect to which AT&T PCS has given written notice to the Company and the other Stockholders 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 hereby. "Employment Agreements" shall have the meaning assigned to such term in the Securities Purchase Agreement. "Equity Securities" shall have the meaning set forth in Section 7.2(a). 5 "Escrowed Shares" shall have the meaning set forth in the Securities Purchase Agreement. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. "FAA" shall have the meaning set forth in Section 12.8(e). "FCC" shall mean the Federal Communications Commission or similar regulatory authority established in replacement thereof. "FCC Determination Date" shall mean such date, or such reasonable period of time as determined by the FCC in any regulation, rule, order or policy, as of or after which the continued ownership of the Class C Common Stock by a Stockholder which has suffered a Transfer Event will cause the Company to compromise or forfeit any Material Benefits. "Federal Arbitration Act" shall have the meaning set forth in Section 12.8(e). "Final Order" shall mean an action or decision that has been granted by the FCC as to which (i) no request for a stay or similar request is pending, no stay is in effect, the action or decision has not been vacated, reversed, set aside, annulled or suspended and any deadline for filing such request that may be designated by statute or regulation has passed, (ii) no petition for rehearing or reconsideration or application for review is pending and the time for the filing of any such petition or application has passed, (iii) the FCC does not have the action or decision under reconsideration on its own motion and the time within which it may effect such reconsideration has passed, and (iv) no appeal is pending including other administrative or judicial review, or in effect and any deadline for filing any such appeal that may be designated by statute or rule has passed. "First Offer" shall have the meaning set forth in Section 4.2(a). "First Offer Period" shall have the meaning set forth in Section 4.2(b). "First Offeree" shall have the meaning set forth in Section 4.2(a). "Governmental Authority" means a Federal, state or local court, legislature, governmental agency (including, without limitation, the United States Department of Justice), commission or regulatory or administrative authority or instrumentality. "Inclusion Event" shall have the meaning set forth in Section 4.3(a). "Inclusion Event Offeree" shall have the meaning set forth in Section 4.3(a). "Inclusion Event Purchaser" shall have the meaning set forth in Section 4.3(a). "Inclusion Notice" shall have the meaning set forth in Section 4.3(a). "Inclusion Stock" shall have the meaning set forth in Section 4.3(a). "Indemnified Party" shall have the meaning set forth in Section 5(e)(v). 6 "Indemnified Stockholder" shall have the meaning set forth in Section 5(e)(i). "Indemnifying Party" shall have the meaning set forth in Section 5(e)(v). "Immediate Family" shall mean an individual's spouse, children (including adopted children), grandchildren, parents, grandparents, and siblings. "IPO Date" shall mean the first date on which (a) the Class A Voting Common Stock shall have been registered pursuant to an effective Registration Statement under the Securities Act, (b) the aggregate gross proceeds received by the Company in connection with such Registration Statement(s) equals or exceeds $20 million, and (c) the Class A Voting 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. "Issuance Notice" shall have the meaning set forth in Section 7.2(a). "Joint Marketing Period" shall have the meaning set forth in Section 6.2(a). "Kentucky RSAs" shall mean the Kentucky-4, Kentucky-5, Kentucky-6 and Kentucky-8 Rural Service Areas. "Law" shall mean applicable common law and any statute, ordinance, code or other law, rule, permit, permit condition, regulation, order, decree, technical or other standard, requirement or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority. "License" shall mean a license, permit, certificate of authority, waiver, approval, certificate of public convenience and necessity, registration or other authorization, consent or clearance to construct or operate a facility, including any emissions, discharges or releases therefrom, or to transact an activity or business, to construct a tower or to use an asset or process, in each case issued or granted by a Governmental Authority. "Liens" shall mean, with respect to any asset, any mortgage, lien, pledge, charge, security interest, right of first refusal or right of others therein or encumbrance of any nature whatsoever in respect of such asset. "Majority in Interest" shall mean, with respect to the Cash Equity Investors, Persons that Beneficially Own, in the aggregate more than 50% of the aggregate number of shares of Common Stock Beneficially Owned by all such Persons. "Majority of the Southeast Region" shall mean PCS Systems and Cellular Systems owned by AT&T PCS and its Affiliates covering a majority of the POPs in all such PCS Systems and Cellular Systems in the Southeast Region. "Majority of the United States" shall mean PCS Systems and Cellular Systems owned by AT&T PCS and its Affiliates covering a majority of the POPs in all such PCS Systems and Cellular Systems in the United States. 7 "Management Agreement" shall mean the Management Agreement, dated of even date herewith, between the Company and Tritel Management, LLC, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Management Stockholder" shall have the meaning set forth in the preamble. "Martin" shall mean E.B. Martin, Jr. "Material Benefits" shall have the meaning set forth in Section 7.12. "Mercury Investor" shall have the meaning set forth in the preamble. "Mercury I" shall have the meaning set forth in the preamble. "Mercury II" shall have the meaning set forth in the preamble. "Mercury Licenses" shall have the meaning assigned to such term in the Securities Purchase Agreement. "Minimum Build-Out Plan" shall mean the build-out plan for the Company's PCS Systems set forth on Schedule V hereto. "Model Procedures" shall have the meaning set forth in Section 12.8(c). "Mounger" shall mean William M. Mounger II. "MTA" shall mean a geographic area established by the Rand McNally 1992 Commercial Atlas & Marketing Guide, 123rd Edition, pp. 38-39, as modified by the FCC to form the initial geographic area of license for the A and B blocks of broadband PCS spectrum as defined in Section 24.202 of the FCC's rules. "NASD" shall mean the National Association of Securities Dealers, Inc. "NASDAQ" shall mean the National Association of Securities Dealers' Automated Quotation System. "Network Membership License Agreement" shall mean the Network Membership License Agreement between the Company and AT&T Corp., dated of even date herewith, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Offer Notice" shall have the meaning set forth in Section 4.2(a). "Offered Shares" shall have the meaning set forth in Section 4.2(a). "Overlap Territory" shall mean that portion of the Territory in which a Person or its Affiliates (other than AT&T PCS and its Affiliates) that is party to a transaction meeting the description of a transaction set forth in clauses (a), (b) and (c) of the definition of a Disqualifying Transaction owns, before giving effect to such transaction, an FCC License to offer Commercial Mobile Radio Services. 8 "Option Agreement" has the meaning assigned to such term in the Securities Purchase Agreement. "PCS System" shall mean a mobile communication system constructed and operated in a BTA or a MTA (or any successor territorial designations or subdivision thereof authorized by the FCC) exclusively using the 1850 MHZ to 1910 MHZ and 1930 MHZ to 1990 MHZ frequencies, or portions thereof pursuant to a License therefor issued by the FCC. "PCS Territory" shall mean the territory described on hereto as such territory may be expanded in accordance with Section 7.13(a). "Permitted Cellular License" shall have the meaning assigned to such term in Section 7.11(b). "Permitted Consolidation Transaction" shall have the meaning set forth in Section 7.11(a). "Permitted Florida MSAs" shall have the meaning set forth in Section 7.13(b). "Permitted Merger Participant" shall mean an AT&T Licensee (i) that owns one or more FCC Licenses to provide Commercial Mobile Radio Services that were acquired from AT&T PCS or its Affiliates in all or any part of the Louisville, KY, Knoxville, TN, Memphis, TN, Little Rock, AK, Detroit, MI, St. Louis, MO, Atlanta, GA, Boston, MA, Columbus, OH, Baltimore/Washington, Richmond, VA, Charlotte, NC MTAs and (ii) on the date of acquisition from AT&T PCS of any such FCC Licenses to provide Commercial Mobile Radio Service referred to in clause (i) hereof, owned FCC Licenses covering at least 8 million POPs, and in which AT&T PCS or its Affiliates has not disposed of more than one-half of AT&T PCS' original equity interest therein. "Permitted Non-CMRS License" shall have the meaning set forth in Section 7.11(c). "Person" shall mean an individual, corporation, partnership, limited liability company, association, joint stock company, Governmental Authority, business trust or other legal entity. "Piggyback Notice" shall have the meaning set forth in Section 5(b)(i). "Piggyback Registration" shall have the meaning set forth in Section 5(b)(i). "POPs" shall mean, with respect to any licensed area, the residents of such area based on the most recent publication by Equifax Marketing Decision Systems, Inc. "Prohibited Transferee" shall mean any Person that is one of the three (excluding any Person excluded from this definition by reason of the proviso hereto) largest carriers (other than AT&T Corp.) of telecommunications services that as of the date hereof constitute interexchange services (based on revenue derived from the provision of such telecommunications services within the entire United States during the most recent fiscal year for which such information is available) or an Affiliate thereof; provided, however, that such Person shall not constitute a Prohibited Transferee if (a) a material portion of such Person's business is also the business of 9 providing wireless communications systems, and (b) TDMA is utilized in a substantial majority of such Person's wireless communications systems. "Prospectus" shall have the meaning set forth in Section 5(d)(i). "Purchase Notice" shall have the meaning set forth in Section 4.2(b). "Purchase Right" shall have the meaning set forth in Section 7.2(a). "Qualified Holder" shall mean (a) any Stockholder or group of Stockholders that Beneficially Owns (x) for purposes of Sections 7.3 and 7.8, greater than 33 (% percent of the outstanding shares of Common Stock on a fully diluted basis (as appropriately adjusted for stock splits, stock dividends and the like), (y) for purposes of Section 5, shares of Class A Voting Common Stock reasonably expected to, upon sale, result in aggregate gross proceeds of at least $25 million, or (b) AT&T PCS and TWR Cellular for so long as AT&T PCS and TWR Cellular Beneficially Own in the aggregate, greater than two-thirds of the initial issuance to AT&T PCS and TWR Cellular of shares of Series A Preferred Stock (as appropriately adjusted for stock splits, stock dividends and the like). "Registrable Securities" shall mean (a) the Class A Voting Common Stock now owned or hereafter acquired by any Stockholder or issuable upon conversion or exchange of any Equity Security, and (b) all Class A Voting Common Stock issued or issuable upon conversion, exchange or exercise of any Equity Security which is issued pursuant to a stock split, stock dividend or other similar distribution or event with respect to Class A Voting Common Stock but with respect to any Class A Voting Common Stock, only until such time as such Class A Voting Common Stock (i) has been effectively registered under the Securities Act and disposed of in accordance with the Registration Statement covering it, (ii) has been sold to the public pursuant to Rule 144 (or any similar provision then in force), (iii) shall otherwise have been transferred, a new certificate evidencing such Class A Voting Common Stock without a legend restricting further transfer shall have been delivered by the Company, and subsequent public distribution of such Class A Voting Common Stock shall neither require registration under the Securities Act nor qualification (or any similar filing) under any state securities or "blue sky" law then in effect, or (iv) shall have ceased to be issued and outstanding. "Registration" shall have the meaning set forth in Section 5(d). "Registration Expenses" shall have the meaning set forth in Section 5(g). "Registration Statement" shall have the meaning set forth in Section 5(d)(i). "Regulatory Problem" shall have the meaning assigned to such term in the Securities Purchase Agreement. "Related Agreements" shall mean each of the Network Membership License Agreement, the Management Agreement, the Employment Agreements, the Resale Agreement, the Option Agreement, the Old Mercury Note as defined in the Securities Purchase Agreement (and the pledge agreement and other documents referred to therein) and the Roaming Agreement. 10 "Representative" shall have the meaning set forth in Section 7.7(a). "Resale Agreement" shall mean the Resale Agreement between the Company and AWS or an Affiliate thereof, dated of even date herewith, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Restated By-Laws" shall mean the Amended and Restated By-Laws of the Company in the form of Exhibit A, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Restated Certificate" shall mean the Amended and Restated Certificate of Incorporation of the Company, in the form of Exhibit B, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Roaming Agreement" shall mean the Intercarrier Roamer Service Agreement between the Company and AWS, dated of even date herewith, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Rule 144" shall mean Rule 144 promulgated under the Securities Act (or any similar rule as may be in effect from time to time). "Sale Notice" shall have the meaning set forth in Section 7.4(d). "Sale Offer" shall have the meaning set forth in Section 7.4(d). "Sale Transaction" shall have the meaning set forth in Section 7.4(c). "SBIC" shall have the meaning assigned to such term in the Securities Purchase Agreement. "SBIC Holder" shall have the meaning assigned to such term in the Securities Purchase Agreement. "Section 6.2 Period" shall have the meaning set forth in Section 6.2. "Securities Act" shall mean the Securities Act of 1933, as amended. "Securities Purchase Agreement" shall mean the Securities Purchase Agreement, dated as of May 20, 1998, among the Company, Mercury I, Mercury II, and the other parties thereto. "Seller" shall have the meaning set forth in Section 4.2(a). "Selling Stockholder" shall have the meaning set forth in Section 4.3(a). "Series A Preferred Directors" shall have the meaning set forth in Section 3.1(c). "Series A Preferred Stock" shall have the meaning set forth in the first recital. "Series B Preferred Stock" shall have the meaning set forth in the first recital. 11 "Series C Preferred Stock" shall have the meaning set forth in the first recital. "Series D Preferred Stock" shall have the meaning set forth in the first recital. "Southeast Region" shall mean the geographic area comprising Washington, D.C. and the States of Alabama, Florida, Georgia, Kentucky, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and West Virginia. "Stockholder" shall have the meaning set forth in the preamble. "Subject Market" shall mean, with respect to any announcement by AT&T PCS or its Affiliates of a transaction meeting the description of a transaction set forth in clauses (a), (b) and (c) of the definition of a Disqualifying Transaction, the PCS System owned and operated by AT&T PCS and its Affiliates in the Atlanta, GA BTA. "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 interests is owned, directly or indirectly, by such Person. "Substantial Company Breach" shall mean a material breach by the Company or its Subsidiaries of their respective obligations under any of Sections 8.1(a), 8.2, 8.3, or 8.5(a) of this Agreement, if and only if any such material breach is not cured within 30 days of notice thereof from AT&T PCS to the Company or, if such breach is not capable of being cured within such thirty (30) day period, within one-hundred eighty (180) days of such notice, provided the Company is using best efforts to cure such material breach as soon as reasonably practicable. "Sullivan" shall mean Jerry M. Sullivan, Jr. "TDMA" shall mean the North American Time Division Multiple Access standard set by the Cellular Telecommunications Industry Association, IS-54/136, and any standard that is based upon, or is an upgrade from, or is a successor to, such standard, if and only if such new or upgraded standard is (i) adopted by AT&T PCS and its Affiliates in a Majority of the Southeast Region, (ii) technologically compatible in all material respects with the standard then being used in a Majority of the United States (including without limitation for the purpose of facilitating roaming, hand-off and automatic call delivery between systems), and the User Interface in PCS Systems using such new or upgraded standard will not differ from the User Interface in a Majority of the United States in a manner that would be material to customers, or (iii) is approved in writing by AT&T PCS. "TDMA Quality Standards" shall mean the quality standards applicable to TDMA PCS Systems and Cellular Systems owned and operated by AT&T PCS and its Affiliates in the Southeast Region, which, as currently in effect, are set forth on Schedule VII, as the same may be amended from time to time, provided any such amended standards shall become effective one hundred twenty (120) days after notice thereof is given to the Company. "TWR Cellular" shall have the meaning set forth in the preamble. 12 "Territory" shall mean the PCS Territory and the Cellular Territory; provided, however, that in the event that, after consummation of a Disqualifying Transaction, AT&T PCS terminates its and its Affiliates' obligations under Section 8.6 with respect to any Overlap Territory, the "Territory" shall exclude the Overlap Territory solely for the purpose of determining the rights and obligations of AT&T PCS and the Company hereunder. "Transfer" shall have the meaning set forth in Section 4.1. "Transfer Event" shall have the meaning set forth in Section 7.12. "Unfunded Commitment" shall have the meaning assigned to such term in the Securities Purchase Agreement. "User Interface" shall mean the process, functional commands, and look and feel by which a mobile wireless telecommunications service subscriber operates and utilizes the mobile wireless telecommunications services and service features provided by a PCS System, including the sequence and detail of specific commands or service codes, the detailed operation and response of subscriber equipment to the sequence of keys pressed to effect subscriber equipment function, the response of subscriber equipment to the activation of these keys or signals or data from the PCS System, the manner in which information is displayed on the screen of subscriber equipment, and the use of announcement tones and messages. "Voting Preference Stock" shall have the meaning set forth in the first recital. Each definition or pronoun herein shall be deemed to refer to the singular, plural, masculine, feminine or neuter as the context requires. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. 2. Restated Certificate and Restated By-Laws. The Restated Certificate in effect as of the date hereof is in the form of Exhibit B hereto. The Restated By-Laws of the Company in effect as of the date hereof are in the form of Exhibit A hereto. 3. Management of Company. 3.1. Board of Directors. The Board of Directors shall consist of thirteen (13) directors; provided, however, that the number of directors constituting the Board of Directors shall be reduced in the circumstances set forth in this Section 3.1. Each of the Stockholders hereby agrees that it will vote all of the shares of Class A Voting Common Stock and Voting Preference Stock Beneficially Owned or held of record by it (whether now owned or hereafter acquired), in person or by proxy, to cause the election of directors and thereafter the continuation in office of such directors as follows: (a). three (3) individuals elected by holders of a Majority in Interest of the Class A Voting Common Stock Beneficially Owned by the Cash Equity Investors, in their sole discretion; 13 (b) four (4) individuals elected by the holders of the Voting Preference Stock so long as any such individual elected by such holders is an officer of the Company, each of whom, in accordance with the Restated Certificate, shall have that number of votes on all matters requiring the vote or consent of the Board of Directors as shall be equal to a fraction, the numerator of which is two (2) and the denominator of which is the number of such individuals elected to the Board of Directors pursuant to this Section 3.1(b) and then serving thereon; (c) two (2) individuals (the "Series A Preferred Directors") elected by AT&T PCS in its capacity as holder of Series A Preferred Stock so long as it and TWR Cellular have the right to elect two (2) directors in accordance with the Restated Certificate; and (d) (i) until the date that holders of shares of Voting Preference Stock shall vote as a class with holders of Class A Voting Common Stock, (x) one (1) individual selected by the holders of the Voting Preference Stock which individual shall be reasonably acceptable to holders of a Majority in Interest of the Class A Voting Stock Beneficially Owned by the Cash Equity Investors, and (y) three (3) individuals selected by the holders of the Voting Preference Stock, which three (3) individuals shall be reasonably acceptable to holders of a Majority in Interest of the Class A Voting Common Stock Beneficially Owned by the Cash Equity Investors and AT&T PCS, in the reasonable discretion of such Cash Equity Investors, on the one hand, and AT&T PCS, on the other hand, each of whom, in accordance with the Restated Certificate, shall have that number of votes on all matters requiring the vote or consent of the Board of Directors as shall be equal to a fraction, the numerator of which is three (3) and the denominator of which is the number of such individuals elected to the Board of Directors pursuant to this Section 3.1(d)(i)(y) and then serving thereon, and (ii) effective on the date that holders of shares of Voting Preference Stock shall vote as a class with holders of Class A Voting Common Stock, (x) one (1) individual selected by holders of a Majority in Interest of the Common Stock held by the Cash Equity Investors, and (y) three (3) individuals selected by holders of a Majority in Interest of the Common Stock held by the Cash Equity Investors, which three (3) individuals shall be acceptable to Mounger, Martin and Sullivan (in each case so long as he is an officer of the Company), and AT&T PCS, in the discretion of Mounger, Martin and Sullivan on the one hand, and AT&T PCS, on the other hand. In the event that Mounger, Martin or Sullivan shall cease to be an officer of the Company, or the Management Agreement shall cease to be in full force and effect, such individuals shall resign (or the holders of the Voting Preference Stock shall remove him) from the Board of Directors and the holders of the Voting Preference Stock shall select a replacement or replacements who shall be acceptable to a Majority in Interest of the Cash Equity Investors and AT&T PCS, in each case in its sole discretion. In the event that AT&T PCS and TWR Cellular shall cease to be entitled to elect the Series A Preferred Directors, such directors shall resign (or the other directors or Stockholders shall remove them) from the Board of Directors and the remaining directors shall take such action so that the number of directors constituting the entire Board of Directors shall be reduced accordingly. In the event that any Cash Equity Investor that has an Unfunded Commitment shall fail to satisfy any such portion of its Unfunded Commitments when due in accordance with Section 2.2 of the Securities Purchase Agreement or Section 3.10 hereof, and such failure is not cured by such Cash Equity Investor or another Cash Equity Investor within thirty-five (35) days thereof, then, until such failure is cured, the member of the Board of Directors who is designated by, or Affiliated with, such Cash Equity Investor (whether as an 14 employee, partner, member, stockholder or otherwise) shall resign from the Board of Directors and the Person(s) who designated such member shall select an individual acceptable to AT&T PCS in its sole discretion. Any nomination or designation of directors and the acceptance thereof pursuant to Section 3.1 shall be evidenced in writing. Each Cash Equity Investor shall have the right, so long as it Beneficially Owns shares of Series C Preferred Stock with an aggregate purchase price of at least $10,000,000 to designate one (1) person who shall be entitled to attend the Board of Directors Meeting as an observer, including meetings during which the Company's annual budget is discussed and presented. Such observer shall have the right to receive all of the Board of Directors materials and shall also have the right to meet quarterly with the management of the Company to consult on the business affairs of the Company. In addition, so long as AT&T PCS and TWR Cellular have the right to designate two directors in accordance with the Restated Certificate, up to two (2) AT&T PCS regional directors (in regions overlapping with or in geographic proximity to the Territory) shall have the right to attend each meeting of the Board of Directors as an observer. 3.2 Removal; Filling of Vacancies. Except as set forth in Section 3.1, each Stockholder agrees it will not vote any shares of Voting Preference Stock and/or Class A Voting Common Stock Beneficially Owned by such Stockholder, and shall not permit any Affiliated Successor of such Stockholder holding any Voting Preference Stock and/or Class A Voting Common Stock, to vote for the removal without cause of any director designated by any other Stockholder in accordance with Section 3.1. Any Stockholder or group of Stockholders who has the right to designate any member(s) of the Board of Directors shall have the right to replace any member(s) so designated by it (whether or not such member is removed from the Board of Directors with or without cause or ceases to be a member of the Board of Directors by reason of death, disability or for any other reason) upon written notice to the other Stockholders, the Company and the members of the Board of Directors which notice shall set forth the name of the member(s) being replaced and the name of the new member(s); provided, however, that if a director designated pursuant to (A) Section 3.1(d)(i)(x) is replaced by the holders of Voting Preference Stock, the individual designated by the holders of the Voting Preference Stock to replace such director must be acceptable to the Cash Equity Investors in accordance with the terms of Section 3.1(d)(i)(x), (B) Section 3.1(d)(i)(y) is replaced by the holders of Voting Preference Stock, the individual designated by the holders of Voting Preference Stock to replace such director must be acceptable to the Cash Equity Investors and AT&T PCS in accordance with the terms of Section 3.1(d)(i)(y), (C) Section 3.1 (d)(ii)(y) is replaced by the holders of a Majority in Interest of Common Stock held by the Cash Equity Investors, the individual designated by the holders of a Majority in Interest of Common Stock held by the Cash Equity Investors to replace such director must be acceptable to Mounger, Martin and Sullivan and AT&T PCS in accordance with the terms of Section 3.1(d)(ii)(y), and (D) Section 3.1(b) is replaced by the holders of the Voting Preference Stock, the officer designated by the holders of the Voting Preference Stock to replace such director must be acceptable to holders of a Majority in Interest of the Class A Common Stock Beneficially Owned by the Cash Equity Investors and AT&T PCS in the reasonable discretion of such Cash Equity Investors, on the one hand, and AT&T PCS, on the other hand. Each of the Stockholders agrees to vote, and to cause its Affiliated Successors to vote, its shares of Voting Preference Stock and/or Class A Voting 15 Common Stock Beneficially Owned by such Stockholder or such Stockholder's Affiliated Successor, or shall otherwise take any action as is necessary to cause the election of any successor director designated by any Stockholder pursuant to this Section 3.2. The holders of the Voting Preference Stock agree that during the three (3) year period commencing on the date hereof they will not (i) remove the individuals nominated by them pursuant to Sections 3.1(d)(i)(x) or 3.1(d)(i)(y), or (ii) nominate for election any individuals other than the individuals initially selected by them and approved in accordance with said Sections 3.1(d)(i)(x) or 3.1(d)(i)(y) (unless any such individual is removed from the Board of Directors for cause), subject to the agreements of such individuals to serve on the Board of Directors. 3.3 Initial Directors. In accordance with Section 228 of the Delaware General Corporation Law and pursuant to the provisions of Section 3.1 of this Agreement, the Stockholders hereby consent to the election of and do hereby elect in accordance with Section 3.1 hereof the persons designated in Schedule VIII hereto as directors of the Company. Such persons shall hold office until their successors are duly elected and qualified, except as otherwise provided in this Agreement or the Restated Certificate or the Restated By-Laws. 3.4 Compensation and Reimbursement. The members of the Board of Directors (other than the directors selected pursuant to Section 3.1(d)(i)(y) or 3.1(d)(ii)(y), as applicable) shall not be compensated for their services as a director or as a member of any committee of the Board of Directors. The Board of Directors shall determine the compensation payable, if any, to the directors selected pursuant to Section 3.1(d)(i)(y) or 3.1(d)(ii)(y) for their services as a director. The Company shall reimburse each member of the Board of Directors for all out-of-pocket expenses reasonably incurred by such director in connection with the performance of his service as a director or as a member of any committee of the Board of Directors. 3.5 Business of the Company. The business and affairs of the Company shall be conducted by the officers of the Company under the supervision of the Board of Directors, substantially in accordance with operating and capital expenditure budgets approved by the Board of Directors from time to time. The Stockholders and the directors hereby approve the five (5) year build-out plan for the Business and the capital budget for the first two (2) years of the Business in the forms attached hereto as Schedule IX. 3.6 Required Votes. (a) All actions of the Board of Directors of the Company shall require the vote of at least a majority of the entire Board of Directors, unless otherwise required by Law, the Restated Certificate, the Restated By-Laws or this Agreement. (b) None of the following transactions or actions shall be entered into or taken by the Company, unless (i) voted for or consented to by the vote of at least three (3) of the five (5) directors designated pursuant to Sections 3.1(a) and (c) and four (4) of the six (6) votes cast by directors designated pursuant to Sections 3.1(b) and (d). (i) The sale, transfer, assignment or other disposition of any material portion of the assets of the Company or any of its Subsidiaries other than in the ordinary course of business; 16 (ii) The merger, combination or consolidation of the Company or any of its Subsidiaries with or into any other entity, regardless of whether the Company or any such Subsidiary is the surviving entity in any such merger, combination or consolidation, the acquisition of any businesses by the Corporation, the formation of any partnership or joint venture involving the Company, or the liquidation, dissolution or winding up of the Company or any of its Subsidiary; (iii) Any offering or issuance of additional shares of Preferred Stock, Voting Preference Stock or Common Stock of, or any other securities or ownership interests in, the Company or any of its Subsidiaries, including, without limitation, warrants, options or other rights convertible or exchangeable into Preferred Stock, Voting Preference Stock or Common Stock of, or other securities or ownership interests in, the Company or any of its Subsidiaries except as contemplated by the Securities Purchase Agreement or the declaration of any dividends thereon; (iv) The repurchase by the Company of any Company Stock (other than shares of Class A Voting Common Stock purchased from former employees of the Company); (v) The authorization or adoption of any amendment to the Restated Certificate, Restated By-laws or any constituent document of the Company or any of its Subsidiaries; (vi) The hiring or termination of any executive officer of the Company; (vii) The approval of, or amendment to, any operating or capital budget of the Company or any of its Subsidiaries; (viii) The incurrence by the Company or any of its Subsidiaries, whether directly or indirectly, of any indebtedness for borrowed money or capital leases in any calendar quarter in excess of $1,000,000; (ix) Any agreement or arrangement, written or oral, to pay any director, officer, agent or employee of the Company or any of its Subsidiaries $200,000 or more on an annual basis or any loan, lease, contract or other transaction with any employee of the Company or any of its Subsidiaries with an annual salary in excess of $200,000 or with any director or officer of the Company or any member of any such Person's Immediate Family; (x) The making of, or commitment to make, any capital expenditures involving a payment or liability in any one year of $1,000,000 or more in the aggregate by the Company or any of its Subsidiaries; (xi) The initiation of any bankruptcy proceeding, dissolution or liquidation of the Company or any of its Subsidiaries; and (xii) The entering into any contract, agreement or understanding to do any of the foregoing. 17 Notwithstanding the foregoing, any amendment, modification, waiver or termination of the Management Agreement or the Employment Agreements shall require the affirmative vote or consent of a majority of the Board of Directors (excluding Messrs. Mounger, Martin and Sullivan). 3.7 Transactions between the Company and the Stockholders or their Affiliates. Except for this Agreement, the Securities Purchase Agreement and the Related Agreements and the transactions contemplated hereby and thereby and any other arms-length agreements or transactions entered into from time to time between the Company and its Subsidiaries, on the one-hand, and AT&T PCS and its Affiliates, on the other hand, no Stockholder or any Affiliate of any Stockholder shall enter into any transaction with the Company or any Subsidiary of the Company unless such transaction is approved by a majority of the disinterested members of the Board of Directors. For purposes hereof, a director shall be deemed to be disinterested with respect to any such transaction if such director was not designated a director by the Stockholder that (or an Affiliate of which) proposed to engage in such transaction with the Company or any Subsidiary of the Company and such member is not an officer, director, partner, employee, stockholder of, or consultant to, such Stockholder or any of its Affiliates; provided, however, that for purposes of this Section 3.7 the directors designated pursuant to Section 3.1(d)(ii)(y) shall not be deemed to have been designated by the Cash Equity Investors, AT&T PCS or the holders of the Voting Preference Stock. 3.8 Board Committees. If an executive committee of the Board of Directors (or a committee of the Board of Directors having substantially the same mandate and powers of such a committee) is established, one of the Series A Preferred Directors, one of the directors selected by the Cash Equity Investors pursuant to Section 3.1(a), and Mounger (so long as he is an officer of the Company) shall each serve as a member of such committee (or such other committee having substantially the same mandate and powers) and such other directors as shall be designated by the Board of Directors. 3.9 Voting Agreements and Voting Trusts. Except as disclosed on Schedule X or referred to in this Section 3.9, each Stockholder agrees that it will not, directly or indirectly, deposit any of his or its shares of Series C Preferred Stock, Series D Preferred Stock, Voting Preference Stock and/or Common Stock in a voting trust or other similar arrangement or, except as expressly provided herein, subject such shares to a voting agreement or other similar arrangements. Each of AT&T PCS and TWR Cellular covenants and agrees that it will not, directly or indirectly, enter into a voting or similar agreement with any Transferee of shares of Series A Preferred Stock. Each holder of Voting Preference Stock shall vote all shares of Voting Preference Stock owned by him in accordance with the vote of holders of a majority of the shares of Voting Preference Stock. 3.10 Additional Capital Contributions. In accordance with the Securities Purchase Agreement, the Cash Equity Investors shall contribute to the capital of the Company an aggregate additional amount equal to their Unfunded Commitments, such contributions to be made by the Cash Equity Investors in the amounts and on the dates specified on Schedule I thereto. In the event that the Board of Directors determines in good faith that the Company requires all or any portion of the Unfunded Commitment prior to the dates specified on such Schedule, then upon notice given by the Company to the Cash Equity Investors, the Cash Equity 18 Investors shall contribute, pro rata in accordance with their ownership of Series C Preferred Stock on the date hereof, the additional capital set forth in such notice up to the amount, in the case of each such Cash Equity Investor, of its Unfunded Commitment. Any such additional capital required to be contributed by the Cash Equity Investors shall be contributed by the Cash Equity Investors within twenty (20) business days of receipt of written notice from the Company. 3.11 Board Materials. Each Cash Equity Investor shall have the right, so long as it continues to Beneficially Own the shares of Series C Preferred Stock it Beneficially Owns on the date hereof, to request that the Company send to it copies of all materials distributed to the Board of Directors. 4. Transfers of Shares. 4.1 General. (a) Each Stockholder agrees that at all times prior to the IPO Date it shall not, directly or indirectly, transfer, sell, assign, pledge, tender or otherwise grant, create or suffer to exist a Lien in or upon, give, place in trust, or otherwise voluntarily or involuntarily (including transfers by testamentary or intestate succession) dispose of by operation of law, offer or otherwise (any such action being referred to herein as a "Transfer"), any of the shares of Company Stock Beneficially Owned by such Stockholder as of the date hereof or which may hereafter be acquired by such Stockholder, except that (i) a Stockholder may Transfer shares of Series C Preferred Stock, Series D Preferred Stock, Class A Voting Common Stock and Class B Non Voting Common Stock to an Affiliated Successor, (ii) a Stockholder may Transfer shares of Class A Voting Common Stock and Class B Non Voting Common Stock to any other Person after complying first with Section 4.2 and next with Section 4.3, if applicable, (iii) a Cash Equity Investor may Transfer shares of Series C Preferred Stock, Class A Voting Common Stock and Class B Non Voting Common Stock to another Cash Equity Investor, (iv) one or more Cash Equity Investors may transfer up to 1,000 shares (in the aggregate for all Cash Equity Investors) of Series C Preferred Stock to the Management Stockholders, (v) a Management Stockholder may Transfer shares of Class A Voting Common Stock to the Company, or (vi) Mercury I and Mercury II may Transfer shares of Company Stock to Mercury Investors who become Mercury Investor Indemnitors (as defined in the Securities Purchase Agreement) in accordance with Section 6.10(b) of the Securities Purchase Agreement. (b) Each Stockholder agrees that at all times on and after the IPO Date it shall not, directly or indirectly, Transfer any of the shares of Series D Preferred Stock, Class A Voting Common Stock or Class B Non Voting Common Stock Beneficially Owned by such Stockholder as of the date hereof or which may hereafter be acquired by such Stockholder except that (i) a Cash Equity Investor may Transfer shares of Class A Voting Common Stock and Class B Non Voting Common Stock to another Cash Equity Investor, (ii) Mercury I and Mercury II may Transfer shares of Company Stock to Mercury Investors who become Mercury Investor Indemnitors (as defined in the Securities Purchase Agreement) in accordance with Section 6.10(b) of the Securities Purchase Agreement, and (iii) a Stockholder may Transfer (x) shares of Series D Preferred Stock, Class A Voting Common Stock and Class B Non Voting Common Stock to an Affiliated Successor, and (y) shares of Class A Voting Common Stock and Class B Non Voting Common Stock after complying first with Section 4.2 and next with Section 19 4.3, if applicable, provided, however, a Stockholder shall not be required to comply with Section 4.2 if such Stockholder first complies with the applicable provisions of Section 4.4 in connection with Transfers of Class A Common Stock (1) pursuant to a Registration of Common Stock under Section 5 which is an underwritten offering and constitutes a bona fide distribution of such Common Stock pursuant to such Registration, (2) pursuant to Rule 144, or (3) in any single transaction or series of related transactions to one or more Persons which results in the Transfer by such Stockholder (together with any other Stockholder participating in such single transaction or series of related transactions) of not more than ten percent (10%) of the Common Stock on a fully diluted basis (excluding for such purposes the Series A Preferred Stock). Notwithstanding the foregoing, in the event that after the IPO Date any shares of Series C Preferred Stock shall continue to be outstanding, such outstanding shares of Series C Preferred Stock shall be subject to the restrictions on Transfer contained in this Article 4 that are then applicable to shares of Common Stock Beneficially Owned by any Cash Equity Investor, as such restrictions may change from time to time in accordance with this Article 4. (c) Notwithstanding anything to the contrary contained in Sections 4.1(a) or (b), prior to the (i) third anniversary of the date hereof, each Stockholder agrees that it will not Transfer any shares of Series C Preferred Stock, Series D Preferred Stock or Common Stock Beneficially Owned by it as of the date hereof or which may hereafter be acquired by it to any Person, except that (v) Mercury I and Mercury II may Transfer shares of Company Stock to Mercury Investors who become Mercury Investor Indemnitors (as defined in the Securities Purchase Agreement) in accordance with Section 6.10(b) of the Securities Purchase Agreement, (w) a Stockholder may Transfer shares of Series C Preferred Stock, Series D Preferred Stock, Class A Voting Common Stock and Class B Non Voting Common Stock to an Affiliated Successor, (x) a Cash Equity Investor may Transfer shares of Series C Preferred Stock, Class A Voting Common Stock and Class B Non Voting Common Stock to another Cash Equity Investor, (y) one or more Cash Equity Investors may transfer up to 1,000 shares (in the aggregate for all Cash Equity Investors) of Series C Preferred Stock to the Management Stockholders, or (z) a Management Stockholder may Transfer shares of Class A Voting Common Stock to the Company, and (ii) fifth anniversary of the date hereof, each Management Stockholder agrees that it will not Transfer any shares of Class A Voting Common Stock Beneficially Owned by it as of the date hereof or which may hereafter be acquired by it to any Person; provided, however, that (x) on or after the later to occur of (I) the third anniversary of the date hereof, and (II) the IPO Date, a Management Stockholder may Transfer up to 25% of the shares of Class A Voting Common Stock held by such Management Stockholder on the date hereof, plus any shares of Series C Preferred Stock purchased from a Cash Equity Investor which shares may be Transferred notwithstanding the foregoing, and (y) in the event the Management Agreement is terminated on or after the later to occur of (I) the date that the Management Stockholders shall have performed all of their obligations pursuant to Section 5(e) of the Management Agreement, and (II) the third anniversary of the date hereof, a Management Stockholder may Transfer all shares of Class A Voting Common Stock held by such Management Stockholder free of any restrictions imposed on any such Transfer by this Section 4.1(c). In addition, notwithstanding anything to the contrary contained herein, the Management Stockholders shall not Transfer any shares of Class A Voting Common Stock that shall not have ceased to be subject to repurchase in accordance with the terms of any Employment Agreement between the Company and such Management Stockholder. 20 (d) Each of AT&T PCS and TWR Cellular agrees that it will not (i) Transfer any shares of Series D Preferred Stock held by it to any Person other than to an Affiliated Successor; provided, however, that nothing contained in this Section 4.1(d) shall limit AT&T PCS' or TWR Cellular's right to Transfer in accordance with the terms of this Agreement any shares of Series C Preferred Stock or Common Stock issued upon conversion of any such shares of Series D Preferred Stock. Prior to the IPO Date, each of AT&T PCS and TWR Cellular agrees that it will not Transfer any shares of Series A Preferred Stock held by it except that AT&T PCS and TWR Cellular may transfer Series A Preferred Stock (i) to an Affiliated Successor, or (ii) to any other Person after complying with Section 4.2; it being understood that on and after the IPO Date, AT&T PCS and TWR Cellular may Transfer its shares of Series A Preferred Stock free from any restrictions on Transfer of such shares under this Agreement. (e) (i) Each of the holders of Class C Common Stock and Voting Preference Stock agrees that it shall not Transfer any of the shares of Class C Common Stock or Voting Preference Stock Beneficially Owned by it other than pursuant to Section 5(e) of the Management Agreement. (ii) Prior to the IPO Date, each Stockholder agrees that it will not Transfer any shares of Class D Common Stock held by it except (I) to an Affiliated Successor, (II) that Cash Equity Investors may Transfer shares of Class D Common Stock to another Cash Equity Investor, (III) that Mercury I and Mercury II may Transfer Escrowed Shares in accordance with Section 6.10(b) of the Securities Purchase Agreement or (IV) to any other Person after complying with Section 4.2; it being understood that on and after the IPO Date, each Stockholder may Transfer its shares of Class D Common Stock free from any restrictions under this Section 4.1(e) on Transfer of such shares under this Agreement. Notwithstanding anything to the contrary contained in this Agreement, each Stockholder agrees that it will not effect a Transfer of shares of Class D Common Stock to any Person if after giving effect to such Transfer, such Person, together with its Affiliates would Beneficially Own 25% or more of all of the issued and outstanding shares of Class D Common Stock. (f) Notwithstanding anything to the contrary contained in this Section 4, (i) Section 4.1 shall not apply (x) to the pledge by certain of the Cash Equity Investors to the Company of shares of Series C Preferred Stock and Common Stock as security for their Unfunded Commitments, or to the lender under the Cash Equity Loan Documents as security for their obligations to such lender pursuant to the Cash Equity Loan Documents, (y) any other Lien granted by a Stockholder with respect to any shares of Series C Preferred Stock and Common Stock as security for any obligation of such Stockholder to the Company or the lender under the Cash Equity Loan Documents, or to any Transfer of shares of Series C Preferred Stock or Common Stock in connection with the exercise by the Company or the lender under the Cash Equity Loan Documents of their respective remedies pursuant to any such pledge agreements, or (z) any pledge by Mercury II to Mercury I of any shares of Series C Preferred Stock and Common Stock and (ii) a Cash Equity Investor that is a SBIC Holder that is required to dispose of its investment in the Company by reason of a breach by the Company of Section 6.6(d) of the Securities Purchase Agreement or a Regulatory Problem, may Transfer its shares of Class C Preferred Stock or Common Stock without complying with the terms of Section 4.3. 21 4.2 Right of First Offer. (a) If a Stockholder (each a "Seller") desires to Transfer any or all of its shares of Preferred Stock or Common Stock (other than Voting Preference Stock and Class C Common Stock which may only be transferred in accordance with Section 4.1(e)(i) (collectively, the "Offered Shares"), such Seller shall give written notice (the "Offer Notice") to the Company and to each Stockholder entitled to become the First Offeree of such Offered Shares, as determined below. Each Offer Notice shall describe in reasonable detail the number of shares of each class of Offered Shares, the cash purchase price requested and all other material terms and conditions of the proposed Transfer. The Offer Notice shall constitute an irrevocable offer (a "First Offer") to sell all (and not less than all) of the Offered Shares to the First Offeree(s) at a cash price equal to the price contained in such Offer Notice and upon the same terms as the terms contained in such Offer Notice. The First Offeree(s) shall have the irrevocable right and option, exercisable as provided below, but not the obligation, to accept the First Offer as to all (and not less than all) of the Offered Shares. The "First Offeree(s)" shall be determined as follows: (i) If the Seller is a Cash Equity Investor, AT&T PCS shall be First Offeree; (ii) If the Seller is AT&T PCS or TWR Cellular, each Cash Equity Investor shall be the First Offeree; and (iii) If the Seller is any Stockholder other than a Cash Equity Investor, AT&T PCS shall be the First Offeree. (b) The option provided for herein shall be exercisable by the First Offeree(s) by giving written notice (a "Purchase Notice"), that the First Offeree desires to purchase all (and not less than all) of such Offered Shares from the Seller, to the Stockholders (other than the Seller) and the Company not later than ten (10) business days (the "First Offer Period") after the date of the Offer Notice. If the Cash Equity Investors are First Offerees and two or more Cash Equity Investors notify the Seller of their desire to purchase all of the Offered Shares, then each Cash Equity Investor shall acquire the proportion of such Offered Shares as the number of shares of Company Stock owned by such Cash Equity Investor bears to the total number of shares of Company Stock owned by all Cash Equity Investors who elected to purchase all of the Offered Shares. If Offered Shares are purchased by more than one purchaser, the purchase price shall be allocated among the parties purchasing the shares on the basis of the number of shares being so purchased. The purchase of the Offered Shares by the First Offeree(s) shall be closed at the principal executive offices of the Company on a date specified by the First Offeree(s) upon at least five (5) business days' notice, that is within thirty (30) days after the expiration of the First Offer Period; provided, however, that if such purchase is subject to the consent of the FCC or any public service or public utilities commission, the purchase of the Offered Shares shall be closed on the first business day after all such consents shall have been obtained by Final Order. (c) If the First Offeree(s) decline (which shall include the failure to give timely notice of acceptance) to purchase all of the Offered Shares subject to the First Offer within the First Offer Period, the Seller shall have the right (for a period of ninety (90) days 22 following the expiration of the First Offer Period) to consummate the sale of the Offered Shares to any Person; provided, however, that the purchase price of such Offered Shares payable by such Person must be at least equal to the cash purchase price thereof set forth in the Offer Notice and all other terms and conditions of any such sale shall not be more beneficial to such third party than those contained in the Offer Notice. If any Offered Shares are not sold pursuant to the provisions of this Section 4.2 prior to the expiration of the ninety (90) day period specified in the immediately preceding sentence, such Offered Shares shall become subject once again to the provisions and restrictions hereof; provided, however, that if such purchase is subject to the consent of the FCC or any public service or public utilities commission, the purchase of the Offered Shares shall be closed on the first business day after all such consents shall have been obtained by Final Order. (d) The purchase price of any Offered Shares Transferred pursuant to this Section 4.2 shall be payable in cash by certified bank check or by wire transfer of immediately available funds. (e) The provisions of this Section 4.2 shall not be applicable to the repurchase by the Company of any shares of Class A Voting Common Stock repurchased by the Company from an employee of the Company in connection with such individual's termination of employment. 4.3 Rights of Inclusion. (a) No Stockholder shall, directly or indirectly, Transfer, in any single transaction or series of related transactions to one or more Persons who are not Affiliated Successors of such Stockholder (each such Person an "Inclusion Event Purchaser") shares of any series or class of Company Stock (collectively, "Inclusion Stock") in circumstances in which, after giving effect to such Transfer, whether acting alone or in concert with any other Stockholder (such parties referred to herein as "Selling Stockholders") would result in such Selling Stockholder(s) Transferring twenty-five percent (25%) or more of the outstanding shares of any such class of Inclusion Stock (for purposes of this Section 4.3, in the event that the Inclusion Stock is Series C Preferred Stock, Series D Preferred Stock shall also be deemed to be Inclusion Stock and the Series C Preferred Stock and Series D Preferred Stock shall be deemed to be one class of Preferred Stock for purposes of this Section 4.3) outstanding on the date of such proposed Transfer on a fully diluted basis (excluding for such purposes the Series A Preferred Stock) (an "Inclusion Event"), unless the terms and conditions of such sale to such Inclusion Event Purchaser shall include an offer to AT&T PCS, the Cash Equity Investors and the Management Stockholders other than the Selling Stockholder (each, an "Inclusion Event Offeree") to Transfer to such Inclusion Event Purchasers up to that number of shares of any class of Inclusion Stock then Beneficially Owned by each Inclusion Event Offeree that bears the same proportion to the total number of shares of Inclusion Stock at that time Beneficially Owned (without duplication) by each such Inclusion Event Offeree as the number of shares of Inclusion Stock being Transferred by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any applicable series of related transactions) bears to the total number of shares of Inclusion Stock at the time Beneficially Owned (without duplication) by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any applicable series of related transactions). If the Selling Stockholders receive a bona fide offer 23 from an Inclusion Event Purchaser to purchase shares of Inclusion Stock in circumstances in which, after giving effect to such sale would result in an Inclusion Event, and which offer such Selling Stockholders wish to accept, the Selling Stockholders shall then cause the Inclusion Event Purchaser's offer to be reduced to writing (which writing shall include an offer to purchase shares of Inclusion Stock from each Inclusion Event Offeree according to the terms and conditions set forth in this Section 4.3) and the Selling Stockholders shall send written notice of the Inclusion Event Purchaser's offer (the "Inclusion Notice") to each Inclusion Event Offeree, which Inclusion Notice shall specify (i) the names of the Selling Stockholders, (ii) the names and addresses of the proposed acquiring Person, (iii) the amount of shares proposed to be Transferred and the price, form of consideration and other terms and conditions of such Transfer (including, if in a series of related transactions, such information with respect to shares of Inclusion Stock theretofore Transferred), (iv) that the acquiring Person has been informed of the rights provided for in this Section 4.3 and has agreed to purchase shares of Inclusion Stock in accordance with the terms hereof, and (v) the date by which each other Selling Stockholder may exercise its respective rights contained in this Section 4.3, which date shall not be less than thirty (30) days after the giving of the Inclusion Notice. The Inclusion Notice shall be accompanied by a true and correct copy of the Inclusion Event Purchaser's offer. At any time within thirty (30) days after receipt of the Inclusion Notice, each Inclusion Event Offeree may accept the offer included in the Inclusion Notice for up to such number of shares of Inclusion Stock as is determined in accordance with this Section 4.3, by furnishing written notice of such acceptance to each Selling Stockholder, and delivering, to an escrow agent (which shall be a bank or a law or accounting firm designated by the Company), on behalf of the Selling Stockholders, the certificate or certificates representing the shares of Inclusion Stock to be sold pursuant to such offer by each Inclusion Event Offeree, duly endorsed in blank, together with a limited power-of-attorney authorizing the escrow agent, on behalf of the Inclusion Event Offeree, to sell the shares to be sold pursuant to the terms of such Inclusion Event Purchaser's offer. In the event that the Inclusion Event Purchaser does not agree to purchase all of the shares of Inclusion Stock proposed to be sold by the Selling Stockholders and the Inclusion Event Offerees, then each Selling Stockholder and Inclusion Event Offeree shall have the right to sell to the Inclusion Event Purchaser that number of shares of Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock which the Inclusion Event Purchaser has agreed to purchase times (y) a fraction, the numerator of which is the number of shares of Inclusion Stock Beneficially Owned (without duplication) by such Selling Stockholder or Inclusion Event Offeree and the denominator of which is the aggregate number of shares of Inclusion Stock Beneficially Owned (without duplication) by all Selling Stockholders and Inclusion Event Offerees. If any Inclusion Event Offeree desires to sell less than its proportionate amount of shares of Inclusion Stock that it is entitled to sell pursuant to this Section 4.3, then the Selling Stockholders and the remaining Inclusion Event Offerees shall have the right to sell to the Inclusion Event Purchaser an additional amount of shares of Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock not being sold by any such Inclusion Event Purchasers times (y) a fraction, the numerator of which is the number of shares of Inclusion Stock owned such Selling Stockholder or remaining Inclusion Event Offeree and the denominator of which is the aggregate number of shares of Inclusion Stock Beneficially Owned (without duplication) by all Selling Stockholders and remaining Inclusion Event Offerees. Such process shall be repeated in series until all of the remaining Inclusion Event Offerees agree to sell their remaining proportionate number of shares of Inclusion Stock. 24 (b) The purchase from each Inclusion Event Offeree pursuant to this Section 4.3 shall be on the same terms and conditions, including the price per share received by the Selling Stockholders and stated in the Inclusion Notice provided to each Inclusion Event Offeree. In the event that the Inclusion Stock is Common Stock, each Inclusion Event Offeree shall be required, as a condition of participating in such transaction, to convert its Preferred Stock into Common Stock and Transfer Common Stock to the Inclusion Event Purchaser. (c) Simultaneously with the consummation of the sale of the shares of Inclusion Stock of the Selling Stockholders and each Inclusion Event Offeree to the Inclusion Event Purchaser pursuant to the Inclusion Event Purchaser's offer, the Selling Stockholders shall notify each Inclusion Event Offeree and shall cause the purchaser to remit to each Inclusion Event Offeree the total sales price of the shares of Inclusion Stock held by each Inclusion Event Offeree sold pursuant thereto and shall furnish such other evidence of the completion and time of completion of such sale and the terms thereof as may be reasonably requested by each Inclusion Event Offeree. (d) If within thirty (30) days after receipt of the Inclusion Notice, an Inclusion Event Offeree has not accepted the offer contained in the Inclusion Notice, such Inclusion Event Offeree shall be deemed to have waived any and all rights with respect to the sale described in the Inclusion Notice (but not with respect to any subsequent sale, to the extent this Section 4.3 is applicable to such subsequent sale) and the Selling Stockholders shall have sixty (60) days in which to sell not more than the number of shares of Inclusion Stock described in the Inclusion Notice, on terms not more favorable to the Selling Stockholders than were set forth in the Inclusion Notice; provided, however, that if such purchase is subject to the consent of the FCC or any public service or public utilities commission, the purchase of the Offered Shares shall be closed on the first business day after all such consents shall have been obtained by Final Order. 4.4 Right of First Negotiation. In the event that a Stockholder desires to Transfer any shares of Common Stock or Series C Preferred Stock following the IPO Date in a Transfer described in clause (y) of Section 4.1(b)(iii), such Stockholder shall give written notice thereof to AT&T PCS, such notice to specify, among other things, the number of shares that such Stockholder desires to sell. For the applicable first negotiation period hereinafter set forth, AT&T PCS shall have the exclusive right to negotiate with such Stockholder with respect to the purchase of such shares; it being understood and agreed that such exclusive right shall not be deemed to be a right of first offer or right of first refusal for the benefit of AT&T PCS and such Stockholder shall have the right to reject any offer made by AT&T PCS during such applicable first negotiation period. Upon the expiration of such applicable first negotiation period, such Stockholder shall have the right (for the applicable offer period hereinafter set forth with respect to each applicable first negotiation period), following the expiration of such applicable first negotiation period, to offer and sell such shares included in such written notice on such terms and conditions as shall be acceptable to such Stockholder in its sole discretion. If any of such shares included in such written notice are not sold pursuant to the provisions of this Section 4.4 prior to the expiration of the applicable offer period, such shares shall become subject once again to the provision and restrictions hereof. 25 If a Stockholder desires to Transfer shares of Common Stock (a) pursuant to a Registration of Common Stock under Section 5 in an underwritten offering that constitutes a bona fide distribution of such Common Stock pursuant to such Registration, the applicable first negotiation period shall be ten (10) days and the applicable offer period upon the expiration of such first negotiation period shall be one hundred twenty (120) days, (b) pursuant to Rule 144, the applicable first negotiation period shall be three (3) hours (it being understood and agreed that such Stockholder shall, in addition to giving written notice of such proposed Transfer by facsimile, use commercially reasonable efforts to contact AT&T PCS by telephone in accordance with Section 12.1) and the applicable offer period upon the expiration of such first negotiation period shall be five (5) business days, and (c) in any single transaction or series of related transactions to one or more Persons which will result in the Transfer by such Stockholder (together with any other Stockholder participating in such single transaction or series of related transactions) of not more than ten percent (10%) of the Common Stock on a fully diluted basis (excluding for such purposes the Series A Preferred Stock), the applicable first negotiation period shall be one (1) business day, so long as notice of such proposed Transfer is given to AT&T PCS prior to 9:00 A.M. on the day prior to the date of such proposed Transfer (it being understood and agreed that such Stockholder shall, in addition to giving written notice of such proposed Transfer by facsimile, use commercially reasonable efforts to contact AT&T PCS by telephone in accordance with Section 12.1) and the applicable offer period upon the expiration of such first negotiation period shall be ten (10) business days. 4.5 Additional Conditions to Permitted Transfers. (a) As a condition to any Transfer to an Affiliated Successor or any other Transfer permitted pursuant to Section 4.1, or any Transfer pursuant to Section 4.2 or Section 4.3, each transferee that is not a party hereto shall, prior to such Transfer, agree in writing to be bound by all of the provisions of this Agreement applicable to the Stockholders (and shall thereby become a Stockholder for all purposes of this Agreement). Any Transfer without compliance with such provisions of this Agreement shall be null and void and such transferee shall have no rights as a Stockholder of the Company. Any person to which shares of Series C Preferred Stock are Transferred in connected with the exercise of remedies by the lender under the Cash Equity Loan Documents, and any direct or indirect transferee thereof, shall become a party to this Agreement, be bound hereby and be subject to the rights and benefits of a Stockholder provided herein. (b) Notwithstanding anything to the contrary contained in this Agreement, each Stockholder agrees that it will not effect a Transfer of shares of Company Stock to a Prohibited Transferee; provided, however, that nothing contained in this Section 4.5(b) shall be construed to prohibit a Transfer of Common Stock by a Stockholder after the IPO Date pursuant to an underwritten Registration or in accordance with the provisions of Rule 144. It shall be deemed a breach of this Section 4.5(b) by a Stockholder Beneficially Owning more than 10% of the Common Stock outstanding if any Prohibited Transferee shall acquire, directly or indirectly, in a private sale Beneficial Ownership of more than 33-1/3% of any class of equity securities or equity interest in, such Stockholder. (c) Subject to Sections 4.1 and 4.2, prior to the IPO Date, the Cash Equity Investors, AT&T PCS and TWR Cellular may not Transfer shares of Common Stock to 26 any Person that is not an Affiliated Successor of such Stockholder or another Cash Equity Investor unless after giving effect to such Transfer each of such Stockholder and such Person shall after giving effect to such Transfer Beneficially Own more than the lesser of (x) five percent (5%) of the Common Stock, and (y) one-half of the Common Stock Beneficially Owned by the transferor on the date hereof, upon such Transfer unless the Transfer by such Cash Equity Investor, AT&T PCS or TWR Cellular is a Transfer of all of the shares of Common Stock, as applicable, Beneficially Owned by it. Subject to Sections 4.1 and 4.2, prior to the IPO Date, no Management Stockholder may effect more than one (1) Transfer of its shares of Common Stock to a Person that is not an Affiliated Successor of such Management Stockholder during any twelve (12) month period. 4.6 Representations and Warranties. A Stockholder purchasing shares of Company Stock pursuant to Section 4.2 shall be entitled to receive representations and warranties from the transferring Stockholder that such Stockholder has the authority (corporate or otherwise) to sell such shares, is the sole owner of such shares, and has good and valid title to such shares, free and clear of any and all Liens (other than pursuant to this Agreement, the Restated Certificate or any Related Agreement), and that the sale of such shares does not violate any agreement to which it is a party or by which it is bound. 4.7 Stop-Transfer. (a) The Company agrees not to effect any Transfer of shares of Company Stock by any Stockholder whose proposed Transfer is subject to Sections 4.2, 4.3 or 4.4 until it has received evidence reasonably satisfactory to it that the rights provided to any other Stockholders pursuant to such Sections, if applicable to such Transfer, have been complied with and satisfied in all respects. If any portion of such Stockholder's Unfunded Commitment shall remain unpaid on the date of such proposed Transfer, then, as a condition of such Transfer, such Person purchasing such Company Stock shall, or another Cash Equity Investor may, execute an instrument in form satisfactory to the Company agreeing to pay in full such Stockholder's Unfunded Commitment outstanding on the date of such proposed Transfer, provided, however, that such Stockholder shall not be released from its obligation in respect of such Unfunded Commitment. No Transfer of any shares of Preferred Stock and/or Common Stock shall be made except in compliance with all applicable securities laws. Any Transfer made in violation of this Agreement shall be null and void. (b) The Company agrees that it will not, without the prior written consent of AT&T PCS, Transfer, issue or dispose of any Equity Securities to a Prohibited Transferee except that purchases of Common Stock by a Prohibited Transferee in connection with a Registration of Common Stock shall not constitute a violation of this Section 4.7(b). 5. Registration Rights. (a) Demand Registration Rights. (i) Right to Demand Registration. From and after the ninety-first (91st) day following the IPO Date (or such longer period as may be required by the managing underwriters of the Company's initial public offering) and, subject to Section 27 4.1(d), each of (A) a Qualified Holder, and (B) Management Stockholders that in the aggregate Beneficially Own at least 50.1% of the shares of Class A Voting Common Stock then Beneficially Owned by the Management Stockholders (each a " Demanding Stockholder" and, collectively, the "Demanding Stockholders") shall have the right to make a written request to the Company for registration with the Commission, under and in accordance with the provisions of the Securities Act, of all or part of their Registrable Securities pursuant to an underwritten offering (a "Demand Registration"), which request shall specify the number of Registrable Securities proposed to be sold by each Demanding Stockholder; provided, however, that (x) the Company need not effect a Demand Registration unless in the aggregate the sale of the Registrable Securities proposed to be sold by the Demanding Stockholder shall reasonably be expected to result in aggregate gross proceeds to such Demanding Stockholder of at least $10 million, and (y) if the Board of Directors determines that a Demand Registration would interfere with any pending or contemplated material acquisition, disposition, financing or other material transaction, the Company may defer a Demand Registration (including by withdrawing any Registration Statement filed in connection with a Demand Registration); so long as that the aggregate of all such deferrals shall not exceed one hundred twenty (120) days in any 360-day period. Demand Registration shall not be deemed a Demand Registration hereunder until such Demand Registration has been declared effective by the Commission (without interference by any stop order, injunction or other order or requirement of the Commission or other governmental agency, for any reason), and maintained continuously effective for a period of at least three (3) months or such shorter period when all Registrable Securities included therein have been sold in accordance with such Demand Registration; provided, however, that a Qualified Holder may, not more frequently than once in any twelve (12) month period, request that the Demand Registration be a shelf registration that is maintained continuously effective for a period of at least six (6) months or such shorter period when all Registrable Securities included therein have been sold in accordance with such Demand Registration. A Demanding Stockholder may make a written request for a Demand Registration in accordance with the foregoing in respect of Equity Securities that it intends to convert into shares of Class A Voting Common Stock upon the effectiveness of the Registration Statement prepared in connection with such demand, and the Company shall fulfill its obligations under this Section 5 in a manner that permits such Demanding Stockholder to exercise its conversion rights in respect of such Equity Securities and substantially contemporaneously sell the shares of Class A Voting Common Stock issuable upon such conversion under such Registration Statement. The Company will not be obligated to effect more than two (2) separate Demand Registrations during any twelve (12) month period; provided, however, that only one (1) request for a Demand Registration may be exercised by (i) AT&T PCS and/or (ii) Management Stockholders that in the aggregate Beneficially Own at least 50.1% of the shares of Class A Voting Common Stock then Beneficially Owned by the Management Stockholders during any twelve (12) month period. Within ten (10) days after receipt of the request for a Demand Registration, the Company will send written notice (the "Demand Notice") of such Registration request and its intention to comply therewith to all Stockholders who are holders of Registrable Securities and, 28 subject to Section 5(a)(ii), the Company will include in such Demand Registration all Registrable Securities of such Stockholders with respect to which the Company has received written requests for inclusion therein within twenty (20) days after the last date such Demand Notice was deemed to have been given pursuant to Section 12.1. (ii) Priority on Demand Registration. If the managing underwriter or underwriters advise the Company and the holders of the Registrable Securities to be registered in writing that in its or their opinion, the number of Registrable Securities proposed to be sold in such Registration and any other securities of the Company requested or proposed to be included in such Registration exceeds the number that can be sold in such offering without (A) creating a substantial risk that the proceeds or price per share to be derived from such Registration will be reduced or that the number of Registrable Securities to be registered is too large a number to be reasonably sold, or (B) materially and adversely affecting such Registration in any other respect, the Company will (x) include in such Registration the aggregate number of Registrable Securities recommended by the managing underwriter (the number of Registrable Securities to be registered for each Stockholder to be reduced pro rata based on the amount of Registrable Securities each of the Stockholders requested to be included in such Registration), and (y) not allow any securities other than Registrable Securities to be included in such Registration unless all Registrable Securities requested to be included shall have been included therein, and then only to the extent recommended by the managing underwriter or determined by the Company after consultation with an investment banker of nationally recognized standing (notification of which number shall be given by the Company to the holders of Registrable Securities). (iii) Selection of Underwriters. The offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. The Demanding Stockholder that initiated such Demand Registration will select a managing underwriter or underwriters of recognized national standing to administer the offering, which managing underwriter or underwriters shall be reasonably acceptable to the Company. (b) Piggyback Registration Rights. (i) Right to Piggyback. If the Company proposes to register any shares of Class A Voting Common Stock (or securities convertible into or exchangeable for Class A Voting Common Stock) with the Commission under the Securities Act (other than a Registration on Form S-4 or Form S-8, or any successor forms), and the Registration form to be used may be used for the Registration of the Registrable Securities (a "Piggyback Registration"), the Company will give written notice (a " Piggyback Notice") to all Stockholders, at least thirty (30) days prior to the anticipated filing date, of its intention to effect such a Registration, which notice will specify the proposed offering price (if determined at that time), the kind and number of securities proposed to be registered, the distribution arrangements and will, subject to Section 5(b)(ii), include in such Piggyback Registration all Registrable Securities with respect to which the Company has received written requests (which requests have not been withdrawn) for inclusion therein within twenty (20) days after the last date such 29 Piggyback Notice was deemed to have been given pursuant to Section 12.1. If at any time after giving the Piggyback Notice and prior to the effective date of the Registration Statement filed in connection with such Registration, the Company determines for any reason not to register or to delay Registration, the Company may, at its election, give written notice of such determination to each holder of Registrable Securities that has requested inclusion of Registrable Securities in such Registration and (A) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such Registration, and (B) in the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities. (ii) Priority on Piggyback Registrations. If the managing underwriter or underwriters, if any, advise the Company and the holders of Registrable Securities in writing that in its or their opinion, the number or kind of securities proposed to be sold in such Registration (including Registrable Securities to be included pursuant to Section 5(b)(i)) exceeds the number that can be sold in such offering without (A) creating a substantial risk that the proceeds or price per share the Company will derive from such Registration will be reduced, or that the number of shares to be registered is too large a number to be reasonably sold or (B) materially and adversely affecting such Registration in any other respect, without any reduction in the amount of securities the Company proposes to issue and sell for its own account or in the amount of securities any other security holder proposes to sell for its own account pursuant to a demand Registration right, the number of Registrable Securities to be registered for each Demanding Stockholder shall be reduced pro rata based on the amount of Registrable Securities each of the Demanding Stockholders requested to be included in such Registration, to the extent necessary to reduce the number of Registrable Securities to be registered to the number recommended by the managing underwriter or determined by the Company after consultation with an investment banker of nationally recognized standing (notification of which number shall be given by the Company to the holders of Registrable Securities of such determination). (c) Selection of Underwriters. Except as set forth in Section 5.1(a)(iii), the Company (by action of the Board of Directors) will select a managing underwriter or underwriters to administer the offering, which managing underwriter or underwriters will be of nationally recognized standing. (d) Registration Procedures. With respect to any Demand Registration or Piggyback Registration (each, a "Registration"), the Company shall, subject to Sections 5(a)(i) and (5)(a)(ii) and Sections 5(b)(i) and 5(b)(ii), as expeditiously as practicable: (i) prepare and file with the Commission, as promptly as reasonably practicable (but in no event more than forty-five (45) days) after the receipt of the Registration requests under Sections 5(a) or 5(b), a registration statement or registration statements (each, a "Registration Statement") relating to the applicable Registration on any appropriate form under the Securities Act, which form shall be available for the sale of the Registrable Securities in accordance with the intended method or methods of distribution thereof; cooperate and assist in any filings required to be made with the 30 NASD; and use its reasonable best efforts to cause such Registration Statement to become and (to the extent provided herein) remain effective; provided, however, that before filing a Registration Statement or prospectus related thereto (a "Prospectus") or any amendments or supplements thereto, the Company shall furnish to the holders of the Registrable Securities covered by such Registration Statement and the underwriters, if any, copies of all such documents proposed to be filed, which documents will be subject to the reasonable review of such holders and underwriters and their respective counsel, and the Company shall not file any Registration Statement or amendment thereto or any Prospectus or any supplement thereto to which the holders of a majority of the Registrable Securities covered by such Registration Statement or the underwriters, if any, shall reasonably object; (ii) prepare and file with the Commission such amendments and supplements to the Registration Statement as may be necessary to keep each Registration Statement effective for three (3) months (six (6) months in the case of any shelf registration requested by a Qualified Holder pursuant to this Section 5) or such shorter period that will terminate when all Registrable Securities covered by such Registration Statement have been sold; cause each Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act; and comply with the provisions of the Securities 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) promptly notify the selling holders of Registrable Securities and the managing underwriters, if any (and, if requested by any such person or entity, confirm such advice in writing), (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (B) of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information; (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (D) if at any time the representations and warranties of the Company contemplated by subsection (xiv) of this subsection (d) below cease to be true and correct; (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation or threatening of any proceeding for such purpose; and (F) of the happening of any event which makes any statement made in the Registration Statement, the Prospectus or any document incorporated therein by reference untrue or which requires the making of any changes in the Registration Statement, the Prospectus or any document incorporated therein by reference in order to make the statements therein not misleading; (iv) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of (I) the Registration Statement, or (II) the qualification of 31 the Registrable Securities for sale under the securities or blue sky laws of any jurisdiction at the earliest possible time; (v) if requested by the managing underwriter or underwriters or a holder of Registrable Securities being sold in connection with an underwritten offering, promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriters and the holders of a majority of the Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters and any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment; (vi) furnish to each selling holder of Registrable Securities and each managing underwriter, without charge, at least one signed copy of the Registration Statement and any amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (vii) deliver to each selling holder of Registrable Securities and the underwriters, if any, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such selling holder of Registrable Securities underwriters may reasonably request in order to facilitate the public sale or other disposition of the securities owned by such selling holder; (viii) prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling holders of Registrable Securities, the underwriters, if any, and their respective counsel in connection with the Registration or qualification of such Registrable Securities for offer and sale under the securities or "blue sky" laws of such jurisdictions in the United States as any seller or underwriter reasonably requests in writing, use its reasonable best efforts to obtain all appropriate registrations, permits and consents required in connection therewith, and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject; (ix) cooperate with the selling holders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends and to be in such denominations and registered in such names as the managing 32 underwriters may request at least two (2) business days prior to any sale of Registrable Securities to the underwriters; (x) use its reasonable best efforts to cooperate with any selling holder to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities in the United States as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Securities; (xi) upon the occurrence of any event contemplated by subsection (iii)(F) above, promptly prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable 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 not misleading; (xii) cause all Registrable Securities covered by any Registration Statement to be listed on each securities exchange on which similar securities issued by the Company are then listed, or, if not so listed, cause such Registrable Securities to be authorized for trading on the NASDAQ National Market System if any similar securities issued by the Company are then so authorized, if requested by the holders of a majority of such Registrable Securities or the managing underwriters, if any; (xiii) not later than the effective date of the applicable Registration, provide a CUSIP number for all Registrable Securities; (xiv) enter into such customary agreements (including in the case of a Demand Registration that is an underwritten offering, an underwriting agreement in customary form) and take all such other actions reasonably required in connection therewith in order to expedite or facilitate the disposition of such Registrable Securities and in such connection, whether or not an underwriting agreement is entered into and whether or not the Registration is an underwritten Registration, (A) make such representations and warranties to the holders of such Registrable Securities and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in primary underwritten offerings; (B) use reasonable best efforts to obtain opinions of counsel to the Company and updates thereof (which opinions of counsel shall be in form, scope and substance reasonably satisfactory to the managing underwriters, if any, and to the holders of a majority of the Registrable Securities being sold), addressed to each selling holder and the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such holders and underwriters; (C) use reasonable best efforts to obtain "cold comfort" letters and updates thereof from the Company's independent certified public accountants addressed to the selling holders of Registrable Securities and the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters by underwriters in connection with primary underwritten offerings; and (D) deliver such documents and certificates as may 33 be reasonably requested by the holders of a majority of the Registrable Securities being sold and the managing underwriters, if any, to evidence compliance with subsection (xi) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. All the above in this Section 5(d)(xiv) shall be done at each closing under each underwriting or similar agreement or as and to the extent required thereunder; (xv) make available for inspection by a representative of each Demanding Stockholder, any underwriter participating in any disposition pursuant to such Registration, and any attorney or accountant retained by the sellers or underwriter, copies or extracts of all financial and other records, pertinent corporate documents and properties of the Company as shall be reasonably necessary, in the opinion of the holders' or underwriter's counsel, to enable them to fulfill their due diligence responsibilities; and cause the Company's officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement; provided, however, that the Company shall not be required to comply with this paragraph (xv) unless such person executes confidentiality agreements whereby such person agrees that any records, information or documents that are designated by the Company in writing as confidential shall be kept confidential by such Persons and used only in connection with the proposed Registration unless disclosure of such records, information or documents is required by court or administrative order or any regulatory body having jurisdiction; and each seller of Registrable Securities agrees that it will, upon learning that disclosure of such records, information or documents is sought in a court of competent jurisdiction or by a governmental agency, give notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of any records, information or documents deemed confidential; provided further, however, notwithstanding any designation of confidentiality by the Company, confidential information shall not include information which (i) becomes generally available to the public other than as a result of a disclosure by or on behalf of any such Person, or (ii) becomes available to any such Person on a non-confidential basis from a source other than the Company or its advisors, provided that such source is not to such Person's knowledge bound by a confidentiality agreement with or other obligations of secrecy to the Company or another party with respect to such information; (xvi) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders, earnings statements satisfying the provisions of Section 11(a) of the Securities Act, no later than forty-five (45) days after the end of any twelve (12) month period (or ninety (90) days, if such period is a fiscal year) (A) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm or best efforts underwritten offering, or (B) if not sold to underwriters in such an offering, beginning with the first month of the Company's first fiscal quarter commencing after the effective date of the Registration Statement, which statements shall cover said twelve (12) month periods; and 34 (xvii) promptly prior to the filing of any document that is to be incorporated by reference into any Registration Statement or Prospectus (after initial filing of the Registration Statement), provide copies of such document to counsel to the selling holders of Registrable Securities and to the managing underwriters, if any, make the Company's executive officers and other representatives available for discussion of such document and make such changes in such document prior to the filing thereof as counsel for such selling holders or underwriters may reasonably request. The Company may require each seller of Registrable Securities as to which any Registration is being effected to furnish to the Company such information regarding the proposed distribution of such securities as the Company may from time to time reasonably request in writing. Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(d)(xi), such holder shall forthwith discontinue disposition of Registrable Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 5(d)(xi), or until it is advised in writing (the "Advice") 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; and, if so directed by the Company, such holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such seller's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company gives any such notice, the time periods regarding the maintenance of the effectiveness of any Registration Statement in Sections 5(d)(ii) shall be extended by the number of days during the period from and including the date of the receipt of such notice pursuant to Section 5(d)(iii)(F) hereof to and including the date when each seller of Registrable Securities covered by such Registration Statement shall have received the copies of the supplemented or amended prospectuses contemplated by Section 5(d)(xi) or the Advice. (e) Indemnification. (i) In the event of the Registration or qualification of any Registrable Securities under the Securities Act or any other applicable securities laws pursuant to the provisions of this Section 5, the Company agrees to indemnify and hold harmless each Stockholder thereby offering such Registrable Securities for sale (an "Indemnified Stockholder"), underwriter, broker or dealer, if any, of such Registrable Securities, and each other person, if any, who controls any such Indemnified Stockholder, underwriter, broker or dealer within the meaning of the Securities Act or any other applicable securities laws, from and against any and all losses, claims, damages, expenses or liabilities (or actions in respect thereof), joint or several, to which such Indemnified Stockholder, underwriter, broker or dealer or controlling person may become subject under the Securities Act or any other applicable federal or state securities laws or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Securities were registered or qualified under the Securities Act or any other applicable securities laws, any preliminary prospectus or final prospectus relating to such Registrable Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein 35 or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation under the Securities Act or any other applicable federal or state securities laws applicable to the Company or relating to any action or inaction required by the Company in connection with any such Registration or qualification, and will reimburse each such Indemnified Stockholder, underwriter, broker or dealer and each such controlling person for any legal or other expenses reasonably incurred by such Indemnified Stockholder, underwriter, broker or dealer or controlling person in connection with investigating or defending any such loss, claim, damage, expense, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement or omission contained in such Registration Statement, such preliminary prospectus, such final prospectus or such amendment or supplement thereto, made in reliance upon and in conformity with written information furnished to the Company by such Indemnified Stockholder, underwriter, broker, dealer or controlling person specifically and expressly for use in the preparation thereof or by the failure of such Indemnified Stockholder, underwriter, broker or dealer, or controlling person to deliver a copy of the Registration Statement, such preliminary prospectus, such final prospectus or such amendment or supplement thereto after the Company has furnished such party with a sufficient number of copies of the same and such party failed to deliver or otherwise provide a copy of the final prospectus to the person asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of securities to such person, if such statement or omission was in fact corrected in such final prospectus. (ii) In the case of an underwritten offering in which the Registration Statement covers Registrable Securities, the Company agrees to enter into an underwriting agreement in customary form and substance with such underwriters and to indemnify the underwriters, their officers and directors, if any, and each person, if any, who controls such underwriters within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the same extent as provided in the preceding paragraph with respect to the indemnification of the holders of Registrable Securities; provided, however, the Company shall not be required to indemnify any such underwriter, or any officer or director of such underwriter or any person who controls such underwriter within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the extent that the loss, claim, damage, expense or liability (or actions in respect thereof) for which indemnification is sought results from such underwriter's failure to deliver or otherwise provide a copy of the final prospectus to the person asserting an untrue statement or omission or alleged untrue statement or omission at or prior to the written confirmation of the sale of securities to such person, if such statement or omission was in fact corrected in such final prospectus. (iii) In the event of the Registration or qualification of any Registrable Securities of the Stockholders under the Securities Act or any other applicable federal or state securities laws for sale pursuant to the provisions hereof, each Indemnified Stockholder agrees severally, and not jointly, to indemnify and hold harmless the Company, each person who controls the Company within the meaning of the Securities Act, and each officer and director of the Company from and against any losses, claims, damages, expenses or liabilities (or actions in respect thereof), joint or several, to which the Company, such controlling person or any such officer or director may become subject under the Securities Act or any other applicable securities laws or otherwise, insofar as such losses, claims, damages, expenses or liabilities (or actions in 36 respect thereof) arise out of or are based upon any untrue statement of any material fact contained in any Registration Statement under which such Registrable Securities were registered or qualified under the Securities Act or any other applicable securities laws, any preliminary prospectus or final prospectus relating to such Registrable Securities, or any amendment or supplement thereto, or arise out of or are based upon an untrue statement therein or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which untrue statement or omission was made therein in reliance upon and in conformity with written information furnished to the Company by such Indemnified Stockholder specifically and expressly for use in connection with the preparation thereof, and will reimburse the Company, such controlling person and each such officer or director for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, expense, liability or action; provided, however, an Indemnified Stockholder's liability under this Section 5(e)(iii) shall not exceed the net proceeds received by such Indemnified Stockholder with respect to the sale of any Registrable Securities. (iv) In the case of an underwritten offering of Registrable Securities, each holder of a Registrable Security included in a Registration Statement shall agree to enter into an underwriting agreement in customary form and substance with such underwriters, and to indemnify such underwriters, their officers and directors, if any, and each person, if any, who controls such underwriters within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the same extent as provided in the preceding paragraph with respect to indemnification by such holder of the Company, but subject to the same limitation as provided in Section 5(e)(ii) with respect to indemnification by the Company of such underwriters, officers, directors and control persons. (v) Promptly after receipt by a person entitled to indemnification under this Section 5(e) (an "Indemnified Party") of notice of the commencement of any action or claim relating to any Registration Statement filed under this Section 5 as to which indemnity may be sought hereunder, such Indemnified Party will, if a claim for indemnification hereunder in respect thereof is to be made against any other party hereto (an "Indemnifying Party"), give written notice to each such Indemnifying Party of the commencement of such action or claim, but the omission to so notify each such Indemnifying Party will not relieve any such Indemnifying Party from any liability which it may have to any Indemnified Party otherwise than pursuant to the provisions of this Section 5(e) and shall also not relieve any such Indemnifying Party of its obligations under this Section 5(e) except to the extent that any such Indemnifying Party is actually prejudiced thereby. In case any such action is brought against an Indemnified Party, and such Indemnified Party notifies an Indemnifying Party of the commencement thereof, such Indemnifying Party will be entitled (at its own expense) to participate in and, to the extent that it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense, with counsel reasonably satisfactory to such Indemnified Party, of such action and/or to settle such action and, after notice from the Indemnifying Party to such Indemnified Party of its election so to assume the defense thereof, the Indemnifying Party will not be liable to such Indemnified Party for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense thereof, other than the reasonable cost of investigation; provided, however, that no Indemnifying Party shall consent to the entry of any judgment or enter into any settlement agreement without the prior written consent of the Indemnified Party unless such Indemnified Party is fully released and discharged from any such liability, and no 37 Indemnified Party shall consent to the entry of any judgment or enter into any settlement of any such action the defense of which has been assumed by an Indemnifying Party without the consent of each Indemnifying Party. Notwithstanding the foregoing, the Indemnified Party shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (a) the employment of such counsel shall have been authorized in writing by the Indemnifying Party in connection with the defense of such suit, action, claim or proceeding; (b) the Indemnifying Party shall not have employed counsel (reasonably satisfactory to the Indemnified Party) to take charge of the defense of such action, suit, claim or proceeding; or (c) such Indemnified Party shall have reasonably concluded, based upon the advice of counsel, that there may be defenses available to it which are different from or additional to those available to the Indemnifying Party which, if the Indemnifying Party and the Indemnified Party were to be represented by the same counsel, could result in a conflict of interest for such counsel or materially prejudice the prosecution of the defenses available to such Indemnified Party. If any of the events specified in clauses (a), (b) or (c) of the preceding sentence shall have occurred or shall otherwise be applicable, then the fees and expenses of one counsel or firm of counsel selected by a majority in interest of the indemnified parties (and reasonably acceptable to the Indemnifying Party) shall be borne by the Indemnifying Party. If, in any such case, the Indemnified Party employs separate counsel, the Indemnifying Party shall not have the right to direct the defense of such action, suit, claim or proceeding on behalf of the Indemnified Party and the Indemnified Party shall assume such defense and/or settle such action; provided, however, that an Indemnifying Party shall not be liable for the settlement of any action, suit, claim or proceeding effected without its prior written consent, which consent shall not be unreasonably withheld. The provisions of this Section 5(e) shall be in addition to any liability which any party may have to any other party and shall survive any termination of this Agreement. (f) Contribution. If for any reason the indemnification provided for in Section 5(e)(i) or 5(e)(iii) is unavailable to an Indemnified Party as contemplated therein, then the Indemnifying Party, in lieu of indemnification shall contribute to the amount paid or payable by the Indemnified Party as a result of such loss, claim, damage, expense or liability (or action in respect thereof) in such proportion as is appropriate to reflect not only the relative benefits received by the Indemnified Party and the Indemnifying Party, but also the relative fault of the Indemnified Party and the Indemnifying Party, as well as any other relevant equitable considerations, provided that no Stockholder shall be required to contribute in an amount greater than the difference between the net proceeds received by such Stockholder with respect to the sale of any Registrable Securities and all amounts already contributed by such Stockholder with respect to such claims, including amounts paid for any legal or other fees or expenses incurred by such Stockholder. No person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of any such fraudulent misrepresentation. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. 38 (g) Registration Expenses. Except as hereinafter provided, all expenses incident to the Company's performance of or compliance with this Section 5 will be borne by the Company, including, without limitation, all Registration and filing fees under the Securities Act and the Exchange Act, the fees and expenses of the counsel and accountants for the Company (including the expenses of any "cold comfort" letters and special audits required by or incident to the performance of such persons), all other costs and expenses of the Company incident to the preparation, printing and filing under the Securities Act of the Registration Statement (and all amendments and supplements thereto), and furnishing copies thereof and of the Prospectus included therein, all out-of-pocket expenses of underwriters customarily paid for by issuers to the extent provided for in any underwriting agreement, the costs and expenses incurred by the Company in connection with the qualification of the Registrable Securities under the state securities or "blue sky" laws of various jurisdictions, the costs and expenses associated with filings required to be made with the NASD, the costs and expenses of listing the Registrable Securities for trading on a national securities exchange or authorizing them for trading on NASDAQ and all other costs and expenses incurred by the Company in connection with any Registration hereunder. In addition, the Company shall pay or reimburse the sellers of Registrable Securities the reasonable fees and expenses of one attorney to such sellers incurred in connection with a registration (collectively, with the expenses referred to in the immediately preceding sentence, the "Registration Expenses"). Except as provided in the immediately preceding sentence, each Stockholder shall bear the costs and expenses of any underwriters' discounts and commissions, brokerage fees or transfer taxes relating to the Registrable Securities sold by such Stockholder and the fees and expenses of any attorneys, accountants or other representatives retained by the Stockholder. (h) Participation in Underwritten Registrations. No Stockholder may participate in any underwritten Registration hereunder unless such Stockholder (i) agrees to sell its Registrable Securities on the basis provided in any customary and reasonable underwriting arrangements approved by the persons entitled hereunder to select the underwriter, and (ii) accurately completes in a timely manner and executes all questionnaires, powers of attorney, underwriting agreements, indemnities and other documents customarily required under the terms of such underwriting arrangements. (i) Holdback Agreements. (i) Each holder of Registrable Securities whose securities are included in a Registration Statement agrees not to effect any public sale or distribution of the issue being registered or a similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 or Rule 144A under the Securities Act, during the fifteen (15) days prior to, and during the ninety (90)-day period (or such longer period as requested by the managing underwriter or underwriters in the case of an underwritten public offering) beginning on, the effective date of such Registration Statement (except as part of such Registration), if and to the extent requested by the managing underwriter or underwriters in an underwritten public offering. (ii) The Company agrees not to effect any public sale or distribution of the issue being registered or a similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities (other than any such sale or distribution of such 39 securities in connection with any merger or consolidation by the Company or any Subsidiary or the acquisition by the Company or any Subsidiary of the capital stock or substantially all of the assets of any other Person), during the fifteen (15) days prior to, and during the ninety (90)-day period beginning on, the effective date of each Demand Registration. (j) Public Information Reporting. The Company hereby covenants and agrees to and with the Stockholders that at all times following the IPO Date it shall provide and file such financial and other information concerning the Company as may from time to time be required by the Commission and any other governmental authority having jurisdiction, so as to comply with all reporting requirements under the Exchange Act, and shall, upon request, state in writing that it has complied with all such requirements, and further agrees that, for so long as (following the IPO Date) the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall comply in all respects with paragraph (c)(2) of Rule 144. 6. Disqualifying Transactions. 6.1 Company Conversion Rights. In the event AT&T PCS terminates its obligations under Section 8.6 pursuant to Section 8.8(c) with respect to any Overlap Territory, the Company shall have the following rights which may be exercised by the Company in its sole discretion during the sixty (60) day period commencing on the date of such termination: (a) (i) The Company shall have the right in accordance with the Restated Certificate to cause AT&T PCS, TWR Cellular and any Section 4.9 Transferee (as defined in the Restated Certificate) to exchange either (A) all, or (B) a proportionate number of shares of Series A Preferred Stock then owned by AT&T PCS, TWR Cellular and each Section 4.9 Transferee equal to a fraction, the numerator of which is the number of POPS in the Overlap Territory and the denominator of which is the total number of POPS in the Territory, of the shares of Series A Preferred Stock then owned by AT&T PCS, TWR Cellular and each Section 4.9 Transferee for an equivalent number of shares of Series B Preferred Stock determined in accordance with the Restated Certificate; and (ii) The Company shall have the right in accordance with the Restated Certificate to cause AT&T PCS, TWR Cellular and each Section 4.9 Transferee to exchange either (A) all or (B) a proportionate number equal to a fraction, the numerator of which is the number of POPs in the Overlap Territory, and the denominator of which is the total number of POPs in the Territory, of the shares of Series D Preferred Stock and Common Stock Beneficially Owned by AT&T PCS and TWR Cellular on the date hereof (or shares of Common Stock into which such shares of Series D Preferred Stock shall have been converted) and that AT&T PCS, TWR Cellular or a Section 4.9 Transferee continues to own on the date such right is exercised by the Company for that number of shares of Series B Preferred Stock as shall be equal to the aggregate purchase price paid by AT&T PCS and TWR Cellular for all of such shares of Series D Preferred Stock and Common Stock that AT&T PCS, TWR Cellular or such Section 4.9 Transferee then Beneficially Owns (including any shares of Common Stock into which such Series D Preferred Stock shall have been converted) divided by the liquidation preference of the Series B Preferred Stock determined in accordance with the Restated Certificate; 40 provided, however, that (x) if the Company exercises its right under clause (i)(A) of this Section 6.1(a) it shall be required to exercise its right under clause (ii)(A) of this Section 6.1(a), and vice versa; and if the Company exercises its right under clause (i)(B) of the Section 6.1(a) it shall be required to exercise its right under clause (ii)(B) of this Section 6.1(a) and vice versa, and (y) the provisions of this Section 6.1(a) shall not apply to any Section 4.9 Transferee which is a Cash Equity Investor. (b) The Company may redeem the shares of Series B Preferred Stock at any time as provided in the Restated Certificate. 6.2 Joint Marketing Right. During the period commencing on the date of announcement by AT&T PCS of a transaction meeting the description of a transaction set forth in clauses (a), (b) and (c) of the definition of a Disqualifying Transaction (unless AT&T PCS notifies the Company it has waived its right to declare such transaction a Disqualifying Transaction in which event, this Section 6.2 shall not be applicable to such transaction) and terminating on the later of (x) six (6) months after the date of consummation of such transaction, and (y) if applicable, the date by which AT&T PCS is required under applicable law to dispose of any PCS System or Cellular System serving a Subject Market (the "Section 6.2 Period"), the following provisions shall apply: (a) If AT&T PCS proposes to sell, transfer or assign the Subject Market to any Person which is not an Affiliate of AT&T PCS, AT&T PCS shall give written notice (the "Company Sale Notice") to the Company and the Company shall have the right, exercisable by written notice given within ten (10) days of receipt of the Company Sale Notice, to elect to cause AT&T PCS to offer for sale jointly with the Company for a period of ninety (90) days the Subject Market covered by the Company Sale Notice together with all of the Territory included in the MTA that includes the Subject Markets (the "Joint Marketing Period"). In the event that AT&T PCS has granted similar rights to the rights set forth in this Section 6.2 to any Permitted Merger Participant and the Subject Market is also a "Subject Market" under the terms of any agreement between AT&T PCS and such Permitted Merger Participant, the Company agrees that any territory of the Permitted Merger Participant that is required under the terms of such agreement to be offered for sale jointly with the Subject Market shall be offered for sale jointly with such Subject Market and all of the Territory included in the MTA that includes such Subject Market. During the Joint Marketing Period, AT&T PCS shall not sell the Subject Market other than in a transaction that includes the Subject Market and the Territory included in the MTA that includes the Subject Market, provided, however, that neither AT&T PCS nor the Company shall be obligated to enter into a transaction for the Subject Market and such Territory other than on terms acceptable to each of them in their sole discretion. This Section 6.2 shall cease to apply to the Subject Market upon the earlier of (x) if the Company fails to make the joint marketing election with respect to the Subject Market within the ten (10) day period referred to above, the expiration of such ten (10) day period, or (y) if the Company makes the joint marketing election with respect to the Subject Market, upon the expiration of the Joint Marketing Period. (b) Nothing contained in this Section 6.2 shall (x) be construed to require AT&T PCS to deliver a Company Sale Notice with respect to the Subject Market except during the Section 6.2 Period, (y) extend the obligation of AT&T PCS set forth in this Section 41 6.2 beyond the expiration of the Section 6.2 Period or (z) apply to any sale, transfer or assignment of the Subject Market pursuant to an agreement executed on any date not within the Section 6.2 Period. (c) Nothing in this Agreement shall be construed to require AT&T PCS to deliver the notice described in clause (d) of the definition of a Disqualifying Transaction, including, without limitation, circumstances in which AT&T PCS or its Affiliates enters into any transaction meeting the description of a transaction set forth in clauses (a), (b) and (c) of the definition of a Disqualifying Transaction. 7. Additional Rights and Covenants. 7.1 Financial Statements. The Company shall provide to each Stockholder (a) within (x) seventy-five (75) days after the end of each fiscal quarter (other than the fourth fiscal quarter) or such shorter periods as is required pursuant to the terms of the Company's senior indebtedness, and (y) thirty (30) days after the end of each month the unaudited consolidated balance sheet of the Company and its Subsidiaries as at the end of such period and the related unaudited consolidated statements of income, surplus and cash flows for such period and year-to-date and (b) within one hundred twenty (120) days after the end of each fiscal year, the audited consolidated balance sheet of the Company and its Subsidiaries as at the end of such year and the related unaudited consolidated statements of income, surplus and cash flows for such year. All financial statements and information provided pursuant to this Section 7.1 shall constitute Confidential Information under Section 7.7. The Company shall also provide to AT&T PCS and each Cash Equity Investor copies of the Company's operating and capital expenditure budgets within five (5) days after any such operating and capital expenditure budget is adopted by the Board of Directors and shall promptly provide AT&T PCS or any Cash Equity Investor any other additional financial information that AT&T PCS or any such Cash Equity Investor reasonably requests. 7.2 Purchase Right. (a) If on or prior to the IPO Date the Company proposes to offer, issue, sell or otherwise dispose of shares of any class or series of common stock or Preferred Stock, or options, rights, warrants, conversion rights or appreciation rights relating thereto, or any other type of equity security (collectively, "Equity Securities") of the Company for cash to any Person, including pursuant to an initial public offering, (x) the Company shall, prior to any such offer, issuance, sale or other disposition, give written notice (an "Issuance Notice") to each of the Stockholders setting forth the purchase price of such Equity Securities (or, in the case of an initial public offering, the anticipated price range), the type and aggregate number of Equity Securities or rights to acquire Equity Securities to be so offered, issued, sold or otherwise disposed of, the terms and conditions of such offer, issuance, sale or other disposition, and the rights, powers and duties inhering in such additional Equity Securities or rights to acquire Equity Securities, and (y) each Stockholder shall have the right (the "Purchase Right") to acquire the percentage of Equity Securities proposed to be offered, issued, sold or otherwise disposed of equal to the number of shares of Class A Voting Common Stock then Beneficially Owned by such Stockholder divided by the aggregate number of shares of Class A Voting Common Stock outstanding immediately prior to such offer, issuance, sale or other disposition of Equity 42 Securities (including any shares of Class A Voting Common Stock Beneficially Owned by such Stockholder); provided, however, that the terms and conditions of this Section 7.2 shall not apply to any offer, issuance, sale or other disposition of Equity Securities or rights to acquire Equity Securities to any Person pursuant to a stock option or stock appreciation rights plan established by the Company for the benefit of its employees, officers, directors, agents or consultants, or otherwise granted to an employee of the Company in connection with such person's employment by the Company. In the case of an offer, issuance sale or other disposition of Equity Securities issued as part of a unit with other debt, equity or other securities of the Company, the right of a Stockholder to acquire such Equity Security shall be conditioned upon such Stockholder's acquisition of such debt, equity or other securities included in such unit. (b) Each Stockholder may exercise such Purchase Right, in whole or in part, on the terms and conditions and for the purchase price set forth in the Issuance Notice, by giving to the Company notice to such effect, within thirty (30) days after the giving of the Issuance Notice. In the case of an initial public offering, the following conditions shall apply to the Purchase Right set forth herein: (i) In the event that a Stockholder exercises such Purchase Right, such Stockholder shall be obligated to exercise such right if the public offering price is not greater than the highest price in the anticipated range specified in the applicable notice, and (ii) in the event that a Stockholder exercises such Purchase Right and the public offering price is greater than the highest price in the anticipated range specified in the applicable notice, such Stockholder shall have the right but not the obligation, to exercise such right at such public offering price. After the expiration of such thirty (30) day period, the Company shall have the right to offer, issue, sell and otherwise dispose of any or all of the Equity Securities referred to in the applicable Issuance Notice as to which no Purchase Right has been exercised but only upon the terms and conditions, and for a purchase price not lower than the purchase price set forth in the Issuance Notice; provided, however, that in the case of an initial public offering, such right of the Company shall be the right to offer, issue, sell and otherwise dispose of such Equity Securities at any price. In the event of an initial public offering of Equity Securities at a price more than 20% below such lowest price, AT&T PCS shall have the right, exercisable at the time of pricing of such initial public offering, to exercise such Purchase Right. If the Company does not offer, issue, sell or otherwise dispose of the Equity Securities referred to in the applicable Issuance Notice on the terms and conditions set forth in such Issuance Notice within one hundred twenty (120) days after the expiration of such thirty (30) day period, then any subsequent proposal by the Company to offer, issue, sell or otherwise dispose of such Equity Securities shall be subject to this Section 7.2. 7.3 Access. The Company shall permit, and shall cause each of its Subsidiaries to permit, upon reasonable notice, during normal business hours, each Qualified Holder and its directors, officers, employees, attorneys, accountants, representatives, consultants and other agents, at the sole expense of such Qualified Holder, to (a) visit and inspect any of the properties and facilities of the Company and its Subsidiaries, (b) examine and make copies of and extracts from the corporate and financial records of the Company and its Subsidiaries, (c) discuss the affairs, finances and accounts of the Company or any such Subsidiary with any of its officers, directors and key employees and its independent accountants, and (d) otherwise investigate the properties, businesses and operations of the Company and its Subsidiaries, in each case as such Qualified Holder reasonably deems necessary; provided, however, that each Qualified Holder may exercise its rights pursuant to this Section 7.3 no more than three times in 43 any 12 month period. The Company shall, and shall cause each of its Subsidiaries and the officers, directors and employees of the Company and its Subsidiaries to, cooperate fully in connection with such inspection, examinations and discussions. The presentation of a copy of this Agreement by any Qualified Holder to the independent accountants of the Company or any of its Subsidiaries shall constitute permission by the Company or such Subsidiary to its independent accountants to participate in discussions with such Qualified Holder. 7.4 Merger, Sale or Liquidation of the Company. (a) Except for transactions permitted pursuant to Section 7.11 and to the extent permitted in this Section 7.4, the Company shall not, and shall not permit any of its Subsidiaries to, except with the prior written consent of AT&T PCS or in accordance with Sections 7.4(b) and 7.4(c), effect (i) any merger, combination or consolidation of the Company or such Subsidiary with or into any other entity (regardless of whether the Company or such Subsidiary is the surviving entity in any such transaction) (any such merger, combination or consolidation is referred to as a "Company Merger"), (ii) any sale or disposition of a substantial portion of its assets (a "Company Asset Sale"), or (iii) the liquidation, dissolution or winding up of the Company or such Subsidiary. (b) The Company and its Subsidiaries may effect a Company Merger, without the prior written consent of AT&T PCS, (i) in which the only constituent corporations are two or more of the Company's wholly owned Subsidiaries, (ii) in which the only constituent corporations are the Company and one or more of its wholly owned Subsidiaries and the Company is the surviving corporation, or (iii) between a Subsidiary of the Company and another entity for the purpose of acquiring such other entity; provided, that (x) such transaction does not affect the capital structure of the Company, except to the extent the Company issues common stock to the stockholders of the other entity pursuant to the terms of such Company Merger, (y) the surviving corporation is a direct or indirect wholly owned Subsidiary of the Company, and (z) the consummation of such transaction does not violate Section 8.1(a). (c) The Company and its Subsidiaries may effect any of the transactions described in clauses (i) or (ii) of Section 7.4(a) (a "Sale Transaction"), without the prior written consent of AT&T PCS, if (a) such transaction has no material effect on AT&T PCS' equity interest in the Company (and the seniority thereof) or its rights under this Agreement, (b) the Company's direct or indirect interest in its assets is unaffected by such transaction in any material respect, and (c) such transaction is otherwise equivalent in all material respects to AT&T PCS to the sale by each of the other Stockholders of its equity interests in the Company for cash or marketable securities; provided, that any such Sale Transaction shall nevertheless be subject to a right of first offer in accordance with the provisions of Section 7. 4(d). (d) Prior to entering into a Sale Transaction, the Company shall give written notice (the "Sale Notice") to AT&T PCS. Each Sale Notice shall describe in reasonable detail all material terms of the proposed Sale Transaction. The Sale Notice shall constitute an irrevocable offer (a "Sale Offer") to enter into the Sale Transaction with AT&T PCS on the terms set forth in the Sale Notice. AT&T PCS shall have the irrevocable right and option, but not the obligation, to accept the Sale Offer in whole but not in part by giving written notice of its 44 acceptance of such offer within thirty (30) days of the date the Sale Notice is given. The Sale Transaction shall be closed at the principal executive offices of the Company within thirty (30) days after the acceptance by AT&T PCS of the Sale Offer; provided, however, that, if the Sale Transaction is subject to the consent of the FCC or any public service or public utilities commission, the Sale Transaction shall be closed on the fifth business day after all such consents shall have been obtained by Final Order. If AT&T PCS declines (which shall include the failure to give timely notice of acceptance) to accept the Sale Offer, the Company shall have the right (for a period of ninety (90) days following the expiration of the thirty (30) day acceptance period referred to above) to close a Sale Transaction on the terms described in the Sale Offer (except that the price must be at least 95% of the price set forth in the Sale Offer); provided however that, if the consent of the FCC or any public service or public utilities commission is required, the Sale Transaction may be closed not later than the fifth business day after all such consents shall have been obtained by Final Order. If, after giving a Sale Offer, the Company does not close a Sale Transaction in accordance with the terms of the immediately preceding sentence, the Company shall not effect any Sale Transaction without giving another Sale Notice in accordance with this Section 7.4(d). 7.5 Wholly-Owned Subsidiaries. All of the Company's Subsidiaries shall be direct or indirect wholly owned Subsidiaries of the Company, and the Company shall not, and shall not permit any Subsidiary to, sell or issue, transfer, encumber or otherwise dispose of any shares of capital stock of any of the Company's Subsidiaries to any Person other than the Company and its direct or indirect wholly owned Subsidiaries, except for a pledge of any such shares in connection with the incurrence of indebtedness. 7.6 Amendments of the Restated Certificate and By-Laws. Prior to the IPO Date, the Company shall not, without the prior written consent of AT&T PCS, authorize or adopt any amendment, modification or repeal of any provision of the Restated Certificate or the Restated By-Laws, unless such amendment is consistent with the terms of this Agreement. 7.7 Confidentiality. (a) Each party shall, and shall cause each of its Affiliates, and its and their respective stockholders, members, managers, directors, officers, employees and agents (collectively "Representatives") to, keep secret and retain in strictest confidence any and all information relating to the Company or any other party that is designated in writing by the party providing such information or the Company as confidential ("Confidential Information") and shall not disclose such information, and shall cause its Representatives not to disclose such information, to anyone except such Affiliates, Representatives or any other Person that agrees in writing to keep in confidence all such information in accordance with the terms of this Section 7.7. Each party agrees to use such information received from another party or the Company only in connection with its ownership interest in the Company but not for any other purpose. All such information furnished pursuant to this Agreement shall be returned promptly to the party to whom it belongs upon request by such party. (b) To the fullest extent permitted by law, if a party or any of its Affiliates or Representatives breaches, or threatens to commit a breach of, this Section 7.7, the party whose Confidential Information shall be disclosed, or threatened to be disclosed, shall have 45 the right and remedy to have this Section 7.7 specifically enforced by any court having jurisdiction, it being acknowledged and agreed that money damages will not provide an adequate remedy to such party. Nothing in this Section 7.7 shall be construed to limit the right of any party to collect money damages in the event of breach of this Section 7.7. (c) Anything else in this Agreement notwithstanding, each party shall have the right to disclose any information, including Confidential Information of the other party or such other party's Affiliates, in any filing with any regulatory agency, court or other authority or any disclosure to a trustee of public debt of a party to the extent that the disclosing party determines in good faith that it is required by Law, regulation or the terms of such debt to do so; provided, however, that any such disclosure shall be as limited in scope as possible and shall be made only after giving the other party as much notice as practicable of such required disclosure and an opportunity to contest such disclosure if possible. 7.8 IPO Date. In the event that the IPO Date shall not have occurred on or prior to the fifth (5th) anniversary of the date hereof, the Company shall, at the request of any Qualified Holder, as promptly as is reasonably practicable after the date of such request, undertake a registration of Common Stock pursuant to an effective Registration Statement that results in the occurrence of the IPO Date; provided, however, that if the Board of Directors determines that such registration would interfere with any pending or contemplated material acquisition, disposition, financing or other material transaction, the Company may defer such registration (including by withdrawing any Registration Statement filed in connection with such registration); provided that the aggregate of all such deferrals shall not exceed one hundred twenty (120) days in any 360-day period. Any such registration shall be pursuant to an underwritten offering. Each Stockholder agrees to cooperate in such registration, including, without limitation, entering into customary holdback agreements. 7.9 AT&T Retained Licenses. In the event that AT&T PCS desires to Transfer all or any of the AT&T Retained Licenses in the Territory at any time prior to the eighth anniversary of the date hereof, AT&T PCS shall give written notice thereof to the Company at least thirty (30) days prior to entering into a binding agreement to sell such AT&T Retained Licenses in the Territory such notice to specify among other things, the AT&T Retained Licenses in the Territory that it desires to sell. For a period of thirty (30) days after the date such notice is given, the Company shall have the right to negotiate with AT&T PCS with respect to the purchase of all, but not less than all, of such AT&T Retained Licenses in the Territory; it being understood and agreed that such right shall not be deemed to be a right of first offer or right of first refusal for the benefit of the Company and AT&T PCS shall have the right to reject any offer made by the Company during such thirty (30) day period. In the event no binding agreement to sell all or any of such AT&T Retained Licenses in the Territory is entered into prior to the expiration of the one hundred and eighty (180) day period following the expiration of such (30) day period, such Licenses shall become subject once again to the provision and restrictions hereof. 7.10 Regulatory Cooperation. Each of the Stockholders severally agrees to comply with the last sentence of Section 6.7 of the Securities Purchase Agreement. 46 7.11 Permitted Transactions. Notwithstanding the terms of Section 7.4(a) and 8.4(a): (a) after completion of the Minimum Build-Out Plan and certification that Company Systems meet the TDMA Quality Standards, the Company and its Subsidiaries may effect a merger, combination of consolidation with or into a Permitted Merger Participant or acquire all or substantially all of the assets of a Permitted Merger Participant or sell all or substantially all of the assets of the Company and its Subsidiaries to a Permitted Merger Participant (any such transaction being referred to as a "Permitted Consolidation Transaction"), so long as such transaction is approved by the Board of Directors and the holders of the Company's capital stock to the extent such approval is required pursuant to the Restated Certificate or applicable law; (b) the Company may acquire FCC Licenses (each such License a "Permitted Cellular License") authorizing the holder to provide in a specified geographic area using specified frequencies in respect of which the Board of Directors has determined that the acquisition of such License (and any other assets being acquired together therewith) is a demonstrably superior alternative to constructing a PCS System in the applicable area within the PCS Territory, provided that, (i) a majority of the POPs included in the geographic area covered by such License are within the PCS Territory, (ii) none of AT&T PCS, any Affiliate thereof or any AT&T Licensee owns an interest in an FCC License to provide Commercial Mobile Radio Service in such geographic area, and (iii) the ownership of such License will not conflict with, or cause AT&T PCS, any Affiliate thereof or any AT&T Licensee to be in violation or breach of any agreement, instrument, Law or License applicable to or binding upon such Person or its assets. Notwithstanding the foregoing, the Company shall not acquire any Permitted Cellular License if the acquisition of such License would adversely affect the Company's ability to satisfy its obligations under the first sentence of Section 8.1(b); and (c) The Company may acquire licenses issued by the FCC to provide wireless services (other than FCC Licenses) (each such license a "Permitted Non-CMRS License") authorizing the holder to provide in a specified geographic area using specified frequencies in respect of which the Board of Directors has determined that the acquisition of such Permitted Non-CMRS License (and any other assets being acquired together therewith) is necessary or desirable to constructing a PCS System in the applicable area within the PCS Territory, provided that, (i) the POPs included in the geographic area covered by such License are within the PCS Territory, (ii) none of AT&T PCS or any Affiliate thereof owns an interest in a similar Permitted Non-CMRS License in such geographic area, (iii) the ownership of such License will not conflict with, or cause AT&T PCS or any Affiliate thereof to be in violation or breach of any agreement, instrument, Law or License applicable to or binding upon such Person or its assets, and (iv) the service to be provided by the Company using such Permitted Non-CMRS License complies with the definition of Business. Notwithstanding the foregoing, the Company shall not acquire any Permitted Non-CMRS License if the acquisition of such License would adversely affect the Company's ability to satisfy its obligations under the first sentence of Section 8.1(b). 7.12 Covenant of Holders of Class C Common Stock. (a) Each holder of Class C Common Stock hereby covenants and agrees that, for so long as it is a holder of any Class C 47 Common Stock and for so long as required by FCC rules, it will maintain its status as an "Institutional Investor", as such term is used in 47 CFR Section 24.720(h), and that it will give written notice to the Company within five (5) days after such Stockholder becomes aware that it no longer maintains such status for any reason (the "Transfer Event"). Upon the occurrence of a Transfer Event with respect to any Stockholder under circumstances such that (i) the failure of the Stockholder to maintain its status as an Institutional Investor would compromise any of the material benefits the Company derives as a "Very Small Business", as defined in 47 CFR ss. 24.720(b)(2) or from the Company's eligibility to bid on frequency block "C" or "F" licenses, as specified in 47 CFR Section 24.709 or to be eligible to receive any of the rights specified in 47 CFR Sections 24.711, 24.712, 24.716 and 24.717 (collectively, the "Material Benefits") and (ii) the Stockholder is unable to obtain a waiver from the FCC regarding, or to cure, such Transfer Event or loss of Material Benefits, the other holders of Class C Common Stock at the time shall have the right to purchase any or all of such Stockholder's Class C Common Stock pursuant to the terms hereof, or, if not so purchased by the other holders of Series C Common Stock, by one or more Persons designated by the Company. (b) Within fifteen (15) days of becoming aware that a Transfer Event has occurred with respect to a Stockholder, the Company shall give the other holders of Class C Common Stock notice of their right to purchase the Stockholder's Class C Common Stock for the purchase price paid by such holder of Class C Common Stock. (c) Notwithstanding the foregoing, any Stockholder which suffers a Transfer Event may, if to do so would avoid the loss of Material Benefits, elect to convert all or part of its Class C Common Stock to another class of Common Stock which the Company has authorized, or to waive in writing such rights pertaining to its ownership of such stock as may be necessary to avoid the loss of Material Benefits, which election shall be made no later than five (5) days before the FCC Determination Date. 7.13 Additional Florida POPs. In the event that the PCS Licenses that are subject to the Option Agreement are acquired by the Company, the "PCS Territory" shall include the territory covered by such PCS Licenses. The Company shall have the right to acquire the Pensacola, FL and Fort Walton Beach, FL MSAs (the "Permitted Florida MSAs") so long as at least one (1) of the Series A Preferred Directors shall have consented or voted in favor thereof. 8. Operating Arrangements. 8.1 Construction of Company Systems. (a) The Company hereby agrees to construct, or cause its Subsidiaries to construct, Company Systems covering the Territory on a schedule no less rapid than is set forth in the Minimum Build-Out Plan. Company Systems shall be technologically compatible in all material respects with systems being used in a Majority of the Southeast Region (including without limitation for the purpose of facilitating roaming and hand-off between systems), and will to the extent technologically feasible implement the same User Interface as such systems, with the intention that the User Interface in Company Systems will not differ from the User Interface in a Majority of the Southeast Region in a manner that would be material to customers. 48 (b) The Company and AT&T PCS hereby agree that the Company shall assume and be obligated to satisfy the construction requirements set forth in 47 CFR 24.203 with respect to the AT&T Retained Licenses in the Territory and the AT&T Contributed Licenses. The Company and AT&T PCS agree from time to time at the request of the Company or AT&T PCS, as applicable, to provide the other with information concerning the status of construction of its PCS Systems to enable such party to determine the level of compliance with such construction requirements with respect to the AT&T Retained Licenses and AT&T Contributed Licenses, as applicable. (c) The Company will arrange for all necessary microwave relocation in connection with the AT&T Contributed Licenses and pay, assume or (if applicable) reimburse AT&T PCS or its Affiliates for any obligation to pay, any reasonable costs incurred by it or AT&T PCS in connection with any such microwave relocation, provided, that nothing contained herein shall require the Company to pay any costs incurred in connection with microwave relocation in connection with the AT&T Retained Licenses. 8.2 Service Features. Company Systems will offer the Core Service Features. Company Systems will also offer, at the written request of AT&T PCS, additional service features that AT&T PCS has notified the Company it will provide in a Majority of the Southeast Region, unless the Board of Directors reasonably determines that the provision of such additional features would be financially detrimental to the Company. Unless the Board of Directors makes such a determination, any such additional features shall be adopted within one hundred twenty (120) days after the request by AT&T PCS. The Critical Network Elements are set forth on Schedule XI. 8.3 Quality Standards. The Company shall use commercially reasonable efforts to cause the Company Systems to comply with the TDMA Quality Standards. Without limiting the foregoing, with respect to each material portion of a Company System (such as a city) that the Company places in commercial service, on or prior to the first anniversary of the date such material portion is placed in commercial service, the Company shall cause each such material portion to achieve a level of compliance with the TDMA Quality Standards equal to at least the average level of compliance achieved by comparable PCS and Cellular Systems owned and operated by AT&T PCS taking into account, among other things, the relative stage of development thereof. In the event that the Company fails to achieve such level of compliance, the Company shall not be deemed to be in material breach of this provision if such non-compliance is cured within thirty (30) days of notice thereof from AT&T PCS to the Company, or, if such breach is not capable of being cured within such thirty (30) day period using commercially reasonable efforts, within one hundred eighty (180) days of such notice, provided the Company is using commercially reasonable efforts to cure such material breach as soon as reasonably practicable. 8.4 No Change of Business. (a) Subject to Section 7.11, the Company will not, and will not permit any of its Subsidiaries to, without obtaining the prior written consent of AT&T PCS, do any of the following: (i) conduct, directly or indirectly, any business other than the Business, (ii) make any material change to the Minimum Build-Out Plan in the Territory, or (iii) effect any 49 transaction, agreement or arrangement which has or could reasonably be expected to have the effect of materially impairing or materially limiting the ability of (x) subscribers to Cellular Systems and PCS Systems in which AT&T PCS or its Affiliates have an ownership interest to utilize the Company Systems for roaming, or (y) AT&T PCS or its Affiliates to resell wireless service on the Company Systems; it being understood that clause (i) shall not be deemed to restrict the business of the Company in any Overlap Territory. (b) During the period commencing on the date hereof through and including the first anniversary of the date hereof, without obtaining the prior written consent of each SBIC Holder, the Company will not, and will not permit any of its Subsidiaries, to conduct, directly or indirectly, any business other than the Business. (c) If at any time during the term of this Agreement AT&T PCS and its Affiliates determine to discontinue use of TDMA in a Majority of the United States: (i) the Company will have the right to cease to use TDMA and may adopt the new technology adopted by AT&T PCS and its Affiliates in a Majority of the United States or implement any other alternative technology in Company Systems, and, if it exercises such right, the definition of Company Systems shall be automatically deemed to be modified by substituting a reference to such new or alternative technology in lieu of the reference in such definition to TDMA, and (ii) the obligations of AT&T PCS and its Affiliates pursuant to Section 8.6 shall terminate and be of no further force or effect, unless within sixty (60) days of notice by AT&T PCS to the Company specifying that AT&T PCS and its Affiliates have determined to discontinue use of TDMA in a Majority of the United States, the Company agrees to implement in Company Systems on a reasonable schedule the new technology adopted by AT&T PCS and its Affiliates in a Majority of the United States. In the event AT&T PCS desires to test any technology that is an alternative to TDMA in any PCS System or Cellular System contiguous to the Territory, AT&T PCS hereby agrees to notify the Company at least thirty (30) days before conducting such test and will conduct such tests in a manner that does not have a material adverse effect on the Company. 8.5 Preferred Provider. (a) The Company and its Subsidiaries shall not market, offer, provide or resell interexchange services, except (i) interexchange services that constitute Company Communication Services, and (ii) interexchange services procured from AT&T Corp. or an Affiliate thereof designated by AT&T Corp. Such interexchange services shall be provided by AT&T Corp. or such Affiliate at the same rates as the rates charged by AT&T Corp. or such Affiliate to other similarly situated carriers. It is anticipated that such services will be provided by AT&T Corp. or such Affiliate pursuant to an agreement incorporating such rates. Upon specific request of any customer, the Company may permit such customer to utilize the interexchange services of another interexchange provider (including the interexchange services of AT&T Corp. and its Affiliates), provided, however, that neither the Company nor any Affiliate thereof will accept any referral fee, commission, credit against its long distance bill, or any other remuneration, directly or indirectly, from such other provider in exchange for permitting its customers to utilize such other interexchange provider. The Company covenants and agrees that neither it nor its Subsidiaries will market, offer, promote or otherwise encourage its customers to utilize the interexchange services of any Person other than the Company (such 50 services having been procured as set forth above by the Company from AT&T Corp. or an Affiliate thereof) or AT&T Corp. or an Affiliate thereof. (b) With respect to services other than interexchange services, when the Company or a Subsidiary does not itself develop, or is not permitted to develop, one or more telecommunications services that are offered or provided in connection with the conduct of its Business (including, by way of example, local telephone services or voicemail), but instead procures such services, the Company shall request in writing that AT&T PCS provide such services (directly or through an Affiliate designated by it) and, provided, that AT&T PCS (or a designated Affiliate) offers to provide such telecommunication services to the Company on reasonably competitive terms, the Company or such Subsidiary shall procure such services from AT&T PCS (or such Affiliate thereof). 8.6 Exclusivity. (a) None of the Stockholders or their respective Affiliates will provide or resell, or act as the agent for any Person offering, within the Territory, Company Communications Services (when used in this Section 8.6, solely with respect to the Management Stockholders and their Affiliates and the Cash Equity and their respective Affiliates, the term "Company Communications Services" shall include all mobile wireless telecommunications services, initiated or terminated, using analog, CDMA, GSM, TDMA or any other technology) except that, AT&T PCS and its Affiliates may (i) resell, or act as the Company's agent for, Company Communications Services provided by the Company in accordance with the Resale Agreement (or any other agreement between AT&T PCS and its Affiliates, on the one hand, and the Company, on the other hand), including bundling any such Company Communications Services with other telecommunications services marketed, offered and provided or resold by such Person, (ii) provide or resell wireless telecommunications services to or from specific locations (such as buildings or office complexes), even if the subscriber equipment used in connection with such service may be capable of routine movement within a limited area (such as a building or office complex), and even if such subscriber equipment may be capable of obtaining other telecommunications services beyond such limited area (which other services may include routine movement beyond such limited area) and hand-off between the service to such specific locations and such other telecommunications services; provided, however, that if AT&T PCS or any of its Affiliates sells such mobile wireless subscriber equipment such equipment shall be capable of providing (but not necessarily on an exclusive basis) Company Communications Services, (iii) resell Company Communications Services provided by a Person other than the Company in any geographical area within the Territory in which the Company has not placed a Company System into commercial service (it being understood that in the event that AT&T PCS or any of its Affiliates that is reselling Company Communication Services of a Person other than the Company in a geographic area within the Territory at the time the Company places a portion of a Company System including such geographic area into commercial service, AT&T PCS or its Affiliates, as applicable, shall terminate such resale arrangement with respect to such geographic areas within thirty (30) days of the date such portion of a Company System is placed in commercial service) and (iv) provide or resell, or act as the agent for any person offering, Company Communications Services within the Kentucky RSAs pursuant to the terms of the agreement in effect on the date hereof with PriCellular Inc., as such agreement may be amended, modified, supplemented or modified after the date hereof or 51 pursuant to a successor agreement entered into with respect to the subject matter thereof. AT&T PCS agrees to provide the Company with not less than sixty (60) days' prior notice of any resale activities described in clause (iii) hereof, such notice to include a reasonable description of such resale activities and to use dual band/dual mode phones, to the extent commercially reasonable in connection with such resale activities. To the extent the "other telecommunications services" referred to in clause (ii) of the first sentence of this Section 8.6(a) constitute Company Communications Services, neither AT&T PCS nor any of its Affiliates or any AT&T Licensee may provide or resell, or act as agent for any Person offering, such "other telecommunications services" except Company Communications Services provided by the Company in accordance with the terms of clause (i) of the first sentence of this Section 8.6(a). Nothing herein shall be construed to limit in any respect any advertising and promotional and similar activities by AT&T PCS or its Affiliates or any Cash Equity Investor or any of its Affiliates. (b) With respect to the markets listed on Schedules 1 and 2 to the Roaming Agreement, each of AT&T PCS and the Company shall, and shall cause each of its Affiliates to, in its and such Affiliates' capacity as Home Carrier: (i) program and direct its authorized dealers to program the subscriber equipment provided by it or such authorized dealers to its customers, at the time it is provided to such customers, (to the extent such programming is technologically feasible) so that the Company or AT&T PCS, as the case may be, and such Affiliates, in its and such Affiliates' capacity as Serving Carrier, is the preferred provider of Service in the markets listed on such Schedules 1 and 2, and (ii) refrain, and direct its authorized dealers to refrain, from inducing any of its customers to change or, except at such customer's request in the event the quality of the Company's services do not meet industry standards, changing the programming described in clause (i) above; provided, however, the provisions of this Section 8.6(b) shall not apply to AT&T PCS and its Affiliates in the Kentucky RSAs. For the purpose of this Section 8.6(b), the terms "Affiliate," "Home Carrier" and "Serving Carrier" shall have the meanings ascribed thereto in the Roaming Agreement. 8.7 Other Business; Duties; Etc. Except to the extent expressly set forth in Section 8.6, AT&T PCS and TWR Cellular and each Cash Equity Investor and any Person affiliated with AT&T PCS, TWR Cellular or a Cash Equity Investor may engage in or possess an interest in other business ventures, and may engage in any other activities, of every kind and description (whether or not competitive with the business of the Company or otherwise affecting the Company), independently or with others and shall owe no duty or liability to the Company, the other Stockholders or their Affiliates in connection therewith. None of the Company or the other Stockholders shall have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement or any of the Related Agreements. Without limiting the generality of the foregoing, in the event that AT&T PCS, TWR Cellular or a Cash Equity Investor or a Person affiliated with AT&T PCS, TWR Cellular or a Cash Equity Investor develops inventions which are patentable or are otherwise trade secrets relevant to the Business, AT&T PCS, TWR Cellular or such Cash Equity Investor or affiliated Person shall nevertheless retain ownership of such invention and may license it to the Company if the Company so desires and if mutually satisfactory terms are agreed to. The Company shall also have the right to develop any inventions related to the Business deemed desirable by it and to retain title to such inventions. To the extent that, at law or in equity, AT&T PCS, TWR Cellular or a Cash Equity Investor or any Person affiliated with AT&T PCS, TWR Cellular or a Cash Equity Investor would have duties (including fiduciary duties) and liabilities to the Company, or to the 52 Stockholders, different from or in addition to those provided in this Section 8.7 and Section 8.6 with respect to the subject matter of such Sections, all rights of the Company and the Stockholders arising out of such duties and liabilities are hereby waived and no such Person shall be liable to the Company or to any Stockholder for its good faith reliance on the provisions of this Section 8.7. 8.8 Acknowledgments and Termination of Exclusivity. (a) The Stockholders hereby expressly acknowledge that none of the Stockholders would have been willing to enter into this Agreement or make contributions to the capital of the Company, except for each other Stockholder's and its Affiliates' willingness to enter into this Agreement (including without limitation the provisions set forth in this Section 8) and the Related Agreements. (b) Without limiting the foregoing, and without limiting the remedies that may be available to it at law or in equity, in the event of a Substantial Company Breach, the obligations of AT&T PCS and its Affiliates (including TWR Cellular) under Section 8.6 shall automatically terminate and be of no further force or effect. (c) Upon consummation of a Disqualifying Transaction, AT&T PCS may, by notice to the Company, terminate its and its Affiliates' (including TWR Cellular) obligations under Section 8.6 with respect to any Overlap Territory, provided that the obligations of AT&T PCS and its Affiliates (including TWR Cellular) pursuant to Section 8.6(b)(ii) shall continue in effect with respect to the then existing customers of the PCS Systems and Cellular Systems owned and operated by AT&T PCS and its Affiliates (including TWR Cellular) (and their respective successors pursuant to the applicable Disqualifying Transaction) before giving effect to such Disqualifying Transaction, so long as such customers remain customers of such systems and such systems continue to be owned or operated by AT&T PCS or its Affiliates (including TWR Cellular). Notwithstanding the foregoing, in the event that the Company exercises its right pursuant to Section 6.1 to convert all of the shares of Company Stock owned by AT&T PCS and TWR Cellular into Series B Preferred Stock, the reference in this Section 8.8(c) to the "Overlap Territory" shall be deemed to refer to the Territory. 8.9 Equipment, Discounts and Roaming. AT&T PCS acknowledges and agrees that, subject to the terms of Sections 8.1 and 8.5, the Company shall have the sole discretion to select (a) the equipment vendor(s) for the infrastructure to be constructed by the Company and (b) billing and other vendors providing goods and services to the Company. If reasonably requested by the Company, AT&T PCS agrees to use commercially reasonable efforts to assist representatives of the Company in obtaining discounts from any AT&T PCS vendor with whom the Company is negotiating for the purchase of any such subscriber or infrastructure equipment. In addition, AT&T PCS agrees to use all commercially reasonable efforts to enable the Company to become a party to the roaming agreements between AT&T PCS and its Affiliates and operators of other Cellular Systems and PCS Systems or, subject to the Company agreeing to the obligations thereunder, entitled to the rights and benefits of AT&T PCS under such roaming agreements. The two immediately preceding sentences shall not be construed to require AT&T PCS or its Affiliates to take any action that AT&T PCS or such Affiliate determines in its sole discretion to be adverse to its interests. AT&T PCS may develop 53 a roaming clearinghouse for AT&T Licensees, including the Company, pursuant to which the Company's subscribers that are roaming on PCS or Cellular Systems with which AT&T PCS or any of its Affiliates have entered into a roaming agreement will be identified on such PCS or Cellular System as an AT&T PCS subscriber, and settlement of roaming accounts for such Company subscribers would be effected first between AT&T PCS and such PCS or Cellular System and then settled between AT&T PCS and the Company. In the event AT&T PCS provides such roaming clearinghouse to the Company, the per-subscriber handling charge to the Company shall be commercially reasonable. 8.10 Intentionally Omitted. 8.11 Resale Agreements. (a) From time to time, upon the request of AT&T PCS, the Company shall enter into a Resale Agreement relating to the Territory, substantially in the form of Exhibit C to the Securities Purchase Agreement, with AT&T PCS and any of its Affiliates and, with respect to any geographic area within the Territory, one other Person designated by AT&T PCS, provided such other Person is licensed to provide telecommunications services in such geographic area under the service marks used by AT&T Corp. and such other Person qualifies as a reseller under any generally applicable standards the Company establishes for its resellers from time to time and upon the request of AT&T PCS, the Company shall enter into an agency agreement authorizing AT&T PCS and any of its Affiliates and, with respect to any geographic area within the Territory, one other Person designated by AT&T PCS, provided such other Person is licensed to provide telecommunications services in such geographic area under the service marks used by AT&T Corp. and such other Person qualifies as an agent under any generally applicable standards the Company establishes for its agents from time to time. Any such agency agreements shall provide that the Company shall pay the agent a commission at the rate then generally offered to the Company's agents and shall otherwise be on commercially reasonable terms. At no time shall there be more than one Person (other than AT&T PCS and its Affiliates) designated by AT&T PCS as a reseller or an agent with respect to any geographic area within the Territory. (b) It is the intention of the parties that, in light of AT&T's PCS's equity interest in the Company and the other arrangements between AT&T PCS and its Affiliates and the Company (including the roaming revenues anticipated to be earned by the Company from subscribers of AT&T PCS and its Affiliates), the rates, terms and conditions of Service (as defined in the Resale Agreement) provided by the Company pursuant to the Resale Agreement or any other agreement between AT&T PCS or such other reseller and the Company shall be at least as favorable to AT&T PCS or such other reseller, taken as a whole, as the rates, terms and conditions of Service, taken as a whole, provided by the Company to any other Customer (as defined in the Resale Agreement) and, to the extent permitted by applicable law, such rates, terms and conditions shall be superior to those provided to any other Customer. Without limiting the foregoing, the rate plans offered by the Company pursuant to any Resale Agreement shall be designed to result in the average actual rate per minute paid by the Reseller for Service being at least 25% below the weighted average actual rate per minute billed by the Company to its subscribers for access and air time, but excluding revenues for features, taxes, toll or other non-rate items. The Company and Reseller shall negotiate commercially reasonable reductions to 54 such resale rate based upon increased volume commitments (including roaming charges incurred by subscribers of AT&T PCS and its Affiliates). 8.12 Non-Solicitation. (a) AT&T PCS hereby covenants and agrees that from and after the date hereof until six months after the date on which it shall cease to own any Equity Securities that neither AT&T PCS nor its Affiliates (including TWR Cellular) shall solicit for employment any employee of the Company; provided however that, nothing contained in this Section 8.12(a) shall prevent AT&T PCS or its Affiliates (including TWR Cellular) from engaging in a general solicitation for employment that is not directed at employees of the Company. (b) The Company hereby covenants and agrees that from and after the date hereof until six months after the date on which AT&T PCS or its Affiliates (including TWR Cellular) shall cease to own any Equity Securities that neither the Company nor its Affiliates shall solicit for employment any employee of the AT&T PCS or its Affiliates (including TWR Cellular); provided, however that nothing contained in this Section 8.12(b) shall prevent the Company or its Affiliates from engaging in a general solicitation for employment that is not directed at employees of AT&T PCS and its Affiliates (including TWR Cellular). 8.13 Co-Location. Except in any portion of the Territory as to which the provisions of Section 8.6 shall have been terminated: (a) the Company agrees to permit on commercially reasonable terms AT&T PCS and its Affiliates (including TWR Cellular) to install, operate and maintain cell site equipment owned or used by AT&T PCS and its Affiliates (including TWR Cellular) in their respective businesses on the towers, buildings and other locations at which the Company's cell site equipment is installed, operated and maintained, and (b) AT&T PCS and its Affiliates (including TWR Cellular) agree to permit on commercially reasonable terms the Company to install, operate and maintain cell site equipment owned or used by the Company in its business on the towers, buildings and other locations at which AT&T PCS and its Affiliates' (including TWR Cellular) cell site equipment is installed, operated and maintained. 8.14 Billing. The Company hereby covenants and agrees that the Company's billing system and software will conform to the "MABEL" format. 9. After-Acquired Shares; Recapitalization. 9.1 After Acquired Shares; Recapitalization. (a) All of the provisions of this Agreement shall apply to all of the shares of Equity Securities now owned or hereafter issued or transferred to a Stockholder or to his, her or its Affiliated Successors in consequence of any additional issuance, purchase, exchange or reclassification of shares of Equity Securities, corporate reorganization, or any other form of recapitalization, or consolidation, or merger, or share split, or share dividend, or which are acquired by a Stockholder or its Affiliated Successors in any other manner. (b) Whenever the number of outstanding shares of Equity Securities is changed by reason of a stock dividend or a subdivision or combination of shares effected by a 55 reclassification of shares, each specified number of shares referred to in this Agreement shall be adjusted accordingly. 9.2 Amendment of Restated Certificate. Whenever the number of shares of authorized Common Stock is not sufficient in order to issue shares of Common Stock upon conversion of Preferred Stock in accordance with the Restated Certificate, (i) the Company shall promptly amend the Restated Certificate in order to authorize a sufficient number of shares of Common Stock, and (ii) each Stockholder agrees to vote its shares of Preferred Stock and Common Stock in favor of such amendment. 10. Share Certificates. 10.1 Restrictive Endorsements; Replacement Certificates. Each certificate representing the shares of Equity Securities now or hereafter held by a Stockholder (including any such certificate delivered upon conversion of the Preferred Stock) or delivered in substitution or exchange for any of the foregoing certificates shall be stamped with legends in substantially the following form: (a) "The shares represented by this Certificate are subject to a Stockholders' Agreement dated as of January 7, 1999, a copy of which is on file at the offices of the Company and will be furnished by the Company to the holder hereof upon written request. Such Stockholders' Agreement provides, among other things, for the granting of certain restrictions on the sale, transfer, pledge, hypothecation or other disposition of the shares represented by this Certificate, and that under certain circumstances, the holder hereof may be required to sell the shares represented by this Certificate. By acceptance of this Certificate, each holder hereof agrees to be bound by the provisions of such Stockholders' Agreement. The Company reserves the rights to refuse to transfer the shares represented by this Certificate unless and until the conditions to transfer set forth in such Stockholders' Agreement have been fulfilled"; and (b) "The securities represented by this Certificate have been acquired for investment and have not been registered under the Securities Act of 1933, as amended (the "Act"), or under any state securities or 'Blue Sky' laws. Said securities may not be sold, transferred, assigned, pledged, hypothecated or otherwise disposed of, unless and until registered under the Act and the rules and regulations thereunder and all applicable state securities or 'Blue Sky' laws or exempted therefrom under the Act and all applicable state securities or 'Blue Sky' laws." Each Stockholder agrees that he, she or it will deliver all certificates for shares of Equity Securities owned by him, her or it to the Company for the purpose of affixing such legends thereto. (c) Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any certificate representing shares of Equity Securities subject to this Agreement and of a bond or other indemnity reasonably satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses incident 56 thereto, and upon surrender of such certificate, if mutilated, the Company will make and deliver a new certificate of like tenor in lieu of such lost, stolen, destroyed or mutilated certificate. 11. Equitable Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions of this Agreement and that, in addition to being entitled to exercise all of the rights provided herein or in the Restated Certificate or granted by law, including recovery of damages, equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement. 12. Miscellaneous. 12.1 Notices. All notices or other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, or by registered or certified mail (return receipt requested), postage prepaid, with an acknowledgment of receipt signed by the addressee or an authorized representative thereof, addressed as follows (or to such other address for a party as shall be specified by like notice; provided that notice of a change of address shall be effective only upon receipt thereof: If to AT&T PCS or TWR Cellular: c/o AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, Washington 98033 Attention: William W. Hague Telephone: (425) 828-8461 Facsimile: (425) 828-8451 With a copy to: AT&T Corp. 295 North Maple Avenue Basking Ridge, NJ 07920 Attention: Corporate Secretary Telephone: Facsimile: (908) 953-4657 and Friedman Kaplan & Seiler LLP 875 Third Avenue, 8th Floor New York, New York 10022 Attention: Daniel M. Taitz Telephone: (212) 833-1109 Facsimile: (212) 355-6401 57 and Rubin Baum Levin Constant & Friedman 30 Rockefeller Plaza New York, New York 10112 Attention: Gregg S. Lerner, Esq. Telephone: (212) 698-7705 Facsimile: (212) 698-7825 If to a Cash Equity Investor, to its address set forth on Schedule I: With a copy to: Mayer, Brown & Platt 1675 Broadway New York, New York 10019 Attention: Mark S. Wojciechowski, Esq. Telephone: (212) 506-2525 Facsimile: (212) 262-1910 If to a Management Stockholder or to the Company: Tritel, Inc. (or in the case of a Management Stockholder, c/o Tritel, Inc.) 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Telephone: (601) 936-0893 Facsimile: (601) 936-6045 With a copy to: Young Williams, Henderson & Fuselier, P.A. 2000 Deposit Guaranty Plaza Jackson, MS 39201 Attention: James H. Neeld IV, Esq. Telephone: (601) 360-9021 Facsimile: (601) 355-6136 With a copy to each other party sent to the addresses set forth in this Section 12.1. 12.2 Entire Agreement; Amendment; Consents. (a) This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof. 58 (b) No change or modification of this Agreement shall be valid, binding or enforceable unless the same shall be in writing and signed by the Company and the Beneficial Owners of a majority of the shares of Class A Voting Common Stock, including AT&T PCS, 66 K% of the Class A Voting Common Stock Beneficially Owned by the Cash Equity Investors, and 66-2/3% of the Class A Voting Common Stock Beneficially Owned by the Management Stockholders; provided, however, that in the event any party hereto shall cease to own any shares of Equity Securities such party hereto shall cease to be a party to this Agreement and the rights and obligations of such party hereunder shall terminate, except to the extent otherwise provided in Section 4.7(a) with respect to any Unfunded Commitment. (c) Whenever in this Agreement the consent or approval of a Stockholder is required, except as expressly provided herein, such consent or approval may be given or withheld in the sole and absolute discretion of each Stockholder. 12.3 Term. (a) Subject to Sections 12.3(b), 12.3(c) and 12.4, this Agreement shall terminate upon the earliest to occur of any of the following events: (i) The consent in writing of all of the parties hereto; or (ii) The expiration of eleven (11) years from the date of execution and delivery of this Agreement; or (iii) One Stockholder shall Beneficially Own all of the Class A Voting Common Stock. (b) Notwithstanding anything contained herein to the contrary, (i) the provisions of Sections 3.2, 3.3, 3.4, 3.5, 3.11, 4.1(a), 4.5 (other than Section 4.5(b)), 7.1, 7.2 and 7.6 shall terminate on the earlier to occur of a termination pursuant to Section 12.3(a) and the IPO Date, (ii) the provisions of Sections 3 and 4 shall terminate on the earlier to occur of a termination pursuant to Section 12.3(a) and the expiration of ten (10) years from the date hereof, (iii) the provisions of Section 3.1(d)(i)(y) (relating to AT&T PCS' right to approve the directors selected by the holders of the Voting Preference Stock pursuant to Section 3.1(d)(i)(y)) and the provision of Section 3.1(d) relating to the right of AT&T PCS to approve any replacement for Messrs. Mounger, Martin and Sullivan to the Board of Directors, Section 3.1(d)(ii)(y) (relating to AT&T PCS' right to approve the directors selected by the holders of the Majority in Interest of the Common Stock held by the Cash Equity Investors and any replacement thereof to the Board of Directors) 4.7(b), 7.4, 7.6 and 8.4(a), shall terminate, and neither the Company nor any Stockholder shall be required to obtain AT&T PCS's prior written consent as required under such Sections, on the earlier to occur of (i) a termination pursuant to Section 12.3(a) and (ii) (x) with respect to the period prior to the eighth anniversary of the date hereof, the date on which AT&T PCS and TWR Cellular shall cease to Beneficially Own, in the aggregate, more than two-thirds of the number of shares of Series A Preferred Stock that AT&T PCS and TWR Cellular Beneficially Owns on the date hereof and (y) with respect to the period after the eighth anniversary of the date hereof on which AT&T PCS and TWR Cellular shall cease to Beneficially Own more than two-thirds of the number of shares of Class A Voting Common 59 Stock that AT&T PCS and TWR Cellular Beneficially Owns on such eighth anniversary date, (iv) the provisions of Section 3.1 shall terminate on the later to occur of (x) the date that the holders of shares of Voting Preference Stock shall vote as a class with holders of Class A Voting Common Stock, and (y) the date after the IPO Date; and (v) the provisions of 3.6 shall terminate on the date that the holders of shares of Voting Preference Stock shall vote as a class with holders of Class A Voting Common Stock. (c) (i) Notwithstanding anything contained herein to the contrary, in the event the Cash Equity Investors shall Beneficially Own in the aggregate less than (I) one-half but more than one-quarter of the number of shares of Common Stock Beneficially Owned in the aggregate by the Cash Equity Investors on the date hereof, the number of directors the Cash Equity Investors shall be permitted to designate under Section 3.1(a) shall be reduced to one, or (II) one-quarter of the number of shares of Common Stock Beneficially Owned in the aggregate by the Cash Equity Investors on the date hereof, the provisions of Section 3.1(a) and the provisions of Section 3.1(d)(i) (relating to the Cash Equity Investors' right to approve the directors selected by the holders of the Voting Preference Stock), Section 3.1(d)(ii) (relating to the Cash Equity Investors' right to designate four (4) directors upon the events stated in Section 3.1(d)(ii)), the right to approve any director that replaces Messrs. Mounger, Martin and Sullivan on the Board of Directors and the right to designate any director to replace any director designated by the Cash Equity Investors on the Board of Directors shall terminate, and neither the Company nor any Stockholder shall be required to obtain the Cash Equity Investors' prior written consent as required under such Sections. In the event the number of directors the Cash Equity Investors are entitled to designate is reduced pursuant to Section 12.3(c)(i)(I), two (2) of the directors designated by the Cash Equity Investors under Section 3.1(a) shall resign (or the other directors or Stockholders shall remove them from the Board of Directors) and the remaining directors shall take such action so that the number of directors constituting the entire Board of Directors shall be reduced accordingly. In the event the provisions of Section 3.1(a) and 3.1(d) are terminated (as to the rights of the Cash Equity Investors) pursuant to Section 12.3(c)(i)(II), the directors designated by the Cash Equity Investors pursuant to Section 3.1(a) and the director designated pursuant to Section 3.1(d)(i)(x) or Section 3.1(d)(ii)(x), as applicable, shall resign (or the other directors or Stockholders shall remove them from the Board of Directors) and the remaining directors shall take such action so that the number of directors constituting the entire Board of Directors shall be reduced to eight (8) individuals. In the event such provisions are so terminated the holders of the Voting Preference Stock, in the event the Voting Preference Stock is outstanding, or Mounger, Martin and Sullivan (for so long as each individual is an officer of the Company), in the event Section 3.1(d)(ii) is in effect, shall thereafter have the right to designate three (3) individuals to the Board of Directors provided each such individual is acceptable to AT&T PCS (so long as AT&T PCS and TWR Cellular continue to Beneficially Own, in the aggregate, more than two-thirds of the Common Stock Beneficially Owned by AT&T PCS and TWR Cellular, in the aggregate, on the date hereof). For all purposes of this Agreement, all references in this Agreement to directors designated pursuant to Section 3.1(d)(i) and (ii), as applicable, shall thereafter be deemed to refer to the three (3) directors designated pursuant to the immediately preceding sentence. 12.4 Survival. Nothing contained in Section 12.3 shall impair any rights or obligations of any party hereto arising prior to the time of the termination of this Agreement, or which may arise by an event causing the termination of this Agreement. The provisions of 60 Section 5 shall survive any termination of this Agreement pursuant to Section 12.3 and shall continue in full force and effect until the twentieth anniversary of the date hereof. The provisions of Section 7.7 and Article 12 shall survive the termination of this Agreement. 12.5 Waiver. No failure or delay on the part of any Stockholder in exercising any right, power or privilege hereunder, nor any course of dealing between the Company and any Stockholder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege hereunder preclude the simultaneous or later exercise of any other right, power or privilege. The rights and remedies herein expressly provided are cumulative and not exclusive of any rights and remedies which any Stockholder would otherwise have. No notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Stockholders or any of them to take any other or further action in any circumstances without notice or demand. 12.6 Obligations Several. The obligations of each Stockholder under this Agreement shall be several with respect to each such Stockholder. 12.7 Governing Law. This Agreement shall be governed and construed in accordance with the law of the State of Delaware. 12.8 Dispute Resolution. (a) The parties shall use and strictly adhere to the following dispute resolution processes, except as otherwise expressly provided in this Section 12.8, to resolve any and all disputes, controversies or claims, whether based on contract, tort, statute, fraud, misrepresentation or any other legal or equitable theory (hereinafter, "Dispute(s)"), arising out of or relating to this Agreement (and any prior agreement this Agreement supersedes), including without limitation, its making, termination, non-renewal, its alleged breach and the subject matter of this Agreement (e.g., products or services furnished hereunder or those related to those furnished): (b) The parties shall first attempt to settle each Dispute through good faith negotiations. The aggrieved party shall initiate such negotiations by giving the other party(ies) written notice of the existence and nature of the Dispute. The other party(ies) shall in a writing to the aggrieved party acknowledge such notice of Dispute within ten (10) business days. Such acknowledgment may also set forth any Dispute that the acknowledging party desires to have resolved in accordance with this Section. (c) Thereafter, if any Dispute is not resolved by the parties through negotiation within thirty (30) calendar days of the date of the notice of acknowledgment, either party may terminate informal negotiations with respect to that Dispute and request that the Dispute be submitted to non-binding mediation. Any mediation of a Dispute under this Section shall be conducted by the CPR Institute for Dispute Resolution ("CPR") in accordance with the then current CPR "Model Mediation Procedure for Business Disputes" ("Model Procedures") and the procedures specified in this Section to the extent that they conflict with, modify or add to such Model Procedures. Any demand for initiation of mediation of a Dispute must be given in 61 writing to both the other party(ies) involved and to the CPR and must set forth the nature of the Dispute. Each party to the mediation shall bear its own expenses with respect to mediation and the parties shall share equally the fees and expenses of the CPR and the mediator. The failure by a party to timely pay its share of the mediation fees and expenses of the CPR and the mediator shall be a bar to arbitration under Section 12.8(d) of that party's Dispute(s). Any mediation under this Section shall be conducted within the State of New York at a site selected by the mediator that is reasonably convenient to the parties. Each party shall be represented in the mediation by representatives having final settlement authority with respect to the Dispute(s). All information and documents disclosed in mediation by any party shall remain private and confidential to the disclosing party and may not be disclosed by any party outside the mediation. No privilege or right with respect to any information or document disclosed in mediation shall be waived or lost by such disclosure. (d) Any Dispute not finally resolved after negotiation and mediation in accordance with Section 12.8(b) and 12.8(c) shall, upon the written demand of any involved party delivered to the other party(ies) and the CPR, be finally resolved through binding arbitration in accordance with the then current CPR "Non-Administered Arbitration Rules" ("Arbitration Rules") and the procedures specified in this Section to the extent that they conflict with, modify or add to such Arbitration Rules. Any Dispute of any other party not finally resolved after negotiation and mediation pursuant to this Section may be made a part of the arbitration demanded by another party, provided that the written notice of demand for arbitration of that Dispute is received by the CPR before selection of an arbitrator by the CPR. Any demand for arbitration of a Dispute received by the CPR after the selection of the arbitrator must be resolved through a separate arbitration proceeding in accordance with this Section. Each party shall bear its own expenses with respect to arbitration and the parties shall share equally the fees and expenses of the CPR and the arbitrator. Unless otherwise mutually agreed by the parties in writing, the arbitration shall be conducted by one (1) neutral arbitrator. The arbitration shall be conducted in the State of New York at a site selected by the arbitrator that is reasonably convenient to the parties. The arbitrator shall be bound by and strictly enforce the terms of the Agreement and may not limit, expand, or otherwise modify the terms of this Agreement. The arbitrator shall make a good faith effort to apply applicable law, but an arbitration decision and award shall not be subject to review because of errors of law. The arbitrator shall have the sole authority to resolve issues of the arbitrability of any Dispute, including the applicability or running of any statute of limitation. The arbitrator shall not have power to award damages in connection with any Dispute in excess of actual compensatory damages or to award punitive damages and each party irrevocably waives any claim thereto. The arbitrator shall not have the power to order pre-hearing discovery of documents or the taking of depositions. The arbitrator may compel, to the extent provided by the FAA, attendance of witnesses and the production of documents at the hearing. The arbitrator's decision and award shall be made and delivered to the parties within six (6) months of selection of the arbitrator by the CPR and judgment on the award by the arbitrator may be entered by any court having jurisdiction thereof. (e) This Section shall be interpreted, governed by and enforced in accordance with the United States Arbitration Act, 9 U.S.C. Sections 1-14 (the "Federal Arbitration Act" or "FAA"). The laws of the State of Delaware, except those pertaining to choice of law, arbitration of disputes and those pertaining to the time limits for bringing an action that conflict with the terms of this Dispute Resolution provision, shall govern all other 62 substantive matters pertaining to the interpretation and enforcement of the other terms of this Agreement with respect to any Dispute. Any party to a Dispute, which is the subject of a notice initiating the Dispute resolution procedures under this Section, may seek a temporary injunction in any state or federal court of competent jurisdiction to the limited extent necessary to preserve the status quo during the pendency of final resolution of a Dispute in accordance with this Section. If court proceedings to stay litigation of a Dispute or compel arbitration of a Dispute are necessary, the party who unsuccessfully opposes such proceedings shall pay all associated costs, expenses, and attorneys' fees that the other party reasonably incurs in connection with such court proceedings. An order to pay such costs, expenses and attorney fees shall become part of any decision and award of the arbitrator of the Dispute. An arbitrator appointed pursuant to Section 12.8(d) to resolve a Dispute may also issue such injunctive orders and shall have the power to modify or dissolve the injunctive order of any court to the extent it pertains to the Dispute which the arbitrator has been selected to finally resolve. The parties, their representatives, other participants, and the mediator and arbitrator shall hold the existence, content, and result of the mediation and arbitration of a Dispute in confidence except to the limited extent necessary to enforce a final settlement agreement or to obtain and secure enforcement of or a judgment on an arbitration decision and award. (f) The statute(s) of limitation applicable to any Dispute shall be tolled upon initiation of the Dispute resolution procedures under this Section and shall remain tolled until the Dispute is resolved by mediation or arbitration under this Section. Tolling shall cease if the aggrieved party with a Dispute does not initiate mediation within sixty (60) calendar days after good faith negotiations are terminated by any party and, after mediation of a Dispute, if the aggrieved party with a Dispute does not initiate a demand for arbitration within sixty (60) calendar days after mediation is terminated. However, any Dispute is forever barred that has not expressly been made the subject of the written notice required under Section 12.8(b) above within 365 days after the date the Party asserting the Dispute first knows or should have known of the existence of the acts or omissions that give rise to such Dispute. (g) Unless the parties mutually agree in writing, Disputes relating to trademarks (including service marks), patents and copyrights shall not be resolved in accordance with the Dispute resolution procedures set forth in this Section and shall be resolved as otherwise provided in this Agreement. (h) The Company and each of the Stockholders hereby irrevocably consents to the exclusive jurisdiction of the state or federal courts in the State of New York, and all state or federal courts competent to hear appeals therefrom, over any actions which may be commenced against any of them under or in connection with this Agreement. The Company and each Stockholder hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which any of them may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute in the Southern District of New York and New York County. The Company and each Stockholder hereby agree that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The Company and each Stockholder hereby consent to process being served by any party to this Agreement in any actions by the transmittal of a copy thereof in accordance with the provisions of Section 12.1. 63 12.9 Benefit and Binding Effect; Severability. This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns, and each of the Stockholders and their respective executors, administrators and personal representatives and heirs and permitted assigns. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy or any listing requirement applicable to the Common Stock, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto affected by such determination in any material respect shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the provisions hereof are given effect as originally contemplated to the greatest extent possible. 12.10 Amendment of By-Laws. The Stockholders agree that the terms of this Agreement shall supersede any inconsistent provision that is contained in the Restated By-Laws and, to the extent required by Delaware law or the Restated By-Laws, this Agreement shall be deemed to constitute a written action taken by the Stockholders of the Company and shall be deemed an amendment of the Restated By-Laws. 12.11 Authorized Agent of AT&T PCS. AT&T PCS hereby authorizes Wireless PCS, Inc. as its agent, with full power to execute, in the name of and on behalf of AT&T PCS, the Related Agreements to which AT&T PCS is a party and any and all other documents that AT&T PCS is required to execute and deliver, and to give and receive all notices, requests, consents, amendments, demands and other communications to or from AT&T PCS, hereunder or thereunder. Each party hereto (other than AT&T PCS) shall be entitled to rely on the full power and authority of Wireless PCS, Inc. to act on behalf of AT&T PCS in accordance with this Section 12.11. Nothing contained in this Section 12.11 shall relieve AT&T PCS from complying with its obligations under this Agreement or any of the Related Agreements to which it is a party. 12.12 FCC Approval. Notwithstanding anything contained in this Agreement to the contrary, no transaction or action contemplated herein shall be consummated and no interests or rights transferred, converted or exchanged prior to receiving FCC approval with respect thereto to the extent such approval is necessary. 12.13 Expenses. The Company shall pay the reasonable fees and expenses of counsel to the Stockholders incurred in connection with the preparation, negotiation and execution of this Agreement and of any amendment or modification hereof. Except as provided in Sections 5(g) and 12.14, all other attorneys' fees incurred by the Stockholders in connection with this Agreement (including, without limitation, in the preparation of notices (and responses thereto) and consents) shall be borne by the Stockholder(s) incurring such fees. 12.14 Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy. 64 12.15 Headings. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 12.16 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 65 IN WITNESS WHEREOF, each of the parties has executed or consent this Agreement to be executed by its duly authorized officers as of the date first written above. AT&T WIRELESS PCS INC. By: ---------------------------------- Name: Title: TWR CELLULAR, INC. By: ---------------------------------- Name: Title: TRITEL, INC. By: ---------------------------------- Name: Title: 66 CASH EQUITY INVESTORS: TORONTO DOMINION INVESTMENTS, INC. By: ---------------------------------- Name: Martha L. Gariepy Title: Vice President ENTERGY WIRELESS COMPANY By: ---------------------------------- Name: Gary S. Fuqua Title: President and Chief Executive Officer GENERAL ELECTRIC CAPITAL CORPORATION By: ---------------------------------- Name: Molly Fergusson Title: Managing Director 67 WASHINGTON NATIONAL INSURANCE COMPANY By: -------------------------------------- Name: Title: UNITED PRESIDENTIAL LIFE INSURANCE COMPANY By: -------------------------------------- Name: Title: 68 DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP BY: DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC, AS ITS GENERAL PARTNER By: ----------------------------------- Name: Alexander P. Coleman Title: Authorized Signatory 69 TRIUNE PCS, LLC, A DELAWARE LIMITED LIABILITY COMPANY BY: OAK TREE, LLC, A DELAWARE LIMITED LIABILITY COMPANY TITLE: MANAGER BY: TRIUNE INC., A DELAWARE CORPORATION TITLE: MANAGER By: ---------------------------------- Name: Kevin Shepherd Title: President 70 FCA VENTURE PARTNERS II, L.P. BY: CLAYTON-DC VENTURE CAPITAL GROUP, LLC, ITS GENERAL PARTNER By: Name: D. Robert Crants, III Title: Manager CLAYTON ASSOCIATES, LLC BY:________________________________, ITS MANAGING MEMBER By: ----------------------------------- Name: Title: 71 AIRWAVE COMMUNICATIONS, LLC (F/K/A MERCURY PCS, LLC) By: MSM, Inc., its Manager By: ---------------------------------- Name: E.B. Martin, Jr. Title: Vice President DIGITAL PCS, LLC (F/K/A MERCURY PCS II, LLC) By: MSM, Inc., its Manager By: ---------------------------------- Name: E.B. Martin, Jr. Title: Vice President 72 THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.) By: ------------------------------------- Name: Title: 73 TRILLIUM PCS, LLC By: ----------------------------------- Name: William M. Mounger, II Title: Manager 74 MANAGEMENT STOCKHOLDERS: ----------------------------------- William M. Mounger, II ----------------------------------- E.B. Martin, Jr. ----------------------------------- Jerry M. Sullivan, Jr. 75 - -------------------------------------------------------------------------------- SCHEDULE I CASH EQUITY INVESTORS ---------------------
SECOND AGGREGATE INITIAL CASH FUNDING CASH EQUITY INVESTORS COMMITMENT CONTRIBUTION 9/30/99 - --------------------- ---------- ------------ ------- Washington National Insurance Company $25,000,000 $16,666,667 $8,333,333 United Presidential Life Insurance Company 25,000,000 16,666,667 8,333,333 Trillium PCS, LLC 2,000,000 1,333,333 666,667 Dresdner Kleinwort Benson Private Equity Partners LP 30,000,000 20,000,000 10,000,000 Entergy Wireless Corporation 20,000,000 13,333,333 6,666,667 Triune, Inc. 24,139,040 16,092,694 8,046,346 Toronto Dominion Investments, Inc. 5,000,000 3,333,333 1,666,667 General Electric Capital Corporation 2,500,000 1,666,667 833,333 The Manufacturers' Life Insurance Company (U.S.A.) 10,000,000 6,666,667 3,333,333 FCA Venture Partners II, LP 5,500,000 3,666,667 1,833,333 Clayton Associates, LLC 100,000 66,667 33,333 Digital PCS, LLC 2,976,401 2,976,401 -0- - -------------------------------------------------------------------------------------------------- Airwave Communications, LLC 11,163,079 11,163,079 -0- ---------- ---------- TOTAL 163,369,520 113,623,175 49,746,345
SCHEDULE II MANAGEMENT STOCKHOLDERS ----------------------- William M. Mounger II E.B. Martin, Jr. Jerry M. Sullivan, Jr. William Arnett SCHEDULE III EQUITY CAPITALIZATION --------------------- (See Attached) SCHEDULE IV CORE FEATURES Below is a list and description of the Core Features that Licensee agrees to implement in accordance with Section 8.2 of this Agreement. These definitions are functional descriptions of the Core Features, and the parties agree that such Core Features shall be implemented using the Critical Network Elements identified in Schedule XI hereto. Licensee further agrees to implement additional features in accordance with Section 8.2 of this Agreement. 1. CALL DELIVERY This capability permits a PCS customer to receive incoming calls to his or her phone while in his or her home market or while roaming in any part of the Licensee's Wireless Network or the AWS Wireless Network (together, the "Mobile Wireless Network"). 2. ROAMING - DO NOT DISTURB This capability permits a PCS customer, who would normally receive all incoming calls while visiting a Mobile Switching Center that is part of the Mobile Wireless Network, to temporarily inhibit the delivery of such calls. Activating this capability has no impact on the PCS customer's ability to originate calls or on the PCS customer's ability to receive calls via the roamer access ports. 3. CALL FORWARDING A. CALL FORWARDING IMMEDIATE This capability permits a PCS customer to send all incoming calls destined for the PCS customer's PCS phone to another phone number specified by the PCS customer. Activating this capability has no impact on the PCS customer's ability to originate calls. When this capability is activated, calls are forwarded regardless of whether the PCS customer is located within his or her local market or whether the customer is roaming outside of such local market. B. CALL FORWARDING BUSY This capability permits a PCS customer to send all incoming calls destined for his or her PCS phone to another phone number specified by the PCS customer when the PCS customer is engaged in a call. C. CALL FORWARDING NO ANSWER This capability permits a PCS customer to send all incoming calls destined for his or her PCS phone to another phone number specified by the PCS customer when the PCS customer does not answer or when the PCS customer's PCS phone does not respond to a page. 4. CALL WAITING This capability permits a PCS customer to receive incoming calls even though a call may already be in progress. 5. VOICEMAIL This capability forwards those PCS customer's incoming calls which are not answered by the PCS customer, and for which no other explicit treatment has been activated (for example, those described in items above), to a voice storage and retrieval system. This capability also permits a PCS customer to subsequently retrieve messages from the PCS customer's voice mail box. 6. THREE WAY CALLING This capability permits a PCS customer to add a third party to an active two party call. 7. MESSAGE WAITING INDICATOR This capability is an enhancement to PCS voice mail, and provides the PCS customer with the current status of the number of unheard voice mail messages waiting in his or her PCS voice mail box. 8. CALLING NUMBER IDENTIFICATION This capability identifies for the PCS customer either the telephone number or the stored name (in the PCS phone) of the person who is calling. It also permits a PCS customer to inhibit the ability of a person to whom the PCS customer is placing a call from identifying either the telephone number or the name of such PCS customer who is placing the call. 9. WIRELESS OFFICE SERVICE (WOS) A. PCS/PBX INTERWORKING This capability permits WOS customers to have just one published number that delivers all incoming calls to both the PCS and PBX phone. B. PRIVATE NUMBER PLAN This capability permits a defined group of customers to call defined private network extensions by using an abbreviated unique dialing pattern (four digit dialing). C. PRIVATE NETWORKS This capability permits a WOS customer to have his or her own private or semiprivate PCS system. 2 D. LOCATION ID This capability permits the PCS customer to identify the nature of the system (private, public, or residential) that the PCS customer is using, by displaying the system's name on the PCS phone. 10. SLEEP MODE This capability permits an IS 136 PCS phone to operate in a power saving mode when camping on an IS 136 system, thereby allowing the battery standby time to increase. 11. PCS MESSAGING This capability will permit a caller to deliver both numeric and alphanumeric messages of up to eighty characters to an IS 136 PCS phone. If the PCS customer to whom the message has been delivered has his or her phone off or is not in the IS 136 coverage area, then messages are stored for future delivery. MessageFlash software permits alphanumeric messages to be sent from a computer via a standard modem to the customer. E-Mail messaging teleservice allowing an IS-136 phone to have an E-Mail address. 12. AUTHENTICATION This capability allows for the validation of the IS-136 phone's identity. Text Dispatch Service permits people to call an operator (provided by or on behalf of the Company) and dictate a message which can then be converted to an alphanumeric message and delivered to the customer. Cut Through Paging permits people to send a numeric message while listening to the customer's voicemail greeting. 3 SCHEDULE V MINIMUM BUILD-OUT PLAN ---------------------- BUILDOUT SCHEDULE-YEAR 1 ------------------------ ATLANTA MTA - ----------- Cities: Chattanooga, Tennessee Cleveland, Tennessee Dalton, Georgia Interstates/State Highways: Portion of I-75 South from Chattanooga Portion of I-75 North from Chattanooga Portion of I-24 West from Chattanooga Portion of I-59 South from Chattanooga BIRMINGHAM MTA - -------------- Cities: Huntsville, Alabama Decatur, Alabama Interstates/State Highways: Portion of I-65 South from Decatur Portion of I-65 North from Decatur MEMPHIS/JACKSON MTA - ------------------- Cities: Jackson, Mississippi Vicksburg, Mississippi Interstates/State Highways: Portion of I-20 West from Jackson Portion of I-20 East from Jackson Portion of I-55 South from Jackson Portion of I-55 North from Jackson Portion of Highway 49 South from Jackson KNOXVILLE MTA - ------------- Cities: Knoxville, Tennessee Interstates/State Highways: Portion of I-40 West from Knoxville Portion of I-40 East from Knoxville Portion of I-75 North from Knoxville NASHVILLE MTA - ------------- Cities: Nashville, Tennessee Interstates/State Highways: Portion of I-40 East from Nashville, Portion of I-40 West from Nashville Portion of I-24 East from Nashville Portion of I-24 West from Nashville Portion of I-65 North from Nashville Portion of I-65 South from Nashville The buildout of the above referenced cities, interstates and state highways represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 2,954,700 pops within the license area. The estimated pops recited hereinabove for the buildout during year 1 represents 21.7% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 2 -------------------------- BIRMINGHAM MTA - -------------- Cities: Birmingham, Alabama Montgomery, Alabama Tuscaloosa, Alabama Anniston, Alabama Interstates/State Highways: Portion of I-20 East from Birmingham Portion of I-20 West from Birmingham Portion of Highway 280 East from Birmingham Portion of I-59 North from Birmingham Portion of I-65 South from Montgomery Portion of I-65 North from Montgomery Portion of Highway 231 South from Montgomery Portion of Highway 80 West from Montgomery Portion of I-20 East from Tuscaloosa Portion of I-20 West from Tuscaloosa Portion of I-20 East from Anniston Portion of I-20 West from Anniston 2 LOUISVILLE MTA - -------------- Cities: Louisville, Kentucky Lexington, Kentucky Interstates/State Highways: Portion of I-64 East from Louisville Portion of I-64 West from Louisville Portion of I-65 South from Louisville Portion of I-65 North from Louisville Portion of I-71 North from Louisville Portion of I-75 North from Lexington Portion of I-75 South from Lexington Portion of I-64 East from Lexington Portion of I-64 West from Lexington MEMPHIS/JACKSON MTA - ------------------- Cities: Hattiesburg, Mississippi Meridian, Mississippi Tupelo, Mississippi Interstates/State Highways: Portion of Highway 49 North from Hattiesburg Portion of Highway 49 South from Hattiesburg Portion of Highway 98 East from Hattiesburg Portion of I-59 South from Hattiesburg Portion of I-59 North from Hattiesburg Portion of I-20 East from Meridian Portion of I-20 West from Meridian Portion of I-59 South from Meridian NASHVILLE MTA - ------------- Cities: Clarksville, Tennessee Hopkinsville, Kentucky Interstates/State Highways: Portion of I-24 East from Clarksville Portion of I-24 West from Clarksville NEW ORLEANS MTA - --------------- Cities: Mobile, Alabama 3 Interstates/State Highways: Portion of I-65 North from Mobile Portion of I-10 East from Mobile Portion of I-10 West from Mobile Portion of Highway 98 West from Mobile The buildout of the above referenced cities, interstates and state highways represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 3,882,900 pops within the license area. The estimated pops recited hereinabove for the buildout during year 2 represents 28.6% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1 and 2 will constitute an estimated aggregate total of 6,837,600 pops within the license area at the completion of the year 2 buildout or 50.3% of the estimated total pops contained under the terms of this agreement. 4 BUILDOUT SCHEDULE - YEAR 3 -------------------------- BIRMINGHAM MTA - -------------- Cities: Gadsden, Alabama Dothan, Alabama Florence, Alabama Interstates/State Highways: Portion of I-59 North from Gadsden Portion of I-59 South from Gadsden Portion of Highway 231 North from Dothan LOUISVILLE MTA - -------------- Cities: Owensboro, Kentucky Bowling Green, Kentucky Glasgow, Kentucky Madisonville, Kentucky Corbin, Kentucky Interstates/State Highways: Portion of Audubon Parkway West from Owensboro Portion of Western Kentucky Parkway East from Madisonville Portion of Pennyrile Parkway North from Madisonville Portion of Pennyrile Parkway South from Madisonville Portion of I-65 North from Elizabethtown Portion of I-65 South from Elizabethtown Portion of I-75 North from Corbin Portion of I-75 South from Corbin NASHVILLE MTA - ------------- Cities: Cookeville, Tennessee Columbia, Tennessee Interstates/State Highways: Portion of I-40 East from Cookeville Portion of I-40 West from Cookeville Portion of I-65 North from Columbia Portion of I-65 South from Columbia 5 MEMPHIS/JACKSON MTA - ------------------- Cities: Columbus, Mississippi Starkville, Mississippi Greenville, Mississippi Greenwood, Mississippi Interstates/State Highways: Portion of Highway 82 East from Columbus Portion of Highway 82 West from Columbus Portion of Highway 82 East from Starkville NEW ORLEANS MTA - --------------- Cities: Gulfport, Mississippi Biloxi, Mississippi Pascagoula, Mississippi Brookhaven, Mississippi McComb, Mississippi Laurel, Mississippi Interstates/State Highways: Portion of Highway 49 North from Gulfport Portion of I-10 West from Gulfport Portion of I-10 East from Gulfport Portion of I-10 West from Biloxi Portion of I-10 East from Biloxi Portion of I-10 West from Pascagoula Portion of I-10 East from Pascagoula Portion of I-55 North from Brookhaven Portion of I-55 South from Brookhaven Portion of I-55 North from McComb Portion of I-55 South from McComb Portion of I-59 North from Laurel Portion of I-59 South from Laurel The buildout of the above referenced cities, interstates and state highways represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 1,484,700 pops within the license area. The estimated pops recited hereinabove for the buildout during year 3 represents 10.9% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1, 2 and 3 will constitute an estimated aggregate total of 8,322,300 pops within the license area at the completion of 6 the year 3 buildout or 61.2% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 4 -------------------------- Cities: Corinth, Mississippi Natchez, Mississippi Rome, Georgia Selma, Alabama Demopilis, Alabama Opelika, Alabama Auburn, Alabama LaGrange, Georgia Interstates/State Highways: Additional portions of all interstates and highways listed under years 1 and 2 buildout. The buildout of the above referenced cities, interstates and state highways, and expansion of existing cities listed in the buildout for years 1 through 3, represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 1,196,670 pops within the license area. The estimated pops recited hereinabove for the buildout during year 4 represents 8.8% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1, 2, 3 and 4 will constitute an estimated aggregate total of 9,518,970 pops within the license area at the completion of the year 4 buildout or 70.0% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 5 -------------------------- Cities: The buildout for year 5 will encompass expansion of all cities, where applicable, launched in the buildout for years 1 through 4. Interstates/State Highways: Additional portions of all interstates and highways listed under year 3 buildout. The buildout of the above referenced cities, interstates and state highways, and expansion of existing cities listed in the buildout for years 1 through 4, represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 1,359,853 pops within the license area. The estimated pops recited hereinabove for the buildout during year 5 represents 10% of the estimated total pops contained under the terms of this agreement. 7 The estimated pops recited herein for the buildout for years 1, 2, 3, 4 and 5 will constitute an estimated aggregate total of 10,878,823 pops within the license area at the completion of the year 5 buildout or 80.0% of the estimated total pops contained under the terms of this agreement. 8 SCHEDULE VI PCS TERRITORY ------------- I. From Atlanta MTA BTA Market Designator ---------------- --------------------- Carroll County, GA (1) Haralson County, GA ** Opelika-Auburn, AL 334 Chattanooga, TN 076 Cleveland, TN 085 Dalton, GA 102 LaGrange, GA 237 Rome, GA 384 II. From Knoxville MTA -------------------------------- Knoxville, TN 232 III. From Louisville-Lexington-Evansville MTA ---------------------------------------- Louisville, KY 263 Lexington, KY 252 Bowling Green-Glasgow, KY 052 Owensboro, KY 338 Corbin, KY 098 Somerset, KY 423 Madisonville, KY 273 IV. From Memphis-Jackson MTA ------------------------ Montgomery County, TN (2) Jackson, MS 210 Tupelo-Corinth, MS 449 Greenville-Greenwood, MS 175 Meridian, MS 292 Columbus-Starkville, MS 094 Natchez, MS 315 Vicksburg, MS 455 V. From Nashville MTA ------------------ Nashville, TN 314 Clarksville, TN-Hopkinsville, KY 083 Cookeville, TN 096 - -------- (1) Carrol County and Haralson County are both located within the Atlanta BTA (B024). (2) Montgomery County is located within the Memphis BTA (B290). VI. From Birmingham MTA ------------------- Anniston, AL 017 Birmingham, AL 044 Decatur, AL 108 Dothan-Enterprise, AL 115 Florence, AL 146 Gladsden, AL 158 Huntsville, AL 198 Montgomery, AL 305 Selma, AL 415 Tuscaloosa, AL 450 VII. From New Orleans MTA --------------------- Biloxi-Gulfport-Pascagoula, MS 042 Hattiesburg, MS 186 Laurel, MS 246 McComb-Brookhaven, MS Mobile, AL 302 2 SCHEDULE VII TDMA QUALITY STANDARDS QUALITY AND REPORTING STANDARDS GENERAL OVERVIEW This Schedule VII sets out the Network and Reporting Standards with which the Company ("Licensee") shall comply pursuant to Section 8.3 of this Agreement. These Standards set out the network performance metrics and the process by which such metrics will be established, measured and reported. All metrics which represent a defined standard of quality for acceptable network operations have, or will have, specific targets which the Licensee must comply with in accordance with the following network standards I. NETWORK STANDARDS There are three categories of Network Standards: network quality (the "Network Quality Category"); system performance (the "System Performance Category"); and audio quality (the "Audio Quality Category") (each hereafter referred to generally as a "Category"). For each Category of Network Standards, specific metrics have been identified to measure performance in each such Category. The detailed description of how to measure and interpret the metrics for each Category is set out in the following AWS documents (each referred to generally as a "Network Standards Document"): o NETWORK QUALITY CATEGORY: Document ES-4034, Revision 1.1, dated July 30, 1997 entitled "Network Quality Scorecard User Guide" (as referred to as the "Network Quality Standards Document"). This document is a collection of key network performance and traffic indicators (metrics) that are measured and reported on a regular basis. Included in this category, Licensee shall perform the ANS Consistency Test, as attached to this Schedule VII. o SYSTEM PERFORMANCE CATEGORY: OSS draft document, Revision 0.7, dated June 17, 1997 entitled "Key Metrics for System Performance Document" (as referred to as the "System Performance Standards Document"). This document identifies the network-wide key metrics for Ericsson and Lucent switching systems, as well as cell sites, which will provide a high level assessment of the system. o AUDIO QUALITY CATEGORY: Document PP-4027E, Revision 1.1, dated May 30, 1996 entitled "Audio Quality Measurement (AQM)" (as referred to as the "Audio Quality Standards Document"). This document provides the basis for assessing the quality of RF transmission by describing the standards for performing audio quality measurements and the reporting of their results. AWS measures the metrics for the Audio Quality Category using the "Radio Quality Scorecard". The Radio Quality Scorecard is comprised of performance statistics derived from driving the PCS system using the Buzzard tool or a tool with similar measurement and reporting capability. These Network Standards Documents are collectively attached to this Schedule VII which, subject to the terms and conditions of this Agreement including, without limitation, this Schedule VII, is hereby incorporated into and forms a part of this Agreement. In the event of any inconsistency between any part of a Network Standards Document and the provisions of this Schedule VII, the provisions of this Schedule VII shall govern. Notwithstanding anything else in this Agreement including, without limitation, this Schedule VII, the parties acknowledge and confirm that the Network Standards Documents represent the standards and metrics currently identified by AWS as applicable to each Category. Target values for key quality related metrics are contained herein and Licensee agrees to comply with the specific metric target values as specified in Schedule VII. In addition, the parties acknowledge and confirm that the Network Standards Documents are subject to revision and the Licensee shall comply with subsequent revisions to these Network Standards Documents, as well as with Call Center Quality Standards which will constitute an additional Category once they are formally implemented, in accordance with Section 8.2 of this Agreement. Set out below is a brief description of each Category of Network Standard and the currently established metrics for each such Category. II. TARGETS FOR NETWORK STANDARDS Licensee shall meet the following targets for key metrics which represent overall network and system quality. These targets are subject to revision and shall be implemented in accordance with Section 8.2 of this Agreement. o % Established Calls: The percentage of call attempts to and from a mobile phone that result in a successful voice channel assignment. The target goal for this metric is 93%. o % Dropped Calls: The percentage of established calls, as defined below, which terminate abnormally. The target, goal for this metric is a drop call rate of 1.7% or less. o % Handoff Failures: The target goal for this metric is a handoff failure rate of 1.5%. o Failures per Erlang: The ratio of failed calls to carried traffic, where failed calls are measured utilizing switch counters for originating and terminating traffic, and carried traffic is measured in erlangs. The target goal for this metric is 1.68 o Switch Outage Time: The amount of time (in minutes) in a month when subscribers are impacted by a cellular switch outage. Target for this metric is 10 minutes per switch per year, with all ten minutes occurring the maintenance window between 12:00 am and 5:00 am. o % Blocking - Cell Routes: Percentage of time all cellular traffic channels (voice paths in a trunk group) are unavailable within a given measurement interval. Target for this metric is 5%. 2 o % Blocking - Network Routes: Percentage of time all network traffic channels are unavailable within the measurement interval. Target for this metric is 5%. o ANS Consistency Test: The percentage of successful ANS feature deliveries, based on the following sequence: feature activation/deactivation (when applicable), test call, correct response, and call termination. The target goal for this metric is 96% for all ANS features. This target metric includes feature delivery failures due to call processing failures (i.e. call delivery, call origination, handoff failures, or dropped calls. These failures are estimated to be approximately 4%.) III. REPORTING STANDARDS Licensee agrees to comply with the reporting requirements as specified in the Network Standards Documents and as specified below: o Except as specified Audio Quality Network Standards, Licensee will submit the metric reports required pursuant to this Schedule VII (the "Results") to AWS no less than quarterly. o With respect to Audio Quality Network Standards, Licensee shall only submit quarterly Results for markets with 10,000 or more subscribers; for markets with less than 10,000 subscribers, Licensee shall only submit Results on a semi-annual basis. o Licensee shall submit all Results by the fifteenth day of the month following the end of the applicable reporting period. o Licensee will report the Results to AWS on an aggregated national basis; the aggregated national Results will reflect the distribution of the metric measured across Licensee's Territory. Licensee may also be required to provide a breakdown, by market, of any metric. IV. CUSTOMER SERVICE STANDARDS Promptly following the execution of this Agreement, Licensee and AWS shall negotiate in good faith the applicable customer service standards, with a goal of reaching agreement thereon by April 1, 1999. 3 SCHEDULE VIII INITIAL DIRECTORS ----------------- See Attached SCHEDULE IX CAPITAL BUDGETS --------------- See Attached SCHEDULE X VOTING AGREEMENTS ----------------- See Folder 4 SCHEDULE XI CRITICAL NETWORK ELEMENTS ------------------------- This Schedule sets out the Equipment which comprises the Critical Network Elements. The Critical Network Elements consist of the following: Mobile Switching Center, Service Control Point, Message Center and Voice Mail System. Below is a basic description of these Critical Network Elements. The Company shall have the right to substitute for the equipment described below alternative equipment so long as such alternative equipment provides substantially the same User Interface. 1. MOBILE SWITCHING CENTER (INCLUDING BASE STATIONS) The Mobile Switching Centers consist of Ericsson's AXE1O and Lucent's Autoplex platform. Each of these products are required to support: ISUP; IS41B+ (origination request message); Global Title routing; and EIA 553, IS54B and IS136 air interface protocols. The current application software is AS1OO for Ericsson's AXE1O and APXEC 8.0 for Lucent's Autoplex platform. 2. SERVICE CONTROL POINT (SCP) The SCP is based on a Tandem Himalaya K1OOO/2000 series platform running the Tandem realtime operating system known as "Non-Stop Kernel" and support the software applications commonly known as: Home Location Register, Private Dialing Service and Authentication Center. The current commercial software revision is A20 bundle which consists of NSK D30, SCP 1.09.15, HLR 2.02, AC2.00 and PDS 1.001. 3. MESSAGE CENTER (MC) Hewlett Packard 1/70 runs the Telepath Short Message Center (SMSC) application software provided by Aldiscon Inc. Current revision of Telepath SMSC is release 2.0. 4. VOICE MAIL SYSTEM (VMS) The voice mail system is based on the Octel Communications Corporation's Sierra platform. The current software release is Voice Information Services (VIS) 1.01. 2 EXHIBIT A RESTATED BY-LAWS ---------------- See Folder 48 EXHIBIT B RESTATED CERTIFICATE -------------------- See Folder 47 EX-10.1.2 4 AMENDMENT NO. 1 TO STOCKHOLDERS' AGREEMENT EXHIBIT 10.1.2 AMENDMENT NO. 1 TO STOCKHOLDERS' AGREEMENT AMENDMENT NO. 1 TO STOCKHOLDERS' AGREEMENT ("Amendment No.1") dated as of August 27, 1999, by and among AT&T WIRELESS PCS INC., a Delaware corporation (together with its Affiliated Successors (as hereinafter defined), "AT&T PCS"), TWR CELLULAR, INC., a Maryland corporation, the investors listed under the heading "Cash Equity Investors" on the signature pages hereto, the individuals listed under the heading "Management Stockholders" on the signature pages hereto and TRITEL, INC., a Delaware corporation (the "Company"). Certain capitalized terms used herein and not otherwise defined have the meaning assigned to such term in the Stockholders' Agreement referred to below. WHEREAS, each of the parties hereto (other than the Company) are stockholders of the Company; WHEREAS, the parties hereto are parties to that certain Stockholders' Agreement, dated as of January 7, 1999 (the "Stockholders' Agreement"), pursuant to which, among other things, the parties hereto entered into certain agreements relating to the PCS Territory; WHEREAS, pursuant to the Option Agreement the Company has an option to acquire the PCS Licenses referred to on Schedule I thereto (the "Option Licenses"), and the Company wishes to exercise such option; WHEREAS, pursuant to the terms of the Company's Stockholders Agreement, dated as of January 7, 1999, among the parties hereto and the other stockholders of the Company referred to therein, the Company is required to obtain the consent of AT&T PCS and TWR Cellular, Inc., a Maryland corporation and an affiliate of AT&T PCS ("TWR"), to the Company's exercise of such option, and the Company wishes to obtain such consent; WHEREAS, AT&T PCS and TWR wish to grant such consent pursuant to a Consent, dated the date hereof, provided, among other things, that the parties to the Stockholders Agreement (other than AT&T PCS and TWR) enter into this Amendment, and such Persons wish to enter into this Amendment; and WHEREAS, the Company and AT&T PCS and TWR desire that the Stockholders' Agreement be amended to provide that, except with the prior written consent of AT&T PCS (i) the term "PCS Territory" as used in the Stockholders' Agreement excludes the territory (the "Option Territory") covered by the Option Licenses, and (ii) each of the Company and its Subsidiaries shall only engage in specified permitted activities relating to the Option Licenses or the Option Territory; NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Amendments. Section 7.13 is hereby amended by deleting it in its entirety and replacing it with the following: Section 7.13 Option Licenses. (a) Notwithstanding any other provision of this Stockholders Agreement, except with the prior written consent of AT&T PCS, the PCS Territory shall not include the geographic area covered by the PCS Licenses (the "Option Licenses")acquired by the Company pursuant to the Option Agreement. By way of amplification and not limitation of the foregoing, the Company and the Stockholders acknowledge and agree that, unless and until such consent of AT&T PCS is hereafter obtained, the term "Company Communications Services" shall not include any mobile wireless telecommunications services or any other telecommunications services provided using the Option Licenses, and the term "Business" shall not include owning, constructing or operating systems to provide Company Communications Services (or any other telecommunications systems) on frequencies licensed to the Company for Commercial Mobile Radio Services pursuant to the Option Licenses. (b) The Company further agrees that, except with the prior written consent of AT&T PCS, it shall not (and it shall not permit its Subsidiaries to) construct any telecommunications systems with respect to the Option Licenses or take any other actions in respect of, or incur or pay any costs or expenses relating to, the Option Licenses or the territory covered by the Option Licenses (the "Option Territory"), except that the Company and its Subsidiaries may: (i) perform its obligations under and consummate the transactions contemplated in the Option Agreement and the License Purchase Agreement annexed thereto; (ii) take actions reasonably required to maintain ownership of the Option Licenses (other than any applicable FCC build-out requirements relating to the Option Territory), including paying when due interest on and principal of the existing indebtedness to the U.S. Department of Treasury related to the Option Licenses; and (iii) if it determines to do so in the future, dispose of the Option Licenses, and, in the case of (i), (ii) and (iii), pay any reasonable out-of-pocket costs related thereto. 2. Severability of Provisions. Any provision of this Amendment No. 1 which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction. -2- 3. Agreements to Remain in Full Force and Effect. This Amendment No. 1 shall be deemed to be an amendment to the Stockholders' Agreement. All references to the Stockholders' Agreement in any other agreements or documents shall on and after the date hereof be deemed to refer to the Stockholders' Agreement as amended hereby. Except as amended hereby, the Stockholders' Agreement shall remain in full force and effect and is hereby ratified, adopted and confirmed in all respects. 4. Heading. The headings in this Amendment No. 1 are inserted for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Amendment No. 1 or any provision thereof. 5. Counterparts. This Amendment No. 1 may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. 6. Governing Law. This Amendment No. 1 shall be governed and construed in accordance with the laws of the State of Delaware. [signature pages follow] -3- IN WITNESS WHEREOF, each of the parties has executed or consent this Agreement to be executed by its duly authorized officers as of the date first written above. AT&T WIRELESS PCS INC. By: --------------------------------- Name: Title: TWR CELLULAR, INC. By: --------------------------------- Name: Title: TRITEL, INC. By: --------------------------------- Name: Title: CASH EQUITY INVESTORS: TORONTO DOMINION INVESTMENTS, INC. By: --------------------------------- Name: Martha L. Gariepy Title: Vice President ENTERGY WIRELESS COMPANY By: --------------------------------- Name: Gary S. Fuqua Title: President and Chief Executive Officer GENERAL ELECTRIC CAPITAL CORPORATION By: --------------------------------- Name: Molly Fergusson Title: Managing Director WASHINGTON NATIONAL INSURANCE COMPANY By: --------------------------------- Name: Title: UNITED PRESIDENTIAL LIFE INSURANCE COMPANY By: --------------------------------- Name: Title: DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP BY: DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC, AS ITS GENERAL PARTNER By: ----------------------------- Name: Alexander P. Coleman Title: Authorized Signatory TRIUNE PCS, LLC, A DELAWARE LIMITED LIABILITY COMPANY BY: OAK TREE, LLC, A DELAWARE LIMITED LIABILITY COMPANY TITLE: MANAGER BY: TRIUNE INC., A DELAWARE CORPORATION TITLE: MANAGER By: ----------------------------- Name: Kevin Shepherd Title: President FCA VENTURE PARTNERS II, L.P. BY: CLAYTON-DC VENTURE CAPITAL GROUP, LLC, ITS GENERAL PARTNER By: ----------------------------- Name: D. Robert Crants, III Title: Manager CLAYTON ASSOCIATES, LLC BY: , -------------------------------- ITS MANAGING MEMBER By: ------------------------------ Name: Title: AIRWAVE COMMUNICATIONS, LLC (F/K/A MERCURY PCS, LLC) By: MSM, Inc., its Manager By: ----------------------------- Name: E.B. Martin, Jr. Title: Vice President DIGITAL PCS, LLC (F/K/A MERCURY PCS II, LLC) By: MSM, Inc., its Manager By: ----------------------------- Name: E.B. Martin, Jr. Title: Vice President THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.) By: --------------------------------- Name: Title: TRILLIUM PCS, LLC By: --------------------------------- Name: William M. Mounger, II Title: Manager MANAGEMENT STOCKHOLDERS: ------------------------------------ William M. Mounger, II ------------------------------------ E.B. Martin, Jr. ------------------------------------ Jerry M. Sullivan, Jr. EX-10.2 5 INVESTORS STOCKHOLDERS' AGREEMENT Exhibit 10.2 - -------------------------------------------------------------------------------- INVESTORS STOCKHOLDERS' AGREEMENT by and among TRITEL, INC., WASHINGTON NATIONAL INSURANCE COMPANY, UNITED PRESIDENTIAL LIFE INSURANCE COMPANY, DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP, TORONTO DOMINION INVESTMENTS, INC., ENTERGY WIRELESS CORPORATION, GENERAL ELECTRIC CAPITAL CORPORATION, TRIUNE PCS, LLC, FCA VENTURE PARTNERS II, L.P., CLAYTON ASSOCIATES LLC, TRILLIUM PCS, LLC AIRWAVE COMMUNICATIONS, LLC DIGITAL PCS, LLC and THE STOCKHOLDERS NAMED HEREIN dated as of January 7, 1999 - -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ---- 1. Certain Definitions..............................................2 2. Management of Company; Certain Voting Requirements...............2 2.1. Board of Directors......................................2 2.2. Removal; Filling of Vacancies...........................3 2.3. Election of Initial Board of Directors..................3 2.4. Board Committees........................................3 2.5. Reduction of Unfunded Commitment........................3 3. Transfers of Shares..............................................4 3.1. General.................................................4 3.2. Right of First Offer....................................4 3.3. Tag Along Rights........................................5 3.4. Drag-Along Rights.......................................7 4. Unfunded Commitment; Additional Capital Contributions............8 5. Purchase Rights.................................................10 5.1. Right to Exercise Purchase Rights......................10 6. After-Acquired Shares; Recapitalization.........................10 6.1. After-Acquired Shares; Recapitalization................10 7. Equitable Relief................................................10 7.1. Equitable Relief.......................................10 8. Miscellaneous.........................................................11 8.1. Notices................................................11 8.2. Entire Agreement; Amendment; Consents..................11 8.3. Term...................................................11 8.4. Obligations Several....................................11 8.5. Governing Law..........................................11 8.6. Jurisdiction...........................................11 8.7. Benefit and Binding Effect; Severability...............12 8.8. Headings...............................................12 8.9. Counterparts...........................................12 i Schedules Schedule I Cash Equity Investors Schedule II Stock Ownership Schedule III Initial Director Nominees ii INVESTORS STOCKHOLDERS' AGREEMENT STOCKHOLDERS' AGREEMENT, dated as of January 7, 1999 (this "Agreement"), by and among, MERCURY PCS CORPORATION, a Delaware corporation (the "Company"), WASHINGTON NATIONAL INSURANCE COMPANY, an Illinois corporation ("WNIC"), UNITED PRESIDENTIAL LIFE INSURANCE COMPANY, an Indiana corporation ("Presidential"; WNIC and Presidential are hereinafter referred to collectively as "Conseco"), DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP, a Delaware limited partnership ("Dresdner"), TORONTO DOMINION INVESTMENTS, INC., a Delaware corporation ("TD"), ENTERGY WIRELESS CORPORATION, a Delaware corporation ("Entergy"), GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("GE Capital"), TRIUNE PCS, LLC, a Delaware limited liability company ("Triune"), FCA VENTURE PARTNERS II, L.P., a Delaware limited partnership ("FCA"), CLAYTON ASSOCIATES LLC, a Tennessee limited liability company ("Clayton"), TRILLIUM PCS, LLC., a Mississippi limited liability company ("Trillium"), AIRWAVE COMMUNICATIONS, LLC, a Mississippi limited liability company ("Airwave"), DIGITAL PCS, LLC, a Mississippi limited liability company ("Digital"), THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.), a Michigan corporation ("MF"), (individually, each a "Cash Equity Investor" and, collectively with Conseco, Dresdner, TD, Entergy, GE Capital, Triune, FCA and Clayton, Trillium, Airwave, Digital, MF and any of their respective Affiliated Successors who become a Stockholder and a party to this Agreement in accordance with the terms hereof, the "Cash Equity Investors"). Each of the foregoing Cash Equity Investors are sometimes referred to herein, individually, as a "Stockholder" and, collectively, as the "Stockholders." RECITALS WHEREAS, the Cash Equity Investors, the Company and the other Stockholders named therein are party to that certain Stockholders Agreement, dated the date hereof (as amended from time to time, in accordance with its terms, the "Company Stockholder Agreement") pursuant to which the Cash Equity Investors and the other parties thereto have agreed to provide for the management of the Company and to impose certain restrictions with respect to the sale, transfer or other disposition of Company Stock on the terms set forth therein; and WHEREAS, each Stockholder is the registered owner of the respective shares of Common Stock of the Company (the "Common Stock") and Series C Preferred Stock set forth opposite its name on Schedule II; and WHEREAS, the parties hereto desire to enter into this Agreement in order to impose certain further restrictions with respect to the sale, transfer or other disposition of Company Stock and to provide for certain rights with respect to the management of the Company on the terms and conditions hereinafter set forth; 1 NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, the parties agree as follows: 1. Certain Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Company Stockholder Agreement. Each definition or pronoun herein shall be deemed to refer to the singular, plural, masculine, feminine or neuter as the context requires. Words such as "herein," "hereinafter," "hereof," "hereto" and "hereunder" refer to this Agreement as a whole, unless the context otherwise requires. 2. Management of Company; Certain Voting Requirements. 2.1. Board of Directors. (a) Each of the Cash Equity Investors hereby agrees, so long as such Stockholder continues to hold any shares of Series C Preferred Stock or Common Stock, in exercising its rights under Section 3 of the Company Stockholder Agreement, that it will vote or cause to be voted all of the shares of its Series C Preferred Stock or Common Stock owned or held of record by it (whether now owned or hereafter acquired), in person or by proxy, to cause the selection of directors, the election of directors and thereafter the continuation in office of the following persons as members of the Board of Directors as follows: (i) one (1) individual to be designated by Conseco (or its Affiliated Successors) (the "Conseco Designee") who shall initially be Andrew Hubregsen; (ii) one (1) individual to be designated by Dresdner (or its Affiliated Successors) (the "Dresdner Designee") who shall initially be Alex P. Coleman; (iii) one (1) individual to be designated by Entergy (or its Affiliated Successors) (the "Entergy Designee") who shall initially be Gary S. Fuqua; and (iv) with respect to any individual selected pursuant to Section 3.1(d) of the Company Stockholder Agreement, such individual shall be deemed acceptable to holders of a "Majority in Interest of the Class A Voting Stock Beneficially Owned by the Cash Equity Investors" in accordance with such Section 3.1(d) only in the event such individual has been approved by "Two-Thirds in Interest of the Cash Equity Investors" (as defined below). (b) Any nomination or designation of directors and the acceptance thereof pursuant to this Section 2.1 shall be evidenced in writing. (c) If the right of the Cash Equity Investors to nominate directors under the Company Stockholder Agreement is reduced to the right to nominate one director pursuant to Section 2 12.3(c) therein, such right shall be exercisable by Two-Thirds In Interest of the Cash Equity Investors. (d) For purposes of this Agreement, "Two-Thirds in Interest of the Cash Equity Investors" shall mean the Cash Equity Investors owning two-thirds of the outstanding shares of Common Stock and/or Series C Preferred Stock (on an as-converted basis) held by all Cash Equity Investors. 2.2. Removal; Filling of Vacancies. Except as set forth in Section 2.1, each Cash Equity Investor agrees it will not vote any shares of Series C Preferred Stock and/or Common Stock owned or controlled by such Cash Equity Investor for the removal without cause of any director designated by any other Cash Equity Investor in accordance with Section 2.1, except at the request of such other Cash Equity Investor. Any successor director to the director designated by Conseco, Dresdner or Entergy (a "Designating CEI") shall be designated by the applicable Designating CEI, provided, however, in the event (i) that the aggregate number of shares of Series C Preferred Stock and/or Common Stock (on an as-converted basis) owned or controlled by such Designating CEI or its Affiliated Successors is less than fifty percent of the Series C Preferred Stock and/or Common Stock (on an as-converted basis) owned or controlled by such Designating CEI on the date hereof (after adjustment for stock dividends, splits, combinations and the like) or (ii) on any date of determination, such Designating CEI has sold, transferred or otherwise disposed of one-third or more of the shares of Series C Preferred Stock and/or Common Stock owned or controlled by such Designating CEI on the date hereof and as a result of such sale, transfer or other dispositions the CEI Ownership Percentage (as defined below) of such Designating CEI is not one of the three highest CEI Ownership Percentages, the successor director shall be selected by Two-Thirds in Interest of the Cash Equity Investors. For purposes of this Agreement, "CEI Ownership Percentage" shall mean the percentage obtained by dividing the number of shares of Common Stock and/or Series C Preferred Stock (on an as-converted basis) held by the applicable Cash Equity Investor and its Affiliated Successors by the total number of shares of Common Stock and/or Series C Preferred Stock held by all Cash Equity Investors. Notwithstanding the foregoing, if a Designating CEI defaults on its Unfunded Commitment, the Cash Equity Investor who has the largest CEI Ownership Percentage of the Cash Equity Investors other than the Designating CEI's after giving effect to such defaults shall become a Designating CEI for purposes of Section 2.1(a) and this Section 2.2. 2.3. Election of Initial Board of Directors. The Cash Equity Investors hereby consent to the nomination of the persons designated on Schedule III hereto to be directors of the Company pursuant to the Company Stockholder Agreement. 2.4. Board Committees. The initial member of the executive committee of the Board of Directors appointed in accordance with Section 3.1(a) of the Company Stockholder Agreement shall be an individual nominated by Conseco provided, however, in the event Two-Thirds in Interest of the Cash Equity Investors elect to replace such member, such member shall be an individual nominated by Two-Thirds in Interest of the Cash Equity Investors. If the Cash 3 Equity Investors have the right to appoint a member of any other committee of the Board of Directors, such member shall be selected by Two-Thirds in Interest of the Cash Equity Investors. 2.5. Reduction of Unfunded Commitment. In connection with a proposed initial public offering of the Company's Common Stock, the Cash Equity Investors may request that the Company reduce the Unfunded Commitment of the Cash Equity Investors upon the divestiture to the Company of a number of shares of Company Stock having a value (based upon the initial public offering price of the Common Stock) equal to the amount by which the Unfunded Commitment is to be reduced; provided, that such proposal has been approved by Two-Thirds in Interest of the Cash Equity Investors and AT&T Wireless PCS Inc. 3. Transfers of Shares. 3.1. General. Each Stockholder agrees that it shall not, directly or indirectly, Transfer Company Stock held by such Stockholder as of the date hereof or which may hereafter be acquired by such Stockholder except in accordance with the Company Stockholder Agreement and as set forth in this Article 3. Each Stockholder further agrees that it shall not, directly or indirectly, Transfer Company Stock held by such Stockholder as of the date hereof or which may hereafter be acquired by such Stockholder to a Disallowed Transferee (as such term is defined in that certain Network Membership License Agreement, dated the date hereof, between AT&T Corp. and the Company) except in connection with a sale of capital stock of the Company held by the parties hereto holding 66% of the shares of the Common Stock of the Company on a fully-diluted basis (assuming conversion of all Company Stock which is convertible into Common Stock, such fully diluted Common Stock referred to herein as "Common Stock Owned") owned by such parties at the time of the proposed sale. Each Stockholder agrees to cause each of its Affiliated Successors to become a party to and become bound by this Agreement (and shall thereby become a Stockholder for all purposes of this Agreement) prior to any transfer of Company Stock. 3.2. Right of First Offer. (a) If a Cash Equity Investor (each a "CEI Seller") desires to Transfer any or all of its shares of Company Stock (collectively, the "Offered Shares"), other than a Transfer to an Affiliate or an Affiliated Successor, such CEI Seller shall give written notice (the "CEI Offer Notice") to each Cash Equity Investor. Each CEI Offer Notice shall describe in reasonable detail the number of shares of each class of Offered Shares, the cash purchase price requested and all other material terms and conditions of the proposed Transfer. The CEI Offer Notice shall constitute an irrevocable offer (a "First Offer") to sell all (but not less than all) of the Offered Shares to the Cash Equity Investors (in the aggregate) at a cash price equal to the price contained in such CEI Offer Notice and upon the same terms as the terms contained in such Offer Notice. The Cash Equity Investors shall have the irrevocable right and option exercisable as provided below, but not the obligations, to accept the First Offer as to the Offered Shares. (b) If the Cash Equity Investors have a right of First Offer pursuant to clause (a) Cash Equity Investors shall exercise their right of First Offer by giving a Purchase Notice to the CEI 4 Seller, the other Cash Equity Investors and the Company not later than twenty-five (25) days (the "Cash Equity First Offer Period") after the date of the Offer Notice. If the Cash Equity Investors notify the Seller of their desire to purchase less than all of the Offered Shares, the Company shall deliver notice to all Cash Equity Investors who have notified the CEI Seller and the Company of their desire to purchase Offered Shares (the "Purchasing Cash Equity Investors") within twenty-nine (29) days after the Offer Notice, and the Purchasing Cash Equity Investors shall have the right to purchase any excess Offered Shares which other Cash Equity Investors do not desire to purchase by written notice to the Seller and the Company so that each Purchasing Cash Equity Investor shall have the right to acquire the proportion of such excess Offered Shares as the number of shares of Company Stock owned by such Purchasing Cash Equity Investor bears to the total number of shares of Company Stock owned by all Purchasing Cash Equity Investors; provided that the CEI Seller will not be obligated to sell any Offered Shares to the Purchasing Cash Equity Investors unless the Purchasing Cash Equity Investors in the aggregate, agree to purchase all (but not less than all) of the Offered Shares. (c) The purchase of the Offered Shares by the Purchasing Cash Equity Investors shall be closed at the principal executive offices of the Company on a date specified by the Purchasing Cash Equity Investors at least five (5) business days' notice, that is within thirty (30) days after the expiration of the Cash Equity First Offer Period; provided, however, that if such purchase is subject to the consent of the FCC or any public service or public utilities commission, the purchase of the Offered Shares shall be closed on the first business day after all such consents shall have been obtained by Final Order. The purchase price of any Offered Shares Transferred pursuant to this Section 3.2 shall be payable in cash by certified bank check or by wire transfer of immediately available funds. 3.3. Tag Along Rights. (a) No Stockholder shall, directly or indirectly, Transfer, in any single transaction or series or related transactions to one or more Persons who are not Affiliates or Affiliated Successors of such Stockholder (a "CEI Inclusion Event Purchaser") shares of any class of Inclusion Stock in circumstances in which, after giving effect to such Transfer, whether acting alone or in concert with any other Stockholder (such parties referred to herein as "Selling Stockholders") would result in such Selling Stockholder(s) Transferring, (x) ten percent (10%) or more of the outstanding shares of Inclusion Stock Beneficially Owned by such Selling Stockholder to a Person who is a party, or an Affiliated Successor of a party, to the Company Stockholder Agreement or (y) ten percent (10%) or more of the outstanding shares of Inclusion Stock outstanding on the date of such proposed Transfer on a fully diluted basis to a Person who is not a party, or an Affiliated Successor to a party, to the Company Stockholder Agreement, but, in either case, not more than twenty-five percent (25%) of the outstanding shares of Inclusion Stock outstanding on the date of such proposed Transfer on a fully diluted basis (a "Tag Along Event"), unless the terms and conditions of such sale to such CEI Inclusion Event Purchaser shall include an offer to the Cash Equity Investors other than the Selling Stockholder (each, a "Tag Along Offeree") to Transfer to such CEI Inclusion Event Purchasers up to that number of shares of any class of Inclusion Stock then Beneficially Owned by each Tag Along Offeree that bears 5 the same proportion to the total number of shares of Inclusion Stock at that time Beneficially Owned (without duplication) by each such Tag Along Offeree as the number of shares of Inclusion Stock being Transferred by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any applicable series of related transactions) bears to the total number of shares of Inclusion Stock at the time Beneficially Owned (without duplication) by the Selling Stockholders (including shares of Inclusion Stock theretofore Transferred if in any applicable series of related transactions). If the Selling Stockholders receive a bona fide offer from an Inclusion Event Purchaser to purchase shares of Inclusion Stock in circumstances in which, after giving effect to such sale would result in a Tag Along Event, and which offer such Selling Stockholders wish to accept, the Selling Stockholders shall then cause the Inclusion Event Purchaser's offer to be reduced to writing (which writing shall include an offer to purchase shares of Inclusion Stock from each Tag Along Offeree according to the terms and conditions set forth in this Section 3.3) and the Selling Stockholders shall send written notice of the CEI Inclusion Event Purchaser's offer (the "Tag Along Notice") to each Tag Along Offeree, which Tag Along Notice shall specify (i) the names of the Selling Stockholders, (ii) the names and addresses of the proposed acquiring Person, (iii) the amount of shares proposed to be Transferred and the price, form of consideration and other terms and conditions of such Transfer (including, if in a series of related transactions, such information with respect to shares of Inclusion Stock theretofore Transferred), (iv) that the acquiring Person has been informed of the rights provided for in this Section 3.3 and has agreed to purchase shares of Inclusion Stock in accordance with the terms hereof, and (v) the date by which each other Selling Stockholder may exercise its respective rights contained in this Section 3.3, which date shall not be less than thirty (30) days after the giving of the Tag Along Notice. The Tag Along Notice shall be accompanied by a true and correct copy of the CEI Inclusion Event Purchaser's offer. At any time within thirty (30) days after receipt of the Tag Along Notice, each Tag Along Offeree may accept the offer included in the Tag Along Notice for up to such number of shares of Inclusion Stock as is determined in accordance with this Section 3.3, by furnishing written notice of such acceptance to each Selling Stockholder, and delivering, to an escrow agent (which shall be a bank or a law or accounting firm designated by the Company), on behalf of the Selling Stockholders, the certificate or certificates representing the shares of Inclusion Stock to be sold pursuant to such offer by each Tag Along Offeree, duly endorsed in blank, together with a limited power-of-attorney authorizing the escrow agent, on behalf of the Tag Along Offeree, to sell the shares to be sold pursuant to the terms of such CEI Inclusion Event Purchaser's offer. In the event that the CEI Inclusion Event Purchaser does not agree to purchase all of the shares of Inclusion Stock proposed to be sold by the Selling Stockholders and the Tag Along Offerees, then each Selling Stockholder and Tag Along Offeree shall have the right to sell to the CEI Inclusion Event Purchaser that number of shares of Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock which the Inclusion Event Purchaser has agreed to purchase times (y) a fraction, the numerator of which is the number of shares of Inclusion Stock Beneficially Owned (without duplication) by such Selling Stockholder or Tag Along Offeree and the denominator of which is the aggregate number of shares of Inclusion Stock Beneficially Owned (without duplication) by all Selling Stockholders and Tag Along Offerees. If any Tag Along Offeree desires to sell less than its proportionate amount of shares of Inclusion Stock that 6 it is entitled to sell pursuant to this Section 3.3, then the Selling Stockholders and the remaining Tag Along Offerees shall have the right to sell to the CEI Inclusion Event Purchaser an additional amount of shares of Inclusion Stock as shall be equal to (x) the number of shares of Inclusion Stock not being sold by any such Inclusion Event Purchasers times (y) a fraction, the numerator of which is the number of shares of Inclusion Stock owned such Selling Stockholder or remaining Tag Along Offeree and the denominator of which is the aggregate number of shares of Inclusion Stock Beneficially Owned (without duplication) by all Selling Stockholders and remaining Tag Along Offerees. Such process shall be repeated in series until all of the remaining Tag Along Offerees agree to sell their remaining proportionate number of shares of Inclusion Stock. (b) The purchase from each Tag Along Offeree pursuant to this Section 3.3 shall be on the same terms and conditions, including the price per share received by the Selling Stockholders and stated in the Tag Along Notice provided to each Tag Along Offeree. In the event that the Inclusion Stock is Common Stock, all Tag Along Offerees shall be required, as a condition of participating in such transaction, to Transfer Common Stock to the CEI Inclusion Event Purchaser. In the event that the Tag Along Offerees elect to sell their pro rata share of Series C Preferred Stock or Common Stock pursuant to this Section 3.3 the CEI Inclusion Event Purchaser shall be required to purchase both Series C Preferred Stock and Common Stock, the purchase price allocable to holders of Series C Preferred Stock, on the one hand, and to holders of Common Stock, on the other hand, shall be determined by an independent committee of the Board of Directors selected from among those directors who were not designated by any Selling Stockholders or Tag Along Offerees, it being understood that the directors selected pursuant to Section 2.1(c) shall be deemed independent for such purposes. (c) Simultaneously with the consummation of the sale of the shares of Inclusion Stock of the Selling Stockholders and each Tag Along Offeree to the CEI Inclusion Event Purchaser pursuant to the Inclusion Event Purchaser's offer, the Selling Stockholders shall notify each Tag Along Offeree and shall cause the Inclusion Event Purchaser to remit to each Tag Along Offeree the total sales price of the shares of Inclusion Stock by each Tag Along Offeree sold pursuant thereto and shall furnish such other evidence of the completion and time of completion of such sale and the terms thereof as may be reasonably requested by each Tag Along Offeree. (d) If within thirty (30) days after receipt of the Tag Along Notice, Tag Along Offeree has not accepted the offer contained in the Tag Along Notice, such Tag Along Offeree shall be deemed to have waived any and all rights with respect to the sale described in the Tag Along Notice (but not with respect to any subsequent sale, to the extent this Section 3.3 is applicable to such subsequent sale) and the Selling Stockholders shall have sixty (60) days in which to sell not more than the number of shares of Inclusion Stock described in the Tag Along Notice, on terms not more favorable to the Selling Stockholders than were set forth in the Tag Along Notice; provided, however, that if such purchase is subject to the consent of the FCC or any public service or public utilities commission, the purchase of the Offered Shares shall be closed on the first business day after all such consents shall have been obtained by Final Order. 7 3.4. Drag-Along Rights. (a) If at any time, (i) any two Cash Equity Investors, each holding Series C Preferred Stock and Common Stock with a purchase price of no less than $20 million (a "Twenty Million Investor") at the time of the proposed sale or (ii) holders of 50% or more of the Common Stock Owned by the Cash Equity Investors at the time of the proposed sale, provided that so long as any Twenty Million Investor exists, at least one Twenty Million Investor is included in such group of Cash Equity Investors, proposes in a single transaction or series of transactions to Transfer Company Stock, (each member of the group, a "Selling Investor"), in a bona fide arm's-length transaction to a third party in which the same price per share shall be payable in respect of all shares of any class of the Common Stock Owned, then, upon the written request of such Selling Investors, each other Cash Equity Investor shall be obligated to, and shall, if so requested by such third party (a) sell, transfer and deliver or cause to be sold, transferred and delivered to such third party, up to all shares of Common Stock Owned by them at the same price per share (irrespective of class) and on the same terms as are applicable to the Selling Investors, and (b) if approval of the transaction is required of the stockholders of the Company, vote his, her or its shares of Series C Preferred Stock and Common Stock in favor thereof and, in the event such sale or transfer is in connection with a merger or consolidation, each Cash Equity Investor shall waive any dissenters' rights, appraisal rights or similar rights in connection with such merger or consolidation. (b) The obligation of each Cash Equity Investor to sell shares of capital stock pursuant to clause (a) shall be conditioned upon the following: (i) the maximum liability with respect to indemnification granted by each selling Cash Equity Investor to the purchaser in such sale shall not exceed the proceeds of the sale to such Cash Equity Investor, (ii) any such liability with respect to indemnification shall be a several (and not joint and several) obligation of each selling Cash Equity Investor and (iii) the value of the consideration received by each Cash Equity Investor pursuant to such sale shall be equal to or greater than the purchase price of such Cash Equity Investor's Company Stock included in the transaction plus a return of twenty percent, compounded annually. 4. Unfunded Commitment; Additional Capital Contributions. (a) In the event any Cash Equity Investor (a "Defaulting Cash Equity Investor") fails to satisfy any portion of its Unfunded Commitment pursuant to Section 2.2 of the Securities Purchase Agreement (a "Payment Default"), the Company shall give prompt written notice, but no later than one (1) business day following such default (a "Default Notice"), to each Cash Equity Investor other than the Defaulting Cash Equity Investor (each a "Non-Defaulting Cash Equity Investor") of the amount of such Payment Default (the "Default Amount"). In the event the Defaulting Cash Equity Investor has failed to cure such Payment Default, within five (5) days of the Payment Default, each Non-Defaulting Cash Equity Investor may, acting on its own or in conjunction with one or more of the other Non-Defaulting Cash Equity Investors (each a "Participating Cash Equity Investor"), agree to fund all or any portion of such Payment Default by providing written notice to the Company (a "Payment Notice") no later than 12:00 Noon (New York time) twenty (20) days following the date on which the Default Notice is delivered (the "Notice Period") and the Company shall thereafter provide each Participating Cash Equity Investor with copies of such Payment Notice or Payment Notices; provided, however, that if the aggregate amount 8 agreed to be funded by the Participating Cash Equity Investors shall exceed the Payment Default, then the amount to be funded by each such Participating Cash Equity Investor shall be divided amongst the Participating Cash Equity Investors pro rata in accordance with the shares of Common Stock Owned by the Participating Cash Equity Investors; provided, further, however, that if the aggregate amount agreed to be funded by the Participating Cash Equity Investors shall be less than the Payment Default (a "Payment Default Shortfall"), the Company shall give prompt written notice, but no later than one (1) business day following the end of the Payment Notice Period, of such Payment Default Shortfall (a "Payment Default Shortfall Notice") to all Non-Defaulting Cash Equity Investors and all such Non-Defaulting Cash Equity Investors may agree to fund the Payment Default Shortfall by providing written notice to the Company within five (5) days of delivery of the Payment Notice and payment shall be made in accordance with the preceding two provisos. (b) In the event any Cash Equity Investor (a "Defaulting Ericsson Investor") fails to pay any amount due and payable pursuant to the Ericsson Documents (as defined in the Securities Purchase Agreement) (a "Ericsson Payment Default"), the Company shall give prompt written notice, but no later than one (1) business day following such default (a "Ericsson Default Notice"), to each Cash Equity Investor other than the Defaulting Ericsson Investor (each a "Non-Defaulting Party") of the amount of such Ericsson Payment Default (the "Ericsson Default Amount"). In the event the Defaulting Ericsson Investor has failed to cure such Ericsson Payment Default, within two (2) days of the Ericsson Payment Default, each Non-Defaulting Party may, acting on its own or in conjunction with one or more of the other Non-Defaulting Parties (each a "Participating Party"), agree to fund all or any portion of such Ericsson Payment Default by providing written notice to the Company (a "Ericsson Payment Notice") and funding such Ericsson Default Amount to Ericsson ("Ericsson") no later than 12:00 Noon (New York time) four (4) days following the date on which the Ericsson Default Notice is delivered (the "Ericsson Payment Notice Period") and the Company shall thereafter provide each Participating Party with copies of such Ericsson Payment Notice or Ericsson Payment Notices; provided, however, that if the aggregate amount agreed to be funded by the Participating Parties shall exceed the Ericsson Payment Default, then the amount to be funded by each such Participating Party shall be divided amongst the Participating Parties pro rata in accordance with the shares of Common Stock Owned by the Participating Parties; provided, further, however, that if the aggregate amount agreed to be funded by the Participating Parties shall be less than the Ericsson Payment Default (a "Ericsson Default Shortfall"), the Company shall give prompt written notice, but no later than one (1) business day following the end of the Ericsson Payment Notice Period, of such Ericsson Payment Default Shortfall (a "Ericsson Payment Default Shortfall Notice") to AT&T Wireless PCS, Inc. ("AT&T") and AT&T may fund the Ericsson Payment Default Shortfall by providing written notice to the Company and funding such Ericsson Default Shortfall to Ericsson within two (2) days of delivery of the Ericsson Payment Default Shortfall Notice. (c) Upon payment of the Default Amount (or any portion thereof), each Participating Cash Equity Investor (i) shall be deemed to be the record and beneficial owner of that number of shares of Common Stock Owned by the Defaulting Cash Equity Investor equal to the total 9 number of shares of Common Stock acquired in respect of such Defaulting Cash Equity Investor's Commitment pursuant to the Securities Purchase Agreement multiplied by a fraction the numerator of which is the amount equal to the amount paid by such Participating Cash Equity Investor pursuant to this Section 4 and the denominator of which is the Default Amount, and (ii) shall become obligated to the Company pursuant to Section 2.2 of the Securities Purchase Agreement with respect to the remaining Unfunded Commitment, if any, of the Defaulting Cash Equity Investor in an amount equal to the product of the amount of such remaining Unfunded Commitment multiplied by the percentage of the Unfunded Commitment the Defaulting Cash Equity Investor failed to satisfy which such Participating Cash Equity Investor funded pursuant to this Section 4. (d) Upon payment of the Ericsson Default Amount (or any portion thereof), each Participating Party and/or AT&T (if applicable) shall be deemed to be the record and beneficial owner of that number of shares of Common Stock Owned by the Defaulting Ericsson Investor equal to the aggregate number of shares of Common Stock Owned by the Defaulting Ericsson Investor and subject to a pledge to Ericsson pursuant to the Ericsson Documents multiplied by a fraction, the numerator of which is the amount paid by such Participating Party, or AT&T, as applicable, pursuant to this Section 4, and the denominator of which is the Ericsson Default Amount. 5. Purchase Rights. 5.1. Right to Exercise Purchase Rights. If Equity Securities are issued by the Company pursuant to Section 7.2 of the Company Stockholder Agreement, then, notwithstanding the notice provisions in Section 7.2 of the Company Stockholder Agreement, each Cash Equity Investor may exercise such Purchase Right, in whole or in part, on the terms and conditions and for the purchase price set forth in the Issuance Notice, by giving to the Company notice to such effect, within twenty-five (25) days after the giving of the Issuance Notice pursuant to the Company Stockholder Agreement. If Cash Equity Investors give notice to exercise Purchase Rights (each, a "Purchase Right Cash Equity Investor") with respect to less than the entire percentage of Equity Securities proposed to be offered, issued, sold or otherwise disposed of equal to the number of shares of Common Stock then Beneficially Owned by all Cash Equity Investors divided by the aggregate number of shares of Common Stock outstanding immediately prior to such offer, issuance, sale or disposition of Equity Securities (the "Purchase Right Shares"), then the Purchase Right Cash Equity Investors shall have the right by written notice to the Company within twenty-nine (29) days after the giving of the Issuance Notice to acquire the excess Purchase Right Shares in such proportion as such excess Purchase Right Shares bears to the number of shares of Common Stock Owned by such Purchase Right Cash Equity Investor immediately prior to such offer of Equity Securities by the Company. 6. After-Acquired Shares; Recapitalization. 6.1. After-Acquired Shares; Recapitalization. (a) All of the provisions of this Agreement shall apply to all of the shares of Equity Securities now owned or hereafter issued or 10 transferred to a Stockholder or to his, her or its Affiliates in consequence of any additional issuance, purchase, exchange or reclassification of shares of Equity Securities, corporate reorganization, or any other form of recapitalization, or consolidation, or merger, or share split, or share dividend, or which are acquired by a Stockholder or its Affiliate in any other manner. (b) Whenever the number of outstanding shares of Equity Securities is changed by reason of a stock dividend or a subdivision or combination of shares effected by a reclassification of shares, each specified number of shares referred to in this Agreement shall be adjusted accordingly. 7. Equitable Relief. 7.1. Equitable Relief. The parties hereto agree and declare that legal remedies may be inadequate to enforce the provisions of this Agreement and that, in addition to being entitled to exercise all of the rights provided herein or in the Restated Certificate or granted by law, including recovery of damages, equitable relief, including specific performance and injunctive relief, may be used to enforce the provisions of this Agreement. 8. Miscellaneous. 8.1. Notices. All notices or other communications hereunder shall be in writing and shall be given in the manner prescribed in the Company Stockholder Agreement. 8.2. Entire Agreement; Amendment; Consents. (a) This Agreement and the Company Stockholder Agreement constitute the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings, both written and oral, among the parties or any of them with respect to the subject matter hereof. The Stockholders agree that the terms of this Agreement shall supersede any inconsistent provision contained in the Company Stockholder Agreement. (b) No change or modification of this Agreement shall be valid, binding or enforceable unless the same shall be in writing and signed by Stockholders holding 66% of all shares of Common Stock Owned by all Cash Equity Investors; provided, however, that no change or modification to this Agreement which adversely affects the rights of any Stockholder (as compared with its effect on any similarly-situated Stockholder) or the Company shall be valid, binding and enforceable unless the same shall be in writing and signed by such Stockholder or the Company. In the event any party hereto shall cease to own any shares of Equity Securities such party hereto shall cease to be a party to this Agreement and the rights and obligations of such party hereunder shall terminate. (c) Whenever in this Agreement the consent or approval of a Stockholder is required, except as expressly provided herein, such consent or approval may be given or withheld in the sole and absolute discretion of each Stockholder. 11 (d) Whenever the Company Stockholder Agreement is amended in accordance with its terms, the Stockholders hereto agree to enter into such amendments to this Agreement necessary to effectuate the intent of this Agreement. The Stockholder shall not enter into any such amendment the effect of which adversely effects the rights of any Stockholder hereto without the consent of such Stockholder. 8.3. Term. This Agreement shall terminate upon the termination of the Company Stockholder Agreement. 8.4. Obligations Several. The obligations of each Stockholder under this Agreement shall be several with respect to each such Stockholder. 8.5. Governing Law. This Agreement shall be governed and construed in accordance with the law of the State of Delaware. 8.6. Jurisdiction. (a) The Company and each of the Stockholders hereby irrevocably consents to the exclusive jurisdiction of the state or federal courts in the State of New York, and all state or federal courts competent to hear appeals therefrom, over any actions which may be commenced against any of them under or in connection with this Agreement. The Company and each Stockholder hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which any of them may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute in the Southern District of New York and New York County. The Company and each Stockholder hereby agree that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The Company and each Stockholder hereby consent to process being served by any party to this Agreement in any actions by the transmittal of a copy thereof in accordance with the provisions of Section 8.1. 8.7. Benefit and Binding Effect; Severability. This Agreement shall be binding upon and shall inure to the benefit of the Company (solely with respect to Sections 3.2, 3.3 and 4), its successors and assigns, and each of the Stockholders and their respective executors, administrators and personal representatives and heirs and permitted assigns. Any person to which shares of Series C Preferred Stock are Transferred in connection with the exercise of remedies by the lender under the Cash Equity Loan Documents, and any direct or indirect transferee thereof, shall become a party to this Agreement, be bound hereby and be subject to the rights and benefits of a Stockholder provided herein. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy or any listing requirement applicable to the Common Stock, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto affected by such determination in any material respect shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the provisions hereof are given effect as originally contemplated to the greatest extent possible. 12 8.8. Headings. The captions in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 8.9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 13 IN WITNESS WHEREOF, each of the parties has executed or consent this Agreement to be executed by its duly authorized officers as of the date first written above. TRITEL, INC. By: Name: Title: S-1 CASH EQUITY INVESTORS: TORONTO DOMINION INVESTMENTS, INC. By: Name: Martha L. Gariepy Title: Vice President ENTERGY WIRELESS CORPORATION By: Name: Gary Fuqua Title: President and Chief Executive Officer GENERAL ELECTRIC CAPITAL CORPORATION By: Name: Molly Fergusson Title: Managing Director S-2 WASHINGTON NATIONAL INSURANCE COMPANY By: Name: Title: UNITED PRESIDENTIAL LIFE INSURANCE COMPANY By: Name: Title: DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP BY: DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC, AS ITS GENERAL PARTNER By: Name: Alexander P. Coleman Title: Authorized Signatory TRIUNE PCS, LLC, A DELAWARE LIMITED LIABILITY COMPANY BY: OAK TREE, LLC, A DELAWARE LIMITED LIABILITY COMPANY TITLE: MANAGER BY: TRIUNE INC., A DELAWARE CORPORATION TITLE: MANAGER By: Name: Kevin Shepherd Title: President S-3 FCA VENTURE PARTNERS II, L.P. BY: CLAYTON-DC VENTURE CAPITAL GROUP, LLC, ITS GENERAL PARTNER By: Name: D. Robert Crants Title: Manager CLAYTON ASSOCIATES LLC By: Name: Bill F. Cook Title: President THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.) By: Name: Title: S-4 TRILLIUM PCS, LLC By: Name: Title: AIRWAVE COMMUNICATIONS, LLC (F/K/A MERCURY PCS, LLC) By: MSM, Inc., its Manager By: Name: E.B. Martin, Jr. Title: Vice President DIGITAL PCS, LLC (F/K/A MERCURY PCS II, LLC) By: MSM, Inc., its Manager By: Name: E.B. Martin, Jr. Title: Vice President S-5 With respect to Section 4 only: AT&T WIRELESS PCS, INC. By: Name: Title: S-6 SCHEDULE I CASH EQUITY INVESTORS WASHINGTON NATIONAL INSURANCE COMPANY UNITED PRESIDENTIAL LIFE INSURANCE COMPANY 11825 North Pennsylvania Street Carmel, IN 46032-4911 Attention: John J. Sabl Facsimile: 317-817-6327 TRILLIUM PCS, LLC AIRWAVE COMMUNICATIONS, LLC DIGITAL PCS, LLC 1410 Livingston Lane Jackson, MS 39213-8003 Attention: William M. Mounger, II Facsimile: 601-362-2664 DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC 75 Wall Street, 24th Floor New York, NY 10005-2889 Attention: Alexander P. Coleman Facsimile: 212-429-3139 ENTERGY WIRELESS CORPORATION Three Financial Centre 900 South Shackelford, Suite 210 Little Rock, AR 72211 Attention: Stephen T. Refsell Facsimile: 501-954-5003 TRIUNE PCS, LLC 4770 Baseline Road, Suite 380 Boulder, CO 80303 Attention: Kevin Shepherd Facsimile: 303-499-6255 S-7 TORONTO DOMINION INVESTMENTS, INC. 31 W. 52nd Street New York, NY 10019 Attention: Steve Reinstadtler Facsimile: 212-974-8429 With copy to: TORONTO DOMINION INVESTMENTS, INC. 909 Fannin, Suite 1700 Houston, TX 77010 Attention: Martha Gariepy Facsimile: 713-652-2647 GE CAPITAL SERVICES STRUCTURED FINANCE GROUP 120 Long Ridge Road, 3rd Floor Stamford, CT 06927-4000 Attention: Mark De Cruccio Facsimile: 203-357-6868 FCA VENTURE PARTNERS II, LP CLAYTON ASSOCIATES, LLC 10 Burton Hills Blvd., Suite 120 Nashville, TN 37215 Attention: Joel Goldberg Facsimile: 615-263-0234 THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.) 73 Tremont Street, Suite 1300 Boston, MA 02108-3915 Attention: David Alpert Facsimile: 617-854-4340 S-8 SCHEDULE II STOCK OWNERSHIP [SEE ATTACHED CAP TABLE] S-9 SCHEDULE III INITIAL DIRECTOR NOMINEES [SEE ATTACHED] S-10 EX-10.3 6 AT&T WIRELESS SERVICES NETWORK MEMBERSHIP LICENSE AGREEMENT Exhibit 10.3 ================================================================================ AT&T WIRELESS SERVICES NETWORK MEMBERSHIP LICENSE AGREEMENT between AT&T CORP. and TRITEL, INC. Dated as of January 7, 1999 ================================================================================ AT&T WIRELESS SERVICES NETWORK MEMBERSHIP LICENSE AGREEMENT NETWORK MEMBERSHIP LICENSE AGREEMENT (the "Agreement") dated as of January 7, 1999, by and between AT&T Corp., a New York corporation, with offices located at 32 Avenue of the Americas, New York, New York 10013, for itself and its affiliated companies, including AT&T Wireless Services, Inc. (collectively "Licensor"), and Tritel, Inc., a Delaware corporation, with offices located at 1410 Livingston Lane, Jackson, Mississippi 39213-8003 ("Licensee"). Certain capitalized terms used herein are defined in Section 1. WHEREAS, Licensor has, for many years, used and Licensor desires that Licensee use, the AT&T Service Marks, and Licensor desires that Licensee use the Licensed Marks, in connection with Telecommunications Services; WHEREAS, Licensee, an Affiliate of Licensor and the other stockholders of Licensee are parties to that certain Stockholders Agreement, dated as of the date hereof (as the same may be amended, modified or supplemented in accordance with the terms thereof, the "Stockholders Agreement;" capitalized terms defined therein and not otherwise defined herein being used herein as therein defined) and the execution and delivery of the Stockholders Agreement and the other agreements contemplated therein is a condition to Licensee entering into this Agreement; WHEREAS, Licensee wishes to use the Licensed Marks in a limited manner in the Licensed Territory in connection with the Licensed Activities; and WHEREAS, Licensor is willing to license and allow Licensee to use the Licensed Marks under the terms and conditions set forth in this Agreement. NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: 1. Definitions. As used herein, the following terms shall have the meanings set forth below: "Affiliate": A Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the Person specified. "Approval": The granting by all appropriate Regulatory Authorities of all necessary licenses, permits, approvals, authorizations and clearances for this Agreement and the registration or recording of this Agreement as required by all Regulatory Authorities. "Approved Licensee Marks": As defined in Section 4.1. "AT&T Service Marks": The service marks and trademarks AT&T, and AT&T with a fanciful globe design. "Authorized Dealers": Any distributor or other agent of Licensee authorized to market, advertise or otherwise offer, on behalf of Licensee, any Licensed Services under the Licensed Marks in the Licensed Territory. "Bankruptcy": With respect to a Person, means (i) the filing by such Person of a voluntary petition seeking liquidation, dissolution, reorganization, rearrangement or readjustment, in any form, of its debts under Title 11 of the United States Code (or corresponding provisions of future laws) or any other bankruptcy or insolvency law, or such Person's filing an answer consenting to, or acquiescing in any such petition; (ii) the making by such Person of any assignment for the benefit of its creditors, or the admission by such Person in writing of its inability to pay its debts as they mature; (iii) the expiration of 60 days after the filing of an involuntary petition under Title 11 of the United States Code (or corresponding provisions of future laws), an application for the appointment of a receiver for the assets of such Person, or an involuntary petition seeking liquidation, dissolution, reorganization, rearrangement or readjustment of its debts or similar relief under any bankruptcy or insolvency law, provided that the same shall not have been vacated, set aside or stayed within such 60 day period; or (iv) the entry of an order for relief against such Person under Title 11 of the United States Bankruptcy Code. "Change of Control": Any transaction or event, whether voluntary or involuntary, that results in, or as a consequence of which, any of the following events shall occur, except as a result of a sale, transfer or other disposition by Licensor or any of its Affiliates: (i) any Person, excluding any Person that is an owner of shares of capital stock of Licensee on the date hereof or that acquires shares of Voting Preference Common Stock and Tracked Common Stock pursuant to the terms of the Management Agreement or the Lenders (as defined in Section 3.1(b)) or any Person to whom the Lenders, with the consent of Licensor, assign this Agreement, shall acquire, directly or indirectly, Beneficial Ownership (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of (x) more than 50% of the voting stock of Licensee, or (y) more than 33-1/3% of the voting stock of Licensee, unless the Persons owning capital stock of Licensee on the date hereof (together with any Person that acquires Voting Preference Common Stock and Tracked Common Stock of Licensee pursuant to the terms of the Management Agreement) collectively own a percentage of such voting stock that is higher than such Person; (ii) any Disallowed Transferee shall acquire, directly or indirectly, Beneficial Ownership of more than 15% of the voting stock of Licensee; provided that, for purposes of this Agreement, purchases of Licensee's capital stock made by third parties in the open market shall not be deemed to be acquisitions of Licensee's capital stock by Disallowed Transferees; or (iii) a proxy contest for the election of directors of Licensee results in the persons constituting the Board of Directors of Licensee immediately prior to the initiation of such proxy contest ceasing to constitute a majority of the Board of Directors upon the conclusion of such proxy contest. "Company Communications Services": Mobile wireless telecommunications services (including the transmission of voice, data, image or other messages or content) provided solely within the Licensed Territory, initiated or terminated using TDMA and frequencies licensed by the FCC, to or from subscriber equipment that is capable of usage during routine movement throughout the area covered by a cell site and routine handing-off between cell sites, and is either intended for such usage or is temporarily fixed to a specific location on a short-term basis (e.g., a bank of wireless telephones temporarily installed during a special event of limited -2- duration). Without limiting the foregoing, Company Communications Services shall include wireless office services if such services comply with this definition. Company Communications Services shall also include the transmissions between Licensee's cell sites and Licensee's switch or switches in the Licensed Territory, handing-off transmissions at Licensee's switch or switches for termination by other carriers, and receiving transmissions to Licensee's customers handed-off at Licensee's switch or switches. "Company Systems": The systems operated by Licensee to provide Company Communications Services in the Licensed Territory. "Control": For purposes of the definitions of "Affiliate" and "Change of Control", the term "control" (including the terms "controlling," "controlled by", and "under common control with") of a Person means the possession, direct or indirect, of the power to (i) vote 50% or more of the voting securities of such Person or (ii) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise. "Disallowed Transferee": Any Prohibited Transferee, or any Regional Bell Operating Companies, Microsoft, GTE, SNET or any of their respective Affiliates, successors or assigns. "FCC": The Federal Communications Commission and any successor governmental authority. "Licensed Activities": Each of the following activities: (a) the provision to end-users and resellers, solely within the Licensed Territory, of Company Communications Services on frequencies licensed to Licensee for Commercial Mobile Radio Services pursuant to the AT&T Contributed Licenses, the Mercury Licenses, the Alabama Licenses, the Florida Cellular Licenses, PCS Licenses acquired pursuant to the Option Agreement and the Permitted Cellular Licenses, and the provision in connection with such Company Communications Services of Adopted Service Features (as defined in the Stockholders Agreement), and (b) marketing and offering the services and features described in clause (a) within the Licensed Territory, including advertising such services and features using broadcast and other media, so long as such advertising extends beyond the Licensed Territory only when and to the extent necessary to reach end-users and potential end-users in the Licensed Territory. "Licensed Logo": The logo containing the AT&T and globe design, as such logo may be modified or replaced pursuant to Section 4.3, and the expression "Member, AT&T Wireless Services Network," as set forth in Schedule A attached hereto. Registrations and pending applications covering the Licensed Logo in the United States are set forth in Schedule B1 attached hereto. The listing of goods or services in the specification of any of these registrations or applications which are outside the scope of services authorized under this Agreement shall not be construed as inclusion of such goods or services in the license granted by this Agreement; it being understood that the only services authorized under this Agreement are as expressly set forth in this Agreement. -3- "Licensed Marks": Collectively, the Licensed Logo, the Licensed Phrase, the Licensed Trade Dress, and any additional Marks that may be licensed hereunder pursuant to Section 4.3 or 4.4. "Licensed Phrase": The expression "Member, AT&T Wireless Services Network" or the expression "[Licensee] is a member of the AT&T Wireless Services Network" and the form of such expression as it may be modified or replaced pursuant to Section 4.3 or 4.4. "Licensed Services": The services described in clause (a) of the definition of the term "Licensed Activities." "Licensed Territory": The Territory (as defined in the Stockholders Agreement). The Licensed Territory as of the date hereof is comprised of those geographic areas set forth in Schedule C. "Licensed Trade Dress": The general image or appearance of the marketing of services performed under the Licensed Logo, including without limitation, the colors, designs, sizing configurations, publication formats and the like as set forth in Schedule B attached hereto and as such trade dress may be modified or replaced pursuant to Section 4.3, and such other trade dress as may be added thereto or substituted therefor in accordance with Section 4.3 or 4.4. "Licensee": As defined in the preamble. "Licensor": As defined in the preamble. "Mark": Any name, brand, mark, trademark, service mark, sound mark, trade dress, trade name, business name, slogan, or other indicia of origin. "Marketing Materials": Any and all materials, whether written, oral, visual or in any other medium, used by Licensee or its Authorized Dealers to market, advertise or otherwise offer any Licensed Services under the Licensed Marks. "Non-Renewal Request": As defined in Section 11.1(a). "Person": Any individual, corporation, partnership, firm, joint venture, limited liability company, limited liability partnership, association, joint-stock company, trust, estate, incorporated or unincorporated organization, governmental or regulatory body, or other entity. "Quality Control Representatives": Representatives of Licensor appointed in accordance with Section 7 . "Quality Standards": The TDMA Quality Standards and the Guidelines for Use of the Licensed Logo and Licensed Phrase set forth in Schedules D and E to this Agreement. "Regulatory Authority": Any regulatory, administrative or governmental entity, authority or agency, including without limitation, the FCC and the Export Licensing Office of the U.S. Department of Commerce. -4- "Renewal Notice": As defined in Section 11.1(a). "Renewal Request": As defined in Section 11.1(a). "Significant Breach by Licensee": As defined in Section 11.2 . "Stockholders Agreement": As defined in the second recital. "Successor": With respect to any party, any successor, transferee or assignee, including without limitation, any receiver, debtor in possession, trustee, conservator or similar Person with respect to such party or such party's assets. "TDMA Quality Standards": The quality standards applicable to TDMA PCS Systems and Cellular Systems (as such terms are defined in the Stockholders Agreement) owned and operated by Licensor's Affiliates in the Central and Southwest Region, which, as currently in effect, are set forth on Schedule D, as the same may be amended from time to time, provided any such amended standards shall become effective one hundred twenty (120) days after notice thereof is given to Licensee. "Telecommunications Service": Any service providing the transmission of voice, data, image or other messages or content, by radio or by aid of wire, cable or other means now known or later developed between the points of origin and reception of such transmission, or by means of any combination of the foregoing. 2. Grant of License, Etc. 2.1 Grant of License. Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a royalty free, non-transferable, non-sublicensable, non-exclusive limited right and license to use the Licensed Marks in the Licensed Territory, solely in connection with Licensed Activities. 2.2 No Other Services or Products. The Licensed Marks may not be used by Licensee in connection with any service, except as expressly set forth in this Agreement, or any product, except as expressly permitted by the terms of Section 2.4. Specifically, but not by way of limitation, this Agreement does not grant Licensee the right to use the Licensed Marks in connection with (a) the manufacture or distribution of any products other than the distribution of mobile phones to the extent expressly permitted by the terms of Section 2.4, or (b) any Telecommunications Services, including, but not limited to long distance services, other than Licensed Services. Accordingly, this Agreement does not grant any license, authorization or permission to Licensee to appear on an equal access ballot, or in any other fashion, as a long distance provider using the Licensed Marks, or to use the Licensed Marks in connection with the reselling of long distance or local service or any other service. Licensee shall identify to Licensee's customers that Licensor is their long distance carrier and refer to Licensor by its Marks and trade dress. This Agreement does not grant Licensee the right to use any AT&T Service Mark or any other Mark of Licensor in any manner, except as part of the Licensed Logo, Licensed Phrase and Licensed Trade Dress as specifically set forth in this Agreement, or in the manner specifically set forth in Sections 2.4, 4.1, 4.3 and 4.4. -5- 2.3 Exclusivity. Licensor (on behalf of itself and its Affiliates) shall not grant to any Person (other than a Subsidiary of Licensor) a right or license to provide or resell, or act as agent for any Person offering, Company Communications Services under the Licensed Marks except to any Person that (i) resells, or acts as Licensee's agent for, Company Communications Services provided by Licensee, including bundling any such Company Communications Services with other Telecommunications Services marketed, offered and provided or resold by such Person pursuant to an agreement between such Person and Licensor or its Affiliates (in its capacity as reseller or agent) or Licensee, or (ii) provides or resells wireless Telecommunications Services to or from specific locations (such as buildings or office complexes), even if the subscriber equipment used in connection with such service may be capable of routine movement within a limited area (such as a building or office complex), and even if such subscriber equipment may be capable of obtaining other telecommunications services beyond such limited area (which other services may include routine movement beyond such limited area) and hand-off between the service to such specific location and such other telecommunications services. To the extent the "other telecommunications services" referred to in clause (ii) of the immediately preceding sentence constitute Company Communications Services, Licensor (on behalf of itself and its Affiliates) shall not grant to any Person a right or license to provide or resell such "other telecommunications services" under the Licensed Marks, except in accordance with the terms of clause (i) of the immediately preceding sentence. Nothing herein shall be construed to affect the obligations of AT&T Wireless PCS Inc. and its Affiliates set forth in Section 8.6 of the Stockholders Agreement. 2.4 Use of Licensed Marks on Mobile Phones. In connection with its marketing, offering and provision of Licensed Services, Licensee may offer and distribute to end-users mobile phones branded with the same Marks of Licensor, and in the same manner, as the mobile phones distributed by or on behalf of Licensor and its Affiliates, provided that (I) such mobile phones (a) are purchased from Licensor or its Affiliates, (b) are identical to mobile phones offered and distributed by Licensor and its Affiliates and are purchased from the same manufacturer (or its authorized dealers), or (c) are manufactured and distributed by a manufacturer authorized by Licensor to manufacture mobile phones branded with such Marks (or its authorized dealers), and (II) Licensee complies in all material respects with Licensor's Minimum Advertised Price program, as such program shall be amended, modified or supplemented by Licensor from time to time. 3. Agreement Personal. 3.1 Personal to Licensee. (a) In recognition of the unique nature of the relationship between Licensor and Licensee, the fact that Licensor would not be willing to enter into an agreement such as this Agreement with any other party in any other circumstances, and the unique nature of Licensee (including without limitation, the fact that Licensee is partially owned by Licensor's Affiliate, AT&T Wireless PCS Inc.), the parties agree that the rights, obligations and benefits of this Agreement shall be personal to Licensee, and Licensor shall not be required to accept performance from, or render performance to an entity other than Licensee or even to Licensee itself in the event of a Change of Control of Licensee. Pursuant to 11 U.S.C. ss. 365(c)(1)(A) (as it may be amended from time to time, and including any successor to such provision), in the -6- event of the Bankruptcy of Licensee, this Agreement may not be assigned or assumed by Licensee (or any Successor) and Licensor shall be excused from rendering performance to, or accepting performance from, Licensee or any Successor. (b) Notwithstanding the foregoing, this Agreement may be assigned to the lenders (the "Lenders") named in the $550 million Credit Agreement (the "Credit Agreement") dated the date hereof entered into between Licensee and the Lenders, and, after a default under the Credit Agreement and the expiration of any applicable grace and cure periods thereunder, the Lenders may enforce Licensee's rights hereunder and the Lenders may assign this Agreement to any Person with the consent of Licensor. 3.2 Licensee Acknowledgment. Licensee acknowledges and agrees that it understands it may have, or, in the future, may elect to enter into, agreements with Licensor's Affiliates and that neither the execution or continuation nor the renewal of any of these agreements will have any effect on this Agreement and Licensee may choose to contract, or not, with Licensor's Affiliates as it deems appropriate. 4. Use of Licensed Marks and Other Marks. 4.1 Approved Licensee Marks. Licensee shall have the right from time to time during the term hereof to create and use its own Marks, together with the Licensed Marks, in connection with the Licensed Activities; provided that Licensee provides Licensor with prior written notice of its desire to use any such Marks owned by Licensee and Licensor approves Licensee's proposed use of such Marks (which approval shall not be unreasonably withheld, delayed or conditioned). Licensor shall use commercially reasonable efforts to approve or disapprove any Marks proposed to be used by Licensee within 30 days of its receipt of a written request for such approval. If Licensee has not received a response from Licensor by the end of such 30-day period, Licensee shall have the right to send a second written request for such approval to Licensor that states expressly that, if Licensee does not receive a response from Licensor within 30 days after Licensor's receipt of such second request, Licensor shall be deemed to have approved Licensee's proposed Mark or Marks. If Licensee does not receive such response by the end of such second 30-day period, Licensor shall be deemed to have approved such proposed Mark or Marks. Marks approved by Licensor in accordance with this Section 4.1 shall be sometimes referred to herein as "Approved Licensee Marks." 4.2 Marks To Be Used. Licensee shall conduct all Licensed Activities solely under the Approved Licensee Marks, together with the Licensed Marks, all in accordance with guidelines set forth on Schedule E. 4.3 Modification of Licensed Marks. In the event Licensor modifies or replaces any of the Licensed Marks as they are used in any portion of Licensor's business, and if Licensor requests Licensee to adopt and use any such modified or replaced Licensed Marks, Licensee will adopt and use such modified or replaced Licensed Marks and, in such event, such modified or replaced Licensed Marks shall be considered the Licensed Marks contemplated by this Agreement; provided that in such event, Licensee shall be granted a 180-day period during which to phase-out its use of the superseded forms of the Licensed Marks, as applicable, and -7- during such 180-day period Licensee shall have the right to use its existing inventory of Marketing Materials bearing the superseded forms of the Licensed Marks, as applicable. 4.4 Use of Additional Marks at Licensor's Request. Licensor may, from time to time, request Licensee to adopt and use a Mark or Marks of Licensor, in addition to the then existing Licensed Marks in connection with the Licensed Activities. Such additional Mark or Marks shall be licensed hereunder on the same terms as the then existing Licensed Marks and Licensee shall within a reasonable time, but in any event within one hundred eighty (180) days, comply with Licensor's request by adopting and using such additional Mark or Marks; provided that during such 180-day period Licensee shall have the right to use its existing inventory of Marketing Materials that do not contain the additional Mark or Marks. 5. Retention of Rights. Except as otherwise expressly provided in Section 2, nothing in this Agreement shall be deemed or construed to limit in any way Licensor's rights in and to the AT&T Service Marks and the Licensed Marks, including without limitation: (a) all rights of ownership in and to the AT&T Service Marks and the Licensed Marks, including the right to license or transfer the same; and (b) the unimpaired right to use the AT&T Service Marks and the Licensed Marks in connection with marketing, offering or providing any products or services (including, without limitation Licensed Services) whether within or without the Licensed Territory. 6. System Requirements. The terms of Sections 8.1(a), 8.2, 8.3, and 8.5(a) of the Stockholders Agreement are hereby incorporated herein by reference with the same effect as if set forth herein in their entirety and Licensee shall comply with its obligations therein. 7. Quality Control. 7.1 General. Licensee acknowledges that the services and activities covered by this Agreement must be of sufficiently high quality as to provide maximum enhancement to and protection of the Licensed Marks and the good will they symbolize. Licensee further acknowledges that the maintenance of high quality services is of the essence of this Agreement, as is the use of the Licensed Marks in connection therewith, and that it will utilize only Marketing Materials which enhance (and do not disparage or place in disrepute) Licensor, its businesses or its business reputation, and enhance (and do not adversely affect or detract from) Licensor's good will and will use the Licensed Marks in ways (but only in ways) which will so enhance Licensor's business reputation and good will. 7.2 Quality Standards. Licensee shall use commercially reasonable efforts to cause the Company Systems to comply with the TDMA Quality Standards. Without limiting the foregoing, with respect to each material portion of a Company System (such as a city) that Licensee places in commercial service, on or prior to the first anniversary of the date such material portion is placed in commercial service, Licensee shall cause each such material portion to achieve a level of compliance with the TDMA Quality Standards equal to at least the average level of compliance achieved by comparable PCS and Cellular Systems owned and operated by AT&T PCS taking into account, among other things, the relative stage of development thereof. -8- Licensee shall also comply with the Guidelines for Use of the Licensed Logo and Licensed Phrase as set forth in Schedule E to this Agreement, and which shall be considered part of the Quality Standards. 7.3 Quality Service Reviews; Right of Inspection. Licensor shall have the right to designate from time to time, one or more Quality Control Representatives, who shall have the right at any time, upon fifteen (15) days notice to Licensee, to conduct during regular business hours an inspection, test, survey and review of Licensee's facilities and the facilities of Licensee's Authorized Dealers, if any, and otherwise to determine compliance with the Quality Standards (each, an "Inspection"); provided that Licensor shall use all commercially reasonable efforts to ensure that such Inspections shall not unreasonably interfere with Licensee's conduct of its business; and provided further that Licensor shall not be permitted to conduct more than two (2) Inspections during each 12-month period of the term of this Agreement unless Licensor reasonably believes that Licensee is not in compliance with the Quality Standards, in which case Licensor shall be permitted to conduct Inspections from time to time until Licensee has been determined to be in compliance. Licensee agrees to collect, maintain and furnish to the Quality Control Representatives: (i) all performance data relating to Licensee's Licensed Services reasonably requested by the Quality Control Representatives and representative samples of Marketing Materials that are marketed or provided under the Licensed Marks for Inspections to assure conformance of the Licensed Services and the Marketing Materials with the Quality Standards; and (ii) all performance data in its control reasonably requested by the Quality Control Representatives relating to the conformance of Licensed Services with the Quality Standards. Any such data provided to Licensor shall be treated confidentially in accordance with Section 18. Licensor may independently conduct continuous customer satisfaction and other surveys to determine if Licensee is meeting the Quality Standards. Licensee shall cooperate with Licensor fully in the distribution and conduct of such surveys so long as such cooperation shall not unreasonably interfere with the conduct of Licensee's business. If Licensee learns that it is not complying with the Quality Standards in any material respect, it shall notify Licensor, and the provisions of Section 8 shall apply to such noncompliance. 7.4 Authorized Dealers. Licensee shall provide to Licensor within 10 days after the expiration of each calendar quarter during the term of this Agreement a list of all Authorized Dealers. Licensor shall have the right, exercisable in its reasonable discretion, to give Licensee written notice requiring Licensee to terminate any Authorized Dealer that Licensor reasonably believes is not in compliance with the Quality Standards (after notice of such non-compliance and a reasonable opportunity to cure has been granted to such Authorized Dealer) effective no later than 30 days from the date such written notice is given by Licensor to Licensee. All Authorized Dealers shall be bound by Licensor's Quality Standards and by Licensee's obligations under this Agreement. A breach by any such Authorized Dealer of this Agreement shall be deemed a breach of this Agreement by Licensee; provided that Licensee's termination of such breaching Authorized Dealer shall be deemed to cure any such breach. 7.5 Sponsorship. Licensee shall not use the Licensed Marks to sponsor, endorse, or claim affiliation with any event, meeting, charitable endeavor or any other undertaking (each, an "Event") without the express written permission of Licensor; provided however that, the categories of Events described on Schedule F attached hereto shall be deemed pre-approved by Licensor and Licensee shall not be required to seek permission from Licensor to -9- sponsor, endorse or claim affiliation with such Events using the Licensed Marks. Notwithstanding the foregoing, Licensor reserves the right to deny permission to any event and to amend Schedule F. In the event that Licensee desires to sponsor, endorse or claim affiliation with an Event not described on Schedule F, Licensee shall provide Licensor with at least twenty (20) business days prior written notice of such Event in reasonable detail and Licensor shall be deemed to have granted Licensee permission to sponsor, endorse or claim affiliation with such Event if a denial of permission is not received by Licensee by the date or time specified in such notice. Any breach of this provision reasonably determined to have a material adverse effect on Licensor or the Licensed Marks shall be deemed a Significant Breach by Licensee (in no event less than ten business days after receipt of the notice). 7.6 Universal Wireless Consortium. Licensee shall, throughout the term of this Agreement, and any renewals or extensions thereof, be a member of the Universal Wireless Consortium. 8. Remedies for Noncompliance With Quality Standards. 8.1 Cure Period. If Licensor becomes aware that Licensee or its Authorized Dealers, if any, are not complying with any Quality Standards in any material respect, and notifies Licensee in writing thereof, setting forth, in reasonable detail, a written description of the noncompliance and any suggestions for curing such noncompliance, then Licensee shall cure such noncompliance as soon as is practicable but in any event within thirty (30) days thereafter or, in the case of noncompliance with the TDMA Quality Standards, if such breach is not capable of being cured on commercially reasonable terms within such thirty (30) day period, within one-hundred eighty (180) days of such notice, provided that Licensee is using commercially reasonable efforts to cure such material breach as soon as reasonably practicable. In the event that the non-compliance with the Quality Standards is being caused by an Authorized Dealer, Licensee's termination of such Authorized Dealer shall be deemed to cure such non-compliance. If such non-compliance with the Quality Standards continues beyond the applicable cure period described above, Licensee shall then: (i) cease any Licensed Activities under the Licensed Marks in the Licensed Territory until it can comply with the Quality Standards; and (ii) at Licensor's election, be deemed to be in breach of this Agreement. 8.2 Potential Injury to Persons or Property. Notwithstanding the foregoing, in the event that Licensor reasonably determines that any noncompliance creates a material threat of personal injury or injury to property of any third party, upon written notice thereof by Licensor to Licensee, Licensee shall cure such non-compliance as soon as practicable but in any event within thirty (30) days after receiving such notice. If the non-compliance continues beyond such cure period, Licensee shall either cease any Licensed Activities under the Licensed Marks in the Licensed Territory until it can comply with the Quality Standards, or be deemed to be in breach of this Agreement. 9. Protection of Licensed Marks. 9.1 Ownership and Rights. Licensee admits the validity of, and agrees not to challenge the ownership or validity of the Licensed Marks. Licensee acknowledges that it will not obtain any ownership interest in the Licensed Marks or any other right or entitlement to -10- continued use of them, regardless of how long this Agreement remains in effect and regardless of any reason or lack of reason for the termination thereof by Licensor; provided that by making this acknowledgment Licensee is not waiving, and does not intend to waive, any contractual rights hereunder or its remedies upon a breach hereof by Licensor. Licensee shall not disparage, dilute or adversely affect the validity of the Licensed Marks. Licensee agrees that any and all good will and other rights that may be acquired by the use of the Licensed Marks by Licensee shall inure to the sole benefit of Licensor, except a security interest granted to the Lenders in accordance with the terms of the Credit Agreement. Licensee will not grant or attempt to grant a security interest in the Licensed Marks or this Agreement, or to record any such security interest in the United States Patent and Trademark Office or elsewhere, against any trademark application or registration belonging to Licensor. Licensee agrees to execute all documents reasonably requested by Licensor to effect registration of, maintenance and renewal of the Licensed Marks. For purposes of this Agreement, Licensee shall be considered a "related company" under the U.S. Trademark Act, 15 U.S.C. ss. 1051 et seq. 9.2 Similar Marks. Licensee further agrees not to register in any country any Mark resembling or confusingly similar to the Licensed Marks or the AT&T Service Marks, or which dilutes the Licensed Marks or the AT&T Service Marks, and not to use the Licensed Marks or the AT&T Service Marks or any part thereof as part of its corporate name, nor use (except in accordance with Section 4.1) any Mark confusingly similar, deceptive or misleading with respect to the Licensed Marks or the AT&T Service Marks or which dilutes the Licensed Marks or the AT&T Service Marks. Licensee further agrees not to use or register in any country any Mark similar to the Licensed Marks or the AT&T Service Marks, or which dilutes the Licensed Marks or the AT&T Service Marks. If any application for registration is, or has been filed in any country by Licensee which relates to any Mark which, in the sole opinion of Licensor, is confusingly similar, deceptive or misleading with respect to the Licensed Marks or the AT&T Service Marks, or which dilutes the Licensed Marks or the AT&T Service Marks, Licensee shall, at Licensor's sole discretion, immediately abandon any such application or registration or assign it (free and clear of any Liens, and for consideration of $1.00) to Licensor. If Licensee uses any Mark which, in the sole opinion of Licensor, is confusingly similar, deceptive or misleading with respect to the Licensed Marks or the AT&T Service Marks, or which dilutes the Licensed Marks or the AT&T Service Marks, or if Licensee uses the Licensed Marks or the AT&T Service Marks in connection with any product, or in connection with any service not specifically authorized hereunder, Licensee shall, immediately upon receiving written request from Licensor, permanently cease such use. Notwithstanding anything to the contrary contained in this Section 9.2, Licensee shall have the right to use and register the Approved Licensee Marks that are used together with the Licensed Marks in accordance with the terms of this Agreement and the Approved Licensee Marks shall not be deemed by Licensor to resemble or to be confusingly similar to the Licensed Marks. 9.3 Infringement. In the event that either party learns of any infringement or threatened infringement of the Licensed Marks, or any unfair competition, passing-off or dilution with respect to the Licensed Marks, or any third party alleges or claims that any of the Licensed Marks are liable to cause deception or confusion to the public, or is liable to dilute or infringe any right of such third party (each such event, an "Infringement"), such party shall promptly notify the other party or its authorized representative giving particulars thereof, and Licensee shall provide necessary information and reasonable assistance to Licensor or its authorized -11- representatives in the event that Licensor decides that proceedings should be commenced or defended. For purposes of this Agreement, Licensee shall be deemed to have "learned" of an Infringement when either (i) the General Manager of one of Licensee's operating subsidiaries or divisions or (ii) an executive officer of Licensee obtains actual knowledge of the Infringement. Licensor shall have exclusive control of any litigation, opposition, cancellation or related legal proceedings. The decision whether to bring, defend, maintain or settle any such proceedings shall be at the exclusive option and expense of Licensor, and all recoveries shall belong exclusively to Licensor. Licensee will not initiate any such litigation, opposition, cancellation or related legal proceedings in its own name but, at Licensor's request, agrees to be joined as a party in any action taken by Licensor to enforce its rights in the Licensed Marks or the AT&T Service Marks; provided that Licensor shall reimburse Licensee for all reasonable out-of-pocket costs and expenses incurred by Licensee, its Affiliates and authorized representatives (and their respective directors, officers, stockholder, employees and agents) in connection with their participation in such action. Nothing in this Agreement shall require, or be deemed to require Licensor to enforce the Licensed Marks or the AT&T Service Marks against others. 9.4 Compliance With Laws. In the performance of this Agreement, Licensee shall comply in all material respects with all applicable laws and regulations and administrative orders, including those laws and regulations particularly pertaining to the proper use and designation of Marks in the Licensed Territory. Should Licensee be or become aware of any applicable laws or regulations which are inconsistent with the provisions of this Agreement, Licensee shall promptly notify Licensor of such inconsistency. In such event, Licensor may, at its option, either waive the performance of such inconsistent provisions, or negotiate with Licensee to make changes in such provisions to comply with applicable laws and regulations, it being understood that the parties intend that any such changes shall preserve to the extent reasonably practicable the parties' respective benefits under this Agreement. 10. No Sublicensing. Licensee shall not: (i) assign, license, transfer, dispose or relinquish any of its rights or obligations hereunder (whether by merger, consolidation, sale, operation of law or otherwise) other than as contemplated by Section 3.1(b); or (ii) grant or purport to grant any sublicense in respect of the Licensed Marks; provided that Licensee's Authorized Dealers and Subsidiaries shall have the right to use the Licensed Marks in accordance with the Quality Standards in connection with Licensed Activities. Any such purported assignment, license, transfer, disposition, relinquishment or sublicense shall be void and of no effect. 11. Term and Termination. 11.1 Term. (a) This Agreement shall commence on the date hereof and shall be in effect for five (5) years following such date, unless terminated earlier pursuant to this Section 11. Neither party has a right or obligation to renew this Agreement beyond the initial term; provided, however, that if each party gives written notice (a "Renewal Notice") to the other party of an election to renew not less than ninety (90) days prior to the end of the initial term, then, and only then, shall this Agreement renew for an additional five (5) year term. During the ten (10) day period commencing one hundred twenty (120) days prior to the end of the initial term, either -12- party may give written notice (a "Renewal Request") to the other party requesting that such other party give a Renewal Notice. No later than ninety (90) days prior to the end of the initial term, the recipient of a Renewal Request shall give to the requesting party either, in its sole discretion: (i) a Renewal Notice or (ii) a written notice (a "Non-Renewal Notice") stating it is not electing to renew the term of this Agreement. Any recipient of a Renewal Request that fails to send either a Renewal Notice or a Non-Renewal Notice in accordance with the immediately preceding sentence shall be deemed to have given a Renewal Notice. In the event either party fails to give a Renewal Notice or, in response to a Renewal Request, gives a Non-Renewal Notice, such party shall be presumed to have good cause for non-renewal either due to an action or failure to act by the other party or due to circumstances related to the party who did not provide the notice. In the event that AT&T Wireless PCS Inc. shall convert any shares of Series A Preferred Stock of Licensee into Common Stock of Licensee (as such terms are defined in the Stockholders Agreement), the term of this Agreement shall expire on the later of (x) two (2) years from the Series A Conversion Date (as such term is defined in Licensee's Restated Certificate of Incorporation), and (y) the then existing expiration date of this Agreement. (b) Notwithstanding anything to the contrary contained in this Section 11.1, this Agreement may be terminated by Licensor upon written notice to Licensee at any time following the later to occur of (x) the termination by AT&T Wireless PCS Inc. of its obligations under Section 8.6 of the Stockholders Agreement pursuant to Section 8.8(c) of the Stockholders Agreement, and (y) the second anniversary of the date Licensor (or an affiliate of Licensor) gives written notice to Licensee that it has entered into a letter of intent or binding agreement to engage in a Disqualifying Transaction (as defined in the Stockholders Agreement); provided, however, that in no event shall Licensor have the right to terminate this Agreement as of a date prior to the fifth anniversary of the date hereof; provided further however that, in the event that this Agreement is terminated pursuant to this Section 11.1(b) and Licensee does not exercise its right pursuant to Section 6.1 of the Stockholders Agreement to convert all of the shares of Company Stock (as defined in the Stockholders Agreement) owned by AT&T Wireless PCS Inc. into Series B Preferred Stock (as defined in the Stockholders Agreement), the termination shall only apply to the portion of the Territory that constitutes the "Overlap Territory" (as defined in the Stockholders Agreement) and this Agreement shall remain in full force and effect with respect to the remainder of the Territory. 11.2 Breach by Licensee. Licensor may terminate this Agreement at any time in the event of a Significant Breach by Licensee. A "Significant Breach by Licensee" shall mean, after exhaustion of any applicable cure periods set forth in this Agreement, any of the following: (a) Licensee's use of any Mark (including the Licensed Marks and the AT&T Service Marks) contrary to the provisions of this Agreement, or the use by an Authorized Dealer of any Mark (including the Licensed Marks and the AT&T Service Marks) contrary to the provisions of this Agreement, including a violation by Licensee of Section 4.2, in each case which continues for more than 30 days after written notice thereof has been given to Licensee; (b) Subject to the provisions of Section 8.1, Licensee's use of the Licensed Marks in connection with any Marketing Materials, or the offering, marketing or provision of -13- any Licensed Services, or the conduct of any Licensed Activities or any other aspect of its business conducted by it, which fail to meet the Quality Standards in any material respect; (c) Licensee's refusing or neglecting a request by Licensor pursuant to Section 7.3 for access to Licensee's facilities or Marketing Materials, which refusal or neglect continues for more than five business days after written notice thereof is given to Licensee; (d) Licensee's licensing, assigning, transferring, disposing of or relinquishing (or purporting to license, assign, transfer, dispose of or relinquish) any of the rights granted in this Agreement to others, except as permitted by Section 10; (e) Licensee's failure to maintain the Quality Standards and other information furnished under this Agreement in confidence pursuant to Section 18, or failing to restrict the transmission of information, products and commodities as required by Section 18; (f) The occurrence of a Change of Control of Licensee; (g) Licensee's loss, for any reason whatsoever, of its rights to hold, directly or indirectly, the FCC licenses for Company Communications Services in the Licensed Territory or to provide the Company Communications Services under such licenses, unless (i) such loss results, directly or indirectly, from the actions or inactions of Licensor or its Affiliates or (ii) such loss relates to less than 5% of the Pops in the Licensed Territory; (h) The Bankruptcy of Licensee; (i) Licensee's failure in any material respect to obtain Licensor's permission as provided in, or any other material breach of the provisions of, Section 7.5; or (j) Any Substantial Company Breach. 11.3 Termination Obligations. In the event this Agreement terminates pursuant to this Section 11: (a) Licensee shall immediately cease use of the Licensed Marks upon notice of termination, except that Licensee shall have the right to continue to use the Licensed Marks (including without limitation, Licensee's then existing inventory of Marketing Materials bearing the Licensed Marks) to the extent such use is otherwise in accordance with the provisions of this Agreement, for a period of up to ninety (90) days following such termination; and (b) Licensee shall have no further rights under this Agreement, except as provided in Section 11.5. 11.4 No Waiver of Rights. In addition to any other provision of this Section 11, each party will retain all rights to any other remedy it may have at law or equity for any breach by the other of this Agreement. 11.5 Survival. Sections 11.3(a), 12.1, 17 and 18 shall survive any expiration or termination of this Agreement. -14- 12. Indemnity. 12.1 Licensor shall defend, indemnify and hold Licensee and its authorized representatives (including the Authorized Dealers), and their respective directors, officers, stockholders, employees and agents, harmless against all claims, suits, proceedings, costs, damages, losses and expenses (including reasonable attorneys' fees) and judgments incurred, claimed or sustained by Licensee or such persons arising out of: (i) claims by third parties that Licensee's use of the Licensed Marks in accordance with this Agreement constitutes trademark, service mark or trade dress infringement (or infringement of any other intellectual property or other proprietary right owned by a third party), dilution, unfair competition, misappropriation or false/misleading advertising; (ii) any third party claims as to the lack of validity or enforceability of (A) the registrations of the Licensed Marks or (B) Licensor's ownership rights in the Licensed Marks; and (iii) any lack of validity or enforceability of this Agreement caused by Licensor. Subject to Licensor's indemnification obligations in the previous sentence, Licensee shall defend, indemnify and hold Licensor, its Affiliates and authorized representatives, and their respective directors, officers, stockholders, employees and agents, harmless against all claims, suits, proceedings, costs, damages and judgments incurred, claimed or sustained by third parties, whether for personal injury or otherwise, arising out of Licensee's or any Authorized Dealer's marketing, sale, or use of services under the Licensed Marks and shall indemnify Licensor and the foregoing persons for all damages, losses, costs and expenses (including reasonable attorneys' fees) arising out of such use, sale or marketing and also for any improper or unauthorized use of the Licensed Marks or any use of its own Marks. Licensee shall also defend, indemnify and hold Licensor, its Affiliates and authorized representatives, and their respective directors, officers, stockholders, employees and agents, harmless against all claims, suits, proceedings, costs, damages, losses and expenses (including reasonable attorneys' fees) and judgments incurred, claimed or sustained by Licensor or such persons arising out of: (i) any third party claims as to the lack of validity or enforceability of (x) the registrations (if any) of the Approved Licensee Marks or (y) Licensee's ownership rights in the Approved Licensee Marks; and (ii) any lack of validity or enforceability of this Agreement caused by Licensee. 12.2 Licensee shall maintain, at its own expense, in full force and effect at all times during which Licensed Services bearing the Licensed Marks are being sold, with a responsible insurance carrier acceptable to Licensor, at least a Two Million Five Hundred Thousand Dollar ($2,500,000.00) products liability insurance policy with respect to the Licensed Services offered under the Licensed Marks. This insurance shall be primary to any of Licensor's coverage, shall name Licensor as an insured party, shall be for the benefit of Licensor and Licensee and shall provide for at least ten (10) days' prior written notice to Licensor and Licensee of the cancellation or any substantial modification of the policy. This insurance may be obtained for Licensor by Licensee in conjunction with a policy which covers services and/or products other than the services covered under this Agreement. 12.3 Licensee shall from time to time, upon reasonable request by Licensor, promptly furnish or cause to be furnished to Licensor, evidence in form and substance satisfactory to Licensor, of the maintenance of the insurance required by Section 12.2, including without limitation, originals or copies of policies, certificates of insurance (with applicable riders and endorsements) and proof of premium payments. -15- 13. Consent of Licensor. Except where another standard is expressly provided for herein, whenever reference is made to Licensor's consent or approval in this Agreement, such consent or approval may be granted or withheld in Licensor's sole discretion and, if granted, may be done so conditionally or unconditionally; provided, however, that such standard shall not be interpreted by Licensor as justifying arbitrary rejection, but will connote a reasonable application of judgment, taking into consideration Licensor's licensing practices and customs in telecommunications licensing transactions. 14. Notices and Demands. All notices, requests, demands or other communications required by, or otherwise with respect to this Agreement shall be in writing and shall be deemed to have been duly given to any party when delivered personally (by courier service or otherwise), against receipt, when delivered by telecopy and confirmed by return telecopy, or when actually received when mailed by registered first-class mail, postage prepaid and return receipt requested in each case to the applicable addresses set forth below: If to Licensee: Tritel, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MI 39208 Attn: Chief Executive Officer Telephone: (601) 936-0893 Facsimile: (601) 936-6045 If to Licensor: AT&T Corp. 295 North Maple Avenue Basking Ridge, New Jersey 07920 Attention: General Counsel Fax No.: (908) 953-8360 With a copies to: AT&T Corp. 131 Morristown Road Basking Ridge, New Jersey 07920-1650 Attention: Frank L. Politano, General Attorney Fax No.: (908) 204-8537 AT&T Corp. 131 Morristown Road Basking Ridge, NJ 07920 Attention: Corporate Secretary Fax No.: (908) 953-4657 -16- AT&T Wireless Services Inc. 5000 Carillon Point Kirkland, Washington 98033 Attention: William W. Hague Fax No.: (425) 827-4500 or to such other address as such party shall have designated by notice so given to each other party. 15. Compliance With Law. Subject to the provisions of Section 9.4, nothing in this Agreement shall be construed to prevent Licensor or Licensee from complying fully with all applicable laws and regulations, whether now or hereafter in effect. 16. Governmental Licenses, Permits and Approvals. Licensee, at its expense, shall be responsible for obtaining and maintaining all licenses, permits and approvals which are required by all Regulatory Authorities with respect to this Agreement, and to comply with any requirements of such Regulatory Authorities for the registration or recording of this Agreement. Licensee shall furnish to Licensor written evidence from such Regulatory Authorities of any such licenses, permits, clearances, authorizations, approvals, registration or recording. 17. Applicable Law; Jurisdiction. The construction, performance and interpretation of this Agreement shall be governed by the U.S. Trademark Act, 15 U.S.C. 1051 et seq., and the internal, substantive laws of the State of New York, without regard to its principles of conflicts of law; provided that if the foregoing laws should be modified during the term hereof in such a way as to adversely affect the original intent of the parties, the parties will negotiate in good faith to amend this Agreement to effectuate their original intent as closely as possible. Except as otherwise provided herein, Licensor and Licensee hereby irrevocably submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York, or absent subject matter jurisdiction in that court, the state courts of the State of New York located in New York County for all actions, suits or proceedings arising in connection with this Agreement, and agree that any such action, suit or proceeding shall be brought only in such courts (and waive any objection based on forum non conveniens or any other objection to venue therein). Licensee and Licensor hereby waive any right to a trial by jury. 18. Confidentiality of Information and Use Restriction. The Quality Standards and other technical information furnished to Licensee under this Agreement and other confidential and proprietary information, know-how and trade secrets of Licensor that are disclosed or otherwise provided to Licensee in connection with this Agreement, shall remain the property of Licensor, and shall be returned to Licensor upon request and upon termination of this Agreement. Unless such information was previously known to Licensee free of any obligation to keep it confidential, or has been or is subsequently made public (a) by any person other than Licensee and Licensor is not attempting to limit further dissemination of such information, (b) by Licensor, or (c) by Licensee, as required by law (including securities laws) or to enforce its rights under this Agreement, it shall be held in confidence, and shall be used only for the purposes of this Agreement. All confidential and proprietary information, know-how and trade secrets of Licensee that are disclosed or otherwise provided to Licensor hereunder (including without limitation, during any Inspection) (collectively, "Licensee Information") shall remain the -17- property of Licensee and shall be returned to Licensee upon request and upon termination of this Agreement. Unless such Licensee Information was previously known to Licensor free of any obligation to keep it confidential, or has been or is subsequently made public (a) by any person other than Licensor and Licensee is not attempting to limit further dissemination of such information, (b) by Licensee, or (c) by Licensor, as required by law (including securities law) or to enforce its rights under this Agreement, it shall be held in confidence and shall be used only for purposes of this Agreement. 19. Miscellaneous. 19.1 Name, Captions. The name assigned this Agreement and the section captions used herein are for convenience of reference only and shall not affect the interpretation or construction hereof. 19.2 Entire Agreement. The provisions of this Agreement contain the entire agreement between the parties relating to use by Licensee of the Licensed Marks, and supersede all prior agreements and understandings relating to the subject matter hereof. This Agreement shall be interpreted to achieve the objectives and intent of the parties as set forth in the text and factual recitals of the Agreement. It is specifically agreed that no evidence of discussions during the negotiation of the Agreement, or drafts written or exchanged, may be used in connection with the interpretation or construction of this Agreement. No rights are granted to use the Licensed Marks or any other marks or trade dress except as specifically set forth in this Agreement. In the event of any conflict between the provisions of this Agreement and provisions in any other agreement involving Licensee, the provisions of this Agreement shall prevail. This Agreement is not a franchise under federal or state law, does not create a partnership or joint venture, and shall not be deemed to constitute an assignment of any rights of Licensor to Licensee. Licensee is an independent contractor, not an agent or employee of Licensor, and Licensor is not liable for any acts or omissions by Licensee. 19.3 Amendments, Waivers. This Agreement may not be amended, changed, supplemented, waived or otherwise modified except by an instrument in writing signed by the party against whom enforcement is sought. 19.4 Specific Performance. The parties acknowledge that money damages are not an adequate remedy for violations of this Agreement and that any party may, in its sole discretion, apply to the court set forth in paragraph 17 for specific performance, or injunctive, or such other relief as such court may deem just and proper, in order to enforce this Agreement or prevent any violation hereof, and to the extent permitted by applicable law, each party waives any objection to the imposition of such relief. 19.5 Remedies Cumulative. All rights, powers and remedies provided under this Agreement, or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. -18- 19.6 No Waiver. The failure of any party hereto to exercise any right, power or remedy provided under this Agreement, or otherwise available in respect hereof at law or in equity, or to insist upon compliance by any other party hereto with its obligations hereunder, and any custom or practice of the parties at variance with the terms hereof, shall not constitute a waiver by such party of its right to exercise any such or other right, power or remedy or to demand such compliance. 19.7 No Third Party Beneficiaries. Except with respect to the persons entitled to indemnification under Section 12.1, this Agreement is not intended to be for the benefit of, and shall not be enforceable by any person or entity who or which is not a party hereto. 19.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies each signed by less than all, but together signed by all the parties hereto. IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in duplicate originals by its duly authorized representatives as of the date first stated above. AT&T CORP. By --------------------------------- Name: Title: TRITEL, INC. By --------------------------------- Name: Title: -19- SCHEDULE A ---------- LICENSED LOGO ------------- See Attached SCHEDULE B ---------- LICENSED TRADE DRESS -------------------- 1. The overall configurations of the AT&T and globe design corporate signature as set forth more fully in the AT&T document Corporate Identity Program: Graphic Standards Manual ("Graphic Standards Manual") provided to the Licensee, and solely as expressed in the Licensed Logo set forth in Schedules A and E. 2. The acceptable color applications of the AT&T and globe design corporate signature as set forth in the Graphic Standards Manual, and solely as expressed in the Licensed Logo set forth in Schedules A and E. 3. The acceptable graphic techniques relating to the AT&T and globe design corporate signature as set forth in the Graphic Standards Manual, and solely as expressed in the Licensed Logo set forth in Schedules A and E. 4. The acceptable applications of the AT&T globe design corporate signature as set forth in Schedule E. 5. Nothing in this Schedule shall restrict or limit AT&T's claim to trade dress rights in or protection of AT&T's Trade Dress. SCHEDULE B1 ----------- UNITED STATES SERVICE MARK REGISTRATIONS OR APPLICATIONS - --------------------------------------------------------
Registration No. Registration Date Mark (Application No.) (Application Date) Services ---- ----------------- ------------------ -------- AT&T and Globe 75/378,611 October 24, 1997 Telecommunication services, namely, the moblie wireless electronic transmission of voice, data, paging and facsimile services; electronic voice and data messaging services, namely, the recording, storage, and subsequent wireless transmission of voice and data messages from and to mobile wireless telephones
SCHEDULE C ---------- INITIAL LICENSED TERRITORY * ---------------------------- I. From Atlanta MTA BTA Market Designator ---------------- --------------------- Carroll County, GA (1) Haralson County, GA (2) Opelika-Auburn, AL 334 Chattanooga, TN 076 Cleveland, TN 085 Dalton, GA 102 LaGrange, GA 237 Rome, GA 384 II. From Knoxville MTA ------------------ Knoxville, TN 232 III. From Louisville-Lexington-Evansville MTA ---------------------------------------- Louisville, KY 263 Lexington, KY 252 Bowling Green-Glasgow, KY 052 Owensboro, KY 338 Corbin, KY 098 Somerset, KY 423 Madisonville, KY 273 IV. From Memphis-Jackson MTA ------------------------ Montgomery County, MS (2) Jackson, MS 210 Tupelo-Corinth, MS 449 Greenville-Greenwood, MS 175 Meridian, MS 292 Columbus-Starkville, MS 094 Natchez, MS 315 Vicksburg, MS 455 - ------------- * The Initial Licensed Territory is more particularly described in the FCC applications filed in connection with the transfer of FCC PCS Licenses to the Licensee. 1 Carrol County and Haralson County are both located within the Atlanta BTA (B024). 2 Montgomery County is located within the Memphis BTA (B290). V. From Nashville MTA ------------------- Nashville, TN 314 Clarksville, TN-Hopkinsville, KY 083 Cookeville, TN 096 VI. From Birmingham MTA ------------------- Anniston, AL 017 Birmingham, AL 044 Decatur, AL 108 Dothan-Enterprise, AL 115 Florence, AL 146 Gladsden, AL 158 Huntsville, AL 198 Montgomery, AL 305 Selma, AL 415 Tuscaloosa, AL 450 VII. From New Orleans MTA -------------------- Biloxi-Gulfport-Pascagoula, MS 042 Hattiesburg, MS 186 Laurel, MS 246 McComb-Brookhaven, MS 269 Mobile, AL 302 SCHEDULE D ---------- TDMA QUALITY STANDARDS ---------------------- QUALITY AND REPORTING STANDARDS ------------------------------- GENERAL OVERVIEW This Schedule D sets out the Network and Reporting Standards with which Licensee shall comply pursuant to Section 7.2 of this Agreement. These Standards set out the network performance metrics and the process by which such metrics will be established, measured and reported. All metrics which represent a defined standard of quality for acceptable network operations have, or will have, specific targets which Licensee must comply with in accordance with the following network standards. I. NETWORK STANDARDS There are three categories of Network Standards: network quality (the "Network Quality Category"); system performance (the "System Performance Category"); and audio quality (the "Audio Quality Category") (each hereafter referred to generally as a "Category"). For each Category of Network Standards, specific metrics have been identified to measure performance in each such Category. The detailed description of how to measure and interpret the metrics for each Category is set out in the following AWS documents (each referred to generally as a "Network Standards Document"): o NETWORK QUALITY CATEGORY: Document ES-4034, Revision 1.1, dated July 30, 1997 entitled "Network Quality Scorecard User Guide" (as referred to as the "Network Quality Standards Document"). This document is a collection of key network performance and traffic indicators (metrics) that are measured and reported on a regular basis. Included in this category, Licensee shall perform the ANS Consistency Test, as attached to this Schedule D. o SYSTEM PERFORMANCE CATEGORY: OSS draft document, Revision 0.7, dated June 17, 1997 entitled "Key Metrics for System Performance Document" (as referred to as the "System Performance Standards Document"). This document identifies the network-wide key metrics for Ericsson and Lucent switching systems, as well as cell sites, which will provide a high level assessment of the system. o AUDIO QUALITY CATEGORY: Document PP-4027E, Revision 1.1, dated May 30, 1996 entitled "Audio Quality Measurement (AQM)" (as referred to as the "Audio Quality Standards Document"). This document provides the basis for assessing the quality of RF transmission by describing the standards for performing audio quality measurements and the reporting of their results. AWS measures the metrics for the Audio Quality Category using the "Radio Quality Scorecard". The Radio Quality Scorecard is comprised of performance statistics derived from driving the PCS system using the Buzzard tool or a tool with similar measurement and reporting capability. These Network Standards Documents are subject to the terms and conditions of this Agreement including, without limitation, this Schedule D, hereby incorporated into and forms a part of this Agreement. In the event of any inconsistency between any part of a Network Standards Document and the provisions of this Schedule D, the provisions of this Schedule D shall govern. Notwithstanding anything else in this Agreement including, without limitation, this Schedule D, the parties acknowledge and confirm that the Network Standards Documents represent the standards and metrics currently identified by AWS as applicable to each Category. Target values for key quality related metrics are contained herein and Licensee agrees to comply with the specific metric target values as specified in this Schedule D. In addition, the parties acknowledge and confirm that the Network Standards Documents are subject to revision and Licensee shall comply with subsequent revisions to these Network Standards Documents, as well as with Call Center Quality Standards which will constitute an additional Category once they are formally implemented, in accordance with Section 8.2 of this Agreement. Set out below is a brief description of each Category of Network Standard and the currently established metrics for each such Category. II. TARGETS FOR NETWORK STANDARDS Licensee shall meet the following targets for key metrics which represent overall network and system quality. These targets are subject to revision and shall be implemented in accordance with Section 8.2 of this Agreement. o % ESTABLISHED CALLS: The percentage of call attempts to and from a mobile phone that result in a successful voice channel assignment. The target goal for this metric is 93%. o % DROPPED CALLS: The percentage of established calls, as defined below, which terminate abnormally. The target goal for this metric is a drop call rate of 1.7% or less. o % HANDOFF FAILURES: The target goal for this metric is a handoff failure rate of 1.5%. o FAILURES PER ERLANG: The ratio of failed calls to carried traffic, where failed calls are measured utilizing switch counters for originating and terminating traffic, and carried traffic is measured in erlangs. The target goal for this metric is 1.68 o SWITCH OUTAGE TIME: The amount of time (in minutes) in a month when subscribers are impacted by a cellular switch outage. Target for this metric is 10 minutes per switch per year, with all ten minutes occurring in the maintenance window between 12:00 am and 5:00 am. o % BLOCKING - CELL ROUTES: Percentage of time all cellular traffic channels (voice paths in a trunk group) are unavailable within a given measurement interval. Target for this metric is 5%. o % BLOCKING - NETWORK ROUTES: Percentage of time all network traffic channels are unavailable within the measurement interval. Target for this metric is 5%. o ANS CONSISTENCY TEST: The percentage of successful ANS feature deliveries, based on the following sequence: feature activation/deactivation (when applicable), test call, correct response, and call termination. The target goal for this metric is 96% for all ANS features. This target metric includes feature delivery failures due to call processing failures (i.e. call delivery, call origination, handoff failures, or dropped calls. These failures are estimated to be approximately 4%.) III. REPORTING STANDARDS Licensee agrees to comply with the reporting requirements as specified in the Network Standards Documents and as specified below: o Except as specified Audio Quality Network Standards, Licensee will submit the metric reports required pursuant to this Schedule D (the "Results") to AWS no less than quarterly. o With respect to Audio Quality Network Standards, Licensee shall only submit quarterly Results for markets with 10,000 or more subscribers; for markets with less than 10,000 subscribers, Licensee shall only submit Results on a semi-annual basis. o Licensee shall submit all Results by the fifteenth day of the month following the end of the applicable reporting period. o Licensee will report the Results to AWS on an aggregated national basis; the aggregated national Results will reflect the distribution of the metric measured across Licensee's Territory. Licensee may also be required to provide a breakdown, by market, of any metric. IV. CUSTOMER SERVICE STANDARDS Promptly following the execution of this Agreement, AWS and Licensee shall negotiate in good faith the applicable customer service standards, with a goal of reaching agreement thereon by April 1, 1999. AT&T Brand Values Marketing, Advertising & Promotion Guidelines The Licensed Logo as set forth in Schedules A and E should not be placed on any content relating to or containing any of the following, unless it has redeeming social value: o Illegal activities o Content which demeans, ridicules or attacks an individual or group on the basis of age, color, national origin, race, religion, sex. secular orientation, or handicap o Pornographic, obscene or sexually explicit suggestive material or content o Material targeted to children, which is deemed to be obscene, vulgar or pornographic o Tobacco and/or alcoholic beverages o Firearms/Ammunition/Fireworks o Gambling o Contraceptives o Violence o Vulgar/obscene language o Solicitation of funds SCHEDULE E ---------- GUIDELINES FOR USE OF THE LICENSED LOGO AND LICENSED PHRASE ------------------- AT&T welcomes Members of the AT&T Wireless Services Network (Member) to use the enclosed icon ("icon") and the expression "Member, AT&T Wireless Services Network" (the "expression") for their advertising and promotion needs. There are only a few requirements to follow: o The icon or the expression may never be used in connection with services or products that are not provided or approved by AT&T in accordance with the Network Membership License Agreement. o Only authorized Members of the AT&T Wireless Services Network marketing AT&T services under a written Network Membership License Agreement may use the icon and the expression. o The authorized member's identity or logo must be at least 3 times the overall size of the icon; provided, however, for stationery and business cards the authorized members identity or logo must be at least 2 times the overall size of the icon. o Use of the icon or expression must never give the impression that the member is a part of AT&T. o There must be a reference in the authorized member's advertising body copy, to the extent that it refers to the nature, character or quality of AT&T's service or network, that states the value, quality, and reliability of AT&T's services and network. o The icon must be used only as illustrated and specified in this document. Do not alter the design in any way. o The expression may not appear in type size or style that is larger or more prominent than the largest or most prominent type size or style of surrounding or accompanying text or body copy. o Any misuse of the icon or the expression or misrepresentation of the AT&T Member relationship may result in termination of permission to use the icon and the expressions cancellation of agreements between Member and AT&T, and/or additional legal action. For questions regarding the use of these materials please contact the AT&T Corporate Identity Office, (973) 564-4942. Permission to use the icon or the expression may not be granted to any telecommunications aggregator or reseller. For additional copies of this document call AT&T Corporate Identity at (973) 564-4942 or e-mail fayhkelly@attmail.com. The "icon" on disk Always reproduce the icon so that it appears with a solid white or black field. See Illustrations. There are two versions of the icon on the disk. One is for larger size reproduction (i.e., advertisements) and one is for smaller sizes (i.e., stationery). It is important to use the correct one because failing to do so will result in poor legibility. Versions AW, AB, AWC and ABC are for larger than P in height. Versions BW, BB, BWC and BBC are for 1" and smaller. Legal Information: 1. Permission to use the icon and expression will not be granted to any telecommunications aggregator or reseller. 2. Permission to use the icon and expression must be contained in a written Network Membership License Agreement between AT&T and the entity using the icon and expression. 3. The user of the icon and expression must abide by all terms and conditions outlined in this document. 4. The icon or expression may never be used in connection with products or services not provided by the representative through or approved by AT&T. With respect to a specific AT&T service, a person or entity is a Member of the AT&T Wireless Network for that specific service under these guidelines if (1) the person or entity has executed a written contract with AT&T that expressly grants that status for that service; and (2) the contract is in effect and grants the right to use. in accordance with these guidelines and such other limitations as are contained in the contract, AT&T's logo, signature and trademarks as expressed in the icon and expression in connection with the marketing, sale, or provision of that specific product or service. The written contract may not alter these guidelines or grant more rights to use AT&T's logo, signature and trademarks than are expressly set forth in these guidelines. Furthermore, the authorization to use the AT&T logo, signature and trademarks under these guidelines for a specific service does not allow use of the AT&T logo, signature and trademarks tor any other product or service. Subscription to an AT&T tariffed service does not make the subscriber a Member of the AT&T Wireless Services Network. SCHEDULE F ---------- PERMITTED EVENTS ---------------- 1. Local community events, such as school athletic and cultural events or other athletic events (e.g. corporate golf or tennis outings). 2. Local events held in conjunction with regionally or nationally recognized organizations, such as Rotary International, Exchange Club, Heart Association, Red Cross, Make-A-Wish Foundation etc. 3. Events in support of major charitable institutions such as Children's Hospitals, Ronald McDonald Foundation, March of Dimes and so on. 4. Local trade shows, Chamber of Commerce events, educational business seminars. 5. Licensee or authorized dealer store grand openings and kiosk sampling. Table of Contents Page ---- 1. Definitions.........................................................1 2. Grant of License, Etc...............................................5 2.1 Grant of License...........................................5 2.2 No Other Services or Products..............................5 2.3 Exclusivity................................................6 2.4 Use of Licensed Marks on Mobile Phones.....................6 3. Agreement Personal..................................................6 3.1 Personal to Licensee.......................................6 3.2 Licensee Acknowledgment....................................7 4. Use of Licensed Marks and Other Marks...............................7 4.1 Approved Licensee Marks....................................7 4.2 Marks To Be Used...........................................7 4.3 Modification of Licensed Marks.............................7 4.4 Use of Additional Marks at Licensor's Request..............8 5. Retention of Rights.................................................8 6. System Requirements.................................................8 7. Quality Control.....................................................8 7.1 General....................................................8 7.2 Quality Standards..........................................8 7.3 Quality Service Reviews; Right of Inspection...............9 7.4 Authorized Dealers.........................................9 7.5 Sponsorship................................................9 7.6 Universal Wireless Consortium.............................10 8. Remedies for Noncompliance With Quality Standards..................10 8.1 Cure Period...............................................10 8.2 Potential Injury to Persons or Property...................10 9. Protection of Licensed Marks.......................................10 9.1 Ownership and Rights......................................10 9.2 Similar Marks.............................................11 9.3 Infringement..............................................11 9.4 Compliance With Laws......................................12 10. No Sublicensing....................................................12 11. Term and Termination...............................................12 11.1 Term......................................................12 (i) 11.2 Breach by Licensee........................................13 11.3 Termination Obligations...................................14 11.4 No Waiver of Rights.......................................14 11.5 Survival..................................................14 12. Indemnity..........................................................15 13. Consent of Licensor................................................16 14. Notices and Demands................................................16 15. Compliance With Law................................................17 16. Governmental Licenses, Permits and Approvals.......................17 17. Applicable Law; Jurisdiction.......................................17 18. Confidentiality of Information and Use Restriction.................17 19. Miscellaneous......................................................18 19.1 Name, Captions............................................18 19.2 Entire Agreement..........................................18 19.3 Amendments, Waivers.......................................18 19.4 Specific Performance......................................18 19.5 Remedies Cumulative.......................................18 19.6 No Waiver.................................................19 19.7 No Third Party Beneficiaries..............................19 19.8 Counterparts..............................................19 Schedules Schedule A -- Licensed Logo Schedule B -- Licensed Trade Dress Schedule B1 -- United States Service Mark Registrations or Applications Schedule C -- Initial Licensed Territory Schedule D -- Quality Control Standards Schedule E -- Guidelines for Use of the Licensed Logo and Licensed Phrase Schedule F -- Permitted Events (ii) EX-10.4 7 INTERCARRIER ROAMER SERVICE AGREEMENT Exhibit 10.4 INTERCARRIER ROAMER SERVICE AGREEMENT ------------------------------------- THIS INTERCARRIER ROAMER SERVICE AGREEMENT (the "Agreement" ) is dated as of the 7th day of January, 1999 (the "Effective Date") by and between AT&T Wireless Services, Inc., on behalf of itself and its Affiliates (individually and collectively, "AWS") for the markets listed on Schedule 1 hereto, and Tritel, Inc., on behalf of itself and its Affiliates listed in Schedule 2 hereto (individually and collectively, "Tritel") for the markets listed on Schedule 3. AWS and Tritel are sometimes referred to, individually, as a "Party" and together as "Parties." R E C I T A L ------------- WHEREAS, each of AWS and Tritel desires to make arrangements to facilitate the provision of voice and voice-related mobile wireless radiotelephone service to its Customers through the wireless radiotelephone facilities of the other Party in a manner providing a common look and feel and the appearance of seamlessness between the Parties' facilities, in accordance with the terms of this Agreement; and NOW, THEREFORE, in consideration of the premises and the mutual promises herein set forth and intending to be legally bound hereby, the Parties do hereby agree as follows: ARTICLE I DEFINITIONS ----------- As used in this Agreement, the terms below shall have the following meanings: Additional Features means the Features that are neither Core Features nor Future Core Features but that are offered by a Party to its Customers in its Home Service Area. Adopted Features means the Core Features and the Future Core Features. Affiliate means, with respect to a Party, any facilities-based CMRS operating company that (a) is controlled by or under common control with the Party, (b) is an entity in which the Party has at least fifty percent (50%) voting interest, (c) shares switching facilities with the Party, (d) is managed by the Party, or (e) is providing Service utilizing CMRS spectrum it has acquired from a Party. Approved CIBERNET Negative File Guidelines means the negative file guidelines appearing in the CIBER Record in effect from time to time. AT&T Wireless means AT&T Wireless Services, Inc., individually. Authentication means a process of determining whether a Roamer is an Authorized Roamer by using an algorithmic calculation and comparison prior to the Serving Carrier providing Service. Authorized Receipt Point or ARP means the location or address of the Party designated by the Home Carrier as the delivery point for its CIBER records and authorized agent for performing CIBER edits. Authorized Roamer means a Roamer using equipment and an assigned telephone number with the NPA/NXX combinations listed in accordance with Article VI below for whom the Serving Carrier has not received a negative notification in accordance with the provisions of this Agreement. AWS has the meaning set forth in the first paragraph of this Agreement. AWS System means the facilities owned and/or operated by AWS with which it provides Service anywhere within the United States. BTA means a geographic area designated by the FCC as a Basic Trading Area in which a PCS System may be operated, as described more specifically in 47 CFR 24.202 of the FCC rules and regulations. Cellular System means a wireless communication system that is operated pursuant to authority granted by the FCC under 47 CFR Part 22. CIBER means Cellular Intercarrier Billing Exchange Record. CIBER Record means the publication prepared by CIBERNET Corporation, a wholly-owned subsidiary of the Cellular Telecommunications Industry Association, as a service to the wireless communications industry. Unless specifically provided otherwise in this Agreement, all words and phrases defined in the CIBER Record shall have the meaning herein that they have therein. Clearinghouse means that entity which provides for the exchange of CIBER records and performs industry accepted CIBER edits, including edits to verify Industry Negative File information. CMRS means any Commercial Mobile Radio Service as authorized by the FCC. Core Features means the Features that, as of the Effective Date, AWS and Tritel have hereby agreed are necessary to implement to create a common look and feel and seamless subscriber service between the AWS System and the Mercury System, as evidenced by their listing in Schedule E-1 to Exhibit E attached hereto. Customer means an end-user of Service with which a Party has entered into an agreement to provide such Service, regardless of whether such Service is to be provided through the facilities of such Party. 2 Default has the meaning set forth in Section 13.1. Effective Date has the meaning set forth in the first paragraph of this Agreement. ESN means the Electronic Serial Number that is encoded in a wireless telephone set by the manufacturer and which is broadcast by such telephone. Equipment means phones, handsets, transmitters, terminals, control equipment and switches and other hardware and software required or useful to use Service, including phones and handsets Customers use in connection with Service. FCC means the Federal Communications Commission and any successor agency or authority. Features means voice and voice-related features and services available from a Party through its mobile wireless telecommunication system. Future Core Features means the Features that are either listed on Schedule E-2 to Exhibit E or are agreed upon in the future by the Parties pursuant to Section 10.3.2 as necessary to maintain a common look and feel, and seamless subscriber service, between the AWS System and the Mercury System, and which the Parties agree will be supported by both of their Systems, on the terms and conditions of this Agreement, in the same manner as the Core Features. General Availability means the date upon which the technology and products that comprise any Future Core Features are commercially available from the vendors of such technology and product(s), and such Feature has successfully completed and passed the first application in the System of the Party seeking to implement such features and is ready for live commercial deployment. Home Carrier means a Party who is providing Service to its registered Customers in a geographic area where it holds a license or permit to construct and operate a mobile wireless radiotelephone system and station. Home Service Area means the geographic area in which a Home Carrier is licensed to provide Service. Implementation Plan has the meaning set forth in Section 10.4. Industry Negative File means the negative file maintained by the authorized Clearinghouses in accordance with approved CIBERNET Negative File Guidelines. Mercury Service Area means the geographic area in which Tritel and those of its Affiliates now or hereafter listed on Schedule 2 provide Service. Mercury System means the facilities owned and/or operated by Tritel with which it provides Service anywhere within the Mercury Service Area. 3 MIN means the "Mobile Identification Number" which is assigned by a Home Carrier to each of its registered Customers. MOU means a minute of usage, with any portion thereof being rounded up to the next full minute. MSA means a geographic area designated by the FCC as a Metropolitan Service Area in which a Cellular System may be operated, as described more specifically in 47 CFR 22.909 of the FCC rules and regulations. MTA means a geographic area designated by the FCC as a Major Trading Area in which a PCS System may be operated, as described more specifically in 47 CFR 24.202 of the FCC rules and regulations. NPA/NXX combinations means the six-digit numerical combinations assigned by regulatory authorities to identify the area code and telephone number prefix for Service. PCS System means a wireless communication system that is operated pursuant to authority granted by the FCC under 47 CFR Part 24. Parties and Party have the meanings set forth in the first paragraph of this Agreement. Roamer means a Customer of one Party who seeks Service from the other Party within the geographic area served by the other Party, regardless of whether Service also is offered in that area by the Party whose Customer is seeking Service. RSA means a geographic area designated by the FCC as a Rural Service Area in which a Cellular System may be operated, as described more specifically in 47 CFR 22.909 of the FCC rules and regulations. Service means telecommunications service for the transmission and reception of voice and voice-related features provided by means of radio frequencies that are or may be licensed, permitted or authorized now or in the future by the FCC for use by a Cellular System or a PCS System, and in respect of which service the user equipment is capable of and intended for usage during routine movement, including halts at unspecified points, at more than one location throughout a wide area public or private wireless network. Unless otherwise specifically agreed by the Parties, Service shall include personal base station services but, by way of example and without limitation, does not include fixed wireless services, two-way messaging wireless services (NBPCS), video broadcasting wireless services, television services (whether cable, broadcast or direct broadcast satellite), broadcast radio services, interactive informational or transactional content services such as on-line content network services, Internet based services, satellite based communications services, and air to ground communications services. Serving Carrier means a Party who provides Service for registered Customers of another Party while such Customers are in the geographic area where the Serving Carrier, directly or through subsidiaries, provides Service. 4 TDMA means the present and future North American Time Division Multiple Access standard which is set by the Telecommunications Industry Association (which at the Effective Date is IS-136), which is the essential radio frequency technical method for digital wireless telephone operations upon which the Service and equipment related thereto are designed to operate. Tritel has the meaning set forth in the first paragraph of this Agreement. User Interface means the process, functional commands, and look and feel by which a Customer operates and utilizes the Adopted Features, including the sequence and detail of specific commands or service codes, the detailed operation and response of Equipment to the sequence of keys pressed to effect subscriber Equipment functions, and the response of subscriber Equipment to the activation of these keys, or in response to signals or data from either the Mercury System or the AWS System. Furthermore and for greater certainty, such definition shall include without limitation, the manner in which information is displayed on the screen of a phone used for Adopted Features, announcement tones or messages occur, and service or feature codes that must be dialed. The origins of the information presented to the user may be the user Equipment, or the AWS System or the Mercury System, or both. ARTICLE II PROVISION OF SERVICE -------------------- 2.1 Each Party shall provide, to any Authorized Roamer who so requests, in accordance with its own ordinary requirements, restrictions, practices, and tariffs, if applicable, and with the terms and conditions of this Agreement, any and all types of Service that such Party provides to its own Customers within its Service Area; provided that, no Party shall be required to provide features other than Core Features and Future Core Features. At a minimum, such Service shall include voice communications capability, as well as any other types of Service required by this Agreement, including without limitation Article X hereof. 2.2 Notwithstanding anything in this Agreement to the contrary, a Serving Carrier may suspend or terminate Service to an Authorized Roamer in accordance with the terms of its own ordinary requirements, restrictions, practices, and tariffs, if any, but such suspension or termination shall not affect the rights and obligations of the Parties for Service furnished hereunder prior to such termination or suspension. 2.3 In connection with its Service to Roamers, no Serving Carrier shall use recorded announcements or other inducements for an Authorized Roamer to discontinue the Service of its Home Carrier or, unless otherwise authorized herein, Roamer's use of a Serving Carrier's system. 2.4 In the event that an operating entity becomes an Affiliate of a Party after the date of this Agreement, such Party may add such operating entity to Schedule 1 or Schedule 2, as the case may be, upon written notice to the other Party, at which time (a) the Customers of such entity shall be entitled to Service as Roamers from the other Party on the terms and conditions of this Agreement and (b) such operating entity shall provide Service to Customers of the other 5 Party who are Authorized Roamers, although the other Party is not obligated to request such Service or to require its Customers to request such Service. 2.5 Tritel shall maintain a membership in the North American Cellular Network throughout the term of this Agreement. ARTICLE III RELATED SERVICES ---------------- 3.1 Tritel and its Affiliates listed in Schedule 2 shall not market, offer, provide, or resell interexchange services, except (i) interexchange services that constitute Company Communication Services (as defined in the Company's Stockholders Agreement dated as of the date hereof) and (ii) interexchange services procured from AT&T Corp. or an Affiliate thereof designated by AT&T Corp. Such interexchange services shall be provided by AT&T Corp. or such Affiliate at the same rates as the rates charged by AT&T Corp. or such Affiliate to other similarly situated carriers. It is anticipated that such services will be provided by AT&T Corp. or such Affiliate pursuant to an agreement incorporating such rates. 3.2 AWS and Tritel agree that Tritel shall participate in AWS's National Account Program ("NAP"). A copy of AWS's standard NAP agreement, has been provided to Tritel. Promptly following the execution of this Agreement, AWS and Tritel shall negotiate in good faith the terms of such agreement, with the goal of executing the agreement by April 1, 1999. ARTICLE IV CUSTOMER SERVICE ---------------- 4.1 Throughout the Mercury Service Area, Tritel will provide customer service meeting or exceeding the standards set forth on Exhibit A. 4.2 The Parties agree to work together in good faith to develop the means by which a Serving Carrier can route to a Customer's Home Carrier a 611 customer service call received from a Customer of the other Party while roaming on the Serving Carrier's System. Upon and subject to the development of such technology, the Parties to implement such technology to the extent commercially feasible. ARTICLE V CHARGES ------- 5.1 Each Home Carrier, whose Customers (including the Customers of its resellers) receive service from a Serving Carrier as Authorized Roamers under this Agreement, shall pay to the Serving Carrier who provided such service 100% of the Serving Carrier's charges for CMRS and one hundred percent (100%) of the toll charges pursuant to Exhibit C. The amount of the 6 charges for the use of each Serving Carrier's Service are set forth in Exhibit C attached to this Agreement. ARTICLE VI EXCHANGE OF INFORMATION ----------------------- 6.1 Exhibit D to this Agreement is a list furnished by the respective Parties of the valid NPA/NXX combinations used by their respective Customers. These combinations shall be accepted by the other Party. Each NPA/NXX combination is and shall be within the entire line range (0000-9999), or a specified portion thereof. The minimum line range to be exchanged by the Parties shall be 1,000 line numbers. Each Party shall be responsible for all billings otherwise properly made under this Agreement to any number listed by such Party within the range or ranges specified by it in Exhibit D. Additions, deletions, or changes to NPA/NXX combinations and line number range(s) for the Home Carrier's Customers may be made upon at least fifteen (15) days prior written notice to the Serving Carrier. Such notice shall be in the form attached as Exhibit D to this Agreement and shall include the requested effective date for the addition, deletion or change. The provisions of this Section 6.1 are subject to the provisions of Section 3.3 with respect to the specific NPA/NXXs addressed in that Section. 6.2 Each Party shall provide to the other Party a list of MINs (from among those within the NPA/NXX combination(s) identified pursuant to Section 6.1 hereof) and ESNs (of the telephones to which the other Party is not authorized to provide Service pursuant to this Agreement), which shall be entered into the Industry Negative File. The approved CIBERNET Negative File Guidelines, as amended from time to time, shall be the governing criteria for the Parties. Thereafter, from time to time, as agreed by the Parties, each Party shall notify each other Party of all additions to, and deletions from, these lists for the Customers of that particular Party. Such notifications shall be made during normal business hours of the Party being notified by facsimile or by telephone with a written confirmation and shall be effective one (1) hour after receipt. 6.3 Each Party hereby agrees to indemnify the other Party, together with its partners and any and all of their officers, directors, employees, agents and/or affiliates, against, and hold them harmless from, any and all claims, suits, demands, losses and expenses, including reasonable attorneys' fees and disbursements, which may result in any way whatsoever from the indemnified Party's denial of Roamer or local Service to any NPA/NXX and MIN combination which has been listed by the indemnifying Party as not being authorized to receive Service. 6.4 Customers from the lists as referred to in Section 6.2 hereof, but in all such cases, such purging or deletion must be done in accordance with the approved CIBERNET Negative File Guidelines. If purging or deletion of numbers is done prior to the time periods established by such Guidelines, or through procedures not otherwise set forth, in the approved CIBERNET Negative File Guidelines, the Party implementing the purge or deletion will assume financial liability for any charges incurred by those numbers. All purges or deletions made pursuant to this Section 6.4 shall be given through the Parties and shall be in the form mutually agreed upon 7 by the Parties and effective as of the time established by the approved CIBERNET Negative File Guidelines (unless otherwise modified by mutual agreement of the Parties.) 6.5 Upon the implementation of wireless number portability in any portion of either the AWS System or the Mercury System, the Parties shall cooperate in establishing an alternative method for exchanging ESN, MIN, and NPA/NXX information required to permit roaming by the other Party's Customers in their respective systems. ARTICLE VII FRAUD ----- 7.1 The Parties will cooperate and, as necessary, supplement this Agreement in order to minimize fraudulent or other unauthorized use of their systems. If any Party reasonably decides that, in its sole judgment, despite due diligence and cooperation pursuant to the preceding sentence, fraudulent or other unauthorized use has reached an unacceptable level of financial loss and is not readily remediable, such Party may suspend the use of applicable NPA/NXX combinations, in whole or in part, pursuant to the terms of this Agreement. 7.2 Each Party shall take reasonable actions to control fraudulent Roamer usage, including without limitation using a positive validation/verification ("PV") system provided by a mutually agreed upon validation/verification service under which the ESN, MIN and/or NPA/NXX used in a call in the Serving Carrier's system is compared against a list of Authorized Roamers. The Parties shall work together in good faith to implement a PV system and enhancements thereto or alternative systems as they shall agree in the future. The Home Carrier shall have no responsibility or liability for calls completed by a Serving Carrier without obtaining positive validation/verification as required herein. If the Serving Carrier provides pre-call validation of the Home Carrier's Customers, the Home Carrier agrees to implement Negative File Suppression at the Clearinghouse and the CIBERNET Negative File Guidelines and procedures do not apply. 7.3 In addition to other procedures set forth in this Agreement, a Home Carrier may notify a Serving Carrier by facsimile, with written confirmation, that certain NPA/NXX combinations are not to receive Service. Any calls completed using such NPA/NXX combinations made one full business day or more after such notice has been given shall be the sole responsibility of the Serving Carrier, and the Home Carrier shall not be charged any amount for such calls. 7.4 Each Serving Carrier shall use commercially reasonable efforts to provide each Home Carrier with real-time visibility of call detail records delivered through a network compatible with AWS's network. Such information shall be delivered within one hour of the applicable call. In the event that the Serving Carrier provides such a real-time visibility system, the Serving Carrier shall not be liable in any event for a temporary failure of the system unless the Serving Carrier has been notified of such failure by the Home Carrier and the Serving Carrier does not take commercially reasonable steps to remedy the failure. If the Serving Carrier has been so notified and has failed to take such commercially reasonable steps, the Serving Carrier 8 shall be liable for all unauthorized usage attributed to Home Carrier's subscribers during the period from the time Serving Carrier was notified of the problem to the time that the problem has been resolved to the reasonable satisfaction of the Home Carrier. 7.5 For purposes of notification under this Article VII, the following addresses and facsimile numbers shall be used: If to AWS: AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, WA 98033 Attn: Billing and ICS Operations Tel. No. 425-827-4500 Fax No. 425-828-1390 If to Tritel: Tritel, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: Chief Executive Officer Tel. No. 601-936-0893 Fax No. 601-936-6045 Each Party may change the names, addresses and numbers set forth above by providing notice to the other Party as provided in Article XVI below. ARTICLE VIII BILLING ------- 8.1 Each Home Carrier shall be responsible for billing to, and collecting from, its own Customers all charges that are incurred by such Customers as a result of service provided to them as Authorized Roamers by the Serving Carrier. The Home Carrier shall also be responsible for billing its Customers for, and remitting to, the Federal Government all federal excise tax that may be due in connection with the service being billed by it to its Customers. While the Serving Carrier will be responsible for the computation and remittance of all state and local taxes, each Home Carrier shall be liable to the Serving Carrier for all such state and local taxes remitted by the Serving Carrier, for Authorized Roamers regardless of whether these amounts are paid to the Home Carrier by its Customers. 8.2 Each Serving Carrier who provides Service to an Authorized Roamer pursuant to this Agreement shall forward Roamer billing information, within five business days of the call date, in accordance with the procedures and standards set forth in the CIBER Record to the Home Carrier's Authorized Receipt Point. CIBER Type 50 and CIBER Type 70 records shall not be accepted without mutual signed agreement and if such mutual agreement is reached it will be attached to this Agreement. Any future revisions of the CIBER Record or additional record types must be mutually agreed upon before implementation. In the event the parties use the 9 CIBERNET Net Settlement Program, or alternative settlement program such information must be in a format in compliance with the CIBER Record requirements or agreed upon format. 8.3 Where the Authorized Roamer billing information required to be provided by the Serving Carrier in accordance with Section 8.2 above is not in accordance with the CIBER Record, the Home Carrier may return a record to the Serving Carrier as provided in the CIBER Record. Returning the defective record will be in accordance with CIBER Record established procedures. The Serving Carrier may correct the defective record and return it to the Home Carrier for billing, provided that the time period from the date of the Service call at issue to the receipt of the corrected record does not exceed sixty (60) days. 8.4 No credit for insufficient data or defective records shall be permitted except as provided in Section 8.3 above, unless mutually agreed upon by both Parties. 8.5 Each Home Carrier may at its discretion perform any necessary edits at its Clearinghouse on incollect or outcollect call records to ensure compliance with the terms of this Agreement. ARTICLE IX SETTLEMENT ---------- 9.1 Each Party will settle its accounts with the other Parties on the basis of billing information received as described in this Article IX. In the event both Parties use a net financial settlement procedure, the Parties shall not submit a paper invoice but will make payments in accordance with such net financial settlement procedures provided that the Parties may submit call records for payment that relate to calls made more than sixty (60) days from the date of the call if such call was the subject of a dispute or investigation regarding fraudulent or unauthorized use. 9.2 If an incorrect roaming rate is charged by the Serving Carrier to the Home Carrier, the Serving Carrier shall refund all amounts in excess of the contract rate back to the Home carrier within forty five days of notification by the Home Carrier. Each carrier shall have ninety (90) days from the end of the settlement period to invoice for amounts in excess of the contract rate. The Home Carrier will send a collection letter within sixty (60) days of the invoice date, within ninety (90) days of the invoice date, and within one hundred (120) days of the invoice date. If the invoice remains unpaid after one hundred twenty (120) days from the original invoice date, the Home Carrier may withhold the amounts from the CIBERNET Net Settlement Program or alternative settlement program. 9.3 In the event that either Party does not use a net financial settlement procedure, the billing and payment for charges incurred under this Agreement shall be as set forth below. 9.3.1 The parties shall determine amounts owed to each other for Service provided to Roamers in one-month periods with the end of such period beginning on the sixteenth of each calendar month and ending on the fifteenth of the following month in which Service is provided. The end of this Period shall be referred to as "Close of Billing." 10 9.3.2 The Parties shall send each other an invoice for Services used under this Agreement within fifteen (15) days after the Close of Billing. 9.3.3 Each invoice shall contain the following information. a. Billing period used by Serving Carrier b. Batch sequence number c. Serving and Home Carrier System Identification Number d. Air Service charges e. Total toll charges (both intrastate and interstate) f. All other charges and credits g. Total taxes h. Total charges 9.3.4 Payment on such invoices shall be made in the form of a check or a wire transfer which must be received by the invoicing party within thirty (30) days from the date of the invoice. Late payments shall be charged with a late payment fee of one and one half percent (1.5%) of the outstanding balance for each thirty-day period (or portion thereof) that such payments are late. 9.3.5 Each Party may offset the amount owed to the other Party under this Agreement and a single payment of the balance to the Party entitled to receive such balance shall be made. ARTICLE X INTEROPERABILITY ---------------- 10.1 The Parties agree that their respective obligations under this Agreement related to the interoperability of their Systems shall be construed in accordance with the following general principles: 10.1.1 The Parties agree, confirm and acknowledge that one of their primary objectives in entering into this Agreement is to promote the establishment and operation throughout the United States of a mobile wireless service that is TDMA-based and that will appear to their respective subscribers as a single Mobile Wireless System with a common User Interface pertaining to the Adopted Features, and that they intend to achieve such purpose and objective as set forth in, and subject to the terms and conditions of, this Agreement. 10.1.2 The Parties agree that each of their respective obligations, duties, rights and entitlements pursuant to this Agreement shall be interpreted, to the extent such interpretation is required to resolve any dispute or uncertainty concerning this Agreement, in a manner that is reasonably consistent with, and which reasonably supports, the purpose and objective of this Agreement as set out in Section 10.1.1. 11 10.1.3 The Parties agree that they each shall, in good faith, work together, cooperate, and use the rights that they each have granted the other under this Agreement for the purposes set out in Section 10.1.1 and on the terms and conditions of this Agreement. 10.2 The Parties each acknowledge and confirm that their digital standard for their respective Systems is currently (as of the Effective Date) TDMA. In addition, Tritel shall maintain its commitment to TDMA as Tritel's digital standard for the Mercury System for so long as, and to the extent that, AWS maintains its commitment to TDMA as AWS's digital standard. AWS agrees that in the event it may exercise its discretion to no longer remain committed to TDMA as its digital standard, it shall inform Tritel of that decision by no later than six months prior to the implementation of any non-compatible interface. Upon the implementation of any such non-compatible interface, Section 2.5 of this Agreement shall immediately terminate. 10.3 Each of the Parties agrees that it shall operate and support its TDMA-based System, to the extent and in substantially all of the geographic area in which installed, to ensure that the other Party's Customers can use the Adopted Features when roaming on the Serving Carrier's System in the same manner that such Customers use such Adopted Features on the Home Carrier's System. 10.3.1 Each Party shall, at its own expense and from the date that operation of its TDMA-based System commences, implement the Core Features. 10.3.2 Each Party shall, at its own expense, implement those Future Core Features listed on Schedule E-2 to Exhibit E in accordance with the schedule set forth in Schedule E-2. Each Party shall, at its own expense, implement such additional Future Core Features that are agreed upon by the Parties within one (1) year after the General Availability of such Future Core Features, provided that, and subject to such Party's determination, in its sole and absolute discretion, that such implementation is both financially feasible and economically viable, and consistent with such Party's objective of maximizing its financial performance. In the event that a Party opts not to adopt a Future Core Feature in accordance with this Section 10.3.1, it shall promptly notify the other Party of that decision. Future Core Features shall be implemented in accordance with this Section in the areas specified for each respective Party in Section 10.3.1. 10.3.3 Each Party shall have the right, in its sole discretion to adopt and implement (at such Party's own expense) Additional Features upon reasonable prior written notice to the other Party, but the other Party shall have no obligation to support any Additional Features. 10.3.4 Tritel shall comply with the network Standards with respect to the Core Features and Future Core Features that are set out in Schedule E-3 to Exhibit E attached hereto. 10.3.5 In addition to and without affecting the standards established pursuant to Article IV, the Customer service Standards with which the Parties shall comply with respect to the Core Features and Future Core Features shall be subject to the mutual agreement of both of 12 AWS and Tritel. Tritel and AWS agree that they shall, promptly after the Effective Date, negotiate such Standards in good faith. 10.4 In order to facilitate performance by each of the Parties of their obligations under this Article X, the Parties agree to exchange and share information with each other as follows, except that nothing contained herein shall be construed to require a Party to exchange information that the Party considers confidential or proprietary: 10.4.1 Subject to Article XVII of this Agreement, the Parties shall provide each other, on a reasonably prompt basis, with all information and materials that either has a right to disclose that is necessary to meet the interoperability standards set forth in this Article X, including without limitation the following information: System Engineering: Minimum Standards for Systems Features: Capability description of present Core Features and other Features o User Interface (codes) o Implementation procedures o Roaming requirements o Feature functionality design documents Research and Development: o operational test results o operational defects and bugs o remedial/back-up plans o operational, functional and technical specifications o all related documentation o systems integration 10.4.2 Each Party agrees that it shall, in performing its obligations to provide the other Party with information in accordance with Section 10.4, act reasonably, and in good faith toward the other Party. 10.4.3 Nothing contained herein is intended or should be construed to constitute the transfer or grant by one Party to the other of any ownership, license, or other rights of or to any trade secret, know-how, or other intellectual property by one Party to the other. 10.5 Each Party shall provide for automatic call delivery for Customers of the other Party who are Roamers in such Party's system. To this end, each Party shall continuously provide the hardware, software and transmission facilities required for such call delivery either directly between the systems of the Parties or indirectly through a separate network of wireless communications carriers. The hardware, software and transmission facilities provided by each 13 Party hereunder shall at all times be operated and maintained to provide the most efficient level of service that is technically feasible and commercially reasonable to minimize transmission errors and Service interruptions. 10.6 To the extent that each Home Carrier's Customers may use the system of a Serving Carrier, the Parties shall provide for automatic call hand-off between such Home and Serving Carrier's systems. To this end, each Party shall continuously provide the hardware, software and transmission facilities required for such call hand-off either directly between the systems of such Home and Serving Carrier or indirectly through a separate network of wireless communications carriers. The hardware, software and transmission facilities provided by each Party hereunder shall at all times be operated and maintained to provide the most efficient level of service that is technically feasible and commercially reasonable to minimize transmission errors and Service interruption. 10.7 The Parties will work together to evaluate the economic advantage of various switch linking options to interconnect and facilitate networking of the Parties' respective Systems as required by this Agreement. Should the Parties agree to install and maintain linking facilities, the cost of the linking facilities shall be allocated pursuant to the following provisions: 10.7.1 AWS and Tritel will each pay one-half of the equipment costs for the establishment of microwave facilities to link the Parties' respective Systems for the purposes of automatic call delivery and automatic call hand-off. Each Party is solely responsible for the costs of preparing its own facilities for the System link. 10.7.2 Equipment costs for the establishment of a landline link (T-1) to link the Parties' respective Systems together for these purposes shall be split between the Parties as follows: (a) AWS and Tritel shall each pay one-half of the cost for the installation, use, modification, or discontinuance of the linking facilities. Each party is solely responsible for all costs to prepare its own facilities for the link between the Systems. (b) For ease of administration, AWS will order and be the customer of record ("COR") for such facilities. Tritel will reimburse AWS monthly for its share of the recurring costs of such facilities. The COR shall be responsible for invoicing the other Party for its share of the costs, with payment due within 30 days of receipt of the invoice. 10.7.3 .7.3 The Parties agree that this Section 10.7 relates only to those costs necessary to establish the referenced facilities. This section is not applicable to the allocation of costs with respect to the provision of service for each Parties Customers. 10.8 The Parties acknowledge that they do not currently have the technical systems in place to allocate charges for cellular service provided by a Carrier when a Customer's call is handed off from one System to another. The Parties agree that the revenues and costs for a call belong to the Party whose System operates the originating Cell Site (the "Bill and Keep System"). 14 10.9 Neither of the Parties will be liable for nonperformance or defective performance of its obligations under this Article X to the extent and for such periods of time as such nonperformance or defective performance is due to reasons outside such Party's control, including, without limitation, acts of God, war, acts of any governmental authority, riots, revolutions, fire, floods, explosions, sabotage, nuclear incidents, lightning, weather, earthquakes, storms, sinkholes, epidemics, strikes, or delays of suppliers or subcontractors for the same causes. Neither Party shall be required to settle any labor dispute in any manner which is deemed by that Party to be less than totally advantageous, in that Party's sole discretion. ARTICLE XI REPRESENTATIONS AND WARRANTIES ------------------------------ 11.1 AWS hereby represents and warrants to Tritel that: 11.1.1 AT&T Wireless is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. AT&T Wireless has all requisite power and authority to execute and deliver this Agreement and to cause this Agreement to be the binding obligation, to the extent provided herein, of those of its Affiliates listed on Schedule 1 or added to Schedule 1 hereafter in accordance with Section 2.4. 11.1.2 This Agreement is the legal, valid, and binding obligation of AT&T Wireless, enforceable against AT&T Wireless in accordance with its terms, except that such enforceability may be subject to (a) bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) equitable principles of law and the discretion of any court or arbitral body before which any related proceeding may be brought. 11.1.3 The execution, delivery, and performance of this Agreement by AT&T Wireless does not and will not conflict with or result in a material default, suspension, or termination of any agreement, contract, obligation, license, or authorization with or granted by any third party or governmental body. 11.2 Tritel hereby represents and warrants to AWS that: 11.2.1 Tritel is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Tritel has all requisite power and authority to execute and deliver this Agreement and to cause this Agreement to be the binding obligation, to the extent provided herein, of those of its Affiliates listed on Schedule 2 or added to Schedule 2 hereafter in accordance with Section 2.4. 11.2.2 This Agreement is the legal, valid, and binding obligation of Tritel, enforceable against Tritel in accordance with its terms, except that such enforceability may be subject to (a) bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect relating to creditors' rights generally and (b) equitable principles of law and the discretion of any court or arbitral body before which any related proceeding may be brought. 15 11.2.3 The execution, delivery, and performance of this Agreement by Tritel does not and will not conflict with or result in a material default, suspension, or termination of any agreement, contract, obligation, license, or authorization with or granted by any third party or governmental body. ARTICLE XII TERM, TERMINATION AND SUSPENSION OF AGREEMENT --------------------------------------------- 12.1 This Agreement shall have a term commencing on the Effective Date and continuing for a period of twenty (20) years. Thereafter, this Agreement shall continue in force on a month-to-month basis unless either party terminates the Agreement by written notice to the other party given at least 90 days prior to the date of termination. Otherwise, this Agreement may be terminated or suspended only as provided in this Article XII. 12.2 This Agreement may be terminated or suspended by either Party immediately upon written notice to the other of a Default by the other Party. In addition, either Party may suspend this Agreement immediately upon written notice to the other Party pursuant to Section 13.1.1 of the existence of a breach of this Agreement which materially affects the Service being provided to Customers of the non-breaching Party. While any suspension is in effect, the obligations of the Parties shall be only those that survive termination and to work together to resolve as expeditiously as possible any difficulty that resulted in a suspension. At such time as the Party originally giving notice of suspension concludes that the problem causing the suspension has been resolved, that Party shall give to the other written notice to this effect. This Agreement shall resume in full effect within five (5) business days after the Parties have mutually agreed that the problem has been resolved. 12.3 The Parties shall cooperate to limit the extent and effect of any suspension of this Agreement to what is reasonably required to address only the cause of such suspension. In such event, the notifying Party shall defend, indemnify and hold harmless the other Party and the other Party's officers, directors, employees, agents and representatives from any claims by any person or entity relating to such suspension of Service. 12.4 In the event that a Party transfers control of an Affiliate listed in Schedule 1 or Schedule 2, as the case may be, the Party shall provide at least four months' prior written notice to the other Party and upon such transfer such Affiliate shall be deleted from the appropriate Schedule, but doing so will not relieve a Party of its obligations under Section 14.1. 12.5 The termination or suspension of this Agreement shall not affect the rights and liabilities of the Parties under this Agreement with respect to all Authorized Roamer charges incurred prior to the effective date of such termination or suspension. 16 ARTICLE XIII DEFAULT ------- 13.1 A Party will be in "Default" under this Agreement upon the occurrence of any of the following events: 13.1.1 Material breach of any material term of this Agreement, if such breach shall continue for thirty (30) days after receipt of written notice thereof from the nonbreaching Party; 13.1.2 Voluntary liquidation or dissolution or the approval by the board of directors or stockholders of a Party of any plan or arrangement for the voluntary liquidation or dissolution of the Party; 13.1.3 A final order by the FCC revoking or denying renewal of CMRS licenses or permits granted to such Party which, individually or in the aggregate, are material to the business of such Party; or 13.1.4 Such Party (i) filing pursuant to a statute of the United States or of any state, a petition for bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee for all or a portion of such Party's property, (ii) has filed against it, pursuant to a statute of the United States or of any state, a petition for bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee for all or a portion of such Party's property, provided that within sixty (60) days after the filing of any such petition such Party fails to obtain a discharge thereof, or (iii) making an assignment for the benefit of creditors or petitioning for, or voluntarily entering into, an arrangement of similar nature, and provided that such filing, petition, or appointment is still continuing. 13.2 All claims and disputes relating in any way to the performance, interpretation, validity, or breach of this Agreement, including but not limited to a claim based on or arising from an alleged tort, shall be resolved as provided in this Section 13.2. It is the intent of the Parties that any disagreements be resolved amicably to the greatest extent possible. 13.2.1 If a disagreement cannot be resolved by the representatives of the Parties with day-to-day responsibility for this Agreement, such matter shall be referred to an executive officer of each of the Parties. The executive officers shall conduct face-to-face negotiations at a neutral location or such other location as shall be mutually agreed upon. If these representatives are unable to resolve the dispute within ten business days after either Party requests the involvement of the executive officers, then either Party may, but is not required to, refer the matter to mediation or arbitration, as applicable in accordance with Sections 13.2.2 and 13.2.3. 13.2.2 In any case where the amount claimed or at issue is One Million Dollars ($1,000,000) or more and the Parties are unsuccessful in resolving the disagreement, the Parties agree to submit the disagreement to non-binding mediation upon written notification by either Party. The Parties shall mutually select an independent mediator experienced in telecommunications system disputes. The specific format for the mediation shall be left to the discretion of the mediator. If mediation does not result in resolution of the disagreement within 17 thirty days of the initial request for mediation, then either Party may, but is not required to, refer the matter to arbitration. 13.2.3 Any disagreement not finally resolved in accordance with the foregoing provisions of this Section 13.2 shall, upon written notice by either Party to the other, be resolved by final and binding arbitration. Subject to this Section 13.2.3, such arbitration shall be conducted through, and in accordance with the rules of, JAMS/Endispute. A single neutral arbitrator shall decide all disputes. Each Party shall bear its own expenses with respect to the arbitration, except that the costs of arbitration proceeding itself, including the fees and expenses of the arbitrator, shall be shared equally by the Parties. The arbitration shall take place in a neutral location selected by the arbitrator. The arbitrator may permit discovery to the full extent permitted by the Federal Rules of Civil Procedure or to such lesser extent as the arbitrator determines is reasonable. The arbitrator shall be bound by and strictly enforce the terms of this Agreement. The arbitrator shall make a good faith effort to apply applicable law, but an arbitration decision and award shall not be subject to review because of errors of law. The arbitrator shall have the sole authority to resolve issues of the arbitrability of any disagreement, including the applicability or running of any applicable statute of limitation. The arbitrator shall not have power to award damages in connection with any dispute in excess of actual compensatory damages nor to award punitive damages nor any damages that are excluded under this Agreement and each party irrevocably waives any claim thereto. The award of any arbitration shall be final, conclusive and binding on the Parties. Judgment on the award may be entered in any court having jurisdiction over the Party against which the award was made. Nothing contained in this Section 13.2.3 shall be deemed to prevent either party from seeking any interim equitable relief, such as a preliminary injunction or temporary restraining order, pending the results of the arbitration. The United States Arbitration Act and federal arbitration law shall govern the interpretation, enforcement, and proceedings pursuant to the arbitration clause in this Agreement. ARTICLE XIV SUCCESSORS AND ASSIGNS 14.1 Neither Party may, directly or indirectly, sell, assign, transfer, or convey its interest in this Agreement or any of its rights or obligations hereunder, including any assignment or transfer occurring by operation of law, without the written consent of both Parties, except that (i) either Party may assign or delegate this Agreement or any of its rights or obligations hereunder to an Affiliate of such Party without the consent of the other Party, but such assignment or delegation will not relieve the Party of any of its obligations hereunder and (ii) in the event that a Party sells, assigns or transfers control of any System or portion thereof operated by the Party, including any Affiliate listed on Schedule 1 or 2, it shall be a condition to such transfer that the transferee assumes this Agreement insofar, and only insofar, as it relates to the operation of the transferred System or portion thereof and the transferee shall have no right to extend the provisions of this Agreement to any other operations of the transferee. 14.2 No person other than a Party to this Agreement shall acquire any rights hereunder as a third-party beneficiary or otherwise by virtue of this Agreement. 18 ARTICLE XV NO PARTNERSHIP OR AGENCY RELATIONSHIP IS CREATED ------------------------------------------------ Nothing contained in this Agreement shall constitute the Parties as partners with one another or render any Party liable for any debts or obligations of any other Party, nor shall any Party hereby be constituted the agent of the other Party. ARTICLE XVI NOTICES AND AUTHORIZED REPRESENTATIVES -------------------------------------- Unless otherwise provided herein, any notice, request, instruction or other document to be given hereunder by any Party to the other shall be in writing and delivered by hand delivery, certified mail (postage prepaid, return receipt requested), telex, facsimile, or overnight air delivery service, as follows: If to AWS, to: AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, WA 98033 Attn: Intercarrier Services with a copy to: AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, WA 98033 Attn: Legal Department If to Tritel, to: Tritel, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: Chief Executive Officer Copy to: Cheryl McCullouch Tel. No. 601-936-0893 Fax No. 601-936-6045 or such other address as any Party may from time to time furnish to the other Party by a notice given in accordance with the terms of this Section. All such notices and communications shall be deemed to have been duly given at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, if mailed; when receipt is confirmed, if by facsimile and received by 3:00 p.m. local time on any business day and otherwise on the next business day; and the next business day if sent by overnight air delivery service. 19 ARTICLE XVII CONFIDENTIALITY --------------- 17.1 Each Party shall, and shall cause each of its Affiliates and each of its and their employees, agents, and contractors, to keep confidential and not use for any purpose except as contemplated by this Agreement, any and all information and know-how provided to it by the other Party which is identified in writing as confidential ("Confidential Information"). Identification of information as confidential shall, in the case of information delivered in tangible form, appear on at least the face or first page of such information and, in the case of information communicated verbally, be given verbally contemporaneously with the delivery of the information and confirmed in writing within five business days thereafter. Notwithstanding the foregoing, the following information shall be treated as Confidential Information without any further identification as such: (i) The terms, but not including the mere existence, of this Agreement; and (ii) all information exchanged pursuant to Article VI. Notwithstanding Section 17.1, a Party shall have no obligation to keep confidential any information that (a) was rightly in the receiving Party's possession before receipt from the disclosing Party, (b) is or becomes a matter of public knowledge without violation of this Agreement by the receiving Party, (c) is rightfully received by the receiving Party from a third party rightfully in possession of, and with a right to make an unrestricted disclosure of such information, (d) is disclosed by the disclosing Party to a third party without imposing a duty of confidentiality on the third party, or is independently developed by the receiving Party without the use of any Confidential Information. In addition, a Party may disclose any Confidential Information to the extent required by applicable law or regulation or by order of a court or governmental agency; provided, that prior to disclosure the Party shall use all reasonable efforts to notify the other Party of such pending disclosure and shall provide any reasonable assistance requested by the other Party to maintain the confidentiality of the information. 17.2 The Parties agree that a Party will not have an adequate remedy at law in the event of a disclosure or threatened disclosure of Confidential Information in violation of this Article XVII. Accordingly, in such event, in addition to any other remedies available at law or in equity, a Party shall be entitled to specific enforcement of this Article XVII and to other injunctive and equitable remedies against such breach without the posting of any bond. 17.3 The obligations under this Article XVII shall survive the termination of this Agreement for a period of three years. ARTICLE XVIII MISCELLANEOUS ------------- 18.1 The Parties agree to comply with, conform to, and abide by all applicable and valid laws, regulations, rules and orders of all governmental agencies and authorities, and agree that this Agreement is subject to such laws, regulations, rules and orders. All references in this Agreement to such laws, regulations, rules and orders include any successor provision. If any 20 amendment to or replacement of the same materially alters the benefits, rights, and duties of the Parties hereunder, the Parties agree to negotiate in good faith an amendment to this Agreement to restore the respective positions of the Parties to substantially the same point as existed prior to such amendment or replacement. 18.2 The Parties agree to use their respective best, diligent, and good faith efforts to fulfill all of their obligations under this Agreement. The Parties recognize, however, that to effectuate all the purposes of this Agreement, it may be necessary either to enter into future agreements or to amend this Agreement, or both. In that event, the Parties agree to negotiate with each other in good faith. 18.3 This Agreement constitutes the full and complete agreement of the Parties with respect to the subject matter hereof. Any prior agreements among the Parties with respect to this subject matter are hereby superseded. This Agreement may not be amended, except by the written consent of the Parties. Waiver of any breach of any provision of the Agreement must be in writing signed by the Party waiving such breach or provision and such waiver shall not be deemed to be a waiver of any preceding or succeeding breach of the same or any other provision. The failure of a Party to insist upon strict performance of any provision of this Agreement or any obligation under this Agreement shall not be a waiver of such Party's right to demand strict compliance therewith in the future. 18.4 The headings in this Agreement are inserted for convenience and identification only and are not intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any provision thereof. 18.5 This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. 18.6 This Agreement shall be construed in accordance with the internal laws of the State of Delaware without reference to the choice of law principles, except as subject to the United States Arbitration Act and the Federal Communications Act. 18.7 Except for claims by third parties which fall within the scope of a Party's indemnification obligations, neither Party shall be liable to the other Party for any special, indirect or consequential damages. 18.8 The Parties agree that they will not use the name, service marks or trademarks of the other party or any of its Affiliates in any advertising, publicity releases or sales presentations, without such Party's written consent. Neither Party is licensed hereunder to conduct business under any logo, trademark, service or trade name (or any derivative thereof) of the other Party. 18.9 No Party shall make any public statement or issue any press release concerning the terms of this Agreement except as necessary to comply with requirements of any law, regulation, or the order or judgment of a court or tribunal of competent jurisdiction. If any such public statement or release is so required, and AWS and Tritel mutually agree to such statement or release, the Party making such disclosure shall consult with the other Party prior to making such statement or release and the Party shall use all reasonable efforts, act in good faith, to agree upon a text for such statement or release which is satisfactory to AWS and Tritel. Nothing 21 contained herein is intended to limit the ability of the Parties to make statements regarding the availability to such Party's Customers of the Services to be provided hereunder by the other Party or that such other Party is the provider of such Services. EXECUTED as of the date first written above. AT&T WIRELESS SERVICES, INC. TRITEL, INC. By By ---------------------------- ---------------------------- Name Name --------------------------- --------------------------- Title Title --------------------------- --------------------------- 22 SCHEDULE 1 AT&T MARKETS [See attached] SCHEDULE 2 AFFILIATES OF TRITEL, INC. TRITEL HOLDING CORP., a Delaware corporation TRITEL FINANCE, INC., a Delaware corporation Tritel Communications, Inc., a Delaware corporation TRITEL C/F HOLDING CORP., a Delaware corporation AIRCOM PCS, INC., an Alabama corporation QUINCOM, INC., an Alabama corporation DIGICOM, INC., a Delaware corporation DIGICALL, INC., a Delaware corporation TRITEL A/B HOLDING CORP., a Delaware corporation NEXCOM, INC., a Delaware corporation CLEARCALL, INC., a Delaware corporation GLOBAL PCS, INC., a Delaware corporation CLEARWAVE, INC., a Delaware corporation DIGINET PCS, INC., a Delaware corporation SCHEDULE 3 TRITEL MARKETS [See Attached] EXHIBIT A CUSTOMER SERVICE Promptly following the execution of this Agreement, AWS and Tritel shall negotiate in good faith the applicable customer service standards, with a goal of reaching agreement thereon by April 1, 1999. EXHIBIT B [intentionally left blank] EXHIBIT C SERVICE CHARGES SERVICE RATES: - -------------- Airtime: -------- 1st - 3rd Yr: [Confidential Treatment Requested] per minute or partial minute 4th - 20th Yr: The Average [Confidential Treatment Requested] per minute, whichever is less. Toll: ----- [Confidential Treatment Requested] per minute for interLATA or such other reciprocal lower rate as the Parties negotiate from time to time in light of cost adjustments and the actual toll charges charged by AWS to its customers for such calls; provided, however, that, in no event shall the per minute interLATA rate paid to a Party be less than the per minute rate paid by it to an unaffiliated third party for interLATA service, plus [Confidential Treatment Requested]. [Confidential Treatment Requested] per minute for intraLATA or such other reciprocal lower rate as the Parties negotiate from time to time in light of cost adjustments and the actual toll charges charged by AWS to its customers for such calls; provided, however, that, in no event shall the per minute intraLATA rate paid to a Party be less than the per minute rate paid by it to an unaffiliated third party for intraLATA service, plus [Confidential Treatment Requested]. Rate Reductions: ---------------- After the expiration of the first three years, and each annual anniversary thereafter, the Parties shall negotiate in good faith roaming rates which are reasonably competitive with comparable telecommunications providers and the actual charges by AWS to its customers for such roaming calls. At no time shall the toll or airtime rates be increased. TAXES: - ------ Amount charged Serving Carrier by applicable taxing authority. Miscellaneous: -------------- Service rates are charged in full minute increments with each partial minute rounded to the next full minute. Neither Party shall be charged for incomplete calls, busy calls, feature activations, 611, #611 or interconnect fees. No later than thirty (30) days prior to each anniversary date of this Agreement, each Party shall review the Service rates it offers to similarly-situated facilities-based wireless carriers ("Other Carriers") under similar Intercarrier Roamer Service Agreements. In the event that a Party charges such an Other Carrier a lower Service rate than it charges the other Party under this Agreement, then the Service rates set forth in this Agreement shall be amended by the Parties to include the lower rate, effective upon the anniversary date after which the rate review was made. Definitions: ------------ "Average Home Rate" means the average AWS revenues from access and airtime divided by the applicable AWS minutes of use. EXHIBIT D TECHNICAL DATA METHODS AND PROCEDURES The following information is furnished by___________ to __________ pursuant to Section 6.1 of the Intercarrier Roamer Service Agreement between AT&T Wireless Services, Inc. and _____________________, by __________________: - -------------------------------------------------------------------------------- NPA/NXX LINE RANGE SID/BID CITY START DATE END DATE - -------------------------------------------------------------------------------- By:_________________________ Title:________________________ Issue Date:___________________ The effective date shall be - ---------------------------- EXHIBIT E INTEROPERABILITY STANDARDS Schedule E-1 Core Features ------------- Below is a list and description of the Core Features to be implemented in accordance with this Agreement. These definitions are functional descriptions of the Core Features that shall be implemented. 1. CALL DELIVERY This capability permits a customer to receive incoming calls to his or her phone while in his or her home market or while roaming in any part of the Parties' respective Systems (together, the "Mobile Wireless System"). 2. ROAMING - DO NOT DISTURB This capability permits a Customer, who would normally receive all incoming calls while visiting a mobile switching center that is part of the Mobile Wireless System, to temporarily inhibit the delivery of such calls. Activating this capability has no impact on the Customer's ability to originate calls or on the Customer's ability to receive calls via the roamer access ports. 3. CALL FORWARDING A. CALL FORWARDING IMMEDIATE This capability permits a Customer to send all incoming calls destined for the Customer's phone to another phone number specified by the Customer. Activating this capability has no impact on the Customer's ability to originate calls. When this capability is activated, calls are forwarded regardless of whether the Customer is located within his or her local market or whether the customer is roaming outside of such local market. B. CALL FORWARDING BUSY This capability permits a Customer to send all incoming calls destined for his or her phone to another phone number specified by the Customer when the Customer is engaged in a call. C. CALL FORWARDING NO ANSWER This capability permits a Customer to send all incoming calls destined for his or her phone to another phone number specified by the Customer when the Customer does not answer or when the Customer's phone does not respond to a page. 4. CALL WAITING This capability permits a Customer to receive incoming calls even though a call may already be in progress. 5. VOICEMAIL This capability forwards those Customer's incoming calls which are not answered by the Customer, and for which no other explicit treatment has been activated (for example, those described in item 3, above), to a voice storage and retrieval system. This capability also permits a Customer to subsequently retrieve messages from the Customer's voice mail box. 6. THREE WAY CALLING This capability permits a Customer to add a third party to an active two party call. 7. MESSAGE WAITING INDICATOR This capability is an enhancement to voice mail, and provides the Customer with the current status and the number of unheard voice mail messages waiting in his or her voice mail box. 8. CALLING NUMBER IDENTIFICATION This capability identifies for the Customer either the telephone number or the stored name (in the phone) of the person who is calling. It also permits a Customer to inhibit the ability of a person to whom the Customer is placing a call from identifying either the telephone number or the name of such Customer who is placing the call. 9. WIRELESS OFFICE SERVICE (WOS) A. WIRELESS/PBX INTERWORKING This capability permits WOS customers to have just one published number that delivers all incoming calls to both the wireless and PBX phone. B. PRIVATE NUMBER PLAN This capability permits a defined group of customers to call defined private network extensions by using an abbreviated unique dialing pattern (four digit dialing). C. PRIVATE NETWORKS This capability permits a WOS customer to have his or her own private or semiprivate wireless system. D. LOCATION ID This capability permits the Customer to identify the nature of the system (private, public, or residential) that the Customer is using by displaying the system's name on the phone. 10. SLEEP MODE This capability permits an IS 136 phone to operate in a power saving mode when camping on an IS 136 system, thereby allowing the battery standby time to increase. 11. MESSAGING This capability will permit a caller to deliver both numeric and alphanumeric messages of up to eighty characters to an IS 136 phone. If the Customer to whom the message has been delivered has his or her phone off or is not in the IS 136 coverage area, then messages are stored for future delivery. Text Dispatch Service permits people to call an operator and dictate a message which can then be converted to an alphanumeric message and delivered to the customer. Cut Through Paging permits people to send a numeric message while listening to the customer's voicemail greeting. E-mail messaging teleservice allowing an IS-136 phone to have an e-mail address. 12. AUTHENTICATION This capability allows for the validation of the IS-136 phone's identity. Schedule E-2 Future Core Features -------------------- None Schedule E-3 Performance Standards GENERAL OVERVIEW This Schedule sets out the Network and Reporting Standards established pursuant to Section 10.3.4. These Standards set out the network performance metrics and the process by which such metrics will be established, measured and reported. All metrics which represent a defined standard of quality for acceptable network operations have, or will have, specific targets. I. NETWORK STANDARDS There are three categories of Network Standards: network quality (the `Network Quality Category'); system performance (the `System Performance Category'); and audio quality (the "Audio Quality Category') (each hereafter referred to generally as a "Category'). For each Category of Network Standards, specific metrics have been identified to measure performance in each such Category. The detailed description of how to measure and interpret the metrics for each Category is set out in the following AWS documents (each referred to generally as a "Network Standards Document"), copies of which have been furnished to licensee: NETWORK QUALITY CATEGORY: Document ES-4034, Revision 1.1 dated July 30, 1997 entitled "Network Quality Scorecard User Guide" (as referred to as the "Network Quality Standards Document"). This document is a collection of key network performance and traffic indicators (metrics) that are measured and reported on a regular basis. Network Quality Category standards also shall include satisfaction of the ANS Consistency Test attached to this Schedule E-3. SYSTEM PERFORMANCE CATEGORY: OSS draft document, Revision 0.7, dated June 17, 1997 entitled "Key Metrics for System Performance Document" (as referred to as the "System Performance Standards Document"). This document identifies the network-wide key metrics for Ericsson and Lucent switching systems, as well as cell sites, which will provide a high level assessment of the system. AUDIOQUALITY CATEGORY: Document PP-4027E, Revision 1.1, dated May 30, 1996 entitled "Audio Quality Measurement (AQM)" (as referred to as the "Audio Quality Standards Document"). This document provides the basis for assessing the quality of RF transmission by describing the standards for performing audio quality measurements and the reporting of their results. AWS measures the metrics for the Audio Quality Category using the "Radio Quality Scorecard". The Radio Quality Scorecard is comprised of performance statistics derived from driving the system using the Buzzard tool. These Network Standards Documents are, subject to the terms and conditions of this Agreement including, without limitation, this Schedule E-3, hereby incorporated into and form a part of this Agreement. In the event of any inconsistency between any part of a Network Standards Document and the provisions of this Schedule E-3, the provisions of this Schedule E-3 shall govern. 2 Notwithstanding anything else in this Agreement including, without limitation, this Schedule E-3, the parties acknowledge and confirm that the Network Standards Documents represent the standards and metrics currently identified by AWS as applicable to each Category. Target values for key quality related metrics are contained herein and must be met. In addition, the parties acknowledge and confirm that the Network Standards Documents are subject to revision and such subsequent revisions to these Network Standards Documents, as well as the Call Center Quality Standards, will constitute an additional Category once they are formally implemented to be complied with, in accordance with this Agreement. Set out below is a brief description of each Category of Network Standard and the currently established metrics for each such Category. II. TARGETS FOR NETWORK STANDARDS The following targets are the minimum acceptable levels that apply to key metrics which represent overall network and system quality. These targets are subject to revision and shall be implemented in accordance with this Agreement. % ESTABLISHED CALLS: The percentage of call attempts to and from a mobile phone that result in a successful voice channel assignment. The target goal for this metric is 93%. % DROPPED CALLS: The percentage of established calls, as defined below, which terminate abnormally. The target goal for this metric is a drop call rate of 1.7 % or less. % HANDOFF FAILURES: The target goal for this metric is a handoff failure rate of 1.5%. FAILURES PER ERLANG: The ratio of failed calls to carried traffic, where failed calls are measured utilizing switch counters for originating and terminating traffic, and carried traffic is measured in erlangs. The target goal for this metric is 1.68 SWITCH OUTAGE TIME: The amount of time (in minutes) in a month when subscribers are impacted by a cellular switch outage. Target for this metric is 10 minutes per switch per year, with all ten minutes occurring the maintenance window between 12:00 am and 5:00 am. % BLOCKING - CELL ROUTES: Percentage of time all cellular traffic channels (voice paths in a trunk group) are unavailable within a given measurement interval. Target for this metric is 5%. % BLOCKING - NETWORK ROUTES: Percentage of time all network traffic channels are unavailable within the measurement interval. Target for this metric is 5%. ANS CONSISTENCY TEST: The percentage of successful ANS feature deliveries, based on the following sequence: feature activation/deactivation (when applicable), test call, correct response, and call termination. The target goal for this metric is 96% for all ANS features. This target metric includes feature delivery failures due to call processing failures (i.e. call delivery, call origination, handoff failures, or dropped calls. These failures are estimated to be approximately 4%.) III. REPORTING STANDARDS Reports shall be submitted as specified in the Network Standards Documents and as specified below: Except as specified herein, the metric reports of Audio Quality Network Standards required in this Schedule E-3 (the "Results") will be submitted to AWS no less than quarterly or as otherwise specified in the Network Standards Documents. Reports of Results for Audio Quality Network Standards will be submitted quarterly for markets with 10,000 or more subscribers; for markets with less than 10,000 subscribers, Results need only be reported on a semi-annual basis. All reports of Results shall be submitted by the fifteenth day of the month following the end of the applicable reporting period. Results will be reported to AWS on an aggregated national basis; the aggregated national Results will reflect the distribution of the metric measured across the territory on which the report is based. AWS also may require a breakdown, by market, of any metric. With respect to the timing of the requirement for compliance with any additional metric targets that are specified or revised target goals, such requirements will be implemented as part of this Schedule E-3 once they are formally adopted for internal use by AWS. The parties agree to meet promptly after their effective date to discuss the implementation of these additional specific targets and metric specifications. 3 EX-10.5 8 AMENDED AND RESTATED AGREEMENT AMENDED AND RESTATED AGREEMENT This AGREEMENT is entered into as of the 16th day of April, 1999, by and among Telecorp Communications, Inc., a Delaware corporation, with a principal place of business at 1010 North Glebe Road, 8th Floor, Arlington, Virginia 22201 ("TELECORP"), Triton PCS, Inc., a Delaware corporation, with a principal place of business at 375 Technology Drive, Malvern, Pennsylvania 19355 ("TRITON"), Tritel Communications, Inc., a Delaware corporation, with a principal place of business at 1080 River Oaks Drive, Suite B-100, Jackson., Mississippi 39208 ("TRITEL") and Affiliate License Co., L.L.C. a Delaware limited liability company, with a place of business at 1010 N. Glebe Road, 8th Floor, Arlington, Virginia 22201 ("Holding Company"). WHEREAS, TRITON, TRITEL and TELECORP have individually been licensed by AT&T Corp., through individual Network Membership License Agreements ("AT&T License"), to use certain AT&T service marks ("The Licensed AT&T Marks") in connection with telecommunications services; WHEREAS, the parties desire to use the marks SUNCOM, SUNCOM WIRELESS and other SUNCOM- and SUN-formative marks (collectively, "the SUNCOM Marks") in connection with telecommunications services and in connection with The Licensed AT&T Marks, all in such a way that each party's licensed territory will not overlap with another party's licensed territory; WHEREAS, TRITON and TELECORP entered an Agreement with each other on December 21, 1998 ("the December 21, 1998 Agreement"), in which they stated their intent to expand that Agreement to include TRITEL, assuming that TRITEL satisfied certain conditions enunciated therein; 1 WHEREAS, TRITEL having satisfied such conditions, the parties wish to restate and amend the December 21, 1998 Agreement between TRITON and TELECORP as set forth herein; WHEREAS, TRITON filed U.S. Trademark Application Ser. No. 75/531,537, on August 13, 1998, for the mark SUNCOMM, for wireless telecommunications services; U.S. Trademark Application Ser. No. 75/548,866, on September 4, 1998, for the mark SUNCOM for wireless telecommunications services; U.S. Trademark Application Ser. No. 75/563,055, on October 2, 1998, for the mark SUNCOM WIRELESS and Design, for wireless telecommunications services; U.S. Trademark Application Ser. No. 75/550,276, on September 9, 1998, for the mark SUN WIRELESS, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/568,694, on December 11, 1998, for the mark EVERYTHING UNDER THE SUN, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/590,913, on December 2, 1998, for the mark SUNCOM PLUS, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/591,452, on December 2, 1998, for the mark SUNSURE, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/591,455, on December 2, 1998, for mark SUNCOM CONNECT, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/591,456, on December 2, 1998, for the mark SUNCALL ONE, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/591,457, on December 2, 1998, for the mark SUNCOM PRE-PAY, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/591,488, on December 2, 1998, for the mark SUNBOND, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/595,868, on December 8, 1998, for the mark SUNCOM TECHFUND, for wireless telecommunication services; U.S. Trademark Application Ser. No. 75/626,826, on 2 January 28, 1999, for the mark SUNCOM FLAT RATE, for wireless telecommunication services; and an application filed on March 3, 1999 (serial number not yet assigned), for the mark SUNCOM and Design, for wireless telecommunication services (collectively "TRITON's Applications"); WHEREAS, on April 16, 1999, TRITON became the owner-by-assignment of all right, title and interest in and to the SUNCOM-formative marks and names, as well as the goodwill pertaining thereto, as previously owned by SunCom Telecommunications, Inc. (collectively, "the SunCom Telecommunications Marks," which are a wholly-encompassed subset of the SUNCOM Marks defined above); WHEREAS, TRITON, TELECORP and TRITEL have formed a new entity, the Holding Company, to be owned solely by TRITON, TELECORP and TRITEL, to own, register, and maintain the SUNCOM Marks and to license the SUNCOM Marks to TRITON, TELECORP and TRITEL on the terms stated herein; WHEREAS, TRITON has agreed to transfer all right, title and interest in and to the SunCom Telecommunications Marks and, upon initiation of bona fide use in commerce, the marks covered by TRITON's Applications and TRITON's Applications themselves, as well as the goodwill pertaining to all of the foregoing, to the Holding Company; WHEREAS, the parties desire to use and allow each other to use the SUNCOM Marks for telecommunications services on the terms stated herein and on terms consistent with each party's AT&T License; and 3 NOW, THEREFORE, in consideration of the mutual promises and undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties agree as follows: 1. TRITON, TELECORP and TRITEL shall maintain the Holding Company to own and register the SUNCOM Marks for telecommunications and related services. The Holding Company shall be comprised of TRITON, TELECORP and TRITEL, who shall each appoint a representative to serve on the Board of Directors of the Holding Company. The removal of Directors and the filling of Director vacancies shall be done in accordance with the Holding Company's Operating Agreement. Meetings of the Board of Directors shall be held at locations and as frequently as established in the Holding Company's Operating Agreement. All actions of the Holding Company shall require the unanimous consent of the Board of Directors. 2. The Holding Company shall grant and hereby grants to TRITON, TELECORP and TRITEL, and to no other entity, a royalty-bearing, transferrable license to use the SUNCOM Marks, including without limitation the SunCom Telecommunications Marks transferred pursuant to paragraph 3 by TRITON, on the terms and conditions stated herein, under the quality control standards established under the AT&T License and under such further and reasonable quality control standards approved by the Board of Directors of the Holding Company ("Alliance Quality Standards"), for a term to be established by the Holding Company, and in contemplation of only those royalties necessary to establish, support, and maintain the Holding Company, to maintain trademarks owned by the Holding Company, to defend against all challenges involving the Holding Company's trademarks, and to reimburse expenses of the parties for market research, creative, legal and other expenses associated with the SUNCOM Marks owned by the Holding Company. Said license shall be supplemented from time to time with additional terms and 4 conditions that the parties deem appropriate. The terms and conditions of each party's license shall be substantially identical to the terms and conditions of each other party's licenses and no party shall be granted a license on terms and conditions materially less favorable than any other party or non-party entity. Notwithstanding any of the foregoing, the parties agree that the Board of Directors of the Holding Company shall be empowered to grant royalty-bearing licenses to additional non-party entities on terms and conditions agreeable to the Board of Directors. Within 10 days following the execution of this Agreement, TRITEL and TELECORP shall each pay to the Holding Company $325,000.00 as royalty payments for the use of the SunCom Telecommunications Marks. Within five (5) business days following receipt of those payments, the Holding Company shall pay said $650,000 to TRITON. 3. In consideration of $650,000.00, and the right to use the marks as provided in paragraph 2, above, TRITON hereby assigns all right, title and interest in and to the SunCom Telecommunications Marks, including all of the goodwill pertaining thereto, to the Holding Company. TRITON also acknowledges that it grants to TELECORP effective as of the date of the December 21, 1998 Agreement, and grants to TRITEL as of January 7, 1999, and grants to the Holding Company as of the date hereof, separate perpetual, royalty-free licenses to use the marks covered by TRITON's Applications, under such reasonable quality control standards as are established under each of TELECORP's and TRITEL's AT&T License, respectively. 4. TRITON represents and warrants that Amendments to Allege Use have been filed at the U.S. Patent and Trademark Office in connection with the pending TRITON's Applications for the following marks: SUNCOM, EVERYTHING UNDER THE SUN, and SUNSURE. TRITON hereby assigns to the Holding Company all right, title and interest in and to the marks covered by those three applications, and in and to the mark SUNCOM and Design as identified 5 in the application for registration filed by TRITON on March 3, 1999, together with all of the goodwill and the applications for registration related thereto. Within 10 days following the execution of this Agreement, TRITON agrees to expressly abandon U.S. Trademark Application Ser. No. 75/531,537, for the mark SUNCOMM, as filed by TRITON on August 13, 1998. TRITON further agrees that, with regard to the remainder of TRITON's Applications not addressed above in this paragraph 4 ("Remaining Marks"), TRITON shall, within 30 days following first use in commerce of any of the Remaining Marks by any of the parties, file with the U.S. Patent and Trademark Office Amendments to Allege Use in connection with each of TRITON's Applications in which an applied-for Remaining Mark has been used in commerce, and, 10 days thereafter, assign to the Holding Company all right, title and interest in and to each of the Remaining Marks, together with all of the goodwill and the applications for registration related thereto. Upon the expiration of one year from the execution of this Agreement, TRITON agrees to expressly abandon those of TRITON's Applications for which no party has commenced use in commerce of an applied-for Remaining Mark. 5. Subject to the provisions of paragraphs 12 and 13 below, each party agrees that it shall use the SUNCOM Marks solely in connection with the marks licensed for use pursuant to each party's AT&T License. Each party further agrees that it shall avoid use of the SUNCOM Marks in a way that is prohibited pursuant to the AT&T License or is otherwise reasonably objectionable to AT&T under the AT&T License, and each party further agrees that it shall use the SUNCOM Marks under the quality control standards established in the AT&T License and under such further reasonable quality control standards that may be established by the Board of Directors of the Holding Company. 6 6. Except as otherwise expressly provided by this Agreement or by the license contemplated and granted hereunder, each party agrees that it will not use any trademark, service mark, trade name, insignia, logo or other designation that is confusingly similar to, or a colorable imitation of, any of the SUNCOM Marks. The provisions of this paragraph shall survive termination of this Agreement, as well as termination of a party's license hereunder. 7. Each party agrees that it shall use reasonable efforts to avoid use of the SUNCOM Marks in a manner that may be deemed immoral, deceptive, or scandalous, or otherwise such that the use of the SUNCOM Marks or a composite mark of which SUNCOM is a part, would be unregistrable under 15 U.S.C. ss. 1052. The parties further agree that, as required by the Holding Company, they will use reasonable efforts to use appropriate symbols (i.e., TM, SM, or (R), as appropriate) in connection with the SUNCOM Marks. 8. Each party agrees that the goodwill developed through its use of the SUNCOM Marks under this Agreement and under the license contemplated hereunder shall inure to the Licensor, Holding Company. 9. Each party agrees that it will cooperate with reasonable requests from the Holding Company for actions reasonably necessary to secure and maintain Holding Company's rights in and to the SUNCOM Marks and Holding Company's registration and attempts to register same. Each party further agrees that it will not attack, and will not cause an attack to be taken, against Holding Company's exclusive right, title and interest in and to the SUNCOM Marks, nor will any party challenge or cause a challenge to be taken against the validity of the SUNCOM Marks or any resulting registrations thereof. The provisions of this paragraph shall survive termination of this Agreement, as well as termination of a party's license contemplated hereunder. 7 10. Each party agrees that it shall comply with all applicable laws and regulations of governmental bodies or agencies in its performance under this Agreement and in its performance under the license contemplated and granted hereunder. 11. Each party agrees that the territory in which it can use the SUNCOM Marks ("Territory") is limited to the territory granted to each party by AT&T under the AT&T License. The parties further agree that each party may expand its Territory ("Expanded Territory") to geographic areas in which (1) that party has secured all necessary governmental and other licenses to operate and offer the telecommunications services rendered under the SUNCOM Marks; (2) that party is permitted to use the marks licensed by AT&T under that party's AT&T License; and (3) no other party has already begun to use any of the SUNCOM Marks, pursuant to the terms of this Agreement, in the Expanded Territory, unless such other party consents to the proposed use in the Expanded Territory. 12. Except to the extent that all parties agree in writing otherwise, whenever a party's ("Terminated Party") AT&T License is terminated because of that party's breach of a material term of its AT&T License, or if a party shall otherwise violate a material term of this Agreement, the parties agree that the Terminated Party's right to use the SUNCOM Marks shall also immediately terminate, and the Terminated Party shall immediately cease and desist use of the SUNCOM Marks. If TRITON, TELECORP and TRITEL become Terminated Parties, the parties shall endeavor, through the Holding Company, to establish new terms and conditions for use of the SUNCOM Marks such that the SUNCOM Marks shall not be deemed abandoned. 13. Notwithstanding the provisions of paragraphs 11 and 12, the parties agree that a Terminated Party shall be permitted to continue to use the SUNCOM Marks so long as (1) such 8 continued use does not affect or limit any other party's ability to use or to continue to use the SUNCOM Marks, and (2) the Terminated Party uses its best efforts to establish a new AT&T License. If, after a reasonable time, which reasonableness shall be judged by the non-Terminated Parties, the Terminated Party is unable to re-secure an AT&T License, the Terminated Party shall be permitted to use the SUNCOM Marks anywhere except within the non-Terminated Parties' licensed Territory and only so long as the Terminated Party continues to meet the Alliance Quality Standards, with the understanding that the Alliance Quality Standards may not change after the effective date of termination of the AT&T License unless the changed limitations also apply to non-Terminated Parties and are in no way unique to or tied in any other way to the terms of an AT&T License, and with the additional understanding that upon a party becoming terminated and being unable to resecure an AT&T License as contemplated in this paragraph 13, the non-Terminated Parties' Territories shall, for purposes of this Agreement, no longer be restricted by the geographic scope of their respective AT&T Licenses as otherwise provided in paragraph 11. Notwithstanding the foregoing, the Terminated Party shall cease use of the SUNCOM Marks in the event that a non-Terminated Party is enjoined in a final judgment from using the SUNCOM Marks because of the Terminated Party's continued use of the SUNCOM Marks. 14. The parties agree that they will cooperate with each other and with the Holding Company in challenging any infringements of the SUNCOM Marks and in defending against charges of trademark infringement. Such cooperation shall include providing prompt notice to all other parties and to the Holding Company of all uses of any of the SUNCOM Marks which may create a likelihood of confusion with the use of any of the SUNCOM Marks by the parties or the Holding Company or which are otherwise inconsistent with the terms of, or the parties' 9 intentions under, this Agreement. The parties shall fund efforts to challenge infringements and to defend against charges of infringement, on a pro rata basis, through the Holding Company, and upon such ocher terms agreed to by the Board of Directors. 15. The parties agree that, upon approval by all parties to this Agreement and consistent with the parties' obligations under each party's AT&T License, the Holding Company can permit a party to expand its Territory or otherwise deviate from the terms and conditions stated herein. Said approval from the Holding Company shall be in writing, and a copy of said written approval shall be provided to every other party. 16. To the extent that there are disagreements among the parties about the interpretation or effect of this Agreement, the decision of the Board of Directors of the Holding Company shall control the resolution of such disputes. This Agreement shall be interpreted according to the laws of Delaware. 17. Each party agrees that it shall not sublicense any rights granted hereunder. The parties also agree, however, that the license contemplated hereunder shall inure to the benefit of the parties' successors-in-interest, unless prohibited under the AT&T License. 18. The parties agree that they shall share in the costs, on terms and conditions to be established by the Holding Company, related to advertising and other promotional efforts that are undertaken for the benefit of, and with the knowledge and consent of, multiple parties. 19. The parties agree that the Board of Directors of the Holding Company shall be empowered to establish guidelines and resolve difficulties in relation to operational issues, including but not limited to, internet addresses, telephone contact numbers, misdirected inquiries 10 and customer care calls and other issues related to ensuring that the public is able to efficiently contact a party intended to be contacted. 20. The parties agree that whenever notice is required or permitted to be provided under this Agreement, said notice shall be deemed effective when delivered, via overnight courier, to the following persons: TeleCorp: TeleCorp Communications, Inc. General Counsel 1010 North Glebe Road 8th Floor Arlington, Virginia 22201 With a copy to: Robert W. Zelnick, Esq. McDermott, Will & Emery 600 13th Street, N.W. Washington, DC 20005 Triton: Triton PCS Inc. 375 Technology Drive Malvern, PA 19355 With a copy to: Jay R. Goldstein, Esq. Kleinbard, Bell & Brecker, L.L.P. 1900 Market Street, Suite 700 Philadelphia, PA 19103 Tritel: James H. Neeld, IV, Esq. Tritel Communications, Inc. 1080 River Oaks Drive, Suite B-100 Jackson, MS 39208 With a copy to: Shannon T. Vale, Esq. Arnold, White & Durkee 600 Congress Ave. Suite 1900 Austin, TX 78701 11 Notice to the Holding Company shall be effective when notice is delivered to each of the parties, as provided above. 21. The parties agree that they shall cooperate with each other to produce a joint press release, reasonably acceptable to all parties, to announce the launch of products and services offered or to be offered under any of the SUNCOM Marks. IN WITNESS WHEREOF, the parties hereto hereby execute this Agreement by their authorized representatives as of the date first set forth above. TELECORP COMMUNICATIONS, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- TRITON PCS, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- 12 TRITON COMMUNICATIONS, INC. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- AFFILIATE LICENSE CO., L.L.C. By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- 13 EX-10.6 9 FORM OF EMPLOYMENT AGREEMENT Exhibit 10.6 FORM OF EMPLOYMENT AGREEMENT ---------------------------- EMPLOYMENT AGREEMENT, dated as of January __, 1999, by and between TRITEL, INC., a Delaware corporation (the "Company"), and _____________ ("Executive"). Capitalized terms used herein but not otherwise defined herein shall have the meanings given to such terms in the Stockholders Agreement of the Company, dated of even date herewith (the "Stockholders Agreement"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Company desires to employ Executive and to enter into an agreement embodying the terms of such employment (the "Agreement"); WHEREAS, Executive desires to accept such employment and enter into such Agreement; WHEREAS, ____________ and Executive (collectively, the "Senior Executives") own all of the ownership interests in Tritel Management, LLC, a Mississippi limited liability company ("Manager"); WHEREAS, the Senior Executives have caused the Manager to enter into a Management Agreement with the Company, dated of even date herewith (the "Management Agreement"), pursuant to which the Manager has agreed, among other things, to manage the business of the Company; WHEREAS, pursuant to Section 3.2(e) of the Securities Purchase Agreement, dated as of May 20, 1998 (the "Securities Purchase Agreement"), Executive has become the record and beneficial owner of ______ shares of the Company's Class A Voting Common Stock, par value $.01 per share ("Class A Common Stock") and ________ shares of the Company's Class C Common Stock, par value $.01 per share (the "Class C Common Stock"; collectively, the "Restricted Shares"); WHEREAS, in order to induce the Purchasers referred to in the Securities Purchase Agreement to purchase the securities issued by the Company thereunder, Executive desires to grant to the Company the repurchase rights with respect to the Restricted Shares as referred to in Section 7; and WHEREAS, the Company desires to accept the grant of such repurchase rights. NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Company and Executive, intending to be legally bound, hereby agree as follows: Employment. ----------- Agreement to Employ. Upon the terms and subject to the conditions of this Agreement, the Company hereby employs Executive, and Executive hereby accepts employment by the Company. Employment Period. The term of Executive's employment shall be for a period of five (5) years commencing on the date hereof (the "Commencement Date") and continuing until January 1, 2004 (the "Expiration Date") unless this Agreement shall have been earlier terminated in accordance with Section 5 (the "Employment Period"). Position and Duties. -------------------- During the Employment Period, Executive shall serve as Chairman of the Board and Chief Executive Officer of the Company and be responsible for the duties set forth on Schedule I, reporting directly to the Board of Directors. During the Employment Period, except as set forth herein, Executive shall devote his entire business time to the services required of him hereunder, except for vacation time, personal time and reasonable periods of absence due to sickness, personal injury or other disability. Nothing contained herein shall preclude Executive from devoting reasonable periods of time to (i) the activities described on Schedule II; (ii) serving on a board of directors of a charitable, trade or other similar organization; or (iii) serving on other boards of directors with the consent of the Board of Directors (excluding the Senior Executives who are members of the Company's Board of Directors), in each such case, so long as such activities do not interfere with the performance of Executive's duties hereunder. Compensation. ------------- Base Salary. The Company shall pay Executive an annual salary of _________. Upon the first anniversary hereof, and annually thereafter, the Compensation Committee of the Board of Directors shall review Executive's base salary in light of the performance of Executive and the Company, and may, in its discretion, increase (but not decrease) such base salary by an amount it determines to be appropriate. Executive's annual base salary payable hereunder, as it may be increased from time to time, is referred to herein as "Base Salary". The Company shall pay Executive his Base Salary in equal monthly installments, or in such other installments as the parties may mutually agree. Annual Bonus. For each calendar year or part thereof during the Employment Period, Executive shall be eligible to receive an annual bonus (an "Annual Bonus") equal to up to _____ of his Base Salary based upon the achievement of certain objectives determined by the Compensation Committee of the Board of Directors for such calendar year, payable within thirty (30) days after certification of the Company's financial statements for such year. Benefits, Perquisites and Expenses. ----------------------------------- 2 Benefit Plans. During the Employment Period, Executive shall be eligible to participate in any welfare benefit plan sponsored or maintained by the Company, including, without limitation, any group life, hospitalization, medical, dental, health, accident or disability insurance or similar plan or program of the Company, in each case, whether now existing or established hereafter, to the extent that Executive is eligible to participate in any such plan under the generally applicable provisions thereof. Perquisites. Executive shall be entitled to up to four weeks paid vacation annually in accordance with the Company's policies and practices. Executive shall also be entitled to receive such perquisites as are generally provided to other senior officers of the Company in accordance with the policies and practices of the Company. Business Expenses. The Company shall pay or reimburse Executive for all reasonable expenses incurred or paid by Executive in performance of Executive's duties hereunder, upon presentation of expense statements or vouchers and such other information as the Company may reasonably require. Indemnification. The Company shall, to the maximum extent permitted by applicable law, the Company's certificate of incorporation or its bylaws, indemnify Executive and hold Executive harmless from and against any claim, loss or cause of action arising from or out of Executive's performance as an officer, director or employee of the Company or any of its subsidiaries or in any other capacity, including serving as a fiduciary, in which Executive serves at the request of the Company. If any claim is asserted hereunder for which Executive reasonably believes in good faith he is entitled to be indemnified, the Company shall pay Executive's reasonable legal expenses (or cause such expenses to be paid), as may be required but no less frequently than on a quarterly basis, provided that Executive shall reimburse the Company for such amounts, plus simple interest thereon at the 90-day United States Treasury Bill rate as in effect from time to time, compounded annually, if Executive shall be found by a final, non-appealable order of a court of competent jurisdiction not to be entitled to indemnification. The indemnification obligations of the Company in this paragraph shall survive any termination of this Agreement. Directors and Officers Liability Insurance. The Company has obtained, and shall use all commercially reasonable efforts to maintain, directors and officers liability insurance coverage covering Executive in amounts customary for similarly situated companies in the telecommunications industry. Termination of Employment. -------------------------- Early Termination of the Employment Period. This Agreement may be terminated in any of the following manners: Executive may, upon 30 days' prior written notice to the Company, voluntarily terminate employment with the Company at any time at the sole discretion of Executive (a "Voluntary Termination"); 3 Executive may, upon written notice to the Company, terminate employment with the Company at any time for "Good Reason" (as defined in Section 5(g)) it being agreed that any such termination, although effected by Executive shall not constitute a Voluntary Termination; Executive's employment may, upon written notice to Executive, be terminated by the Company at any time for Cause (as defined in Section 5(f)); This Agreement shall terminate automatically upon Executive's death; The Company may, upon written notice to Executive, terminate this Agreement upon Executive's Disability. As used herein, the term "Disability" shall mean a determination that Executive suffers from illness or other physical or mental impairment that prevents Executive from substantially performing his duties for a period of 90 days during any six-month period during the Employment Period or for 180 days during any 12-month period during the Employment Period. The determination of whether (and, if appropriate, when) a Disability has occurred shall be made by a majority of the Board of Directors of the Company (excluding the Senior Executives that are directors of the Company); The Company may terminate this Agreement immediately in the event of a material breach of the Management Agreement by Manager (as determined by a majority vote of the Board of Directors (excluding the Senior Executives that are directors of the Company)), which has not been cured within thirty (30) days following notice thereof from the Company, or the failure of the Company to meet any of the objectives set forth on Schedule III-A to this Agreement; or The Company may terminate this Agreement immediately in the event of the failure of the Company to meet any of the objectives set forth in Schedule III-B to this Agreement. Benefits Payable Upon Termination. ---------------------------------- Following the end of the Employment Period pursuant to any manner described in Section 5(a) or for any other reason, the Company shall pay to Executive (or, in the event of his death, his surviving spouse, if any, or his estate): (A) any Base Salary earned, but unpaid, for services rendered to the Company on or prior to the date on which the Employment Period ended, and (B) amounts which are vested or which Executive is otherwise entitled to receive under the terms of or in accordance with any plan, policy, practice or program of, or any contract or agreement with, the Company at or subsequent to the date the Employment Period ends without regard to the performance by Executive of further services or the resolution of a contingency. Following the end of the Employment Period other than pursuant to a termination described in Sections 5(a)(i), (iii) or (vii) (in respect of which Executive shall not be entitled to any payments under this Section 5(b)(ii)), Executive shall be entitled to receive the lesser of (x) his Base Salary, and (y) the balance of his Base Salary through the Expiration Date. In the event that the Employment Period shall end pursuant to a termination by Executive pursuant to Section 4 5(a)(ii) or a termination by the Company pursuant to Section 5(a)(vi), the Executive shall also be entitled to receive the Annual Bonus (if earned in accordance with Section 3(b) of this Agreement). The amount of the Annual Bonus shall be determined as follows: (I) In the event that the date of termination is on or prior to June 30 of any applicable calendar year, the amount of the Annual Bonus shall be equal to a pro rata portion (based upon the actual number of days during such calendar year that this Agreement shall have been in effect) of the Annual Bonus payable in respect of such year (determined based upon the achievement by the Company of the objectives for all of such calendar year). (II) In the event that the date of termination is after June 30 of any applicable calendar year, the amount of the Annual Bonus shall be equal to the Annual Bonus payable in respect of such year (determined based upon the achievement by the Company of the objectives for all of such calendar year). Timing of Payments. ------------------- Amounts payable pursuant to Section 5(b)(i)(A) and, except as provided below upon termination of the Management Agreement, payments of Base Salary pursuant to Section 5(b)(ii) shall be payable monthly in monthly installments in arrears commencing on the last day of the month following the end of the Employment Period. In the event that Executive's employment shall be terminated pursuant to Section 5(a)(ii) or (vi), the Annual Bonus payable pursuant to Section 5(b)(ii) shall, except as provided below upon termination of the Management Agreement, be paid 30 days after the certification of the Company's financial statements for such year. In the event that the Management Agreement is terminated concurrently with the termination of this Agreement (A) the Annual Bonus (if earned in accordance with Section 3(b) of this Agreement) shall be payable on the later to occur of (x) 30 days after the certification of the Company's financial statements for such year, and (y) the last day of the month after which (a) a New Provider (as defined in the Management Agreement) shall be retained by the Company in accordance with Section 5(e)(i)of the Management Agreement, and (b) the Senior Executives shall have nominated a Successor Control Group (as defined in the Management Agreement) acceptable to the Board of Directors in its sole discretion (excluding the Senior Executives that are directors of the Company) in accordance with Section 5(e)(ii) of the Management Agreement, and (B) the Base Salary payable pursuant to Section 5(b)(ii) shall be payable monthly in monthly installments on the last day of the month after which (I) a New Provider shall be retained by the Company in accordance with Section 5(e)(i) of the Management Agreement and (II) the Senior Executives shall have nominated a Successor Control Group reasonably acceptable to the Board of Directors in its sole discretion (excluding the Senior Executives that are directors of the Company) in accordance with Section 5(e)(ii) of the Management Agreement. Vested benefits referred to in clause (B) of Section 5(b)(i) shall be payable in accordance with the terms of the plan, policy, practice, program, contract or agreement under which such benefits have accrued. The Company shall be entitled to set off against the amounts payable to the Executive following the termination of this Agreement pursuant to Section 5(b)(ii), any amounts earned by 5 either Executive in other employment after the termination of this Agreement; provided, however, that Executive shall not be required, as a condition to the receipt of such payment pursuant to Section 5(b)(ii), to seek such other employment. Continuing Obligations. After receipt of written notice of termination, but prior to the effective date of such termination, Executive shall continue to perform his duties under this Agreement unless specifically instructed to discontinue such performance. In the event of termination, Executive and the Company shall remain liable for their respective obligations accrued under this Agreement prior to the effective date of termination. Definition of Cause. For purposes of this Agreement, "Cause" means only: Executive's indictment or conviction of a felony; Fraud, misappropriation or embezzlement by Executive against the Company or any subsidiary or affiliate of the Company; or Executive's willful misconduct or gross negligence in connection with his employment hereunder which has materially adversely affected the Company, monetarily or otherwise, as determined by a majority vote of the Board of Directors of the Company (excluding Executive and other Company executives that are directors of the Company). Definition of Good Reason. For purposes of this Agreement "Good Reason" means any of the following: The Company fails to make any payment when due pursuant to Section 3 within thirty (30) days following Executive's written notice to the Company of such failure; A material breach of this Agreement by the Company (other than a payment default) which has not been cured within thirty (30) days following notice thereof from the Company; Executive is demoted or removed from his/her respective offices or there is a material diminishment of Executive's responsibilities, duties or status which diminishment is not rescinded within 30 days after the date of receipt by the Board of Directors of the Company of Executive's written notice referring to this provision and describing such diminishment; or The Company relocates its principal offices without Executive's consent to a location more than 50 miles from the principal offices of the Company in Jackson, Mississippi. Noncompetition and Confidentiality. ----------------------------------- Noncompetition. During the Employment Period and for one year thereafter, Executive shall not, without the consent of the Company, assist or become associated with any person or entity, whether as a principal, partner, employee, consultant or shareholder (other than as a holder of not in excess of 5% of the outstanding voting shares of any publicly traded company) 6 that is actively engaged in the business of providing mobile wireless telecommunications services in the Territory (as defined in the Company's Stockholders' Agreement); provided, however, that in the event the Employment Period is terminated (x) by Executive pursuant to Section 5(a)(ii) or by the Company pursuant to Section 5(a)(vi) Executive shall have no obligations pursuant to this Section 6(a), and (y) by the Company pursuant to Section 5(a)(vii) such one-year period shall be three (3) months, subject to the right of the Company, upon written notice given to Executive, to extend such three (3) month period on a month-to-month basis for up to an additional nine (9) month period on the condition that the Company pays to Executive his Base Salary during such three (3) month period and for any such additional period that the Company elects to extend Executive's obligations pursuant to this Section 6(a). Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from a governmental body or agency, Executive shall not disclose any trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, management organization (including data and other information relating to members of the Board of Directors and management), operating policies and manuals, business plans, financial records, packaging design or other financial, commercial, business or technical information relating to the Company or any of its subsidiaries or affiliates (collectively, "Confidential Information"), to any third person, unless such Confidential Information has been previously disclosed to the public by the Company or is in the public domain (other than by reason of Executive's breach of this Paragraph 6(b)), except that Executive may disclose Confidential Information to the extent advisable in his sole discretion in connection with (i) the performance of Executive's duties hereunder, or (ii) the issuance of Company securities, or (iii) obtaining financing for the Company, or (iv) the enforcement of Executive's rights under this Agreement, or (v) any disclosures that may be required by law, including securities laws. Inventions. Executive hereby sells, transfers and assigns to the Company all of the right, title and interest of Executive in and to all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable material, made or conceived by Executive, solely or jointly, or in whole or in part, during the Employment Term which (i) relate to methods, apparatus, designs, products, processes or devices sold, leased, used or under construction or development by the Company or any subsidiary or affiliate or (ii) otherwise relate to or pertain to the business, functions or operations of the Company or any subsidiary or affiliate, or (iii) arise (wholly or partly) from the efforts of Executive during the Employment Period. Executive shall communicate promptly and disclose to the Company, in such form as the Company reasonably requests, all information, details and data pertaining to the aforementioned inventions, ideas, disclosures and improvements; and, whether during the Employment Period or thereafter, Executive shall execute and deliver to the Company (at the Company's sole cost and expense) such formal transfers and assignments and such other papers and documents as may be required of Executive to permit the Company to file and prosecute the patent applications and, as to copyrightable material, to obtain copyright thereon. 7 Company Property. Promptly following Executive's termination of employment, Executive shall return to the Company all property of the Company, and all copies thereof in Executive's possession or under his control, and all tangible embodiments of Confidential Information in Executive's possession in whatever media such Confidential Information is maintained. Non-Solicitation of Employees. During the Employment Period and for one year thereafter, Executive will not directly or indirectly induce any employee of the Company or any of its subsidiaries or affiliates to terminate employment with such entity, and will not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or a subsidiary thereof, unless such person shall have ceased to be employed by such entity for a period of at least six months; provided, however, that nothing contained in this Agreement shall prevent Executive from engaging in a general solicitation for employment that is not directed at employees of the Company or any of its subsidiaries or affiliates. Injunctive Relief with Respect to Covenants. Executive acknowledges and agrees that the covenants and obligations of Executive with respect to noncompetition, inventions, confidentiality and Company property contained in this Section 6 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Executive agrees that the Company shall be entitled to an injunction, restraining order, or such other equitable relief as a court of competent jurisdiction may deem necessary or appropriate to restrain Executive from committing any violation of the covenants and obligations contained in this Paragraph 6. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. Vesting and Repurchase of Unvested Shares, Etc. ----------------------------------------------- General. Executive by his acceptance of the Restricted Share certificates bearing the legend set forth in paragraph (e) below, agrees that the Restricted Shares shall be subject to repurchase by the Company at the Repurchase Price in accordance with the terms of this Section 7. As used in this Section 7, the following terms have the following meanings: "Automatic Repurchase Event" means (v) the consummation of a Company Merger after giving effect to which the Cash Equity Investors set forth in the Securities Purchase Agreement, in the aggregate, shall beneficially own on a Fully Diluted Basis less than 33% of the capital stock or other equity interests in the surviving entity, (w) the consummation of a Company Sale, (x) the termination of Executive's employment pursuant to this Agreement or any agreement supplementing, amending or extending this Agreement, (y) if and only if the IPO Date (as defined in the Stockholder Agreement) has theretofore occurred, the seven (7) year anniversary of the date hereof, and (z) if and only if the IPO Date has not occurred prior to the seven (7) year anniversary of the date hereof, the IPO Date. 8 "Base Price" means the initial purchase price per share of the Company's Series C Preferred Common Stock, $.01 par value, paid by a Cash Equity Investor on the date hereof (including the Unfunded Commitment) appropriately adjusted for stock splits, stock dividends and similar changes in capitalization (but excluding changes in the liquidation preference of the Preferred Stock of the Company in accordance with the Restated Certificate). "Base Shares" means ______ shares of Class A Common Stock and ________ shares of Class C Common Stock. "Equity Kicker Shares" means a number of Restricted Shares equal to _________ shares of Class A Common Stock. "Fully Diluted Basis" means, with respect to the shares of Common Stock outstanding, all of the shares of Common Stock then outstanding (regardless of whether subject to repurchase), plus (without duplication) all the shares of Common Stock issuable upon the exercise of outstanding options or convertible securities (excluding the Company's Series A Preferred Stock, $.01 par value); provided, that for the purpose of calculating the number of shares of Common Stock outstanding on a Fully Diluted Basis in order to determine whether the Internal Rate of Return pursuant to Section 7(b)(ii) equals (A) more than 25% but less than 35%, none of the Equity Kicker Shares shall be deemed to be outstanding, and (B) more than 35%, one-half of the Equity Kicker Shares shall be deemed to be outstanding. "Market Price" means in the case of (I) an Automatic Repurchase Event (A) specified in clause (v) or (w) of the definition thereof, the per share consideration paid or payable to the holders of Common Stock in connection with such event, (B) specified in clause (x) of the definition thereof if the IPO Date shall not have occurred prior to the date of termination, (1) the fair market value of all of the assets of the Company and its Subsidiaries at the time of any calculation of such value, less (a) any expenses which would be incurred solely in connection with the disposition of such assets, (b) the aggregate amount of all liabilities of the Company and (c) the aggregate redemption price of all outstanding shares of all series of Preferred Stock of the Company, all as determined in good faith by the Board of Directors (excluding any Senior Executive that is a director of the Company), divided by (2) the number of shares of Common Stock outstanding on a Fully Diluted Basis; provided, however, if the number of Base Shares or Equity Kicker Shares being repurchased by the Company from the Senior Executives on the date of determination of Market Price exceeds .5% of the Common Stock on a Fully Diluted Basis, such determination shall be determined by an investment banking firm selected by the Board of Directors of the Company and reasonably acceptable to the Executive, (C) specified in clause (x) of the definition thereof if the IPO Date shall have occurred on or prior to the date of termination, the average closing price of the Class A Common Stock during the ten (10) trading days prior to such date of termination, (D) specified in clause (y) of the definition thereof, the average closing price of the Class A Common Stock during the ten (10) trading days prior to such seventh (7th) anniversary of the date hereof, or (E) specified in clause (z) of the definition thereof, the per share offering price of the Class A Common Stock issued in connection with the public offering occurring on the IPO Date, or (II) a Trigger Date (A) which is on the IPO Date, 9 the per share offering price of the Class A Common Stock issued in connection with the public offering occurring on the IPO Date, or (B) which is after the IPO Date, the average closing price of share of Class A Common Stock during the ten (10) trading days prior to such Trigger Date. "Non-Released Base Shares" means the number of shares of Class A Common Stock initially issued to Executive as Base Shares less the aggregate number of Executive's Base Shares that have (x) become Triggered Shares, or (y) been repurchased by the Company. "Non-Released Equity Kicker Shares" the number of shares of Class A Common Stock initially issued to Executive as Equity Kicker Shares less the aggregate number of Executive's Equity Kicker Shares that have (x) become Triggered Shares, or (y) been repurchased by the Company. "Repurchase Price" means $.01 per share. "Trigger Date" means the date of delivery to the Company by Executive of a Trigger Notice that refers to Base Shares and/or Equity Kicker Shares. "Trigger Notice" means a notice given by Executive with respect to a specified number of Base Shares or Equity Kicker Shares to determine the number of Triggered Shares. "Trigger Shares" means Restricted Shares set forth in a Trigger Notice and not repurchased in connection with such notice pursuant to this Section 7; provided, however, that Base Shares that are not so repurchased shall, to the extent applicable, continue to be subject to vesting in accordance with Schedule IV annexed hereto. Repurchase of Base Shares and Equity Kicker Shares. --------------------------------------------------- Repurchase of Base Shares upon Automatic Repurchase Event. Upon an Automatic Repurchase Event, Executive shall sell to the Company, and the Company shall purchase from Executive, the aggregate of (I) all Base Shares that shall not have vested in accordance with Schedule IV, plus (II) a number of Base Shares equal to the number of Non-Released Base Shares beneficially owned by Executive multiplied by a fraction, the numerator of which is the Base Price and the denominator of which is the Market Price on the date of such event, plus (III) the number of Restricted Shares subject to repurchase pursuant to Sections 7(b)(iv). Repurchase of Equity Kicker Shares upon Automatic Repurchase Event. Upon an Automatic Repurchase Event specified in clause (x) of the definition thereof occurring prior to the IPO Date with respect to Executive, Executive shall sell to the Company, and the Company shall purchase from Executive, all Equity Kicker Shares. Upon any Automatic Repurchase Event other than an event specified in clause (x) of the definition thereof occurring prior to the IPO Date with respect to Executive, Executive shall sell to the Company, and the Company shall purchase from Executive, the aggregate of (I) the percentage of Executive's Non-Released Equity Kicker Shares set forth opposite the Internal Rate of Return realized by the Cash Equity Investors as set forth on the chart below as of the date of the Automatic Repurchase Event: 10 Internal Rate of Return Percentage of Non-Released Realized by Cash Equity Equity Kicker Shares to be Investors Repurchased ----------------------- -------------------------- Less than 25% 25% or more but less than 35% 35% or more , plus (II) a number of Non-Released Equity Kicker Shares beneficially owned by Executive (less any Equity Kicker Shares, if any, repurchased pursuant to clause (I) hereof) multiplied by a fraction, the numerator of which is the Base Price and the denominator of which is the Market Price on the date of such event, plus (III) the number of Restricted Shares subject to repurchase pursuant to Sections 7(b)(iv) that are not repurchased pursuant to clause (i) above. For the purpose of this Section 7, the Cash Equity Investors will be deemed to have "realized an Internal Rate of Return" of any percentage specified, as of any date, when (i) the aggregate amount of all distributions (but not including proceeds from sales of Common Stock) actually made in respect of the Cash Equity Investors' Common Stock, plus an amount equal to interest thereon at the rate of 10% per annum, compounded annually, from the date each such distribution is made to and including the date of the calculation, plus the product of the Market Price multiplied by the number of shares of Common Stock beneficially owned by the Cash Equity Investors on the date hereof (as adjusted for stock splits, stock dividends and similar changes in capitalization), is equal to (ii) the aggregate amount of all capital contributions made by the Cash Equity Investors, plus an amount equal to interest thereon at such percentage per annum, compounded annually, from the date each such capital contribution is made to and including such date of calculation. Repurchase of Base Shares or Equity Kicker Shares on Trigger Date. ------------------------------------------------------------------ On any Trigger Date Executive may elect, by delivery of a Trigger Notice with respect to a specified number of Base Shares and/or Equity Kicker Shares to determine the number of Triggered Shares. Within 20 days of the giving of a Trigger Notice the Company shall repurchase from Executive, and Executive shall sell to the Company for the Repurchase Price, (x) in the case of Base Shares, a number of Base Shares specified in the Trigger Notice multiplied by a fraction of the numerator of which is the Base Price and the denominator of which Market Price on the date of such notice and (y) in the case of Equity Kicker Shares (I) first, a percentage of the number of such Equity Kicker Shares specified in the Trigger Notice set forth opposite the Internal Rate of Return (determined as specified in clause (ii) above) realized by the Cash Equity Investors as set forth on the chart below in connection with the Trigger Notice as of the Trigger Date: 11 Internal Rate of Return Percentage of Non-Released Realized by Cash Equity Equity Kicker Shares to be Investors Repurchased ----------------------- -------------------------- Less than 25% 25% or more but less than 35% 35% or more , plus (II) a number of Executive's Equity Kicker Shares (less any Equity Kicker Shares, if any, repurchased pursuant to clause I above) multiplied by a fraction, the numerator of which is the Base Price and the denominator of which is the Market Price on the date of such notice. Each Trigger Notice shall be with respect to at least (x) 20% of the Base Shares initially issued to Executive, or (y) at least 50% of the Equity Kicker Shares initially issued to Executive. A Trigger Notice may be delivered (x) not less than twenty (20) Business Days (as such term is defined in the Stockholders Agreement) prior to the IPO Date if the Trigger Date is the IPO Date, or (y) any Business Day occurring during the ten (10) Business Day period commencing ten (10) Business Days following the Company's public announcement of its earnings for the (i) then most recently completed fiscal year, and (ii) the six-month period ended June 30 of each fiscal year. No more than one Trigger Notice may be delivered by Executive within any twelve (12) month period. No Trigger Notice may be delivered by Executive prior to the IPO Date. Executive may only deliver a Trigger Notice with respect to Equity Kicker Shares after a Trigger Notice with respect to all Base Shares beneficially owned by such holder shall have been delivered to the Company. In connection with any such repurchases of Base Shares, the Base Shares to be repurchased by the Company shall proportionately reduce the number of Base Shares initially issued to Executive and allocable to each Vesting Date Event set forth on Schedule IV. Additional Repurchase Rights of the Company. -------------------------------------------- Anything to the contrary contained herein notwithstanding, in the event this Agreement is terminated by the Company pursuant to Section 5(a)(iii), Executive shall sell to the Company, and the Company shall repurchase from Executive, all of the Restricted Shares (whether or not vested). In the event that the Management Agreement is terminated and the Manager does not approve a "New Provider" (as such term is defined in the Management Agreement) within five (5) business days of notice of such New Provider's nomination by the Board of Directors, in accordance with Section 5(e)(i) of the Management Agreement, then for each successive thirty (30) day period or portion thereof following such five (5) business day period that a New Provider shall not have been approved by the Manager, Executive shall sell to the Company 50% of the Restricted Shares then owned by Executive (after giving effect to all other repurchases pursuant to this Section 7). 12 In the event that Executive and the other Senior Executives do not nominate a Successor Control Group reasonably acceptable to the Board of Directors of the Company in its sole discretion (excluding the Senior Executives that are directors of the Company) in accordance with such Section 5(e)(ii) of the Management Agreement within the five (5) business day period set forth in the first sentence of Section 5(e)(ii) of the Management Agreement, then for each successive 30 day period or portion thereof that Executive and the other Senior Executives shall not have nominated a Successor Control Group reasonably acceptable to the Board of Directors of the Company in its sole discretion (excluding the Senior Executives that are directors of the Company), the Executive shall sell to the Company after the expiration of each 30 day period, in addition to and after giving effect to all other repurchases by the Company of Restricted Shares pursuant to this Section 7 (including Section 7(b)(iv)(B)), an additional 50% of the Restricted Shares then owned by Executive. Purchase Price; Closing of Repurchase; Assignment of Repurchase Right. Any repurchase pursuant to this Section 7 shall be for the Repurchase Price. The closing of a purchase and sale of Repurchased Shares shall take place on a date mutually agreed by Executive and the Company, but in no event later than 20 days after (i) the date that employment of Executive shall have terminated or, in the case of a repurchase pursuant to Sections 7(b)(iv), the end of any 30-day period referred to in Section 7(b)(iv), or (ii) in the case of Automatic Repurchase Event other than termination of employment of Executive, the occurrence of the applicable event, or (iii) the date of a Trigger Notice (except that in connection with a Trigger Notice given with respect to the IPO Date, the closing shall take place on the IPO Date). At such closing, the Company shall deliver to the Executive a check in the amount of the aggregate Repurchase Price and, upon delivery thereof, the Company shall become the legal and beneficial owner of the Restricted Shares and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name such shares being repurchased by the Company. Whenever the Company shall have the right to repurchase Restricted Shares hereunder, the Company may designate and assign one or more employees, officers, directors or shareholders of the Company or other persons or organizations to exercise all or a party of the Company's repurchase rights under this Agreement and purchase all or a part of such Shares. Escrow of Shares. The Certificate(s) representing all Restricted Shares shall be held by the Secretary of the Company as escrow holder (the "Escrow Holder"), along with a stock power executed by the Executive in blank. The Escrow Holder is hereby directed to permit transfer of such shares only in accordance with this Agreement and the Stockholders Agreement. In the event further instructions are desired by the Escrow Holder, he shall be entitled to rely upon written directions of the Board of Directors of the Company (excluding any Senior Executive that is a director of the Company). The Escrow Holder shall have no liability for any act or omission hereunder while acting in good faith in the exercise of his own judgment. The Company agrees to indemnify and hold Escrow Holder free and harmless from and against any and all losses, costs, damages, liabilities or expenses, including counsel fees to which Escrow Holder may be put or which he may incur by reason of or in connection with the escrow arrangement hereunder. If the Company or any assignee repurchases any of the Restricted Shares pursuant to this Section 7, the Escrow Holder, upon receipt of written notice of such 13 repurchase from the proposed transferee, shall take all steps necessary to accomplish such repurchase. From time to time, upon Executive's request, Escrow Holder shall: (i) cancel the certificate(s) held by the Escrow Holder and representing Restricted Shares, (ii) cause new certificate(s) to be issued representing the number of Restricted Shares no longer subject to repurchase pursuant to paragraphs (i), (ii) and (iii) of Section 7(b), which certificate(s) the Escrow Holder shall deliver to Executive, and (iii) cause new certificate(s) to be issued representing the balance of the Restricted Shares, which certificate(s) shall be held in escrow by the Escrow Holder in accordance with the provisions of this Section 7(d). Subject to the terms hereof, Executive shall have all the rights of stockholder with respect to the Restricted Shares while they are held in escrow, including without limitation, the right to vote the Restricted Shares and receive any cash dividends declared thereon. If, from time to time during the term of the Company's repurchase right, there is (i) any stock dividend, stock split or other change in the Restricted Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which such Executive is entitled by reason of his ownership of the Restricted Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as "Restricted Shares" for purposes of this Agreement and the Company's repurchase right. Legends. The share certificates evidencing the Restricted Shares shall be endorsed with the following legend (in addition to any legend required to be placed thereon by applicable federal or state securities laws or the Company's Stockholders Agreement): THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A MANAGEMENT AGREEMENT BETWEEN THE COMPANY AND AN AFFILIATE OF THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, WHICH PROVIDES, AMONG OTHER THINGS, FOR THE REPURCHASE BY THE COMPANY OF THE SHARES REPRESENTED BY THIS CERTIFICATE. No Conflict With Prior Agreements; Due Authorization. ----------------------------------------------------- Executive represents to the Company that neither Executive's execution of this Agreement or commencement of employment hereunder nor the performance of Executive's duties hereunder conflicts with any contractual commitment on Executive's part to any third party. The Company represents to Executive that it is fully authorized and empowered by action of the Company's Board of Directors to enter into this Agreement and that performance of its obligations under this Agreement will not violate any agreement between it and any other person, firm or other entity. Nothing herein shall be construed to require Executive to use or disclose any information that he is prohibited from using or disclosing as a result of legal or contractual obligations. Miscellaneous. -------------- 14 Survival. Sections 4(d), 5, 6, 7 and 9 shall survive the termination hereof. Binding Effect. This Agreement shall be binding on the Company and any person or entity which succeeds to the interest of the Company (regardless of whether such succession occurs by operation of law) by reason of the sale of all or a portion the Company's stock, a merger, consolidation, or reorganization involving the Company or a sale of the assets of the business of the Company (or portion thereof) in which Executive performs a majority of his services. This Agreement shall also inure to the benefit of Executive's heirs, executors, administrators and legal representatives. Assignment. Except as provided under Section 9(b), neither this Agreement nor any of the rights or obligations hereunder shall be assigned or delegated by any party hereto without the prior written consent of the other party, except that the Company may delegate to any of its direct or indirect wholly owned subsidiaries its obligations to provide compensation and benefits hereunder, provided no such delegation shall relieve the Company of its obligations hereunder. Entire Agreement. This Agreement, together with the Schedules attached hereto, constitutes the entire agreement between the parties hereto with respect to the matters referred to herein, and no other agreement, oral or otherwise, shall be binding between the parties unless it is in writing and signed by the party against whom enforcement is sought. There are no promises, representations, inducements or statements between the parties other than those that are expressly contained herein. Executive acknowledges that he is entering into this Agreement of his own free will and accord, and with no duress, that he has been represented and fully advised by competent counsel in entering into this Agreement, that he has read it and that he understands it and its legal consequences. No parol or other evidence may be admitted to alter, modify or construe this Agreement, which may be altered, modified or amended only by a writing signed by the parties hereto. Severability; Reformation. In the event that one or more of the provisions of this Agreement shall become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby. In the event that any of Sections 6(a), (b) or (c) is not enforceable in accordance with its terms, Executive and the Company agree that such Section shall be reformed to make such Section enforceable in a manner which provides the Company the maximum rights permitted at law. Waiver. Waiver by any party hereto of any breach or default by the other party of any of the terms of this Agreement shall not operate as a waiver of any other breach or default, whether similar to or different from the breach or default waived. No waiver of any provision of this Agreement shall be implied from any course of dealing between the parties hereto or from any failure by either party hereto to assert its or his rights hereunder on any occasion or series of occasions. Notices. Any notice required or desired to be delivered under this Agreement shall be in writing and shall be delivered personally against receipt, by courier service or by registered mail, return receipt requested, and shall be effective upon actual receipt by the party to which such 15 notice shall be directed, and shall be addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof): If to the Company, to the attention of its Board of Directors at the Company's principal executive offices. If to Executive: Headings. Headings to paragraphs in this Agreement are for the convenience of the parties only and are not intended to be part of or to affect the meaning or interpretation hereof. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local income or employment tax laws or similar statutes or other provisions of law then in effect. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. Resolution of Disputes. All disputes, controversies and claims arising in connection with this Agreement that are not settled by agreement between the parties shall be finally settled under the Commercial Arbitration Rules of the American Arbitration Association ("AAA") in effect from time to time. A single arbitrator shall be appointed by agreement between the parties or, failing such agreement, by AAA. The arbitrator may grant any remedy that (s)he deems just and equitable within the scope of this Agreement, including specific performance. The award of the arbitrator shall be final and binding and judgment thereon may be entered in any court having jurisdiction. The costs and expenses (including reasonable attorney's fees) of the prevailing party shall be borne and paid by the party that the arbitrator determines is the non-prevailing party. 16 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto set his hand as of the day and year first above written. TRITEL, INC. By: ----------------------------------- Name: Title: EXECUTIVE: -------------------------------------- 17 SCHEDULE I ---------- Duties ------ 18 SCHEDULE II Permitted Activities -------------------- 19 SCHEDULE III-A Objectives ---------- [TO BE ESTABLISHED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS] 20 SCHEDULE III-B Objectives ---------- 21 SCHEDULE IV ----------- Vesting Schedule ---------------- Vesting Date Event Percent of Base Shares ------------------ ----------------------- Commencement Date Second Anniversary Third Anniversary Fourth Anniversary Fifth Anniversary Completion of Year 1 and Year 2 of Minimum Build-Out Plan Completion of Year 3 of Minimum Build- Out Plan Total 100% Base Shares that are shares of Class C Common Stock shall vest prior to the vesting of any shares of Class A Common Stock. Accelerated Vesting - ------------------- o Upon termination of the Employment Agreement by the Company pursuant to Section 5(a)(vii) of this Agreement, the Base Shares that would have vested on the immediately following Anniversary Date of such termination shall vest. o Upon termination of the Employment Agreement on or prior to the third anniversary of the date hereof by the Company pursuant to Section 5(a)(vi) of this Agreement or by Executive pursuant to Section 5(a)(ii) of this Agreement, an additional number of Base Shares shall vest such that 75% of the Base Shares shall have vested. o Upon termination of the Employment Agreement after the third anniversary of the date hereof by the Company pursuant to Section 5(a)(vi) of this Agreement or by Executive pursuant to Section 5(a)(ii) of this Agreement, 100% of the Base Shares shall vest. o Upon termination of the Employment Agreement by reason of a Company Merger or Company Sale, all Base Shares shall immediately vest. 22 EX-10.7 10 1999 STOCK OPTION PLAN Exhibit 10.7 TRITEL, INC. 1999 STOCK OPTION PLAN 1. PURPOSE. The purpose of this Plan is to attract and retain qualified officers, directors and other key employees of, and consultants to, Tritel, Inc. (the "Company") and its Subsidiaries and to provide such persons with appropriate incentives. The Company has adopted the Plan effective as of January 7, 1999, and unless extended by amendment in accordance with the terms of the Plan, no Option Rights, Appreciation Rights, Restricted Shares or Deferred Shares will be granted hereunder after the tenth anniversary of such effective date. 2. DEFINITIONS. As used in this Plan, "APPRECIATION RIGHT" means a right granted pursuant to Section 5 of this Plan, including a Free-standing Appreciation Right and a Tandem Appreciation Right. "BASE PRICE" means the price to be used as the basis for determining the Spread upon the exercise of a Free-standing Appreciation Right. "BOARD" means the Board of Directors of the Company. "CODE" means the Internal Revenue Code of 1986, as amended from time to time. "COMMITTEE" means the Compensation Committee of the Board of Directors, as described in Section 13(a) of this Plan, or, in the absence of a Compensation Committee, the full Board. "COMMON SHARES" means (i) shares of the Class A Common Stock, par value $.01 per share, of the Company and (ii) any security into which Common Shares may be converted by reason of any transaction or event of the type referred to in Section 9 of this Plan. "DATE OF GRANT" means the date specified by the Committee on which a grant of Option Rights or Appreciation Rights or a grant or sale of Restricted Shares or Deferred Shares shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto. "DEFERRAL PERIOD" means the period of time during which Deferred Shares are subject to deferral limitations under Section 7 of this Plan. "DEFERRED SHARES" means an award pursuant to Section 7 of this Plan of the right to receive Common Shares at the end of a specified Deferral Period. "FREE-STANDING APPRECIATION RIGHT" means an Appreciation Right granted pursuant to Section 5 of this Plan that is not granted in tandem with an Option Right or similar right. "INCENTIVE STOCK OPTION" means an Option Right that is intended to qualify as an "incentive stock option" under Section 422 of the Code or any successor provision thereto. "MARKET VALUE PER SHARE" means the fair market value of the Common Shares as determined by the Committee from time to time. "NONQUALIFIED OPTION" means an Option Right that is not intended to qualify as an Incentive Stock Option. "OPTIONEE" means the person so designated in an agreement evidencing an outstanding Option Right. "OPTION PRICE" means the purchase price payable upon the exercise of an Option Right. "OPTION RIGHT" means the right to purchase Common Shares from the Company upon the exercise of a Nonqualified Option or an Incentive Stock Option granted pursuant to Section 4 of this Plan. "PARTICIPANT" means a person who is selected by the Committee to receive benefits under this Plan and (i) is at that time an officer, director or other key employee of, or a consultant to, the Company or any Subsidiary or (ii) has agreed to commence serving in any such capacity. "RELOAD OPTION RIGHTS" means additional Option Rights automatically granted to an Optionee upon the exercise of Option Rights pursuant to Section 4(f) of this Plan. "RESTRICTED SHARES" means Common Shares granted or sold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the restriction on transfer referred to in Section 6 hereof has expired. "RULE 16b-3" means Rule 16b-3, as promulgated and amended from time to time by the Securities and Exchange Commission under the Securities Exchange Act of 1934, or any successor rule to the same effect. "SPREAD" means, in the case of a Free-standing Appreciation Right, the amount by which the Market Value per Share on the date when the Appreciation Right is exercised exceeds the Base Price specified therein or, in the case of a Tandem Appreciation Right, the amount by which the Market Value per Share on the date when the Appreciation Right is exercised exceeds the Option Price specified in the related Option Right. "SUBSIDIARY" means a corporation, partnership, joint venture, unincorporated association or other entity in which the Company has a direct or indirect ownership or other equity interest; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, "Subsidiary" means any corporation in which the Company owns or controls directly or indirectly more than 50% of the total combined voting power represented by all classes of stock issued by such corporation at the time of the grant. 2 "TANDEM APPRECIATION RIGHT" means an Appreciation Right granted pursuant to Section 5 of this Plan that is granted in tandem with an Option Right or any similar right granted under any other plan of the Company. "10% SHAREHOLDER" means an individual who, at the time an Option Right is granted, owns stock possessing more than 10% of the total combined voting power of all classes of stock issued by the Company or by any parent or subsidiary corporation, within the meaning of Section 422(b)(6) of the Code or any successor provision thereto. 3. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to adjustment as provided in Section 9 of this Plan, the number of Common Shares which may be (i) issued or transferred upon the exercise of Option Rights or Appreciation Rights, or (ii) awarded as Restricted Shares and released from substantial risk of forfeiture thereof or Deferred Shares, shall not in the aggregate exceed 13,566 Common Shares, which may be Common Shares of original issuance or Common Shares held in treasury or a combination thereof. For the purposes of this Section 3(a): (i) Upon payment in cash of the benefit provided by any award granted under this Plan, any Common Shares that were covered by that award shall again be available for issuance or transfer hereunder; and (ii) Upon the full or partial payment of any Option Price by the transfer to the Company of Common Shares or upon satisfaction of tax withholding obligations in connection with any such exercise or any other payment made or benefit realized under this Plan by the transfer or relinquishment of Common Shares, there shall be deemed to have been issued or transferred under this Plan only the net number of Common Shares actually issued or transferred by the Company less the number of Common Shares so transferred or relinquished. (b) Notwithstanding anything in Section 3(a) hereof, or elsewhere in this Plan, to the contrary, the aggregate number of Common Shares actually issued or transferred by the Company upon the exercise of the Incentive Stock Options shall not exceed the total number of Common Shares first specified in Section 3(a) hereof. (c) Notwithstanding any other provision of this Plan to the contrary, no Participant shall be granted Option Rights and Appreciation Rights, in the aggregate, for more than 2,800 Common Shares during any calendar year, subject to adjustment as provided in Section 9 of this Plan. (d) Notwithstanding any other provision of this Plan to the contrary, no Participant shall be granted Deferred Shares, in the aggregate, for more than 2,800 Common Shares during any calendar year, subject to adjustment as provided in Section 9 of this Plan. 4. OPTION RIGHTS. The Committee may from time to time authorize grants to Participants of options to purchase Common Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions: 3 (a) Each grant shall specify the number of Common Shares to which it pertains. (b) Each grant shall specify an Option Price per Common Share, which may not be less than the Market Value per Share on the Date of Grant. In the case of any grant of Incentive Stock Options to a 10% Shareholder, such Option Price per Common Share may not be less than 110% of the Market Value per Share on the Date of Grant. (c) Each grant shall specify the form of consideration to be paid in satisfaction of the Option Price and the manner of payment of such consideration, which may include (i) cash in the form of currency or check or other cash equivalent acceptable to the Company, (ii) nonforfeitable, unrestricted Common Shares, which are already owned by the Optionee, (iii) any other legal consideration that the Committee may deem appropriate, including without limitation any form of consideration authorized under Section 4(d) below, on such basis as the Committee may determine in accordance with this Plan and (iv) any combination of the foregoing. (d) Any grant of a Nonqualified Option may provide that payment of the Option Price may also be made in whole or in part in the form of Restricted Shares or other Common Shares that are subject to a risk of forfeiture or restrictions on transfer. Unless otherwise determined by the Committee on or after the Date of Grant, whenever any Option Price is paid in whole or in part by means of any of the forms of consideration specified in this Section 4(d), the Common Shares received by the Optionee upon the exercise of the Nonqualified Option shall be subject to the same risks of forfeiture or restrictions on transfer as those that applied to the consideration surrendered by the Optionee; provided, however, that such risks of forfeiture and restrictions on transfer shall apply only to the same number of Common Shares received by the Optionee as applied to the forfeitable or restricted Common Shares surrendered by the Optionee. (e) Any grant may, if there is then a public market for the Common Shares, provide for deferred payment of the Option Price from the proceeds of sale through a broker of some or all of the Common Shares to which the exercise relates. (f) Any grant may provide for the automatic grant to the Optionee of Reload Option Rights upon the exercise of Option Rights, including Reload Option Rights, for Common Shares or any other noncash consideration authorized under Sections 4(c) and (d) above; provided, however, that the term of any Reload Option Right shall not extend beyond the term of the Option Right originally exercised. (g) Successive grants may be made to the same Optionee regardless of whether any Option Rights previously granted to the Optionee remain unexercised. (h) Each grant shall specify the period or periods of continuous employment, or continuous engagement of the consulting services, of the Optionee by the Company or any Subsidiary that are necessary and/or the individual or aggregate performance criteria that must be satisfied before the Option Rights or installments thereof shall become exercisable, and any grant may provide for the earlier exercise of the Option Rights in the event of a change in control of the Company or other similar transaction or event. Notwithstanding the foregoing, in the case of any grant of Incentive Stock Options, the aggregate Market Value per Share on the Date of Grant of the 4 Common Shares subject to such Incentive Stock Options (and all other incentive stock options granted by the Company or any parent or subsidiary corporation) that are exercisable for the first time by the Optionee during any calendar year shall not exceed $100,000. (i) Option Rights granted pursuant to this Section 4 may be Nonqualified Options or Incentive Stock Options or combinations thereof. (j) Any grant of an Option Right may provide for the payment to the Optionee of dividend equivalents thereon in cash or Common Shares on a current, deferred or contingent basis, or the Committee may provide that any dividend equivalents shall be credited against the Option Price. (k) No Option Right granted pursuant to this Section 4 may be exercised more than 10 years from the Date of Grant. In the case of any Incentive Stock Option granted to a 10% Shareholder, such Incentive Stock Option may not be exercised more than five years from the Date of Grant. (l) Each grant shall be evidenced by an agreement, which shall be executed on behalf of the Company by any designated officer thereof and delivered to and accepted by the Optionee and shall contain such terms and provisions as the Committee may determine consistent with this Plan. 5. APPRECIATION RIGHTS. The Committee may also authorize grants to Participants of Appreciation Rights. An Appreciation Right shall be a right of the Participant to receive from the Company an amount, which shall be determined by the Committee and shall be expressed as a percentage (not exceeding 100%) of the Spread at the time of the exercise of an Appreciation Right. Any grant of Appreciation Rights under this Plan shall be upon such terms and conditions as the Committee may determine in accordance with the following provisions: (a) Any grant may specify that the amount payable upon the exercise of an Appreciation Right may be paid by the Company in cash, Common Shares or any combination thereof and may (i) either grant to the Participant or reserve to the Committee the right to elect among those alternatives or (ii) preclude the right of the Participant to receive and the Company to issue Common Shares or other equity securities in lieu of cash. (b) Any grant may specify that the amount payable upon the exercise of an Appreciation Right shall not exceed a maximum specified by the Committee on the Date of Grant. (c) Each grant shall specify (i) the period or periods of continuous employment, or continuous engagement of the consulting services, of the Optionee by the Company or any Subsidiary that are necessary and/or the individual or aggregate performance criteria that must be satisfied before the Appreciation Rights or installments thereof shall become exercisable and (ii) permissible dates or periods on or during which Appreciation Rights shall be exercisable. (d) Any grant may specify that an Appreciation Right may be exercised only in the event of a change in control of the Company or other similar transaction or event. 5 (e) Any grant may provide for the payment to the Participant of dividend equivalents thereon in cash or Common Shares on a current, deferred or contingent basis. (f) Each grant shall be evidenced by an agreement, which shall be executed on behalf of the Company by any designated officer thereof and delivered to and accepted by the Optionee and shall describe the subject Appreciation Rights, identify any related Option Rights, state that the Appreciation Rights are subject to all of the terms and conditions of this Plan and contain such other terms and provisions as the Committee may determine consistent with this Plan. (g) Regarding Tandem Appreciation Rights only: Each grant shall provide that a Tandem Appreciation Right may be exercised only (i) at a time when the related Option Right (or any similar right granted under any other plan of the Company) is also exercisable and the Spread is positive and (ii) by surrender of the related Option Right (or such other right) for cancellation. (h) Regarding Free-standing Appreciation Rights only: (i) Each grant shall specify in respect of each Free-standing Appreciation Right a Base Price per Common Share, which shall be equal to or greater than the Market Value per Share on the Date of Grant; (ii) Successive grants may be made to the same Participant regardless of whether any Free-standing Appreciation Rights previously granted to the Participant remain unexercised; and (iii) No Free-standing Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant. 6. RESTRICTED SHARES. The Committee may also authorize grants or sales to Participants of Restricted Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions: (a) Each grant or sale shall constitute an immediate transfer of the ownership of Common Shares to the Participant in consideration of the performance of services, entitling such Participant to dividend, voting and other ownership rights, subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to. (b) Each grant or sale may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Market Value per Share on the Date of Grant. (c) Each grant or sale shall provide that the Restricted Shares covered thereby shall be subject to a "substantial risk of forfeiture" within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of Grant, and any grant or sale may provide for the earlier termination of such period in the event of a change in control of the Company or other similar transaction or event. 6 (d) Each grant or sale shall provide that, during the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Shares shall be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Date of Grant. Such restrictions may include without limitation rights of repurchase or first refusal in the Company or provisions subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the hands of any transferee. (e) Any grant or sale may require that any or all dividends or other distributions paid on the Restricted Shares during the period of such restrictions be automatically sequestered and reinvested on an immediate or deferred basis in additional Common Shares, which may be subject to the same restrictions as the underlying award or such other restrictions as the Committee may determine. (f) Each grant or sale shall be evidenced by an agreement, which shall be executed on behalf of the Company by any designated officer thereof and delivered to and accepted by the Participant and shall contain such terms and provisions as the Committee may determine consistent with this Plan. Unless otherwise directed by the Committee, all certificates representing Restricted Shares, together with a stock power that shall be endorsed in blank by the Participant with respect to the Restricted Shares, shall be held in custody by the Company until all restrictions thereon lapse. 7. DEFERRED SHARES. The Committee may also authorize grants or sales of Deferred Shares to Participants upon such terms and conditions as the Committee may determine in accordance with the following provisions: (a) Each grant or sale shall constitute the agreement by the Company to issue or transfer Common Shares to the Participant in the future in consideration of the performance of services, subject to the fulfillment during the Deferral Period of such conditions as the Committee may specify. (b) Each grant or sale may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Market Value per Share on the Date of Grant. (c) Each grant or sale shall provide that the Deferred Shares covered thereby shall be subject to a Deferral Period, which shall be fixed by the Committee on the Date of Grant, and any grant or sale may provide for the earlier termination of the Deferral Period in the event of a change in control of the Company or other similar transaction or event. (d) During the Deferral Period, the Participant shall not have any right to transfer any rights under the subject award, shall not have any rights of ownership in the Deferred Shares and shall not have any right to vote the Deferred Shares, but the Committee may on or after the Date of Grant authorize the payment of dividend equivalents on the Deferred Shares in cash or additional Common Shares on a current, deferred or contingent basis. (e) Each grant or sale shall be evidenced by an agreement, which shall be executed on behalf of the Company by any designated officer thereof and delivered to and accepted 7 by the Participant and shall contain such terms and provisions as the Committee may determine consistent with this Plan. 8. TRANSFERABILITY. (a) No Option Right or Appreciation Right granted under this Plan may be transferred by a Participant, except (i) by will or the laws of descent and distribution, (ii) to one or more members of the Participant's immediate family, or (iii) to a trust established for the benefit of the Participant and/or one or more members of the Participant's immediate family. Option Rights and Appreciation Rights granted under this Plan may not be exercised during a Participant's lifetime except by (i) the Participant, (ii) a transferee of the Participant described in the preceding sentence, or (iii) in the event of the legal incapacity of the Participant or any such transferee, by the guardian or legal representative of the Participant or such transferee (as applicable) acting in a fiduciary capacity on behalf thereof under state law and court supervision. (b) Any grant made under this Plan may provide that all or any part of the Common Shares that are to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights or upon the termination of the Deferral Period applicable to Deferred Shares, or are no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan, shall be subject to further restrictions upon transfer. 9. ADJUSTMENTS. (a) The Committee may make or provide for such adjustments in the number of Common Shares covered by outstanding Option Rights, Appreciation Rights and Deferred Shares granted hereunder, the Option Prices per Common Share or Base Prices per Common Share applicable to any such Option Rights and Appreciation Rights, and the kind of shares (including shares of another issuer) covered thereby, as the Committee may in good faith determine to be equitably required in order to prevent dilution or expansion of the rights of Participants that otherwise would result from (i) any stock dividend, stock split, combination of shares, recapitalization or similar change in the capital structure of the Company or (ii) any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of warrants or other rights to purchase securities or any other corporate transaction or event having an effect similar to any of the foregoing. In the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding awards under this Plan such alternative consideration as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all awards so replaced. Moreover, the Committee may on or after the Date of Grant provide in the agreement evidencing any award under this Plan that the holder of the award may elect to receive an equivalent award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect, or the Committee may provide that the holder will automatically be entitled to receive such an equivalent award. The Committee may also make or provide for such adjustments in the maximum numbers of Common Shares specified in Section 3 of this Plan as the Committee may in good faith determine to be appropriate in order to reflect any transaction or event described in this Section 9. 8 (b) If another corporation is merged into the Company or the Company otherwise acquires another corporation, the Committee may elect to assume under this Plan any or all outstanding stock options or other awards granted by such corporation under any stock option or other plan adopted by it prior to such acquisition. Such assumptions shall be on such terms and conditions as the Committee may determine; provided, however, that the awards as so assumed do not contain any terms, conditions or rights that are inconsistent with the terms of this Plan. Unless otherwise determined by the Committee, such awards shall not be taken into account for purposes of the limitations contained in Section 3 of this Plan. 10. FRACTIONAL SHARES. The Company shall not be required to issue any fractional Common Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash. 11. WITHHOLDING TAXES. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for the withholding are insufficient, it shall be a condition to the receipt of any such payment or the realization of any such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of any taxes required to be withheld. At the discretion of the Committee, any such arrangements may without limitation include voluntary or mandatory relinquishment of a portion of any such payment or benefit or the surrender of outstanding Common Shares. The Company and any Participant or such other person may also make similar arrangements with respect to the payment of any taxes with respect to which withholding is not required. 12. CERTAIN TERMINATIONS OF EMPLOYMENT OR CONSULTING SERVICES, HARDSHIP, AND APPROVED LEAVES OF ABSENCE. Notwithstanding any other provision of this Plan to the contrary, in the event of termination of employment or consulting services by reason of death, disability, normal retirement, early retirement with the consent of the Company, termination of employment or consulting services to enter public or military service with the consent of the Company or leave of absence approved by the Company, or in the event of hardship or other special circumstances, of a Participant who holds an Option Right or Appreciation Right that is not immediately and fully exercisable, any Restricted Shares as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, any Deferred Shares as to which the Deferral Period is not complete, or any Common Shares that are subject to any transfer restriction pursuant to Section 8(b) of this Plan, the Committee may take any action that it deems to be equitable under the circumstances or in the best interests of the Company, including without limitation waiving or modifying any limitation or requirement with respect to any award under this Plan. 13. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the Compensation Committee of the Board, which shall be composed of not less than two members of the Board, or, in the absence of a Compensation Committee, by the full Board. At any time that awards under the Plan are subject to Rule 16b-3, each member of the Compensation Committee shall be a "non-employee director" within the meaning of such Rule. In addition, at any time that the Company is subject to Section 9 162(m) of the Code, each member of the Compensation Committee shall be an "outside director" within the meaning of such Section. A majority of the Committee shall constitute a quorum, and the acts of the members of the Committee who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Committee in writing, shall be the acts of the Committee. (b) The interpretation and construction by the Committee of any provision of this Plan or any agreement, notification or document evidencing the grant of Option Rights, Appreciation Rights, Restricted Shares or Deferred Shares, and any determination by the Committee pursuant to any provision of this Plan or any such agreement, notification or document, shall be final and conclusive. No member of the Committee shall be liable for any such action taken or determination made in good faith. 14. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from time to time by the Committee; provided, however, that except as expressly authorized by this Plan, no such amendment shall cause this Plan to cease to satisfy any applicable condition of Rule 16b-3 or cause any award under the Plan to cease to qualify for any applicable exception under Section 162(m) of the Code, without the further approval of the stockholders of the Company. (b) With the concurrence of the affected Participant, the Committee may cancel any agreement evidencing Option Rights or any other award granted under this Plan. In the event of any such cancellation, the Committee may authorize the granting of new Option Rights or other awards hereunder, which may or may not cover the same number of Common Shares as had been covered by the cancelled Option Rights or other award, at such Option Price, in such manner and subject to such other terms, conditions and discretion as would have been permitted under this Plan had the cancelled Option Rights or other award not been granted. (c) The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant. (d) This Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary and shall not interfere in any way with any right that the Company or any Subsidiary would otherwise have to terminate any Participant's employment or other service at any time. (e) To the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from so qualifying, any such provision shall be null and void with respect to any such Option Right; provided, however, that any such provision shall remain in effect with respect to other Option Rights, and there shall be no further effect on any provision of this Plan. (f) Any award that may be made pursuant to an amendment to this Plan that shall have been adopted without the approval of the stockholders of the Company shall be null and 10 void if it is subsequently determined that such approval was required under the terms of the Plan or applicable law. (g) Unless otherwise determined by the Committee, this Plan is intended to comply with Rule 16b-3 at all times that awards hereunder are subject to such Rule. EX-10.8 11 FORM OF RESTRICTED STOCK AGREEMENT Exhibit 10.8 FORM OF RESTRICTED STOCK AGREEMENT (Non-Assignable) ____________ Shares Regarding Class A Common Stock of TRITEL, INC. Issued Pursuant to the Tritel, Inc. 1999 Stock Option Plan THIS CERTIFIES that effective January __, 1999, [name] ______________ is granted the right to purchase [number of shares] ____________ restricted but fully paid and non-assessable shares of the Class A Common Stock of Tritel, Inc. pursuant to the Tritel, Inc. 1999 Stock Option Plan, upon and subject to the following terms and conditions and the terms and conditions of the Plan: 1. Subscription for Restricted Shares. Grantee hereby purchases from the Company, and the Company hereby sells to Grantee, the Restricted Shares for a cash subscription price of $.01 per share. 2. Definitions. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan. The following terms have the following meanings: "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. "Automatic Repurchase Event" means (v) the consummation of a Company Merger after giving effect to which the Cash Equity Investors, in the aggregate, shall beneficially own on a Fully Diluted Basis less than 33% of the capital stock or other equity interests in the surviving entity, (w) the consummation of a Company Asset Sale, (x) the termination of Grantee's employment, (y) if and only if the IPO Date has theretofore occurred, the seventh (7th) anniversary of the Date of Grant, and (z) if and only if the IPO Date has not occurred prior to the seventh (7th) anniversary of the date hereof, the IPO Date. "Base Price" means ONE THOUSAND AND NO/100 U.S. DOLLARS (U.S.$1,000.00) per share appropriately adjusted for stock splits, stock dividends and similar changes in capitalization (but excluding changes in the liquidation preference of the Preferred Stock of the Company in accordance with the Restated Certificate). "Board of Directors" means the Board of Directors of the Company. "Business Day" means a day on which banks and foreign exchange markets are open for the transaction of business required for this Agreement, and the agreements to which this Agreement refers, in New York, New York as relevant to the determination to be made or the action to be taken. "Cause" means only: (i) Grantee's indictment for or conviction of a felony, (ii) Fraud, misappropriation or embezzlement by Grantee against the Company or any subsidiary or affiliate of the Company, (iii) Grantee's willful misconduct or gross negligence in connection with his employment which has materially adversely affected the Company, monetarily or otherwise, as determined by a majority vote of the Board of Directors of the Company, or (iv) Any other act, omission or circumstance which otherwise provides the Company the right to terminate Grantee's employment for "Cause" as defined under Grantee's Employment Agreement, if any, with the Company or any Subsidiary of the Company or under applicable law. "Class A Common Stock" means those shares of the Company's Common Stock designated as Class A Voting Common Stock. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Committee" means the Compensation Committee of the Board of Directors, as described in Section 13(a) of the Plan, or, in the absence of a Compensation Committee, the full Board of Directors. "Company" means Tritel, Inc., a Delaware corporation. "Company Asset Sale" means any sale or disposition of all or substantially all of the Company's assets but excludes any pledges, encumbrances or security interests that may be granted by the Company. "Company Merger" means any merger, combination or consolidation of the Company or any of its Subsidiaries with or into any other entity (regardless of whether the Company or such Subsidiary is the surviving entity in any such transaction). "Company Stock" means any series or class of the Company's Common or Preferred Stock. 2 "Date of Grant" means the effective date of this Agreement. "Disability" means any physical or mental illness, injury or condition that would qualify the Grantee for benefits under any long-term disability benefit plan maintained by the Company or any Affiliate and applicable to Grantee. "Employment Agreement" means, collectively, that certain written employment agreement between the Company and Grantee and that certain letter agreement concerning compensation and other matters between the Company and Grantee, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Escrow Holder" means the Secretary of the Company. "Fully Diluted Basis" means, with respect to the shares of Common Stock outstanding, all of the shares of Common Stock then outstanding (regardless of whether subject to repurchase), plus (without duplication) all the shares of Common Stock issuable upon the exercise of outstanding options or convertible securities (excluding the Company's Series A Preferred Stock, par value $.01 per share). "Governmental Authority" means a Federal, state or local court, legislature, governmental agency (including, without limitation, the United States Department of Justice), commission or regulatory or administrative authority or instrumentality. "Grantee" means the person whose name appears above in the first paragraph of this Agreement. "Investors Stockholders' Agreement" means that certain Investors Stockholders' Agreement, by and among the Company and certain other partners as the same may be amended, modified or supplemented in accordance with the terms thereof. "IPO Date" means the first date on which (a) the Class A Common Stock shall have been registered pursuant to an effective registration statement ("Registration Statement") under the Securities Act, (b) the aggregate gross proceeds received by the Company in connection with such Registration Statement(s) equals or exceeds $20,000,000, and (c) the Class A 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. "Market Price" means in the case of (I) an Automatic Repurchase Event: (A) specified in clause (v) or (w) of the definition thereof, the per share consideration paid or payable to the holders of Class A Common Stock in connection with such event, (B) specified in clause (x) of the definition thereof if the IPO Date shall not have occurred prior to the date of termination, the fair market value per share of Class A Common Stock as determined in good faith by the Board of Directors, 3 (C) specified in clause (x) of the definition thereof if the IPO Date shall have occurred on or prior to the date of termination, the average closing price of the Class A Common Stock during the ten (10) trading days prior to such date of termination, (D) specified in clause (y) of the definition thereof, the average closing price of the Class A Common Stock during the ten (10) trading days prior to such seventh (7th) anniversary of the date hereof, or (E) specified in clause (z) of the definition thereof, the per share offering price of the Class A Common Stock issued in connection with the public offering occurring on the IPO Date, or (II) a Trigger Date: (A) which is on the IPO Date, the per share offering price of the Class A Common Stock issued in connection with the public offering occurring on the IPO Date, or (B) which is after the IPO Date, the average closing price of share of Class A Common Stock during the ten (10) trading days prior to such Trigger Date. "NASDAQ" means the National Association of Securities Dealers' Automated Quotation System. "Non-Released Restricted Shares" means the number of shares of Class A Common Stock initially issued to Grantee as Restricted Shares less the aggregate number of Grantee's Restricted Shares that have (x) become Trigger Shares, or (y) been repurchased by the Company. "Person" means an individual, corporation, partnership, limited liability company, association, joint stock company, Governmental Authority, business trust, unincorporated organization or other legal entity. "Plan" means the Company's 1999 Stock Option Plan, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Preferred Stock" means the Company's preferred stock, par value $.01 per share. "Repurchase Price" means $.01 per share. "Restated Certificate" means the Amended and Restated Certificate of Incorporation of the Company. "Restricted Shares" means the [number] __________________ shares of Class A Common Stock granted and subscribed for hereunder. "Securities Act" means the Securities Act of 1933, as amended. 4 "Securities Purchase Agreement" means the Securities Purchase Agreement by and among the Company and certain other parties, dated as of May 20, 1998, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Stockholders" means those Persons who are issued shares of Company Stock and are a party to the Stockholders' Agreement. "Stockholders' Agreement" means the Stockholders' Agreement by and among the Company and certain other parties, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Trigger Date" means the date of delivery to the Company by Grantee of a Trigger Notice. "Trigger Notice" means a notice given by Grantee with respect to a specified number of Restricted Shares to determine the number of Trigger Shares. "Trigger Shares" means Restricted Shares set forth in a Trigger Notice and not repurchased in connection with such notice pursuant to Section 3; provided, however, that Restricted Shares that are not so repurchased shall, to the extent applicable, continue to be subject to vesting in accordance with the Vesting Schedule annexed hereto. 3. Vesting, Transfer and Repurchase of Unvested Shares, Etc. a. General. The Restricted Shares shall be subject to repurchase by the Company at the Repurchase Price in accordance with the terms of this Section 3. b. Repurchase of Restricted Shares upon Automatic Repurchase Event. Upon an Automatic Repurchase Event, Grantee shall sell to the Company, and the Company shall purchase from Grantee, the aggregate of : i. all Restricted Shares that shall not have vested (or are stated to be subject to repurchase) in accordance with the Vesting Schedule annexed hereto, plus ii. a number of Restricted Shares equal to the number of Non-Released Restricted Shares beneficially owned by Grantee multiplied by a fraction, the numerator of which is the Base Price and the denominator of which is the Market Price on the date of such event. c. Repurchase of Restricted Shares on Trigger Date. On any Trigger Date Executive may elect, by delivery of a Trigger Notice with respect to the number of Restricted Shares to determine the number of Trigger Shares. Within 20 days of the giving of a Trigger Notice the Company shall repurchase from Grantor and Grantee shall sell to the Company for the Repurchase Price a number of Restricted Shares specified in the Trigger Notice multiplied by a fraction, the numerator of which is the Base Price and the denominator of which is the Market Price on the date of such notice. Each Trigger Notice shall be with respect to at least 20% of the Restricted Shares initially issued to Grantee. A Trigger Notice may be delivered only as follows: (x) not less than twenty (20) Business Days prior to the IPO Date if 5 the Trigger Date is the IPO Date, or (y) following the IPO Date, annually, no later than the eleventh Business Day following the Company's public announcement of its earnings for the six (6) month period ended June 30 of each fiscal year. d. Vesting Schedule. In connection with any such repurchases of Restricted Shares, the Restricted Shares to be repurchased by the Company shall proportionately reduce the number of Restricted Shares initially issued to Grantee and allocable to each Vesting Date or Event set forth on the Vesting Schedule annexed hereto. e. Purchase Price; Closing of Repurchase, Assignment of Repurchase Right. Any repurchase pursuant to this Section 3 shall be for the Repurchase Price. The closing of a purchase and sale of repurchased shares shall take place on a date mutually agreed by Grantee and the Company, but in no event later than twenty (20) days after (i) the date that employment of Grantee shall have terminated or (ii) in the case of an Automatic Repurchase Event other than termination of employment of Grantee, the occurrence of the applicable event or (iii) the date of a Trigger Notice (except that in connection with a Trigger Notice given with respect to the IPO Date, the closing shall take place on the IPO Date). At such closing, the Company shall deliver to the Grantee a check in the amount of the aggregate Repurchase Price and, upon delivery thereof, the Company shall become the legal and beneficial owner of the Restricted Shares so sold and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name such shares being repurchased by the Company. 4. Escrow of Shares. The certificate(s) representing all Restricted Shares shall be held by the Escrow Holder, along with a stock power executed by the Grantee in blank. Grantee directs the Company to deliver all certificates representing Restricted Shares to the Escrow Holder. The Escrow Holder is hereby directed to permit transfer of such shares only in accordance with this Agreement, the Stockholders Agreement and the Investors Stockholders' Agreement. In the event further instructions are desired by the Escrow Holder, he shall be entitled to rely upon written directions of the Board of Directors of the Company. The Escrow Holder shall have no liability for any act or omission hereunder while acting in good faith in the exercise of his own judgment. The Company agrees to indemnify and hold Escrow Holder free and harmless from and against any and all losses, costs, damages, liabilities or expenses, including counsel fees to which Escrow Holder may be put or which he may incur by reason of or in connection with the escrow arrangement hereunder. If the Company or any assignee repurchases any of the Restricted Shares pursuant to Section 3, the Escrow Holder, upon receipt of written notice of such repurchase from the proposed transferee, shall take all steps necessary to accomplish such repurchase. From time to time, upon Grantee's request, Escrow Holder shall: (i) cancel the certificate(s) held by the Escrow Holder and representing Restricted Shares, (ii) cause new certificate(s) to be issued representing the number of Restricted Shares no longer subject to repurchase pursuant to Section 3, which certificate(s) the Escrow Holder shall deliver to Grantee and (iii) cause new certificate(s) to be issued representing the balance of the Restricted Shares, which certificate(s) shall be held in escrow by the Escrow Holder in accordance with the provisions of this Section 4. Subject to the terms hereof, Grantee shall have all the rights of stockholder with respect to the Restricted Shares while they are held in escrow, including without limitation, the right to vote the Restricted Shares and receive any cash dividends declared thereon. If, from time to time during the term of the Company's repurchase 6 right, there is (i) any stock dividend, stock split or other change in the Restricted Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which such Grantee is entitled by reason of his ownership of the Restricted Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as Restricted Shares for purposes of this Agreement and the Company's repurchase right. 5. Legends. The share certificates evidencing the Restricted Shares shall be endorsed with any and all legends required to be placed thereon under Section 7(b) hereof, applicable federal or state securities laws or the Stockholders' Agreement and the Investors Stockholders' Agreement. 6. Compliance With Law. The Company and Grantee will make reasonable efforts to comply with all applicable securities laws. In addition, notwithstanding any provision of this agreement to the contrary, the Restricted Shares will not become vested at any time that such vesting would result in a violation of any such law. 7. Investment Representations; Registration. a. Grantee represents and warrants that: (i) Grantee is acquiring the Restricted Shares hereunder for the purpose of investment and not with a view to or for sale in connection with any distribution thereof (other than in compliance with the Securities Act and all applicable state securities laws). (ii) Grantee is not relying on and acknowledges that no representation is being made by the Company or any of its officers, employees, Affiliates, agents or representatives, and, in particular, it is not relying on, and acknowledges that no representation is being made in respect of, (x) any projections, estimates or budgets delivered to or made available to them of future revenues, expenses or expenditures, or future results of operations and (y) any other information or documents delivered or made available to it or its representatives. (iii) In deciding to purchase the Restricted Shares, Grantee has relied exclusively on the investigations made by Grantee and Grantee's representatives and Grantee's and such representatives' knowledge of the industry in which the Company proposes to operate. b. Grantee agrees that all Restricted Shares shall only be sold following registration under the Securities Act or pursuant to an exemption therefrom. c. The Company may affix a legend to the certificates representing unregistered shares of Class A Common Stock issued pursuant to this Agreement to the effect that such shares have not been registered under the Securities Act and may only be sold or transferred upon registration or pursuant to an exemption therefrom. d. Except as may be provided under the Stockholders' Agreement, the Company shall have no obligation to register under the Securities Act any shares of Class A Common Stock or any other securities issued pursuant to this Agreement. 7 8. Applicability of Other Instruments. The Restricted Shares are issued, and this Agreement is entered into, pursuant to and subject to all of the terms and conditions of the Plan, the terms and conditions of which are hereby incorporated as though set forth at length, and the receipt of a copy of which the Grantee hereby acknowledges by his receipt of this Agreement. A determination of the Committee of the Board of Directors of the Company under the Plan as to any questions which may arise with respect to the interpretation of the provisions of this Agreement and of the Plan shall be final. The Committee may authorize and establish such rules, regulations and revisions thereof not inconsistent with the provisions of the Plan, as it may deem advisable. In addition, Grantee hereby acknowledges receipt of a copy of, and by executing this Agreement, joins in and is bound by the terms of, the Stockholders' Agreement and the Investors Stockholders' Agreement as a party thereto, effective upon the execution hereof. 9. Severability. In the event that one or more of the provisions of this Agreement may be invalidated for any reason by a court, any provision so invalidated will be deemed to be separable from the other provisions hereof, and the remaining provisions hereof will continue to be valid and fully enforceable. 10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Mississippi without giving effect to the conflicts of law principles thereof. The parties hereto hereby irrevocably and unconditionally consent to submit to the non-exclusive jurisdiction of the courts of the State of Mississippi and of the United States of America located in Hinds County, Mississippi (the "Mississippi Courts") for any litigation arising out of or relating to this Agreement, waive any objection to the laying of venue of any such litigation in the Mississippi Courts and agrees not to plead or claim in any Mississippi Court that such litigation brought therein has been brought in an inconvenient forum. 8 WITNESS the seal of the Company and the signature of its duly authorized officer. Dated: ____________, ____ TRITEL, INC. By: _________________________ Name: ______________________ Title: _____________________ ACKNOWLEDGED AND AGREED: By: ________________________________ Name: __________________________ 9 VESTING SCHEDULE --------------------------------------------------------------------------- VESTING DATE OR EVENT PERCENT OF RESTRICTED --------------------------------------------------------------------------- Date of Grant *% --------------------------------------------------------------------------- First Anniversary of the Date of Grant *% --------------------------------------------------------------------------- Second Anniversary of the Date of Grant *% --------------------------------------------------------------------------- Third Anniversary of the Date of Grant *% --------------------------------------------------------------------------- Fourth Anniversary of the Date of Grant *% --------------------------------------------------------------------------- Fifth Anniversary of the Date of Grant *% --------------------------------------------------------------------------- Completion of _____ 10% --------------------------------------------------------------------------- Completion of _____ 10% --------------------------------------------------------------------------- Accelerated Vesting o Upon termination of Grantee's employment by reason of a Company Merger or a Company Asset Sale, 100% of the Restricted Shares shall vest. o Upon termination of Grantee's employment for any reason all Restricted Shares that have not yet become vested shall be repurchased in accordance with Section 3. ** To be determined in granting directors resolution. EX-10.9 12 1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS Exhibit 10.9 TRITEL, INC. 1999 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS 1. PURPOSE. The purpose of this Plan is to attract and retain qualified individuals to serve as non-employee members of the Board of Directors of Tritel, Inc. (the "Company") and to provide such persons with appropriate incentives. The Company has adopted the Plan effective as of January 7, 1999, subject to the approval of the Company's stockholders, and unless extended by amendment in accordance with the terms of the Plan, no Option Rights will be granted hereunder after the tenth anniversary of such effective date. 2. DEFINITIONS. As used in this Plan, "BOARD" means the Board of Directors of the Company. "CHANGE IN CONTROL" means a change in control of the Company, which will be deemed to have occurred after the effective date of this Plan if: (i) any "person" as such term is used in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof except that such term shall not include (A) the Company or any of its subsidiaries, (B) any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its affiliates, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, (D) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Shares, or (E) any person or group as used in Rule 13d-1(b) under the Exchange Act, is or becomes the Beneficial Owner, as such term is defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 50% or more of the combined voting power of the Company's then outstanding securities. (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than (A) a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii), or (iv) of this definition or (B) a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority thereof; (iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 75% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (as defined above) is or becomes the beneficial owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such person any securities acquired directly from the Company or its affiliates other than in connection with the acquisition by the Company or its affiliates of a business) representing 25% or more of the combined voting power of the Company's then outstanding securities; or (iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets (or any transaction having a similar effect) other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 75% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. "CODE" means the Internal Revenue Code of 1986, as amended from time to time. "COMMON SHARES" means (i) shares of the Class A Common Stock, par value $.01 per share, of the Company and (ii) any security into which Common Shares may be converted by reason of any transaction or event of the type referred to in Section 6 of this Plan. "DATE OF GRANT" means the date specified by the Board on which a grant of Option Rights shall become effective, which shall not be earlier than the date on which the Board takes action with respect thereto. "DISABILITY" means any physical or mental illness, injury or condition that would qualify a Participant for benefits under any long-term disability benefit plan maintained by the Company or any Subsidiary and applicable to such Participant (or, if the Participant is not eligible for any such plan, to senior executive officers of the Company). 2 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from time to time. "MARKET VALUE PER SHARE" means the fair market value of the Common Shares as determined by the Board from time to time. "OPTION PRICE" means the purchase price payable upon the exercise of an Option Right. "OPTION RIGHT" means the right to purchase Common Shares from the Company upon the exercise of a nonqualified stock option granted pursuant to Section 4 of this Plan. "PARTICIPANT" means an individual who, at the time of any automatic award of Option Rights pursuant to Section 4 below, is a member of the Board and both a "non-employee director" within the meaning of Rule 16b-3 and an "outside director" within the meaning of Section 162(m) of the Code. "RULE 16B-3" means Rule 16b-3, as promulgated and amended from time to time by the Securities and Exchange Commission under the Exchange Act, or any successor rule to the same effect. "SUBSIDIARY" means a corporation, partnership, joint venture, unincorporated association or other entity in which the Company has a direct or indirect ownership or other equity interest. 3. SHARES AVAILABLE UNDER THE PLAN. (a) Subject to adjustment as provided in Section 6 of this Plan, the number of Common Shares which may be issued or transferred upon the exercise of Option Rights shall not in the aggregate exceed 50,000 Common Shares, which may be Common Shares of original issuance or Common Shares held in treasury or a combination thereof. For the purposes of this Section 3(a): (i) Upon payment in cash of the benefit provided by any award granted under this Plan, any Common Shares that were covered by that award shall again be available for issuance or transfer hereunder; and (ii) Upon the full or partial payment of any Option Price by the transfer to the Company of Common Shares or upon satisfaction of tax withholding obligations in connection with any such exercise or any other payment made or benefit realized under this Plan by the transfer or relinquishment of Common Shares, there shall be deemed to have been issued or transferred under this Plan only the net number of Common Shares actually issued or transferred by the Company less the number of Common Shares so transferred or relinquished. 4. OPTION RIGHTS. Subject to adjustment as provided in Section 6 of this Plan, the Board may grant to each Participant Option Rights to purchase Common Shares upon such terms and conditions as the Board shall determine in accordance with the following provisions: 3 (a) Each grant shall specify an Option Price per Common Share, which shall equal the Market Value per Share on the Date of Grant. (b) Each grant shall specify the form of consideration to be paid in satisfaction of the Option Price and the manner of payment of such consideration, which consist of (i) cash in the form of currency or check or other cash equivalent acceptable to the Company, (ii) nonforfeitable, unrestricted Common Shares, which are already owned by the Participant and (iii) any combination of the foregoing. (c) Any grant shall, if there is then a public market for the Common Shares, provide for deferred payment of the Option Price from the proceeds of sale through a broker of some or all of the Common Shares to which the exercise relates. (d) Successive grants may be made to the same Participant regardless of whether any Option Rights previously granted to the Participant remain unexercised. (e) Each grant shall specify that the Option Rights awarded thereby shall become exercisable in full upon the earliest to occur of (i) the 10th anniversary of the Date of Grant, (ii) the date of the Participant's death or Disability, and (iii) the effective date of a Change in Control, provided, in each case, that the Participant remains in continuous service with the Company until such date. (f) Option Rights granted pursuant to this Section 4 shall be nonqualified stock options. (g) No Option Right granted pursuant to this Section 4 may be exercised more than 10 years from the Date of Grant. (h) Each grant shall be evidenced by an agreement, which shall be executed on behalf of the Company by any designated officer thereof and delivered to and accepted by the Participant and shall contain such terms and provisions as the Board may determine consistent with this Plan. 5. TRANSFERABILITY. No Option Right granted under this Plan may be transferred by a Participant, except (i) by will or the laws of descent and distribution, (ii) to one or more members of the Participant's immediate family, or (iii) to a trust established for the benefit of the Participant and/or one or more members of the Participant's immediate family. Option Rights granted under this Plan may not be exercised during a Participant's lifetime except by (i) the Participant, (ii) a transferee of the Participant described in the preceding sentence, or (iii) in the event of the legal incapacity of the Participant or any such transferee, by the guardian or legal representative of the Participant or such transferee (as applicable) acting in a fiduciary capacity on behalf thereof under state law and court supervision. 4 6. ADJUSTMENTS. (a) The Board may make or provide for such adjustments in the number of Common Shares covered by outstanding Option Rights granted hereunder, the Option Prices per Common Share applicable to any such Option Rights, and the kind of shares (including shares of another issuer) covered thereby, as the Board may in good faith determine to be equitably required in order to prevent dilution or expansion of the rights of Participants that otherwise would result from (i) any stock dividend, stock split, combination of shares, recapitalization or similar change in the capital structure of the Company or (ii) any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of warrants or other rights to purchase securities or any other corporate transaction or event having an effect similar to any of the foregoing. In the event of any such transaction or event, the Board may provide in substitution for any or all outstanding awards under this Plan such alternative consideration as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the surrender of all awards so replaced. Moreover, the Board may on or after the Date of Grant provide in the agreement evidencing any award under this Plan that the holder of the award may elect to receive an equivalent award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect, or the Board may provide that the holder will automatically be entitled to receive such an equivalent award. The Board may also make or provide for such adjustments in the maximum numbers of Common Shares specified in Section 3 of this Plan as the Board may in good faith determine to be appropriate in order to reflect any transaction or event described in this Section 6. (b) If another corporation is merged into the Company or the Company otherwise acquires another corporation, the Board may elect to assume under this Plan any or all outstanding stock options or other awards granted by such corporation under any stock option or other plan adopted by it prior to such acquisition. Such assumptions shall be on such terms and conditions as the Board may determine; provided, however, that the awards as so assumed do not contain any terms, conditions or rights that are inconsistent with the terms of this Plan. Unless otherwise determined by the Board, such awards shall not be taken into account for purposes of the limitations contained in Section 3 of this Plan. 7. FRACTIONAL SHARES. The Company shall not be required to issue any fractional Common Shares pursuant to this Plan. The Board may provide for the elimination of fractions or for the settlement thereof in cash. 8. WITHHOLDING TAXES. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for the withholding are insufficient, it shall be a condition to the receipt of any such payment or the realization of any such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of any taxes required to be withheld. At the discretion of the Board, any such arrangements may without limitation include voluntary or mandatory relinquishment of a portion of any such payment or benefit or the surrender of 5 outstanding Common Shares. The Company and any Participant or such other person may also make similar arrangements with respect to the payment of any taxes with respect to which withholding is not required. 9. ADMINISTRATION OF THE PLAN. (a) This Plan shall be administered by the Board. A majority of the Board shall constitute a quorum, and the acts of the members of the Board who are present at any meeting thereof at which a quorum is present, or acts unanimously approved by the members of the Board in writing, shall be the acts of the Board. (b) The interpretation and construction by the Board of any provision of this Plan or any agreement, notification or document evidencing the grant of Option Rights, and any determination by the Board pursuant to any provision of this Plan or any such agreement, notification or document, shall be final and conclusive. No member of the Board shall be liable for any such action taken or determination made in good faith. 10. AMENDMENTS AND OTHER MATTERS. (a) This Plan may be amended from time to time by the Board; provided, however, that except as expressly authorized by this Plan, no such amendment shall cause this Plan to cease to satisfy any applicable condition of Rule 16b-3 without the further approval of the stockholders of the Company. (b) With the concurrence of the affected Participant, the Board may cancel any agreement evidencing Option Rights or any other award granted under this Plan. In the event of any such cancellation, the Board may authorize the granting of new Option Rights or other awards hereunder, which may or may not cover the same number of Common Shares as had been covered by the cancelled Option Rights or other award, at such Option Price, in such manner and subject to such other terms, conditions and discretion as would have been permitted under this Plan had the cancelled Option Rights or other award not been granted. (c) This Plan shall not confer upon any Participant any right with respect to continuance of service with the Board, the Company or any Subsidiary and shall not interfere in any way with any right that the Company, its stockholders or any Subsidiary would otherwise have to terminate any Participant's service at any time. (e) Any award that may be made pursuant to an amendment to this Plan that shall have been adopted without the approval of the stockholders of the Company shall be null and void if it is subsequently determined that such approval was required under the terms of the Plan or applicable law. (f) Unless otherwise determined by the Board, this Plan is intended to comply with Rule 16b-3 at all times that awards hereunder are subject to such Rule. 6 EX-10.10 13 AMENDED AND RESTATED LOAN AGREEMENT Exhibit 10.10 AMENDED AND RESTATED LOAN AGREEMENT DATED AS OF MARCH 31, 1999 BY AND AMONG TRITEL HOLDING CORP., AS BORROWER; TRITEL, INC., AS PARENT; THE FINANCIAL INSTITUTIONS SIGNATORY HERETO, AS LENDERS, AND TORONTO DOMINION (TEXAS), INC., AS ADMINISTRATIVE AGENT FOR THE LENDERS POWELL, GOLDSTEIN, FRAZER & MURPHY LLP ATLANTA, GEORGIA TABLE OF CONTENTS ----------------- Page ---- ARTICLE 1 Definitions..............................................2 Section 1.1 Defined Terms............................................2 Section 1.2 Interpretation..........................................27 ARTICLE 2 Credit Facilities and Letters of Credit.................27 Section 2.1 Commitments and Letters of Credit.......................27 Section 2.2 Manner of Borrower and Disbursement.....................28 Section 2.3 Interest................................................31 Section 2.4 Fees....................................................33 Section 2.5 Mandatory Commitment Reductions.........................34 Section 2.6 Voluntary Commitment Reductions.........................36 Section 2.7 Prepayments and Repayments..............................37 Section 2.8 Prepayment Fee..........................................40 Section 2.9 Notes; Loan Accounts....................................40 Section 2.10 Manner of Payment.......................................41 Section 2.11 Reimbursement...........................................42 Section 2.12 Pro Rata Treatment......................................43 Section 2.13 Capital Adequacy........................................43 Section 2.14 Lender Tax Forms........................................44 Section 2.15 Letters of Credit.......................................45 ARTICLE 3 Conditions Precedent....................................50 Section 3.1 Conditions Precedent to Effectiveness of Agreement......50 Section 3.2 Conditions Precedent to Each Advance....................52 Section 3.3 Conditions Precedent to Issuance of Letters of Credit...53 ARTICLE 4 Representations and Warranties..........................54 Section 4.1 Representations and Warranties..........................54 Section 4.2 Survival of Representations and Warranties..............61 ARTICLE 5 General Covenants.......................................62 Section 5.1 Preservation of Existence and Similar Matters...........62 Section 5.2 Business; Compliance with Applicable Law................62 Section 5.3 Maintenance of Properties...............................62 Section 5.4 Accounting Methods and Financial Records................63 Section 5.5 Insurance...............................................63 Section 5.6 Payment of Taxes and Claims.............................64 Section 5.7 Compliance with ERISA...................................64 Section 5.8 Visits and Inspections..................................66 Section 5.9 Payment of Indebtedness; Loans..........................66 Section 5.10 Use of Proceeds.........................................66 Section 5.11 Indemnity...............................................66 Section 5.12 Interest Rate Hedging...................................67 Section 5.13 Covenants Regarding Formation of Subsidiaries and Acquisitions........................................67 Section 5.14 Payment of Wages........................................68 Section 5.15 Further Assurances......................................68 Section 5.16 License Subs............................................69 Section 5.17 Business of the Parent; Immediate Contributions to the Borrower.........................................69 Section 5.18 Year 2000 Compliance....................................69 (i) Section 5.19 Bidding Company Documentation...........................69 Section 5.20 The Bid Equity Commitments..............................70 ARTICLE 6 Information Covenants...................................70 Section 6.1 Quarterly Financial Statements and Information..........70 Section 6.2 Annual Financial Statements and Information.............71 Section 6.3 Performance Certificates................................71 Section 6.4 Copies of Other Reports.................................72 Section 6.5 Notice of Litigation and Other Matters..................73 ARTICLE 7 Negative Covenants......................................74 Section 7.1 Indebtedness of the Parent, the Borrower and the Borrower's Subsidiaries.............................74 Section 7.2 Limitation on Liens.....................................75 Section 7.3 Amendment and Waiver....................................75 Section 7.4 Liquidation, Merger or Disposition of Assets............76 Section 7.5 Limitation on Guaranties................................76 Section 7.6 Investments and Acquisitions............................77 Section 7.7 Limitation on Distributions.............................79 Section 7.8 Senior Debt Capitalization Ratio........................79 Section 7.9 Total Debt Capitalization Ratio.........................79 Section 7.10 Minimum Required Covered POPs...........................79 Section 7.11 Minimum Subscribers.....................................80 Section 7.12 Aggregate Service Revenue...............................81 Section 7.13 Maximum Capital Expenditures............................81 Section 7.14 Total Leverage Ratio....................................82 Section 7.15 Senior Leverage Ratio...................................83 Section 7.16 Fixed Charges Coverage Ratio............................83 Section 7.17 Interest Coverage Ratio.................................84 Section 7.18 Affiliate Transactions..................................84 Section 7.19 Real Estate.............................................84 Section 7.20 ERISA Liabilities.......................................85 Section 7.21 No Limitation on Upstream Dividends by Subsidiaries.....85 ARTICLE 8 Default.................................................85 Section 8.1 Events of Default.......................................85 Section 8.2 Remedies................................................88 Section 8.3 Payments Subsequent to Declaration of Event of Default..............................................91 ARTICLE 9 The Administrative Agent................................91 Section 9.1 Appointment and Authorization...........................91 Section 9.2 Interest Holders........................................91 Section 9.3 Consultation with Counsel...............................92 Section 9.4 Documents...............................................92 Section 9.5 Administrative Agent and Affiliates.....................92 Section 9.6 Responsibility of the Administrative Agent and the Issuing Bank........................................92 Section 9.7 Security Documents......................................93 Section 9.8 Action by the Administrative Agent and the Issuing Bank............................................93 Section 9.9 Notice of Default or Event of Default...................93 Section 9.10 Responsibility Disclaimed...............................94 Section 9.11 Indemnification.........................................94 Section 9.12 Credit Decision.........................................95 (ii) Section 9.13 Successor Administrative Agent or Issuing Bank..........95 Section 9.14 Collateral Actions......................................96 Section 9.15 Delegation of Duties....................................96 ARTICLE 10 Change in Circumstances Affecting Eurodollar Advances...96 Section 10.1 Eurodollar Basis Determination Inadequate or Unfair.....96 Section 10.2 Illegality..............................................96 Section 10.3 Increased Costs.........................................97 Section 10.4 Effect On Other Advances................................98 Section 10.5 Claims for Increased Costs and Taxes....................99 ARTICLE 11 Miscellaneous...........................................99 Section 11.1 Notices.................................................99 Section 11.2 Expenses...............................................101 Section 11.3 Waivers................................................101 Section 11.4 Set-Off................................................102 Section 11.5 Assignment.............................................102 Section 11.6 Accounting Principles..................................105 Section 11.7 Counterparts...........................................106 Section 11.8 Governing Law..........................................106 Section 11.9 Severability...........................................106 Section 11.10 Interest...............................................106 Section 11.11 Table of Contents and Headings.........................107 Section 11.12 Amendment and Waiver...................................107 Section 11.13 Entire Agreement.......................................108 Section 11.14 Other Relationships....................................108 Section 11.15 Directly or Indirectly.................................108 Section 11.16 Reliance on and Survival of Various Provisions.........108 Section 11.17 Senior Debt............................................109 Section 11.18 Obligations Several....................................109 Section 11.19 Confidentiality........................................109 ARTICLE 12 Waiver of Jury Trial...................................109 Section 12.1 Waiver of Jury Trial...................................109 (iii) EXHIBITS Exhibit A - Form of Borrower's Pledge Agreement Exhibit B - Form of Borrower's Security Agreement Exhibit C-1 - Form of Revolving Loan Note Exhibit C-2 - Form of Term Loan A Note Exhibit C-3 - Form of Term Loan B Note Exhibit D - Form of Certificate of Financial Condition Exhibit E - Form of Performance Certificate Exhibit F - Form of Request for Advance Exhibit G - Form of Use of Proceeds Letter Exhibit H - Form of Borrower's Loan Certificate Exhibit I - Form of Subsidiary Loan Certificate Exhibit J - Form of Subsidiary Security Agreement Exhibit K - Form of Subsidiary Guaranty Exhibit L - Form of Subsidiary Pledge Agreement Exhibit M - Form of Assignment and Assumption Agreement Exhibit N - Form of Parent Pledge Agreement Exhibit O - Form of Request for Issuance of Letter of Credit Exhibit P - Form of Parent Guaranty SCHEDULES Schedule 1 - Licenses and License Subs Schedule 2 - Subsidiaries Schedule 3 - Exceptions to Representations and Warranties Schedule 4 - Litigation Schedule 5 - Agreements with Affiliates Schedule 6 - Indebtedness Schedule 7 - Liens Schedule 8 - Insurance Schedule 9 - Commitment Ratios and Notice Addresses (iv) AMENDED AND RESTATED LOAN AGREEMENT THIS AMENDED AND RESTATED LOAN AGREEMENT is entered into as of this 31st day of March, 1999 by and among TRITEL, INC., a Delaware corporation (the "Parent"), TRITEL HOLDING CORP., a Delaware corporation (the "Borrower"), THE FINANCIAL INSTITUTIONS SIGNATORY HERETO (the "Lenders"), and TORONTO DOMINION (TEXAS), INC., as administrative agent (the "Administrative Agent") for itself and on behalf of the Lenders and the Issuing Bank (as defined below), W I T N E S S E T H: WHEREAS, the Parent, the Borrower, the Administrative Agent and certain of the Lenders are all parties to that certain Loan Agreement dated as of January 7, 1999 (the "Prior Loan Agreement"); and WHEREAS, the Parent and the Borrower have requested that the Administrative Agent and the Lenders consent to certain amendments to the Prior Loan Agreement, as more fully set forth in this Amended and Restated Loan Agreement; and WHEREAS, the Administrative Agent and the Lenders have agreed to amend and restate the Prior Loan Agreement in its entirety subject to the conditions and on the terms set forth herein; and WHEREAS, the Parent and the Borrower acknowledge and agree that the Security Interest (as defined in the Prior Loan Agreement) granted to the Administrative Agent, for itself and on behalf of the Lenders pursuant to the Prior Loan Agreement and the Loan Documents (as defined in the Prior Loan Agreement) executed in connection therewith shall remain outstanding and in full force and effect in accordance with the Prior Loan Agreement and shall continue to secure the Obligations (as defined herein); and WHEREAS, the Parent and the Borrower acknowledge and agree that (i) the Obligations (as defined herein) represent, among other things, the amendment, restatement, renewal, extension, consolidation and modification of the Obligations (as defined in the Prior Loan Agreement) arising in connection with the Prior Loan Agreement and the other Loan Documents (as defined in the Prior Loan Agreement) executed in connection therewith; (ii) the parties hereto intend that the Security Documents (as defined in the Prior Loan Agreement) executed in connection with the Prior Loan Agreement and the collateral pledged thereunder shall secure, without interruption or impairment of any kind, all existing Indebtedness under the Prior Loan Agreement and the other Loan Documents (as defined in the Prior Loan Agreement) executed in connection therewith as so amended, restated, restructured, renewed, extended, consolidated and modified hereunder, together with all other Obligations hereunder; (iii) all Liens evidenced by the Security Documents (as defined in the Prior Loan Agreement) executed in connection with the Prior Loan Agreement are hereby ratified, confirmed and continued; and (iv) the Loan Documents (as defined herein) are intended to restate, renew, extend, consolidate, amend and modify the Prior Loan Agreement and the other Loan Documents (as defined in the Prior Loan Agreement) executed in connection therewith; and WHEREAS, the parties hereto intend that (i) the provisions of the Prior Loan Agreement and the other Loan Documents (as defined in the Prior Loan Agreement) executed in connection therewith, to the extent restated, renewed, extended, consolidated, amended and modified hereby, are hereby superseded and replaced by the provisions hereof and of the Loan Documents (as defined herein): and (ii) the Notes (as hereinafter defined) amend, renew, extend, modify, replace, are substituted for and supersede in their entirety, but do not extinguish the indebtedness arising under, the promissory notes issued pursuant to the Prior Loan Agreement; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto, the parties hereby agree as follows: ARTICLE 1 Definitions Section 1.1 Defined Terms For the purposes of this Agreement: "Acquisition" shall mean (whether by purchase, lease, exchange, issuance of stock or other equity or debt securities, merger, reorganization or any other method) (i) any acquisition by the Borrower or any of its Subsidiaries of any other Person, which Person shall then become consolidated with the Borrower or any such Subsidiary in accordance with GAAP or (ii) any acquisition by the Borrower or any of its Subsidiaries of all or any substantial part of the assets of any other Person. "Administrative Agent" shall mean Toronto Dominion (Texas), Inc., in its capacity as Administrative Agent for the Lenders and the Issuing Bank, or any successor Administrative Agent appointed pursuant to Section 9.13 hereof. "Administrative Agent's Office" shall mean the office of the Administrative Agent located at 909 Fannin, Suite 1700, Houston, Texas 77010, or such other office as may be designated pursuant to the provisions of Section 11.1 hereof. "Advance" shall mean amounts advanced by the Lenders to the Borrower pursuant to Article 2 hereof on the occasion of any borrowing and having the same Interest Rate Basis and Interest Period; and "Advances" shall mean more than one Advance. 2 "Affected Lender" shall have the meaning ascribed thereto in Section 10.5 hereof. "Affiliate" shall mean, with respect to a Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such first Person. For purposes of this definition, "control" when used with respect to any Person includes, without limitation, the direct or indirect beneficial ownership of more than ten percent (10%) of the voting securities or voting equity of such Person or the power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. "Affiliated Successor" shall mean any Person which is an "Affiliated Successor" as defined in the Stockholders Agreement and as permitted under Sections 4.1(c) and (d) of the Stockholders Agreement. "Agreement" shall mean this Amended and Restated Loan Agreement, together with all Exhibits and Schedules hereto. "Agreement Date" shall mean the date as of which this Agreement is dated. "Aggregate Bid License Purchase Price" shall mean the sum of Bid License Purchase Prices for all Bid Licenses purchased, or committed to be purchased, by the Borrower or any of the Borrower's Subsidiaries from the Bidding Company pursuant to the Bidding Company Documentation. "Aggregate Service Revenue" shall mean, for any period, all service revenues, including, without limitation, subscriber revenues, toll revenues, roaming revenues, wholesale service revenues and long-distance revenues, of the Borrower and its Subsidiaries for such period. "Annualized Operating Cash Flow" shall mean the product of (a) Operating Cash Flow for the most recently completed two (2) fiscal quarter period times (b) two (2). "Applicable Law" shall mean, in respect of any Person, all provisions of constitutions, statutes, rules, regulations and orders of governmental bodies or regulatory agencies applicable to such Person, including, without limiting the foregoing, the Licenses, the Communications Act and all Environmental Laws, and all orders, decisions, judgments and decrees of all courts and arbitrators in proceedings or actions to which the Person in question is a party or by which it is bound. "Applicable Margin" shall mean the interest rate margin applicable to Base Rate Advances and Eurodollar Advances, as the case may be, in each case determined in accordance with Section 2.3(f) hereof. "Applicable Prepayment Fee" shall mean that fee payable upon the prepayment of any portion of Term Loan B, calculated based upon a percentage of the amount of such payment, in accordance with Section 2.8 hereof. 3 "Approved Fund" shall mean, with respect to any Lender that is a fund that invests in commercial loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor. "Arranging Agents" shall mean, collectively, TD Securities (USA) Inc., Barclays Bank PLC and NationsBanc Montgomery Securities LLC, in their capacity as Arranging Agents; and "Arranging Agent" shall mean any one of the foregoing Arranging Agents. "Assignment of Rights" shall mean that certain Assignment of Rights dated as of January 7, 1999 by and between the Parent and the Administrative Agent. "AT&T" shall mean AT&T Wireless PCS Inc., a Delaware corporation. "Auction" shall mean the re-auction for the sale of certain PCS Licenses in the C-Block, D-Block, E-Block and F-Block conducted by the FCC as set forth in parts 1 and 24 of Title 47 of the Code of Federal Regulations commencing on or about March 23, 1999. "Authorized Signatory" shall mean such senior personnel of a Person as may be duly authorized and designated in writing by such Person to execute documents, agreements and instruments on behalf of such Person. "Available Letter of Credit Commitment" shall mean, at any time, the lesser of (a)(i) $10,000,000.00, minus (ii) all Letter of Credit Obligations then outstanding, and (b) the Available Revolving Loan Commitment, but in no event may the Available Letter of Credit Commitment be less than $0.00. "Available Revolving Loan Commitment" shall mean, as of any date, the difference between (a) the Revolving Loan Commitment in effect on such date and (b) the sum of (i) the Revolving Loans then outstanding and (ii) the aggregate amount of all Letter of Credit Obligations then outstanding. "Available Term Loan A Commitment" shall mean, as of any date, the difference between (a) the Term Loan A Commitment on such date and (b) the Term Loan A then outstanding. "Base Rate" shall mean, at any time, the greater of: (a) the rate of interest adopted by The Toronto-Dominion Bank, New York Branch as its reference rate for the determination of interest rates for loans of varying maturities in United States dollars to United States residents of varying degrees of creditworthiness and being quoted at such time by such bank as its "prime rate" or "base rate"; or (b) the sum of (i) the Federal Funds Rate and (ii) one-half of one percent (0.50%) per annum. The Base Rate is not necessarily the lowest rate of interest charged to borrowers of The Toronto-Dominion Bank, New York Branch. "Base Rate Advance" shall mean an Advance which the Borrower requests to be made as 4 a Base Rate Advance or is reborrowed as a Base Rate Advance, in accordance with the provisions of Section 2.2(b) hereof, and which shall be in a principal amount of at least $1,000,000, and in an integral multiple of $500,000. "Base Rate Basis" shall mean a simple interest rate equal to the sum of (a) the Base Rate and (b) the Applicable Margin. The Base Rate Basis shall be adjusted automatically as of the opening of business on the Business Day of each change in the Base Rate to account for such change, and shall also be changed to reflect changes in the Applicable Margin in accordance with Section 2.3(f) hereof. "Bidding Company" shall mean ABC Wireless Corp. L.L.C., a Delaware limited liability company formed by Jerry Vento, Tom Sullivan and Scott Anderson for purposes of bidding in the Auction. "Bidding Company Documentation" shall mean, collectively, the Deposit Loan Note, that certain Business Plan and Bidding Arrangements agreement, that certain Security Agreement securing the obligations of the Bidding Company under the Deposit Loan Note, that certain Guaranty and Pledge Agreement by the members of the Bidding Company securing the obligations of the Bidding Company under the Deposit Loan Note, that certain Closing Agreement and all such other agreements, instruments and other writings in connection therewith or otherwise evidencing an agreement by and among the Borrower, the Bidding Company and any other Persons parties to any of the foregoing concerning the Auction and/or the Bid Licenses; in each case, which shall be in form and substance reasonably satisfactory to the Administrative Agent. "Bid Equity Commitments" shall mean the aggregate sum of (a) irrevocable binding but unfunded commitments to purchase additional Capital Stock of the Parent (other than commitments required to be contributed to the Parent pursuant to the Securities Purchase Agreement) by Persons (i) owning Capital Stock of the Parent or (ii) otherwise reasonably acceptable to the Administrative Agent and (b) irrevocable but unfunded commitments to make unsecured subordinated loans to the Parent by Persons (i) owning Capital Stock of the Parent or (ii) otherwise reasonably acceptable to the Administrative Agent; in either case, which shall be used to fund a portion of the aggregate Bid License Purchase Price and which shall be on terms and conditions and in form and substance reasonably satisfactory to the Administrative Agent. "Bid Equity Commitments Documentation" shall mean, collectively, all documents, agreements, instruments and other writings evidencing the Bid Equity Commitments, which shall be in form and substance reasonably satisfactory to the Administrative Agent. "Bid Licenses" shall mean, collectively, those certain PCS Licenses in the C-Block and F-Block available for purchase at the Auction covering the geographic area for which the Borrower or its Subsidiaries have, as of March 1, 1999, Licenses to provide wireless communications services. 5 "Bid License Purchase Price" shall mean, with respect to each Bid License purchased, or committed to be purchased, by the Borrower and/or one or more of the Borrower's Subsidiaries pursuant to the Bidding Company Documentation the aggregate total purchase price paid, or committed to be paid, for such Bid Licenses. "Board of Directors" shall mean, when used with reference to the Borrower, the board of directors of the Borrower. "Borrower" shall mean Tritel Holding Corp., a Delaware corporation and a wholly-owned subsidiary of the Parent. "Borrower's Pledge Agreements" shall mean, collectively, that certain Borrower's Pledge Agreement dated as of January 7, 1999 between the Borrower and the Administrative Agent, or any other similar agreement, each substantially in the form of Exhibit A attached hereto. "Borrower's Security Agreements" shall mean, collectively, that certain Borrower's Security Agreement dated as of January 7, 1999 between the Borrower and the Administrative Agent, or any other similar agreement, each substantially in the form of Exhibit B attached hereto. "BTA" shall mean a Basic Trading Area, as defined in 47 C.F.R (section) 24.202. "Business Day" shall mean a day on which banks and foreign exchange markets are open for the transaction of business required for this Agreement in New York, New York and, with respect to any Eurodollar Advance, London, England, as relevant to the determination to be made or the action to be taken. "Capital Expenditures" shall mean, in respect of any Person, expenditures for the purchase of tangible assets of long-term use which would be required to be capitalized on the balance sheet of such Person in accordance with GAAP. "Capital Stock" shall mean, as applied to any Person, any capital stock of such Person, regardless of class or designation, and all warrants, options, purchase rights, conversion or exchange rights, voting rights, calls or claims of any character with respect thereto. "Capitalized Lease Obligation" shall mean that portion of any obligation of a Person as lessee under a lease (or other similar arrangement) which at the time would be required to be capitalized on the balance sheet of such lessee in accordance with GAAP. "Cash Equivalents" shall mean investments in (i) certificates of deposit and other interest bearing deposits or accounts (including, without limitation, money market accounts) with United States commercial banks (including, without limitation, United States branches of foreign banks) having, or whose parent corporation has, a combined capital and surplus of at least $500,000,000, which mature within one (1) year from the date of investment, (ii) obligations 6 issued or unconditionally guaranteed by the United States government, or issued by an agency thereof and backed by the full faith and credit of the United States government, which obligations mature within one (1)year from the date of investment, (iii) direct obligations issued by any United States state or political subdivision thereof, which mature within one (1) year from the date of investment and have the highest rating obtainable from Standard & Poor's Corporation or Moody's Investors Service on the date of investment or (iv) commercial paper which has the highest rating obtainable from Standard & Poor's Ratings Group, a division of McGraw Hill, Inc., or any successor, or Moody's Investors Service, or any successor, on the date of investment. "Cellular System" shall mean, as applied to any Person, a wireless communication or PCS system constructed and operated in a BTA or MTA of such Person, and shall include any cellular mobile radio telephone system, microwave system or paging system operated in connection with (and in the same general service area as) any of the foregoing systems. "Certificate of Financial Condition" shall mean a certificate substantially in the form of Exhibit D attached hereto signed by the chief financial officer of the Borrower, together with any schedules, exhibits or annexes appended thereto. "Change of Control Event" shall mean the occurrence or existence of any of the following: (a) any sale or other disposition by AT&T or TWR Cellular, Inc. of any shares of Capital Stock of the Parent prior to January 7, 2002, such that after giving effect thereto AT&T and TWR Cellular, Inc., collectively, shall fail to own at least fifteen percent (15%) of the Capital Stock of the Parent, other than any such sale or other disposition to an Affiliated Successor; (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) other than the Parent, Persons owing Capital Stock of the Parent on January 7, 1999 or any Affiliated Successor, of Capital Stock representing more than twenty (20%) of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of either the Borrower or the Parent; (c) occupation of a majority of the seats (other than vacant seats) on the board of directors of either the Parent or the Borrower, by Persons who were not (i) nominated by the board of directors of the Parent (in the case of the Parent's board) or the Borrower (in the case of the Borrower's board), (ii) appointed by directors so nominated, or (iii) in the case of the Parent, appointed by shareholders of the Parent who are or were shareholders (or an Affiliated Successor of any such shareholder) of the Parent on January 7, 1999; or (d) the acquisition of direct or indirect control of the Borrower or the Parent by any Person (and its Affiliated Successors) owning Capital Stock of the Parent on January 7, 1999. Notwithstanding the foregoing, none of the following shall constitute a "Change of Control": (A) the sale by AT&T or TWR Cellular, Inc. of all or any of its Capital Stock of the Borrower subsequent to January 7, 2002; (B) the public sale by the Parent of newly issued Capital Stock in a public offering; and (C) the dilution of AT&T's and TWR Cellular, Inc.'s collective percentage of Capital Stock of the Parent as a result of an issuance of Capital Stock by the Borrower. "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985 and 7 any amendments thereto. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. "Collateral" shall mean any property of any kind constituting collateral for the Obligations under any of the Loan Documents. "Commitments" shall mean, collectively, the Revolving Loan Commitment, the Term Loan A Commitment and the Term Loan B Commitment; and "Commitment" shall mean any one of the foregoing Commitments. "Commitment Ratio" shall mean, with respect to any Lender for any Commitment, the percentage equivalent of the ratio which such Lender's portion of such Commitment bears to the aggregate amount of such Commitment (as each may be adjusted from time to time as provided herein); and "Commitment Ratios" shall mean, with respect to any Commitment, the Commitment Ratios of all of the Lenders with respect to such Commitment. As of the Agreement Date, the Commitment Ratios of the Lenders party to this Agreement are as set forth on Schedule 9 attached hereto. "Committed Equity" shall mean, collectively, the irrevocable binding but unfunded commitments to purchase Capital Stock of the Parent pursuant to the Securities Purchase Agreement. "Communications Act" shall mean the Communications Act of 1934, and any similar or successor federal statute, and the rules and regulations of the FCC thereunder, all as the same may be in effect from time to time. "Competitor of the Borrower" shall mean any Person primarily engaged in the business of building, owning and operating a wireless communications network covering POPs primarily throughout the south-central United States. "Contributed Equity" shall mean, at any time or for any period, the aggregate amount which shall have been received by the Parent prior to such time or during such period as consideration for the issuance of Capital Stock of the Parent and which is thereafter contributed to the Borrower, all as calculated in accordance with GAAP. "Covered POPs" shall mean, as of any date, the aggregate number of POPs within each geographic area for which facilities owned or operated by the Borrower or its Subsidiaries that provide service to such geographic area have achieved substantial completion. "Debt Service" shall mean, for any period, the amount of all principal paid and Interest Expense of the Borrower and its Subsidiaries on a consolidated basis in respect of Indebtedness for Money Borrowed of the Borrower and its Subsidiaries (other than voluntary principal payments of the Revolving Loans or the Term Loan A which are not required to be accompanied 8 by an identical reduction in the Revolving Loan Commitment or the Term Loan A Commitment). "Default" shall mean any Event of Default, and any of the events specified in Section 8.1, regardless of whether there shall have occurred any passage of time or giving of notice, or both, that would be necessary in order to constitute such event an Event of Default. "Defaulting Lender" shall have the meaning ascribed thereto in Section 2.2(e)(iv) hereof. "Default Rate" shall mean a simple per annum interest rate equal to the sum of (a) the Base Rate, (b) the Applicable Margin then applicable to Base Rate Advances, and (c) two percent (2%). "Deposit" shall mean the deposit of $7,500,000 by the Bidding Company in an escrow account with the FCC in connection with Auction funded by the Deposit Loan. "Deposit Loan" shall mean the loan from the Borrower to the Bidding Company evidenced by the Deposit Loan Note. "Deposit Loan Note" shall mean that certain Promissory Note, dated as of March 1, 1999, in the original principal amount of $7,500,000 made by the Bidding Company in favor of the Borrower, and any extensions, renewals or amendments to, or replacements of, the foregoing. "Disqualifying Transaction" shall have the meaning ascribed thereto in the Stockholders Agreement. "Employee Pension Plan" shall mean any Plan which is (a) maintained by the Borrower, any of its Subsidiaries or any ERISA Affiliate and (b) subject to Part 3 of Title I of ERISA. "Environmental Laws" shall mean, collectively, all applicable federal, state or local laws, statutes, rules, regulations or ordinances, codes, common law, consent agreements, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder relating to public health, safety or the pollution or protection of the environment, including, without limitation, those relating to releases, discharges, emissions, spills, leaching, or disposals to air, water, land or ground water, to the withdrawal or use of ground water, to the use, handling or disposal of polychlorinated biphenyls, asbestos or urea formaldehyde, to the treatment, storage, disposal or management of hazardous substances (including, without limitation, petroleum, crude oil or any fraction thereof, or other hydrocarbons), pollutants or contaminants, to exposure to toxic, hazardous or other controlled, prohibited, or regulated substances, including, without limitation, any such provisions under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 United StatesC. (section) 9601 et seq.), or the Resource Conservation and Recovery Act of 1976, as amended (42 United StatesC. (section) 6901 et seq.). "Ericsson" shall mean Ericsson, Inc. 9 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as in effect from time to time. "ERISA Affiliate" shall mean any Person, including, without limitation, any Subsidiary or Affiliate of the Borrower, that is a member of any group of organizations (within the meaning of Code Sections 414(b), (c), (m) or (o)) of which the Borrower is a member. "Eurodollar Advance" shall mean an Advance which the Borrower requests to be made as a Eurodollar Advance or which is reborrowed as a Eurodollar Advance, in accordance with the provisions of Section 2.2 hereof, and which shall be in a principal amount of at least $1,000,000 and in an integral multiple of $500,000. "Eurodollar Basis" shall mean a simple per annum interest rate (rounded upward, if necessary, to the nearest onehundredth of one percent (0.01%)) equal to the sum of (a) the quotient of (i) the Eurodollar Rate divided by (ii) one (1) minus the Eurodollar Reserve Percentage, if any, stated as a decimal, and (b) the Applicable Margin. The Eurodollar Basis shall apply to Interest Periods of one (1), two (2), three (3), six (6), nine (9) and twelve (12) months, and, once determined, shall remain unchanged during the applicable Interest Period, except for changes to reflect adjustments in the Eurodollar Reserve Percentage and the Applicable Margin as adjusted pursuant to Section 2.3(f) hereof. The Eurodollar Basis for any Eurodollar Advance shall be adjusted as of the date of any change in the Eurodollar Reserve Percentage. The Borrower may not elect an Interest Period in excess of six (6) months unless the Administrative Agent has notified the Borrower that each of the Lenders (in such Lender's discretion) has funds available to it for such Lender's portion of the proposed Advance which are not required for other purposes, and that such funds are available to each Lender at a rate (exclusive of reserves and other adjustments) at or below the Eurodollar Rate for such proposed Advance and Interest Period. "Eurodollar Rate" shall mean, for any Interest Period, the average of the interest rates per annum at which deposits in United States Dollars for such Interest Period are offered to The Toronto-Dominion Bank, New York Branch in the Eurodollar market appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in dollars at approximately 11:00 a.m. (London, England time) two (2) Business Days before the first day of such Interest Period, in an amount approximately equal to the principal amount of, and for a length of time approximately equal to the Interest Period for, the Eurodollar Advance sought by the Borrower. In the event that such rate is not available at such time for any reason, then the "Eurodollar Rate" with respect to such Eurodollar Advance for such Interest Period shall be the rate of interest per annum at which dollar deposits in the aggregate principal amount of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds to prime banks in the London interbank market at approximately 11:00 a.m. (London, England time) two (2) Business Days prior to the commencement of such Interest Period. 10 "Eurodollar Reserve Percentage" shall mean the percentage which is in effect from time to time under Regulation D of the Board of Governors of the Federal Reserve System, as such regulation may be amended from time to time, as the maximum reserve requirement applicable with respect to Eurocurrency Liabilities (as that term is defined in Regulation D), whether or not any Lender has any such Eurocurrency Liabilities subject to such reserve requirement at that time. "Event of Default" shall mean any of the events specified in Section 8.1, provided that any requirement for notice or lapse of time has been satisfied without the event being corrected. "Excess Cash Flow" shall mean, as of the end of any fiscal year of the Borrower based on the audited financial statements provided under Section 6.2 hereof for such fiscal year, the excess, if any, without duplication, of (a) sum of (i) Operating Cash Flow for such fiscal year, and (ii) any negative change in the Borrower's working capital account during such fiscal year, minus (b) the sum of the following: (i) Capital Expenditures by the Borrower and its Subsidiaries during such fiscal year; (ii) Debt Service for such fiscal year; (iii) cash taxes paid by the Borrower and its Subsidiaries during such fiscal year; (iv) Restricted Payments or Restricted Purchases made during such fiscal year; and (v) any positive change in the Borrower's working capital account during such fiscal year; in each case, as determined in accordance with GAAP. "Excluded Taxes" shall mean, with respect to the Administrative Agent or any Lender, (a) income or franchise Taxes imposed on (or measured by) its Net Income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located or any governmental authority of or in any of the foregoing (including, without limitation, minimum Taxes and Taxes computed under alternative methods, the principal one of which is based on or measured by net income), (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which the Borrower is located or the Administrative Agent or a Lender, as applicable, is organized or any governmental authority of or in any of the foregoing, (c) in the case of a Lender that is not organized under the laws of the United States, any State thereof or the District of Columbia (a "Foreign Lender"), any withholding Tax that is in effect and would apply to a payment to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), (d) any Taxes to the extent imposed by reason of a Lender or the Administrative Agent, as applicable, engaging in activities in the jurisdiction imposing the Tax that are unrelated to the transactions contemplated hereby and (e) any Tax that would not have been imposed but for the failure of a Lender or the Administrative Agent, as applicable, to comply with the certification requirements described in Section 2.14. "FCC" shall mean the Federal Communications Commission, or any other similar or successor agency of the federal government administering the Communications Act. "FCC Indebtedness" shall mean any Indebtedness of the Borrower, its Subsidiaries or the Parent owed to the United States Treasury Department that is incurred in connection with the 11 acquisition of any License. "Federal Funds Rate" shall mean, as of any date, the weighted average of the rates on overnight federal funds transactions with the members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by the Administrative Agent. "Fixed Charges" shall mean, for the Borrower and its Subsidiaries, on a consolidated basis, as of any date, the sum of: (a) Debt Service; (b) cash taxes paid by the Borrower and its Subsidiaries; (c) Capital Expenditures (excluding assets purchased with the proceeds of obsolete, worn out or no longer useful assets as permitted by Section 7.4(a) hereof) by the Borrower and its Subsidiaries; and (d) Restricted Payments and Restricted Purchases made; in each case for the most recently completed four (4) fiscal quarter period then ended, and in each case as calculated in accordance with GAAP. "Fixed Charges Coverage Ratio" shall mean, as of any date of determination, the ratio of (a) Annualized Operating Cash Flow to (b) Fixed Charges. "Foreign Lender" shall have the meaning ascribed thereto in the definition of "Excluded Taxes" set forth in Section 1.1 hereof. "Funded Debt" shall mean, as of the date of determination, the aggregate amount of all Indebtedness for Money Borrowed of the Parent, the Borrower and the Borrower's Subsidiaries which by its terms (a) matures more than one (1) year after the date of determination or (b) matures within one (1) year from the date of determination, but which is renewable or extendable at the option of the applicable obligor to a date more than one (1) year from the date of determination; in either case, including, without limitation, the Revolving Loans. "GAAP" shall mean, as in effect from time to time in the United States, generally accepted accounting principles, consistently applied. "Give-back Licenses" shall mean any License voluntarily terminated, surrendered or otherwise cancelled by the Borrower or any of its Subsidiaries, provided that, in connection with any such termination, surrender or other cancellation, (a) the Borrower represents and warrants to the Administrative Agent, the Lenders and the Issuing Bank that such termination, surrender or other cancellation could not reasonably be expected to have a Materially Adverse Effect, (b) the Borrower provides revised financial projections reflecting and such other information relating to such termination, surrender or other cancellation as may be reasonably requested by the Administrative Agent, and (c) the Required Lenders shall consent in writing to such termination, surrender or other cancellation, such consent not to be unreasonably withheld. 12 "Go-Positive Date" shall mean the date on which the Borrower's Operating Cash Flow shall become greater than zero dollars ($0.00). "Guaranty" or "Guaranteed," as applied to an obligation, shall mean and include (a) a guaranty, direct or indirect, in any manner, of all or any part of such obligation and (b) any agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of nonperformance) of all or any part of such obligation, including, without limiting the foregoing, any reimbursement obligations as to amounts drawn down by beneficiaries of outstanding letters of credit or capital call requirements. "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Persons under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capitalized Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. "Indebtedness for Money Borrowed" shall mean, with respect to any Person, Indebtedness for money borrowed and Indebtedness represented by notes payable and drafts accepted representing extensions of credit, all obligations evidenced by bonds, debentures, notes or other similar instruments, all Indebtedness upon which interest charges are customarily paid, all Capitalized Lease Obligations, all reimbursement obligations with respect to outstanding letters of credit, all Indebtedness issued or assumed as full or partial payment for property or services (other than trade payables arising in the ordinary course of business, but only if and so long as such accounts are payable on customary trade terms), whether or not any such notes, drafts, obligations or Indebtedness represent Indebtedness for money borrowed, and, without duplication, Guaranties of any of the foregoing. For purposes of this definition, interest which is accrued but not paid on the scheduled due date for such interest shall be deemed Indebtedness for Money Borrowed. 13 "Indemnitee" shall have the meaning ascribed thereto in Section 5.11 hereof. "Interest Coverage Ratio" shall mean, as of any date of determination, the ratio of (a) Annualized Operating Cash Flow to (b) Interest Expense for the most recently completed four (4) fiscal quarter period. "Interest Expense" shall mean, for any period, all cash interest paid (including imputed interest with respect to Capitalized Lease Obligations) with respect to the Indebtedness for Money Borrowed of the Borrower and its Subsidiaries on a consolidated basis during such period pursuant to the terms of such Indebtedness for Money Borrowed, together with all fees paid in respect of such Indebtedness for Money Borrowed during such period (but specifically excluding fees paid during previous periods but amortized during the current period in accordance with GAAP), calculated in accordance with GAAP. "Interest Period" shall mean, (a) in connection with any Base Rate Advance, the period beginning on the date such Advance is made and ending on the earlier of the last day of the calendar quarter in which such Advance is made and the day such Advance is paid, provided, however, that if a Base Rate Advance is made on the last day of any calendar quarter, it shall have an Interest Period ending on, and its Payment Date shall be, the last day of the following calendar quarter, and (b) in connection with any Eurodollar Advance, the term of such Advance selected by the Borrower or otherwise determined in accordance with this Agreement. Notwithstanding the foregoing, (i) any applicable Interest Period which would otherwise end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless, with respect to Eurodollar Advances only, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any applicable Interest Period, with respect to Eurodollar Advances only, which begins on a day for which there is no numerically corresponding day in the calendar month during which such Interest Period is to end shall (subject to clause (i) above) end on the last day of such calendar month, and (iii) no Interest Period shall extend beyond the Maturity Date, or such earlier date on which the Borrower has any repayment obligations under Section 2.5 or 2.7 hereof. Interest shall be due and payable with respect to any Advance as provided in Section 2.3 hereof. "Interest Rate Basis" shall mean the Base Rate Basis or the Eurodollar Basis, as appropriate. "Interest Rate Hedge Agreements" shall mean the obligations of any Person pursuant to any arrangement with any other Person whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall also include, without limitation, interest rate swaps, caps, floors, collars and similar arrangements. "Issuing Bank" shall mean The Toronto-Dominion Bank, Houston Agency, as issuer of 14 the Letters of Credit. "known to the Borrower" or "to the knowledge of the Borrower" shall mean known by or reasonably should have been known by the executive officers of the Borrower (which shall include, without limitation, the chairman/president, the chief executive officer, the chief financial officer, the chief operating officer, the treasurer, the secretary and any in-house general counsel). "Lenders" shall mean those financial institutions whose names appear as "Lenders" on the signature pages to this Agreement, together with any assignees thereof pursuant to Section 11.5 hereof; and "Lender" shall mean any one of the foregoing Lenders. "Letter of Credit Obligations" shall mean, at any time, the sum of (a) an amount equal to the aggregate undrawn and unexpired amount (including the amount to which any such Letter of Credit can be reinstated pursuant to the terms hereof) of the then outstanding Letters of Credit and (b) an amount equal to the aggregate drawn, but unreimbursed drawings on any Letters of Credit. "Letter of Credit Reserve Account" shall mean any account maintained by the Administrative Agent for the benefit of the Issuing Bank, the Administrative Agent and the Lenders the proceeds of which shall be applied as provided in Section 8.2(a) hereof. "Letters of Credit" shall mean Standby Letters of Credit issued by the Issuing Bank on behalf of the Borrower from time to time in accordance with the terms hereof. "Licenses" shall mean any broadband PCS license issued by the FCC in connection with the operation of a Cellular System granted and held by the Borrower or any of its Subsidiaries, all of which are listed as of the Agreement Date on Schedule 1 hereto. "License Subs" shall mean, collectively, 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 the Borrower designated as a License Sub by notice to the Administrative Agent, in each case, the Capital Stock of which is pledged to the Administrative Agent pursuant to a Borrower's Pledge Agreement or a Subsidiary Pledge Agreement, as appropriate; and "License Sub" shall mean any one of the foregoing License Subs. "Lien" shall mean, with respect to any property, any mortgage, lien, pledge, negative pledge or other agreement not to pledge, assignment, charge, security interest, title retention agreement, levy, execution, seizure, attachment, garnishment or other encumbrance of any kind in respect of such property, whether created by statute, contract, the common law or otherwise, and whether or not choate, vested or perfected. "Loan Documents" shall mean this Agreement, the Notes, the Security Documents, all fee letters, all Requests for Advance, all Requests for Letters of Credit, all Letters of Credit, all 15 Interest Rate Hedge Agreements between the Borrower or any Subsidiary, on the one hand, and the Administrative Agent, the Lenders, or any of their Affiliates, on the other hand, and all other documents and agreements executed or delivered in connection with or contemplated by this Agreement. "Loans" shall mean, collectively, the amounts advanced by the Lenders to the Borrower under the Commitments, not to exceed the aggregate amount of the Commitments, and evidenced by the Notes. "Management Agreement" shall mean the Management Agreement by and between the Parent and Tritel Management, LLC in the form attached as Exhibit A to the Securities Purchase Agreement. "Margin Stock" shall have meaning ascribed thereto in Section 4.1(n) hereof. "Materially Adverse Effect" shall mean any material adverse effect upon any of the following: (a) the business, assets, liabilities, financial condition, results of operations, properties, or business prospects of the Borrower and its Subsidiaries taken as a whole; (b) the binding nature, validity or enforceability of this Agreement or any of the Notes; or (c) the ability of the Borrower and its Subsidiaries taken as a whole to perform the payment obligations or other material obligations under this Agreement or any other Loan Document; in each case, when taken together with other such acts, omissions, situations, statuses, events or undertakings; provided, however, that on or after the date which is five (5) years from January 7, 1999, neither (x) the nonrenewal of the Network License Agreement by AT&T Corp. nor (y) the termination of the Network License Agreement by AT&T Corp. in accordance with its terms as a result of a Disqualifying Transaction shall in and of itself be a Materially Adverse Effect. "Maturity Date" shall mean (a) the Revolving Loan Maturity Date, the Term Loan A Maturity Date or the Term Loan B Maturity Date, as appropriate, or (b) such earlier date as payment of the Obligations shall be due (whether by acceleration, reduction of the Commitments to zero, or otherwise). "Multiemployer Plan" shall mean a multiemployer pension plan as defined in Section 3(37) of ERISA to which the Borrower, any of its Subsidiaries or any ERISA Affiliate is or has been required to contribute subsequent to September 25, 1980. "MTA" shall mean a Major Trading Area as defined in 47 C.F.R. (section) 24.202. "Necessary Authorizations" shall mean, collectively, all approvals and licenses from, and all filings and registrations with, any governmental or other regulatory authority, including, without limiting the foregoing, the Licenses and all approvals, licenses, filings and registrations under the Communications Act. "Net Income" shall mean, for the Borrower and its Subsidiaries on a consolidated basis 16 for any period, net income determined in accordance with GAAP. "Net Proceeds (Asset Sales)" shall mean, with respect to any sale or other disposition of assets by any Person, the difference between (a) the aggregate amount of cash or Cash Equivalents received (including by way of sale or discounting of a note, installment receivable or other receivable, but excluding any other consideration received in the form of assumption by the acquiree of Indebtedness for Money Borrowed or other obligations relating to such properties or assets or received in any other noncash form) therefrom by such Person, and (b) the sum of (i) all legal, title and recording tax expenses, commissions and other fees and expenses incurred and all federal, state, provincial, foreign and local taxes required to be accrued as a liability as a consequence of such asset sale or other disposition, (ii) all payments made by such Person or its Subsidiaries on any Indebtedness for Money Borrowed which is secured by the assets subject to such asset sale or other disposition in accordance with the terms of any Lien upon or with respect to such assets or which must by the terms of such Lien, or in order to obtain a necessary consent to such asset sale or other disposition or by Applicable Law, be repaid out of the proceeds from such asset sale or other disposition, and (iii) a reasonable reserve for the after-tax costs of any indemnification payments (fixed or contingent) attributable to the seller's indemnities to the purchaser undertaken by the Borrower or any of its Subsidiaries in connection with such asset sale or other disposition. "Net Proceeds (Capital Sales)" shall mean, with respect to any sale, issuance or other disposition of any Indebtedness or any Capital Stock of the Borrower or the Borrower's Subsidiaries by the Borrower or the Borrower's Subsidiaries after January 7, 1999, the difference between (1) the aggregate amount of cash or Cash Equivalents received in connection with the sale, issuance or other disposition of such Indebtedness or such Capital Stock, and (2) the aggregate amount of any reasonable and customary transaction costs incurred in connection therewith, including, without limitation, all fees and expenses of attorneys, accountants and other consultants, all underwriting or placement agent fees, and fees and expenses of any trustee, registrar or transfer agent. "Network License Agreement" shall mean the Network Membership License Agreement, dated the date hereof, by and between AT&T Corp. and the Parent. "Non-U.S. Lender" shall have the meaning ascribed thereto in Section 2.9(a) hereof. "Notes" shall mean, collectively, the Revolving Loan Notes, the Term Loan A Notes and the Term Loan B Notes, and any other promissory notes issued by the Borrower to evidence the Loans, and any extensions, renewals or amendments to, or replacements of, the foregoing. "Obligations" shall mean all payment and performance obligations of every kind, nature and description of the Borrower, its Subsidiaries, and any other obligors to the Lenders, the Administrative Agent or the Issuing Bank, or any of them, under this Agreement and the other Loan Documents (including, without limitation, any interest, fees and other charges on the Loans or otherwise under the Loan Documents that would accrue but for the filing of a bankruptcy 17 action with respect to the Borrower or any of its Subsidiaries, whether or not such claim is allowed in such bankruptcy action and including Obligations to the Administrative Agent, any of the Lenders, or the Issuing Bank, or any of their Affiliates, under any Interest Rate Hedge Agreements) as they may be amended from time to time, or as a result of making the Loans, whether such obligations are direct or indirect, absolute or contingent, due or not due, contractual or tortious, liquidated or unliquidated, arising by operation of law or otherwise, now existing or hereafter arising. "Operating Cash Flow" shall mean, with respect to the Borrower and its Subsidiaries on a consolidated basis for any fiscal quarter, the sum of (a) Net Income for such quarter (after eliminating any extraordinary gains and losses), and (b) to the extent deducted in determining Net Income, the sum of the following for such period: (i) depreciation and amortization expense, (ii) Interest Expense, (iii) tax expense and (iv) other non-cash charges, in each case all as determined in accordance with GAAP. For purposes of determining each of the Total Leverage Ratio and the Senior Leverage Ratio, if the Borrower or any of its Subsidiaries acquires (or disposes of) Cellular Systems during a fiscal period, "Operating Cash Flow" for that period shall be determined as if the Cellular Systems so acquired (or disposed of) had been acquired (or disposed of) on the first day of such fiscal period, and the operating results of any acquired Cellular System for that portion of any fiscal period in which such Cellular System was not owned by the Borrower or any of its Subsidiaries shall be determined by reference to financial information prepared by the prior owners thereof, subject to such adjustments as the Administrative Agent may require; provided, however, that no material adjustments may be made without consent of the Required Lenders. "Ownership Interests" shall mean, with respect to any Person, the Capital Stock, partnership interests, membership interests or other instruments or securities evidencing ownership of such Person. "Parent" shall mean Tritel, Inc., a Delaware corporation and the parent company of the Borrower. "Parent Guaranty Agreement" shall mean that certain Parent Guaranty Agreement dated as of January 7, 1999 by and between the Parent and the Administrative Agent, for itself and the Lenders, in substantially the form of Exhibit P attached hereto. "Parent Pledge Agreement" shall mean that certain Parent Pledge Agreement dated as of January 7, 1999 by and between the Parent and the Administrative Agent, for itself and the Lenders, in substantially the form of Exhibit N attached hereto. "Payment Date" shall mean the last day of any Interest Period. "PBGC" shall mean the Pension Benefit Guaranty Corporation, or any successor thereto. "PCS" shall mean a personal communications service, as defined in 47 C.F.R. (section) 24.5. 18 "PCS Documents" shall mean the Securities Purchase Agreement and each of the documents that is an exhibit schedule or other attachment thereto (including, without limitation, the Network License Agreement, the Management Agreement, the Resale Agreement (upon execution and delivery thereof), the Stockholders' Agreement, and the Roaming Agreement). "Performance Certificate" shall mean a certificate, substantially in the form of Exhibit E attached hereto, signed by an Authorized Signatory of the Borrower, together with any schedules, exhibits or annexes attached thereto delivered pursuant to Section 6.3 hereof. "Permitted Liens" shall mean, as applied to any Person: (a) Any Lien in favor of the Administrative Agent or any Lender given to secure the Obligations; (b) (i) Liens on real estate or other property for taxes, assessments, governmental charges or levies not yet delinquent and (ii) Liens for taxes, assessments, judgments, governmental charges or levies or claims the non-payment of which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves have been set aside on such Person's books, but only so long as no foreclosure, distraint, sale or similar proceedings have been commenced with respect thereto; (c) Liens of carriers, warehousemen, mechanics, laborers and materialmen incurred in the ordinary course of business for sums not yet overdue by more than thirty (30) days or being diligently contested in good faith, if reserves or appropriate provisions shall have been made therefor; (d) Liens incurred in the ordinary course of business in connection with worker's compensation and unemployment insurance, social security obligations, assessments or government charges which are not overdue more than sixty (60) days; (e) Restrictions on the transfer of the Licenses or assets of the Borrower or its Subsidiaries imposed by any of the Licenses as presently in effect, by the Communications Act, including any rules or regulations thereunder, or by comparable state legislation; (f) Easements, rights-of-way, and other similar encumbrances on the use of real property which do not materially interfere with the ordinary conduct of the business of such Person or the use of such property; (g) Liens reflected by Uniform Commercial Code financing statements filed in respect of Capitalized Lease Obligations permitted pursuant to Section 7.1(f) hereof and true leases of the Borrower or any of its Subsidiaries; (h) Deposits to secure the performance of bids, trade contracts, leases, 19 statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (i) Liens of attachments, judgments or awards in respect of judgments that do not constitute an Event of Default under Section 8.1(h); (j) Liens existing on the Agreement Date as set forth on Schedule 7 attached hereto; (k) Liens on goods (and the documents of title related thereto) the purchase price of which is financed by a documentary letter of credit issued for the account of the Borrower or its Subsidiaries, provided that such Lien secures only the obligations of the Borrower or such Subsidiaries in respect of such letter of credit; and (l) Liens securing Indebtedness permitted pursuant to Section 7.1(i) hereof, provided that such Liens only attach to the Licenses financed by the FCC Indebtedness. "Person" shall mean an individual, corporation, limited liability company, association, partnership, joint venture, trust or estate, an unincorporated organization, a government or any agency or political subdivision thereof, or any other entity. "Plan" shall mean an employee benefit plan within the meaning of Section 3(3) of ERISA or any other employee benefit plan maintained for employees of any Person or any affiliate of such Person. "POPs" shall mean, as of any calculation date, with respect to any BTA or MTA, the population of such BTA or MTA as such number is set forth in the most recent PCS Atlas and Data Guide published by Paul Kagan Associates, Inc.. "Pre-receivership Period" shall mean the time period beginning on the date of the first possession of the Cellular Systems by the Administrative Agent (or the Lenders) and ending upon the earlier of (i) the taking of possession of the systems by a receiver appointed by a court of competent jurisdiction or (ii) the taking of possession of the systems by a trustee or by the Borrower as debtor-in-possession following the entry of an order for relief in a case of the Borrower pending under the United States Bankruptcy Code. "Qualified Vendors" shall mean, collectively, Ericsson, Lucent Technologies Inc. or any Affiliate of either of the foregoing Persons; and "Qualified Vendor" shall mean any of the foregoing Qualified Vendors. "Qualified Vendor Agreement" shall mean, collectively, (a) that certain Acquisition Agreement between Tritel Communications, Inc. and Tritel Finance, Inc., each a Delaware corporation, on the one hand, and Ericsson, on the other hand, dated as of December 30, 1998 and (b) any other purchase agreement between the Borrower and/or one or more of its 20 Subsidiaries, on the one hand, and a Qualified Vendor, on the other hand, in each case, pursuant to which the Borrower and/or such Subsidiaries shall acquire from Ericsson and/or such Qualified Vendor, as applicable, cellular equipment and ancillary services required for the initial buildout of its or their Cellular Systems, and which shall be in form and substance reasonably satisfactory to the Administrative Agent. "Register" shall have the meaning ascribed thereto in Section 11.5(g) hereof. "Registered Noteholder" shall mean each Non-U.S. Lender that holds a Registered Note pursuant to Section 2.9(a) hereof or registers its Loans pursuant to Section 11.5(g) hereof. "Registered Notes" shall mean those certain Notes that have been issued in registered form in accordance with Sections 2.9(a) and 11.5(g) hereof and each of which bears the following legend: "This is a Registered Note, and this Registered Note and the Loans evidenced hereby may be assigned or otherwise transferred in whole or in part only by registration of such assignment or transfer on the Register and in compliance with all other requirements provided for in the Loan Agreement." "Regulations" shall have the meaning ascribed thereto in Section 4.1(n) hereof. "Replacement Lender" shall have the meaning ascribed thereto in Section 10.5 hereof. "Reportable Event" shall mean, with respect to any Employee Pension Plan, an event described in Section 4043(b) of ERISA. "Request for Advance" shall mean a certificate designated as a "Request for Advance," signed by an Authorized Signatory of the Borrower requesting an Advance hereunder, which shall be in substantially the form of Exhibit F attached hereto, and shall, among other things, (i) specify the Commitment under which such Advance is to be made, the date of the Advance, which shall be a Business Day, the amount of the Advance, the type of Advance (Eurodollar or Base Rate), and, with respect to Eurodollar Advances, the Interest Period selected by the Borrower, (ii) state that there shall not exist a Default or Event of Default as of the date of such Advance and after giving effect thereto and (iii) provide calculations demonstrating compliance with Sections 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17 hereof, after giving effect to the proposed Advance, and the Applicable Margin related thereto. "Request for Issuance of Letter of Credit" shall mean any certificate signed by an Authorized Signatory of the Borrower requesting that the Issuing Bank issue a Letter of Credit hereunder, which certificate shall be in substantially the form of Exhibit O attached hereto and shall, among other things, state (a) the stated amount of the Letter of Credit, (b) the effective date for the issuance of the Letter of Credit (which shall be a Business Day), (c) the date on which the Letter of Credit is to expire (which shall be a Business Day), (d) the Person for whose benefit such Letter of Credit is to be issued, (e) that the requirements of Section 3.3 hereof have been satisfied, and (f) other relevant terms of such Letter of Credit. 21 "Required Lenders" shall mean, collectively, Lenders the total of whose Commitment Ratios equals or exceeds fifty-one percent (51%) of the Commitment Ratios of all Lenders entitled to vote hereunder. "Resale Agreement" shall mean, when executed and delivered, the Resale Agreement by and between AT&T and the Parent in substantially the form of Exhibit D to the Securities Purchase Agreement. "Restricted Payment" shall mean (a) any direct or indirect distribution, dividend or other payment to any Person (other than to the Borrower or a Subsidiary of the Borrower) on account of any general or limited partnership interest in, or shares of Capital Stock or other securities of, the Borrower or any of its Subsidiaries (other than dividends payable solely in the Capital Stock of such Person and stock splits), including, without limitation, any direct or indirect distribution, dividend or other payment to any Person (other than to the Borrower or a Subsidiary of the Borrower) on account of any warrants or other rights or options to acquire shares of Capital Stock of the Borrower or any of its Subsidiaries, (b) any payment of principal of, or interest on, or payment into a sinking fund for the retirement of, or any defeasance of Subordinated Debt, or (c) any management, consulting or similar fees, or any interest thereon, payable by the Borrower or any of its Subsidiaries to any of their respective Affiliates (other than such fees and interest payable to the Borrower or any of its Subsidiaries). "Restricted Purchase" shall mean any payment (including, without limitation, any sinking fund payment, prepayment or installment payment) on account of the purchase, redemption, defeasance or other acquisition or retirement of any general or limited partnership interest in, or shares of Capital Stock of or other securities or Subordinated Debt or other Ownership Interests of the Borrower or any of it's Subsidiaries, including, without limitation, any warrants or other rights or options to acquire shares of Capital Stock or other Ownership Interests of the Borrower or of any of its Subsidiaries or any loan, advance, release or forgiveness of Indebtedness by the Borrower or any of its Subsidiaries to any partner, shareholder or Affiliate (other than to the Borrower or any of its Subsidiaries) of any such Person. "Revolving Loan Commitment" shall mean the several obligations of the Lenders to advance in an aggregate amount of up to $250,000,000 at any one time outstanding, in accordance with their respective Commitment Ratios, to the Borrower prior to the Revolving Loan Maturity Date pursuant to the terms hereof and as such obligations may be reduced from time to time pursuant to the terms hereof. "Revolving Loan Maturity Date" shall mean June 30, 2007, or such earlier date as payment of the remaining outstanding principal amount of the Revolving Loans or of all remaining outstanding Obligations shall be due (whether by acceleration or otherwise). "Revolving Loan Notes" shall mean, collectively, those certain revolving promissory notes in an aggregate original principal amount of the Revolving Loan Commitment, and issued 22 to each of the Lenders by the Borrower with respect to the Revolving Loan Commitment, each one substantially in the form of Exhibit C-1 attached hereto, and any extensions, renewal or amendments to, or replacements of, the foregoing. "Revolving Loans" shall mean, collectively, the amounts advanced by the Lenders to the Borrower under the Revolving Loan Commitment, not to exceed the amount of the Revolving Loan Commitment, and evidenced by the Revolving Loan Notes. "Roaming Agreement" shall mean the Intercarrier Roamer Service Agreement by and between AT&T Wireless Services, Inc. and the Borrower in substantially the form attached as Exhibit F to the Securities Purchase Agreement. "Securities Purchase Agreement" shall mean that certain Securities Purchase Agreement between AT&T, TWR Cellular, Inc., the Cash Equity Investors (as defined therein) parties thereto, Mercury PCS, LLC, Mercury PCS II, LLC, the Management Stockholders party thereto and the Parent dated May 20, 1998, as amended by that certain Closing Agreement dated January 7, 1999. "Security Documents" shall mean the Borrower's Pledge Agreements, the Borrower's Security Agreements, the Subsidiary Guaranties, the Subsidiary Pledge Agreements, the Subsidiary Security Agreements, the Parent Pledge Agreement any other agreement or instrument providing Collateral for the Obligations whether now or hereafter in existence, any filings, instruments, agreements, certificates, stock powers and documents related thereto or to this Agreement, and any confirmations of any of the foregoing and providing the Administrative Agent, for the benefit of itself and the Lenders, with Collateral for the Obligations. "Security Interest" shall mean all Liens in favor of the Administrative Agent, for the benefit of itself and the Lenders, created hereunder or under any of the Security Documents to secure the Obligations. "Senior Debt" shall mean, as of any date, the excess, if any, of (a) Total Debt minus (b) Subordinated Debt. "Senior Debt Capitalization Ratio" shall mean, as of any date, the ratio of (a) Senior Debt outstanding on such date to (b) Total Capital on such date. "Senior Leverage Ratio" shall mean, as of any date, the ratio of (a) Senior Debt on such date to (b) Annualized Operating Cash Flow. "Standby Letter of Credit" shall mean a letter of credit issued to support obligations of the Borrower. "Stockholders' Agreement" shall mean that Stockholders' Agreement by and among AT&T, the Borrower, the Cash Equity Investors (as defined therein) and the Management 23 Stockholders (as defined therein), as stockholders, dated as of January 7, 1999. "Subordinated Debt" shall mean high yield subordinated debt issued by the Borrower or the Parent having a maturity date that is not earlier than the date which is six (6) months subsequent to December 31, 2007, and which is otherwise on terms reasonably acceptable to the Required Lenders, and the Indebtedness represented thereby and refinancings of such Indebtedness, provided that (a) any such refinancing Indebtedness (i) shall not have a greater outstanding principal amount, an earlier maturity date, or a decreased weighted average life than the Subordinated Debt refinanced and (ii) shall be subordinated to the Indebtedness created under the Loan Documents to at least the extent of, and shall otherwise be issued on terms no less favorable to the Lenders than, the Subordinated Debt refinanced, and (b) the proceeds of such refinancing Indebtedness shall be used solely to repay the Subordinated Debt refinanced thereby and any fees and expenses incurred in connection therewith. "Subordinated Debt Documents" shall mean the indenture under which the Subordinated Debt, if any, is issued and all other instruments, agreements and other documents evidencing or governing the Subordinated Debt, if any, or providing for any guarantee or other right in respect thereof. "Subscribers" shall mean, as of any date, all customers receiving broadband PCS services from the Borrower or its Subsidiaries none of the subscriber payments (other than those being contested in good faith by such customer) of which are more than sixty (60) days past due (or past due for more than such shorter period of time as the Borrower may have established for accounting or credit policy purposes for treating a customer as not being in good standing). "Subsidiary" shall mean, as applied to any Person, (a) any corporation of which more than fifty percent (50%) of the outstanding stock (other than directors' qualifying shares) having ordinary voting power to elect a majority of its board of directors, regardless of the existence at the time of a right of the holders of any class or classes of securities of such corporation to exercise such voting power by reason of the happening of any contingency, or any partnership of which more than fifty percent (50%) of the outstanding partnership interests, is at the time owned directly or indirectly by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, or (b) any other entity which is directly or indirectly controlled or capable of being controlled by such Person, or by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person. Subsidiaries of the Borrower as of the Agreement Date are set forth on Schedule 2 attached hereto, except as otherwise noted thereon. "Subsidiary Guaranties" shall mean, collectively, those certain Subsidiary Guaranties dated as of January 7, 1999, in favor of the Administrative Agent and the Lenders given by each Subsidiary of the Borrower, including, without limitation, each License Sub, and shall include any similar agreements, each substantially in the form of Exhibit K attached hereto. "Subsidiary Pledge Agreements" shall mean, collectively, those certain Subsidiary Pledge 24 Agreements between each Subsidiary of the Borrower, including, without limitation, each License Sub, having one or more of its own Subsidiaries, on the one hand, and the Administrative Agent, on the other hand, or any similar agreements, each substantially in the form of Exhibit L attached hereto. "Subsidiary Security Agreements" shall mean, collectively, those certain Subsidiary Security Agreements dated as of January 7, 1999, among each of its Subsidiaries, including, without limitation, each License Sub, and the Administrative Agent, and shall include any similar agreements, each substantially in the form of Exhibit J attached hereto. "Surplus Subordinated Debt" shall mean, as of any date of determination, the aggregate principal amount of Subordinated Debt issued on or before December 31, 1999, minus $125,000,000. "Taxes" shall have the meaning ascribed thereto in Section 2.10(b) hereof. "Term Loan A" shall mean the amounts advanced by the Lenders to the Borrower under the Term Loan A Commitment and evidenced by the Term Loan A Notes. "Term Loan A Commitment" shall mean the several obligations of the Lenders to advance to the Borrower prior to the Term Loan A Draw Termination Date $100,000,000, in accordance with their respective Commitment Ratios pursuant to the terms hereof. "Term Loan A Draw Termination Date" shall mean that date which is six (6) months from the Agreement Date. "Term Loan A Maturity Date" shall mean June 30, 2007, or such earlier date as payment of the remaining outstanding principal amount of the Term Loan A or of all remaining outstanding Obligations shall be due (whether by acceleration or otherwise). "Term Loan A Notes" shall mean, collectively, those certain term promissory notes in the aggregate original principal amount of $100,000,000 and one (1) issued to each of the Lenders having a Term Loan A Commitment by the Borrower, each one substantially in the form of Exhibit C-2 attached hereto, and any extensions, modifications, renewals or replacements of, or amendments to, any of the foregoing. "Term Loan B" shall mean the amounts advanced by the Lenders to the Borrower under the Term Loan B Commitment and evidenced by the Term Loan B Notes. "Term Loan B Commitment" shall mean the several obligations of the Lenders to advance to the Borrower $200,000,000, in accordance with their respective Commitment Ratios pursuant to the terms hereof. "Term Loan B Maturity Date" shall mean December 31, 2007, or such earlier date as 25 payment of the remaining outstanding principal amount of the Term Loan B or of all remaining outstanding Obligations shall be due (whether by acceleration or otherwise). "Term Loan B Notes" shall mean, collectively, those certain term promissory notes in the aggregate original principal amount of $200,000,000 and one (1) issued to each of the Lenders having a Term Loan B Commitment by the Borrower, each one substantially in the form of Exhibit C-3 attached hereto, and any extensions, modifications, renewals or replacements of, or amendments to, any of the foregoing. "Total Capital" shall mean, as of any date, the sum, without duplication, of (a) Funded Debt outstanding on such date, (b) Contributed Equity on such date, and (c) Committed Equity on such date, in each case, as calculated in accordance with GAAP. "Total Debt" shall mean, as of any date, for the Parent, the Borrower and the Borrower's Subsidiaries, on a consolidated basis, the excess, if any, of, without duplication, (a) the sum of (i) the Obligations, (ii) the Subordinated Debt, and (iii) all other Indebtedness for Money Borrowed of the Parent, the Borrower and the Borrower's Subsidiaries, minus (b) cash on hand. "Total Debt Capitalization Ratio" shall mean, as of any date the ratio of (a) Total Debt outstanding on such date to (b) Total Capital on such date. "Total Leverage Ratio" shall mean, as of any date, the ratio of (a) Total Debt outstanding on such date to (b) Annualized Operating Cash Flow. "Total POPs" shall mean, as of any date, the aggregate number of POPs within all geographic areas for which the Borrower or any of its Subsidiaries holds a License to provide broadband PCS services. "Tower Sale/Leaseback Transaction" shall mean any arrangement, direct or indirect, entered into by the Borrower or any of its Subsidiaries, on the one hand, and any third party, on the other hand, pursuant to which the Borrower or such Subsidiary shall sell or transfer any tower or towers, whether now owned or hereafter acquired, and shall then or thereafter rent or lease as lessee such tower or towers or any part thereof which the Borrower or such Subsidiary intends to use for substantially the same purpose or purposes as the tower or towers sold or transferred. "Upstream Dividends" shall have the meaning ascribed thereto in Section 7.21 hereof. "Use of Proceeds Letters" shall mean those certain Use of Proceeds Letters, substantially in the form of Exhibit G attached hereto, to be delivered to the Administrative Agent and the Lenders on the date of any Advance hereunder. "Voting Stock" shall mean, with respect to a corporation, all classes of Capital Stock of such corporation then outstanding and normally entitled to vote in the election of directors. 26 "Year 2000 Compliant" shall have the meaning ascribed thereto in Section 4.1(y) hereof. "Year 2000 Problem" shall have the meaning ascribed thereto in Section 4.1(y) hereof. Section 1.2 Interpretation. Each definition of an agreement, instrument or other document in this Article 1 shall, unless otherwise specified, include such agreement as modified, amended, restated or supplemented from time to time in accordance herewith, and except where the context otherwise requires, the singular shall include the plural and vice versa. Except where otherwise specifically restricted, reference to a party to this Agreement or any other Loan Document includes that party and its successors and assigns. All capitalized terms used herein which are defined in Article 9 of the Uniform Commercial Code in effect in the State of New York on the date hereof and which are not otherwise defined herein shall have the same meanings herein as set forth therein. ARTICLE 2 Credit Facilities and Letters of Credit Section 2.1 Commitments and Letters of Credit. (a) Revolving Loan Commitment. The Lenders who issued a Revolving Loan Commitment, agree, severally, in accordance with their respective Commitment Ratios, and not jointly, upon the terms and subject to the conditions of this Agreement, to lend and relend to the Borrower from time to time, prior to the Revolving Loan Maturity Date amounts which do not exceed, in the aggregate, at the time of any Advance under the Revolving Loan Commitment the Available Revolving Loan Commitment as then in effect; provided, however, that the Borrower may only request Advances under the Revolving Loan Commitment after the Term Loan A Commitment has been drawn in full. Notwithstanding the foregoing, the Borrower may request Advances under the Revolving Loan Commitment prior to the Revolving Loan Maturity Date in an aggregate principal amount not to exceed, and for the sole purpose of making, the Deposit Loan. Subject to the terms and conditions hereof, Advances under the Revolving Loan Commitment may be repaid and reborrowed from time to time on a revolving basis. (b) Term Loan A Commitment. The Lenders who issued a Term Loan A Commitment, agree , severally, in accordance with their respective Commitment Ratios, and not jointly, upon the terms and subject to the conditions of this Agreement, to lend to the Borrower in multiple installments prior to the Term Loan A Draw Termination Date an amount not to exceed the Term Loan A Commitment. Subject to the terms and conditions hereof, Advances under the Term Loan A Commitment may be repaid and reborrowed to effect a change in the Interest Rate Basis or Interest Periods relating thereto; provided, however, that the Borrower may only request Advances under the Term Loan A Commitment after the Term Loan B Commitment has been drawn in full; and provided further, however, that there shall be no increase in the principal amount outstanding under the Term Loan A Commitment after the Term Loan A Draw 27 Termination Date. (c) Term Loan B Commitment. The Lenders who have issued a Term Loan B Commitment agree, severally, in accordance with their respective Commitment Ratios, and not jointly, upon the terms and subject to the conditions of this Agreement, to lend to the Borrower on the Agreement Date an amount not to exceed $150,000,000. The Lenders who issued a "Term Loan B Commitment" under, and as defined in, the Prior Loan Agreement have previously lent to the Borrower the amount in the aggregate of $50,000,000 of which $50,000,000 is outstanding on the Agreement Date. The Borrower hereby acknowledges that all "Obligations" in respect of "Advances" outstanding under the "Term Loan B Commitment" (as such terms are defined in the Prior Loan Agreement) shall be deemed to have been made to the Borrower as Advances under the Term Loan B Commitment hereunder and shall constitute a portion of the Obligations. Subject to the terms and conditions hereof, Advances under the Term Loan B Commitment may be repaid and reborrowed to effect a change in the Interest Rate Basis or Interest Periods relating thereto; provided, however, that there shall be no increase in the principal amount outstanding under the Term Loan B Commitment. (d) The Letters of Credit. Subject to the terms and conditions of this Agreement, the Issuing Bank agrees to issue Letters of Credit for the account of the Borrower pursuant to Section 2.15 hereof in an aggregate amount at the time of issuance of any Letter of Credit hereunder not to exceed the Available Letter of Credit Commitment then in effect. Section 2.2 Manner of Borrowing and Disbursement. (a) Choice of Interest Rate, Etc. Any Advance shall, at the option of the Borrower, be made as a Base Rate Advance or a Eurodollar Advance; provided, however, that at such time as there shall have occurred and be continuing an Event of Default hereunder, the Borrower shall not have the right to receive a Eurodollar Advance. Any notice given to the Administrative Agent in connection with a requested Advance hereunder shall be given to the Administrative Agent prior to 11:00 a.m. (Ne York, New York time) in order for such Business Day to count toward the minimum number of Business Days required. (b) Base Rate Advances. (i) Advances. The Borrower shall give the Administrative Agent irrevocable prior written notice prior to 11:00 a.m. (New York, New York time) on the date of any requested Base Rate Advance in the form of a Request for Advance, or telephonic notice followed immediately by a Request for Advance; provided, however, that the Borrower's failure to confirm any telephonic notice with a Request for Advance shall not invalidate any notice so given if acted upon by the Administrative Agent. Upon receipt of such notice from the Borrower, the Administrative Agent shall promptly notify each Lender by telephone or telecopy of the contents thereof. 28 (ii) Repayments and Reborrowings. The Borrower may repay or prepay a Base Rate Advance without regard to its Payment Date and, (A) upon irrevocable prior written notice prior to 11:00 a.m. (New York, New York time) on the date of any requested repayment and reborrowing, or telephonic notice followed immediately by a written notice, reborrow all or a portion of the principal amount thereof as a Base Rate Advance, (B) upon at least three (3) Business Days' irrevocable prior written notice, or telephonic notice followed immediately by a written notice, reborrow all or a portion of the principal thereof as one or more Eurodollar Advances, or (C) not reborrow all or any portion of such Base Rate Advance; provided, however, that the Borrower's failure to confirm any telephonic notice with a written notice shall not invalidate any notice so given if acted upon by the Administrative Agent. On the date indicated by the Borrower, such Base Rate Advance shall be so repaid and, as applicable, reborrowed. The failure to give timely notice hereunder with respect to the Payment Date of any Base Rate Advance shall be deemed a request for a Base Rate Advance. (c) Eurodollar Advances. (i) Advances. Upon request of the Borrower, the Administrative Agent, whose determination shall be conclusive, shall determine the available Eurodollar Bases and shall notify the Borrower of such Eurodollar Bases. The Borrower shall give the Administrative Agent in the case of Eurodollar Advances at least three (3) Business Days' irrevocable prior written notice in the form of a Request for Advance, or telephonic notice followed immediately by a Request for Advance; provided, however, that the Borrower's failure to confirm any telephonic notice with a Request for Advance shall not invalidate any notice so given if acted upon by the Administrative Agent. Upon receipt of such notice from the Borrower, the Administrative Agent shall promptly notify each Lender by telephone or telecopy of the contents thereof. (ii) Repayments and Reborrowings. At least three (3) Business Days prior to the Payment Date for each Eurodollar Advance, the Borrower shall give the Administrative Agent written notice, or telephonic notice followed immediately by written notice, specifying whether all or a portion of such Eurodollar Advance (A) is to be repaid and then reborrowed in whole or in part as one or more Eurodollar Advances, (B) is to be repaid and then reborrowed in whole or in part as a Base Rate Advance or (C) is to be repaid and not reborrowed; provided, however, that the Borrower's failure to confirm any telephonic notice with a written notice shall not invalidate any notice so given if acted upon by the Administrative Agent. The failure to give such notice shall preclude the Borrower from reborrowing such Advance as a Eurodollar Advance on its Payment Date and shall be deemed a request for a Base Rate Advance. Upon such Payment Date such Eurodollar Advance will, subject to the provisions hereof, be so repaid and, as applicable, reborrowed. (d) Notification of Lenders. Upon receipt of a Request for Advance, or a notice from the Borrower with respect to any outstanding Advance prior to the Payment Date for such Advance, the Administrative Agent shall promptly notify each Lender by telephone or telecopy of the contents thereof and the amount of such Lender's portion of the Advance. Each 29 Lender shall, not later than 12:00 noon (New York, New York time) on the date of borrowing specified in such notice, make available to the Administrative Agent at the Administrative Agent's Office, or at such account as the Administrative Agent shall designate, the amount of its portion of any Advance which represents an additional borrowing hereunder in immediately available funds. (e) Disbursement. (i) Prior to 2:00 p.m. (New York, New York time) on the date of an Advance hereunder, the Administrative Agent shall, subject to the satisfaction of the conditions set forth in Article 3 hereof, disburse the amounts made available to the Administrative Agent by the Lenders in like funds by (a) transferring the amounts so made available by wire transfer pursuant to the Borrower's instructions or (b) in the absence of such instructions, crediting the amounts so made available to the account of the Borrower maintained with the Administrative Agent. (ii) Unless the Administrative Agent shall have received notice from a Lender prior to 12:00 noon (New York, New York time) on the date of any Advance that such Lender will not make available to the Administrative Agent such Lender's ratable portion of such Advance, the Administrative Agent may assume that such Lender has made or will make such portion available to the Administrative Agent on the date of such Advance and the Administrative Agent may in its sole discretion and in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent the Lender does not make such ratable portion available to the Administrative Agent, such Lender agrees to repay to the Administrative Agent on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at the Federal Funds Rate. (iii) If such Lender shall repay to the Administrative Agent such corresponding amount, such amount so repaid shall constitute such Lender's portion of the applicable Advance for purposes of this Agreement. If such Lender does not repay such corresponding amount immediately upon the Administrative Agent's demand therefor, the Administrative Agent shall notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent, with interest at the Federal Funds Rate. The failure of any Lender to fund its portion of any Advance shall not relieve any other Lender of its obligation, if any, hereunder to fund its respective portion of the Advance on the date of such borrowing, but no Lender shall be responsible for any such failure of any other Lender. (iv) In the event that, at any time when the Borrower is not in Default and has otherwise satisfied each of the conditions in Section 3.2 hereof, a Lender for any reason fails or refuses to fund its portion of such Advance (any such Lender being a "Defaulting Lender"), then, until such time as such Defaulting Lender has funded its portion of such Advance (which late funding shall not absolve such Lender from any liability it may have to the Borrower), or all other Lenders have received payment in full from the Borrower (whether by 30 repayment or prepayment) or otherwise of the principal and interest due in respect of such Advance, such Defaulting Lender shall not have the right (A) to vote regarding any issue on which voting is required or advisable under this Agreement or any other Loan Document, and such Defaulting Lender's portion of the Loans shall not be counted as outstanding for purposes of determining "Required Lenders" hereunder, or (B) to receive payments of principal, interest or fees from the Borrower, the Administrative Agent or the other Lenders in respect of its portion of the Loans. Section 2.3 Interest. (a) On Base Rate Advances. Interest on each Base Rate Advance shall be computed on the basis of a year of three hundred sixty-five (365)/ three hundred sixty-six (366) days for the actual number of days elapsed and shall be payable at the Base Rate Basis for such Advance, in arrears on the applicable Payment Date. Interest on Base Rate Advances then outstanding shall also be due and payable on the Maturity Date. (b) On Eurodollar Advances. Interest on each Eurodollar Advance shall be computed on the basis of a three hundred sixty (360) day year for the actual number of days elapsed and shall be payable at the Eurodollar Basis for such Advance, in arrears on the applicable Payment Date, and, in addition, if the Interest Period for a Eurodollar Advance exceeds three (3) months, interest on such Eurodollar Advance shall also be due and payable in arrears on every three-month anniversary of the beginning of such Interest Period. Interest on Eurodollar Advances then outstanding shall also be due and payable on the Maturity Date. (c) Interest if no Notice of Selection of Interest Rate Basis. If the Borrower fails to give the Administrative Agent timely notice of its selection of a Eurodollar Basis, or if for any reason a determination of a Eurodollar Basis for any Advance is not timely concluded, the Base Rate Basis shall apply to such Advance. (d) Interest Upon Default. Immediately upon the occurrence of an Event of Default described in Section 8.1(b) hereunder as a result of the failure of the Borrower to make any payment specified therein when due, the unpaid amount of any such payment (to the extent permitted by Applicable Law) shall bear interest at the Default Rate. Such interest shall be payable by the Borrower on demand by the Required Lenders and shall accrue from the occurrence of such Event of Default until the earlier of (i) waiver or cure of the applicable Event of Default, (ii) agreement by the Required Lenders (or, if applicable to the underlying Event of Default, all of the Lenders) to rescind the charging of interest at the Default Rate or (iii) payment in full of the unpaid amount of any such payment. (e) Eurodollar Advance Contracts. At no time may the number of outstanding Eurodollar Advances hereunder exceed in the aggregate ten (10). (f) Applicable Margin. 31 (i) Revolving Loan Commitment and Term Loan A Commitment. From the Agreement Date through and including the earlier to occur of (A) the Go-Positive Date and (B) the third (3rd) anniversary of the Agreement Date, the Applicable Margin for any Advance under the Revolving Loan Commitment or the Term Loan A Commitment shall be, (1) for Base Rate Advances, two and three-quarters of one percent (2.750%), and (2) for Eurodollar Advances, three and three-quarters of one percent (3.750%). In the event that the third (3rd) anniversary of the Agreement Date shall occur prior to the Go-Positive Date, then from the third (3rd) anniversary of the Agreement Date through and including the Go-Positive Date, the Applicable Margin for any Advance under the Revolving Loan Commitment or the Term Loan A Commitment shall be, (A) for Base Rate Advances, two percent (2.000%), and (B) for Eurodollar Advances, three percent (3.000%). At all times after the Go-Positive Date, the Applicable Margin shall be determined by the Administrative Agent with respect to any Advance under the Revolving Loan Commitment or the Term Loan A Commitment based upon the Total Leverage Ratio as of the end of the fiscal quarter most recently ended, effective as of the third (3rd) Business Day after the financial statements referred to in Section 6.1 or 6.2 hereof, as the case may be, are furnished to the Administrative Agent for such fiscal quarter, as follows:
Base Rate Advance Eurodollar Advance Total Leverage Ratio Applicable Margin Applicable Margin -------------------- ----------------- ----------------- Greater than 10.0:1 1.875% 2.875% Less than or equal to 10.0:1.0, but greater than 8.0:1.0 1.750% 2.750% Less than or equal to 8.0:1.0, but greater than 7.0:1.0 1.500% 2.500% Less than or equal to 7.0:1.0, but greater than 6.0:1.0 1.250% 2.250% Less than or equal to 6.0:1.0, but greater than 5.0:1.0 1.000% 2.000% Less than or equal to 5.0:1.0 0.750% 1.750%
Notwithstanding the foregoing, if the Borrower shall fail to timely deliver to the Administrative Agent the financial statements required for the calculation of the Total Leverage Ratio for any fiscal quarter, then commencing with the Business Day after the date such financial statements were due and continuing through the third (3rd) Business Day following the date of delivery thereof, the Total Leverage Ratio for such period shall be conclusively presumed to be, and the Applicable Margin for any Advance under the Revolving Loan Commitment or the Term Loan A Commitment shall be calculated based upon, the highest Total Leverage Ratio level listed in the table set forth above in this Section 2.3(f)(i). 32 (ii) Term Loan B Commitment. The Applicable Margin for any Advance under the Term Loan B Commitment shall be, (A) from the Agreement Date through and including the earlier to occur of (1) the Go-Positive Date and (2) the third (3rd) anniversary of the Agreement Date, (a) for Base Rate Advances, three and one-half of one percent (3.500%), and (b) for Eurodollar Advances, four and one-half of one percent (4.500%), and (B) at all times after the earlier to occur of (1) the Go- Positive Date or (2) the third (3rd) anniversary of the Agreement Date, (a) for Base Rate Advances, two and three-quarters of one percent (2.750%), and (b) for Eurodollar Advances, three and three-quarters of one percent (3.750%). Section 2.4 Fees. (a) Commitment Fees. The Borrower agrees to pay each of the Lenders, in accordance with their respective Commitment Ratios for the applicable Commitment, a commitment fee on the Available Revolving Loan Commitment and the Available Term Loan A Commitment for each day from the Agreement Date until, (1) with respect to the Revolving Loan Commitment, the Revolving Loan Maturity Date, and (2) with respect to the Term Loan A Commitment, the Term Loan A Draw Termination Date, equal to the product of (A) an amount equal to the sum of the Available Revolving Loan Commitment and the Available Term Loan A Commitment on such date, and (B) the applicable rate per annum set forth below based upon the ratio of the total Available Revolving Loan Commitments and Available Term Loan A Commitments to the total Revolving Loan Commitments and Term Loan A Commitments on such date:
Available Revolving Loan Commitments and Available Term Loan A Commitments as a Percentage of the Total Revolving Commitments and Term Loan A Commitment Commitment Fee Rate Per Annum ------------ ----------------------------- Greater than or equal to sixty-six and two-thirds percent (66-2/3%) 1.75% Greater than or equal to fifty percent (50%), but less than sixty-six and two-thirds percent (66-2/3%) 1.00% Less than fifty percent (50%) 0.50%
Such commitment fees shall be computed on the basis of a year of three hundred sixty-five (365)/three hundred sixty-six (366) days for the actual number of days elapsed, shall be payable quarterly in arrears on the last Business Day of each calendar quarter, and shall be fully earned when due and non-refundable when paid. A final payment of all commitment fees then payable shall also be due and payable on, (i) with respect to the Revolving Loan Commitment, 33 the Revolving Loan Maturity Date and, (ii) with respect to the Term Loan A Commitment, the Term Loan A Draw Termination Date. (b) Letter of Credit Fees. (i) The Borrower shall pay to the Issuing Bank a fee on the undrawn face amount of any outstanding Letters of Credit from the date of issuance through the expiration date of each such Letter of Credit at a rate of one-eighth of one percent (0.125%) per annum, which fee shall be computed on the basis of a year of 365/366 days for the actual number of days elapsed, and shall be payable quarterly in arrears on the last Business Day of each calendar quarter and shall be fully earned when due and non-refundable when paid. A final payment of all letter of credit fees shall also be due and payable on the Revolving Loan Maturity Date. (ii) The Borrower shall also pay to the Administrative Agent on behalf of the Lenders in accordance with their respective Commitment Ratios, a fee on the undrawn face amount of any outstanding Letters of Credit for each day from the date of issuance thereof through the expiration date for each such Letter of Credit at a rate per annum equal to the Applicable Margin for Eurodollar Advances as set forth in Section 2.3(f)(i) hereof. Such letter of credit fee shall be computed on the basis of a year of 365/366 days for the actual number of days elapsed and shall be payable quarterly in arrears for each quarter on the last Business Day of each calendar quarter and shall be fully earned when due and non-refundable when paid. A final payment of all letter of credit fees shall also be due and payable on the Revolving Loan Maturity Date. The letter of credit fee set forth in this Section 2.4(b)(ii) shall be subject to increase and decrease on the dates and in the amounts set forth in Section 2.3(f) hereof in the same manner as the adjustment of the Applicable Margin with respect to Eurodollar Advances that are Revolving Loans. Section 2.5 Mandatory Revolving Loan Commitment Reductions (a) Scheduled Reductions under Revolving Loan Commitment. Commencing December 31, 2002, and on the last day of each calendar quarter ending during the periods set forth below, the Revolving Loan Commitment as of December 30, 2002 shall be automatically and permanently reduced by the percentage amount set forth below for the dates indicated: 34
Percentage of Revolving Loan Commitment as of Scheduled Reduction Dates December 30, 2002 ------------------------- ----------------- December 31, 2002 2.50000% March 31, 2003, June 30, 2003, September 30, 2003 and December 31, 2003 2.96875% March 31, 2004, June 30, 2004, September 30, 2004 and December 31, 2004 4.53125% March 31, 2005, June 30, 2005, September 30, 2005 and December 31, 2005 5.31250% March 31, 2006, June 30, 2006 September 30, 2006 and December 31, 2006 6.40625% March 31, 2007 and the Revolving Loan Maturity Date 10.31250%
(b) Reduction From Excess Cash Flow. The Revolving Loan Commitment shall be automatically and permanently reduced by an amount equal to the repayment of Revolving Loans required under Section 2.7(b)(iv) hereof; provided, however, that if there is no Term Loan A or Term Loan B then outstanding, then the Revolving Loan Commitment shall be reduced by an amount equal to the Excess Cash Flow, regardless of any repayment of the Revolving Loans. Reductions to the Revolving Loan Commitment under this Section 2.5(b) shall be applied to the reductions set forth in Section 2.5(a) hereof pro rata across the reductions set forth therein. (c) Reduction From Permitted Asset Sales. The Revolving Loan Commitment shall be automatically and permanently reduced by an amount equal to the repayment of Revolving Loans required under Section 2.7(b)(iii) hereof; provided, however, that if there is no Term Loan A or Term Loan B then outstanding, the Revolving Loan Commitment shall be reduced by an amount equal to the Net Proceeds (Asset Sales), regardless of any repayment of the Revolving Loans. Reductions to the Revolving Loan Commitment under this Section 2.5(c) shall be applied to the reductions set forth in Section 2.5(a) hereof pro rata across the reductions set forth therein. (d) Reduction From Sale of Capital Stock and Debt Instruments. The Revolving Loan Commitment shall be automatically and permanently reduced by an amount equal to the repayment of Revolving Loans required under Section 2.7(b)(v) hereof; provided, however, that if there is no Term Loan A or Term Loan B then outstanding, then the Revolving Loan Commitment shall be reduced by an amount equal to the Net Proceeds (Capital Sales), regardless of any repayment of the Revolving Loans. Reductions to the Revolving Loan 35 Commitment under this Section 2.5(d) shall be applied to the reductions set forth in Section 2.5(a) hereof pro rata across the reductions set forth therein. Section 2.6 Voluntary Commitment Reductions. The Borrower shall have the right, at any time and from time to time after the Agreement Date, but prior to, (a) with respect to the Revolving Loan Commitment, the Revolving Loan Maturity Date, and (b) with respect to the Term Loan A Commitment, the Term Loan A Draw Termination Date, upon at least three (3) Business Days' prior written notice to the Administrative Agent, without premium or penalty, to cancel or reduce permanently all or a portion of the Revolving Loan Commitment and the Term Loan A Commitment pro rata on the basis of the respective Commitment Ratios of the Lenders applicable to the Revolving Loan Commitment and the Term Loan A Commitment, respectively; provided, however, that any such partial reduction shall be made in an amount not less than $2,000,000 and in an integral multiple of $1,000,000. As of the date of cancellation or reduction set forth in such notice, the Revolving Loan Commitment and the Term Loan A Commitment, as applicable, shall be permanently reduced to the amount stated in such notice for all purposes herein, and the Borrower shall pay to the Administrative Agent for the Lenders the amount necessary to reduce the principal amount of the Loans then outstanding under Revolving Loan Commitment and the Term Loan A Commitment, or take such other action as may be necessary to repay, cancel or otherwise discharge the Letter of Credit Obligations, as applicable, to not more than the amount of Revolving Loan Commitment and the Term Loan A Commitment, as applicable, as so reduced, together with accrued interest on the amount so prepaid and commitment fees accrued through the date of the reduction with respect to the amount reduced. Reductions to the Revolving Loan Commitment under this Section 2.6 shall be applied to the reductions set forth in Section 2.5(a) hereof pro rata across the reductions set forth therein. 36 Section 2.7 Prepayments and Repayments. (a) Prepayment. The principal amount of any Base Rate Advance may be prepaid in full or ratably in part at any time, without premium or penalty (other than any Applicable Prepayment Fee required to be paid pursuant to Section 2.8 hereof) and without regard to the Payment Date for such Advance. Eurodollar Advances may be prepaid prior to the applicable Payment Date, upon two (2) Business Days' prior written notice, or telephonic notice followed immediately by written notice, to the Administrative Agent; provided, however, that the Borrower shall pay any Applicable Prepayment Fee required to be paid pursuant to Section 2.8 hereof and shall reimburse the Lenders and the Administrative Agent, on the earlier of demand by the applicable Lender or the Maturity Date, for any loss or out-of-pocket expense incurred by any Lender or the Administrative Agent in connection with such prepayment, as set forth in Section 2.11 hereof; provided further, however, that the Borrower's failure to confirm any telephonic notice with a written notice shall not invalidate any notice so given if acted upon by the Administrative Agent. Any prepayment hereunder shall be in an amount not less than $2,000,000 and in an integral multiple of $1,000,000. Revolving Loans prepaid pursuant to this Section 2.7 (a) may be reborrowed, subject to the terms and conditions hereof. Amounts prepaid shall be paid together with accrued interest on the amount so prepaid accrued through the date of such repayment. (b) Repayments. The Borrower shall repay the Loans as follows: (i) Scheduled Repayments of Term Loan A and Term Loan B. Commencing December 31, 2002, the principal balance of each of Term Loan A and Term Loan B outstanding on December 30, 2002 shall be repaid in consecutive quarterly installments on March 31st, June 30th, September 30th, and December 31st of each year until paid in full in such amounts and on such dates as set forth below: 37
Percentage of Principal of Percentage of Principal of Term Loan A Outstanding Term Loan B Outstanding on December 30, 2002 Due on on December 30, 2002 Due on Repayment Dates Each Repayment Date Each Repayment Date --------------- ------------------- ------------------- December 31, 2002 2.50000% 1.000% March 31, 2003, June 30, 2003, September 30, 2003 and December 31, 2003 2.96875% 0.250% March 31, 2004, June 30, 2004, September 30, 2004 and December 31, 2004 4.53125% 0.250% March 31, 2005, June 30, 2005, September 30, 2005 and December 31, 2005 5.31250% 0.250% March 31, 2006, June 30, 2006, September 30, 2006 and December 31, 2006 6.40625% 0.250% March 31, 2007 10.31250% 0.250% Term Loan A Maturity Date 10.31250% Not Applicable June 30, 2007 and September 30, 2007 Not Applicable 0.250% Term Loan B Maturity Date Not Applicable 94.250%
(ii) Revolving Loans in Excess of Revolving Loan Commitment. If, at any time, the sum of the Revolving Loans and the Letter of Credit Obligations shall exceed the Revolving Loan Commitment, the Borrower shall, on such date and subject to Section 2.11 hereof, make a repayment of the principal amount of the Revolving Loans, together with any accrued interest with respect thereto, and/or repay, cancel or otherwise discharge the Letter of Credit Obligations in an aggregate amount equal to such excess. (iii) Permitted Asset Sales. On the Business Day following the date of receipt 38 by the Borrower or any of its Subsidiaries of any Net Proceeds (Asset Sales) (other than in connection with a disposition of assets permitted under Section 7.4(a) hereof), the Loans shall be repaid in an amount equal to, in the aggregate, all such Net Proceeds (Asset Sales). The amount of the Net Proceeds (Asset Sales) required to be repaid under this Section 2.7(b)(iii) shall be applied to the Loans on a pro rata basis among the Term Loan A, the Term Loan B and the Revolving Loans then outstanding. Accrued interest on the principal amount of the Loans being prepaid pursuant to this Section 2.7(b)(iii) to the date of such prepayment will be paid by the Borrower concurrently with such principal prepayment. (iv) Excess Cash Flow. On or prior to April 15, 2002, and on or prior to each April 15th thereafter during the term of this Agreement, the Loans shall be repaid in an amount equal to, in the aggregate, fifty percent (50%) of Excess Cash Flow for the fiscal year ended on the immediately preceding December 31st. The amount of the Excess Cash Flow required to be repaid under this Section 2.7(b)(iv) shall be applied to the Loans on a pro rata basis among the Term Loan A, the Term Loan B and the Revolving Loans then outstanding. Accrued interest on the principal amount of the Loans being prepaid pursuant to this Section 2.7(b)(iv) to the date of such prepayment will be paid by the Borrower concurrently with such principal prepayment. (v) Sale of Capital Stock and Debt Instruments. On the Business Day following the date of receipt by the Borrower or any of the Borrower's Subsidiaries of any Net Proceeds (Capital Sales), the Loans shall be repaid in an amount equal to, in the aggregate, (a) with respect to any sale or issuance of any Capital Stock or other Ownership Interests by the Borrower or any of the Borrower's Subsidiaries after the Agreement Date ((i) other than pursuant to the sale, issuance or other disposition of any Capital Stock or other Ownership Interests to: (A) the Parent, the Borrower or any Subsidiary of the Borrower; (B) any employee benefit plan or restricted stock plan maintained or established by the Parent or the Borrower; or (C) any Person pursuant to Section 5.20 hereof and (ii) excluding Committed Equity as of the Agreement Date) fifty percent (50%) of the Net Proceeds (Capital Sales) related thereto, and (b) with respect to any Indebtedness issued by the Borrower or any of the Borrower's Subsidiaries after the Agreement Date (other than Indebtedness permitted under Section 7.1 hereof), one hundred percent (100%) of the Net Proceeds (Capital Sales) related thereto. The amount of the Net Proceeds (Capital Sales) required to be repaid under this Section 2.7(b)(v) shall be applied to the Loans on a pro rata basis among the Term Loan A, the Term Loan B and the Revolving Loans then outstanding. Accrued interest on the principal amount of the Loans being prepaid pursuant to this Section 2.7(b)(v) to the date of such prepayment will be paid by the Borrower concurrently with such principal prepayment. (vi) Pro Rata Application. In addition to the foregoing, (a) any repayment of the Loans required under Section 2.7(b)(iii), (iv) or (v) hereof shall be applied, (1) with respect to the Term Loan A and Term Loan B, pro rata across the maturities set forth in Section 2.7(b)(i) hereof and, (2) with respect to the Revolving Loans, pro rata across the 39 reductions set forth in Section 2.5(a) hereof, and (b) any repayment of the Revolving Loans required under Section 2.7(b)(ii) hereof shall be applied pro rata across the reductions set forth in Section 2.5(a) hereof. (vii) Term Loan B Election Not to Receive Repayment. Notwithstanding any of the foregoing, with respect to any repayment of Term Loan B required under Section 2.7(b)(iii), (iv) or (v) hereof, any Lender having a Term Loan B Commitment may elect not to receive such repayment to the extent that Term Loan A is outstanding (after giving effect to any repayment of Term Loan A required under Section 2.7(b)(iii), (iv) or (v) at such time). In the event that a Lender having a Term Loan B Commitment makes the election not to receive a repayment of Term Loan B set forth in the immediately preceding sentence, the aggregate amount of the affected repayment elected not to be received by such Lender shall be applied to Term Loan A pro rata across the reductions set forth in Section 2.7(b)(i) hereof applicable to Term Loan A. (vii) Maturity Date. In addition to the foregoing, a final payment of all Obligations then outstanding shall be due and payable on the Maturity Date. Section 2.8 Prepayment Fee. Any prepayment of Term Loan B made pursuant to Section 2.7(a) hereof made on or before December 31, 2001 shall be accompanied by the Applicable Prepayment Fee, which shall be an amount equal to the product of (a) the amount of such prepayment and (b) Applicable Prepayment Fee percentage set forth below for the period during which such prepayment is made:
Applicable Prepayment Payment Date Occurs On or Between: Fee percentage ---------------------------------- -------------- Agreement Date through December 31, 1999 3.00% January 1, 2000 through December 31, 2000 2.00% January 1, 2001 through December 31, 2001 1.00%
Section 2.9 Notes; Loan Accounts. (a) The Loans shall be repayable in accordance with the terms and provisions set forth herein and shall be evidenced by the Notes. One (1) Revolving Loan Note, one (1) Term Loan A Note and one (1) Term Loan B Note shall be payable to the order of each Lender for such Commitment, in accordance with such Lender's respective Commitment Ratio for the applicable Commitment. The Notes shall be issued by the Borrower to the Lenders and shall be duly executed and delivered by one (1) or more Authorized Signatories. Any Lender (i) which is not a United States Person (a "Non-U.S. Lender") and (ii) which would become completely exempt from withholding of United States federal income taxes in respect of payment of any obligations due to such Lender hereunder or under the Notes or any other Loan Document 40 relating to any of its Loans if such Loans were in registered form for United States federal income tax purposes may request the Borrower (through the Administrative Agent), and the Borrower agrees thereupon, at the cost and expense of such Lender, to register such Loans as provided in Section 11.5(g) hereof and to issue to such Lender Notes evidencing such Loans as Registered Notes or to exchange Notes evidencing such Loans for new Registered Notes, as applicable. Registered Notes may not be exchanged for Notes that are not in registered form. (b) Each Lender may open and maintain on its books in the name of the Borrower a loan account with respect to its portion of the Loans and interest thereon. Each Lender which opens such a loan account shall debit such loan account for the principal amount of its portion of each Advance made by it and accrued interest thereon, and shall credit such loan account for each payment on account of principal of or interest on its Loans. The records of a Lender with respect to the loan account maintained by it shall be prima facie evidence of its portion of the Loans and accrued interest thereon absent manifest error, but the failure of any Lender to make any such notations or any error or mistake in such notations shall not affect the Borrower's repayment obligations with respect to such Loans. Section 2.10 Manner of Payment. (a) Each payment (including, without limitation, any prepayment) by the Borrower on account of the principal of or interest on the Loans, commitment fees and any other amount owed to the Lenders or the Administrative Agent or any of them under this Agreement, the Notes or any other Loan Document shall be made not later than 1:00 p.m. (New York, New York time) on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent's Office, for the account of the Lenders or the Administrative Agent, as the case may be, in lawful money of the United States of America in immediately available funds. Any payment received by the Administrative Agent after 1:00 p.m. (New York, New York time) shall be deemed received on the next Business Day. Receipt by the Administrative Agent of any payment intended for any Lender or Lenders hereunder prior to 1:00 p.m. (New York, New York time) on any Business Day shall be deemed to constitute receipt by such Lender or Lenders on such Business Day. In the case of a payment for the account of a Lender, the Administrative Agent will promptly thereafter distribute the amount so received in like funds to such Lender. If the Administrative Agent shall not have received any payment from the Borrower as and when due, the Administrative Agent will promptly notify the Lenders accordingly. In the event that the Administrative Agent shall fail to make distribution to any Lender as required under this Section 2.10, the Administrative Agent agrees to pay such Lender interest from the date such payment was due until paid at the Federal Funds Rate. (b) The Borrower agrees to pay principal, interest, fees and all other amounts due hereunder or under the Notes without set-off or counterclaim or any deduction whatsoever and free and clear of all taxes, levies and withholding (other than Excluded Taxes, collectively, "Taxes"). Subject to the compliance by the Administrative Agent and each Lender with the provisions of Section 2.14 hereof, if the Borrower is required by Applicable Law to deduct any Taxes from or in respect of any sum payable to the Administrative Agent or any Lender 41 hereunder, under any Note or under any other Loan Document: (i) the sum payable hereunder or thereunder, as applicable, shall be increased to the extent necessary to provide that, after making all required deductions (including deductions applicable to additional sums payable under this Section 2.10(b)), the Administrative Agent or such Lender, as applicable, receives an amount equal to the sum it would have received had no such deductions been made; (ii) the Borrower shall make such deductions from such sums payable hereunder or thereunder, as applicable, and pay the amount so deducted to the relevant taxing authority as required by Applicable Law; and (iii) the Borrower shall provide the Administrative Agent or such Lender, as applicable, with evidence satisfactory to the Administrative Agent or such Lender, as applicable, that such deducted amounts have been paid to the relevant taxing authority. (c) Prior to the declaration of an Event of Default under Section 8.2 hereof, if some but less than all amounts due from the Borrower are received by the Administrative Agent with respect to the Obligations, the Administrative Agent shall distribute such amounts in the following order of priority, all in accordance where applicable with the respective Commitment Ratios of the Lenders for the applicable Commitment: (i) to the payment of any fees or expenses then due and payable to the Administrative Agent and the Lenders, or any of them; (ii) to the payment of interest then due and payable on the Loans; (iii) to the payment of all other amounts not otherwise referred to in this Section 2.10(c) then due and payable to the Administrative Agent and the Lenders, or any of them, hereunder or under the Notes or any other Loan Document; (iv) to the payment of principal then due and payable on the Loans made under each of the Term Loan A Commitment and the Term Loan B Commitment; and (v) t the payment of principal then due and payable on the Loans made under the Revolving Loan Commitment. (d) Subject to any contrary provisions in the definition of Interest Period, if any payment under this Agreement or any of the other Loan Documents is specified to be made on a day which is not a Business Day, it shall be made on the next Business Day, and such extension of time shall in such case be included in computing interest and fees, if any, in connection with such payment. Section 2.11 Reimbursement. (a) Whenever any Lender shall sustain or incur any losses or out-of-pocket expenses in connection with (i) failure by the Borrower to borrow any Eurodollar Advance after having given notice of its intention to borrow in accordance with Section 2.2(c) hereof (whether by reason of the Borrower's election not to proceed or the non-fulfillment of any of the conditions set forth in Article 3 hereof) or (ii) prepayment (or failure to prepay after giving notice thereof) of any Eurodollar Advance in whole or in part for any reason, the Borrower agrees to pay to such Lender, upon the earlier of ten (10) days after such Lender's demand or the Maturity Date, as appropriate, an amount sufficient to compensate such Lender for all such losses and out-of-pocket expenses other than any lost margin on the Loans. Such Lender's good faith determination of the amount of such losses or out-of-pocket expenses, as set forth in writing and accompanied by calculations in reasonable detail demonstrating the basis for its demand, shall be conclusively correct absent manifest error. 42 (b) Losses subject to reimbursement hereunder shall include, without limiting the generality of the foregoing, expenses incurred by any Lender or any participant of such Lender permitted hereunder in connection with the re-employment of funds prepaid, paid, repaid, not borrowed, or not paid, as the case may be, and will be payable as a result of acceleration of the Obligations. Section 2.12 Pro Rata Treatment. (a) Advances. Each Advance from the Lenders under any Commitment shall be made pro rata on the basis of the respective Commitment Ratios of the Lenders applicable to the particular Commitment. (b) Payments. Except as provided in each of Section 2.2(e) and Article 10 hereof, each payment and prepayment of principal of the Loans and each payment of interest on the Loans, shall be made to the Lenders pro rata on the basis of their respective unpaid principal amounts outstanding under the Notes immediately prior to such payment or prepayment. If any Lender shall obtain any payment (whether involuntary, through the exercise of any right of set-off, or otherwise) on account of the Loans in excess of its ratable share of the Loans under its Commitment Ratio, such Lender shall forthwith purchase from the other Lenders such participations in the portion of the Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from such purchasing Lender, such purchase from each Lender shall be rescinded and such Lender shall repay to the purchasing Lender the purchase price to the extent of such recovery. The Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section 2.12(b) may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. Section 2.13 Capital Adequacy. If after the date hereof, the adoption of any Applicable Law regarding the capital adequacy of Lenders or Lender holding companies, or any change in Applicable Law (adopted after the Agreement Date) or any change in the interpretation or administration thereof (adopted after the Agreement Date) by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender with any directive regarding capital adequacy (whether or not having the force of law) of any such governmental authority, central bank or comparable agency (issued after the Agreement Date), has or would have the effect of reducing the rate of return on any Lender's or any Lender's holding company's capital as a consequence of its obligations hereunder with respect to the Loans and the Commitments to a level below that which it could have achieved but for such adoption, change or compliance (taking into consideration such Lender's policies with respect to capital adequacy immediately before such adoption, change or compliance and assuming that such Lender's capital was fully utilized prior to such adoption, change or compliance) by an amount reasonably deemed by such Lender to be material, then, 43 upon the earlier of ten (10) days after demand by such Lender or the Maturity Date, the Borrower shall promptly pay to such Lender such additional amounts as shall be sufficient to compensate such Lender for such reduced return, together with interest on such amount from the tenth (10th) day after the date of demand or the Maturity Date until payment in full thereof at the Default Rate. Notwithstanding the foregoing, the Borrower shall only be obligated to compensate such Lender for any amount under this subsection arising or occurring during (i) in the case of each such request for compensation, any time or period commencing not more than ninety (90) days prior to the date on which such Lender submits such request and (ii) any other time or period during which, because of the unannounced retroactive application of such law, regulation, interpretation, request or directive, such Lender could not have known that the resulting reduction in return might arise. A certificate of such Lender setting forth the amount to be paid to such Lender by the Borrower as a result of any event referred to in this paragraph and supporting calculations in reasonable detail shall be presumptively correct absent manifest error. Section 2.14 Lender Tax Forms. On or prior to the Agreement Date, and prior to the date on which any Person becomes a Lender hereunder, and from time to time thereafter if required by Applicable Law due to a change in circumstances or if reasonably requested by the Borrower or the Administrative Agent (unless such Lender is unable to do so by reasons of change in Applicable Law), each Lender organized under the laws of a jurisdiction outside the United States shall provide the Administrative Agent and the Borrower with (i) an accurate and duly completed United States Internal Revenue Service Form 4224 or Form 1001, as the case may be, and Form W-8 or Form W-9, as the case may be, or other applicable or successor form, certificate or document prescribed by the United States Internal Revenue Service certifying as to such Lender's entitlement to full exemption from United States withholding tax with respect to all payments to be made to such Lender hereunder or under any Note or other Loan Document, or, (ii) in the case of a Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (A) an accurate and duly completed United States Internal Revenue Service Form W-8, or other applicable or successor form, certificate or document prescribed by the United States Internal Revenue Service certifying to such Lender's foreign status and (B) a certificate certifying to such Lender's entitlement to a complete exemption from United States withholding tax with respect to all payments hereunder or under any Note or other Loan Document. In the event that the Borrower withholds a portion of any payment hereunder or under any Note or other Loan Document in accordance with this Section 2.14, the Borrower shall provide evidence that such taxes of any nature whatsoever in respect of this Agreement, any Loan or any Note or other Loan Document shall have been paid to the appropriate taxing authorities by delivery to the Lender on whose account such payment was made of the official tax receipts or notarized copies of such receipts within thirty (30) days after payment of such tax. If the Borrower fails to make any such payment when due, the Borrower shall indemnify the Lenders for any incremental taxes, interest or penalties that may become payable by any Lender as a result of any such failure. For any period with respect to which a Lender has failed to provide the Borrower with the appropriate form described above (other than if such failure is due to a change in Applicable Law occurring subsequent to the date on which a form originally was required to be provided), such Lender shall not be entitled to indemnification 44 with respect to withholding taxes imposed by the United States and the Borrower shall be allowed to deduct from payments to such Lender hereunder and under any Note or other Loan Document, the amount of any such withholding taxes paid by the Borrower. Section 2.15 Letters of Credit. (a) Subject to the terms and conditions hereof, the Issuing Bank, on behalf of the Lenders, and in reliance on the agreements of the Lenders set forth in subsection (c) of this Section 2.15, hereby agrees to issue one (1) or more Letters of Credit up to an aggregate face amount equal to the Available Letter of Credit Commitment; provided, however, that the Issuing Bank shall not issue any Letter of Credit unless the conditions precedent to the issuance thereof set forth in Sections 3.1 and 3.3 hereof have been satisfied, and shall have no obligation to issue any Letter of Credit if any Default then exists or would be caused thereby or if, after giving effect to such issuance, the Available Revolving Loan Commitment would be less than zero; and provided further, however, that at no time shall the total Letter of Credit Obligations outstanding hereunder exceed $10,000,000.00. Each Letter of Credit shall (1) be denominated in U.S. dollars and (2) expire no later than the earlier to occur of (A) five (5) Business Days prior to the Revolving Loan Maturity Date and (B) one (1) year after its date of issuance. (b) The Borrower may from time to time request that the Issuing Bank issue a Letter of Credit. The Borrower shall execute and deliver to the Administrative Agent and the Issuing Bank a Request for Issuance of Letter of Credit for each Letter of Credit to be issued by the Issuing Bank, not later than 12:00 noon (New York, New York time) on the fifth (5th) Business Day preceding the date on which the requested Letter of Credit is to be issued, or such shorter notice as may be acceptable to the Issuing Bank and the Administrative Agent. Upon receipt of any such Request for Issuance of Letter of Credit, subject to satisfaction of all conditions precedent thereto as set forth in Section 3.3 hereof, the Issuing Bank shall process such Request for Issuance of Letter of Credit and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue the Letter of Credit requested thereby. The Issuing Bank shall, upon request, furnish a copy of such Letter of Credit to any Lender following the issuance thereof. (c) Each Lender irrevocably authorizes the Issuing Bank to issue, reconfirm, reissue and extend each Letter of Credit in accordance with the terms of this Agreement. The Issuing Bank hereby sells, and each other Lender hereby purchases, on a continuing basis, a participation and an undivided interest in (A) the obligations of the Issuing Bank to honor any draws under the Letters of Credit issued pursuant to this Agreement and (B) the Indebtedness of the Borrower to the Issuing Bank under this Agreement relating to each Letter of Credit and any reimbursement or indemnification agreement relating to each Letter of Credit, such participation being in the amount of such Lender's pro rata share of such obligations and Indebtedness based on such Lender's Commitment Ratio. (d) Upon receipt of a draw certificate from the beneficiary of a Letter of 45 Credit, the Issuing Bank shall promptly notify the Administrative Agent and the Administrative Agent shall notify the Borrower and each Lender, by telephone or telecopy, of the amount of the requested draw and, in the case of each Lender, such Lender's portion of such draw amount as calculated in accordance with its Commitment Ratio. (e) The Borrower hereby agrees to immediately reimburse the Issuing Bank for amounts paid by the Issuing Bank in respect of draws under a Letter of Credit issued at the Borrower's request. In order to facilitate such repayment, the Borrower hereby irrevocably requests the Lenders, and the Lenders hereby severally agree, on the terms and conditions of this Agreement (other than as provided in Article 2 hereof with respect to the amounts of, the timing of requests for, and the repayment of Advances hereunder and in Article 3 hereof with respect to conditions precedent to Advances hereunder), with respect to any drawing under a Letter of Credit prior to the occurrence of an event described in clause (f) or (g) of Section 8.1 hereof, to make an Advance (which Advance may be a Eurodollar Advance if the Borrower so requests in a timely manner or may be converted to a Eurodollar Advance as provided in this Agreement) to the Borrower under the Revolving Loan Commitment on each day on which a draw is made under any Letter of Credit and in the amount of such draw, and to pay the proceeds of such Advance directly to the Issuing Bank to reimburse the Issuing Bank for the amount paid by it upon such draw. Each Lender shall pay its share of such Advance by paying its portion of such Advance to the Administrative Agent in accordance with Section 2.2(e) hereof and its Commitment Ratio, without reduction for any set-off or counterclaim of any nature whatsoever and regardless of whether any Default (other than with respect to an event described in clauses (f) or (g) of Section 8.1 hereof) then exists or would be caused thereby. If at any time that any Letters of Credit are outstanding, any of the events described in clause (f) or (g) of Section 8.1 hereof shall have occurred and be continuing, then each Lender shall, automatically upon the occurrence of any such event and without any action on the part of the Issuing Bank, the Borrower, the Administrative Agent or the Lenders, or any of them, be deemed to have purchased an undivided participation in the face amount of all Letters of Credit then outstanding in an amount equal to such Lender's Commitment Ratio times the face amount of all Letters of Credit then outstanding, and each Lender shall, notwithstanding such Event of Default, upon a drawing under any Letter of Credit, immediately pay to the Administrative Agent for the account of the Issuing Bank, in immediately available funds, the amount of such Lender's participation (and the Issuing Bank shall deliver to such Lender a loan participation certificate dated the date of the occurrence of such event and in the amount of such Lender's Commitment Ratio times the face amount of all Letters of Credit then outstanding). The obligation of each Lender to make payments to the Administrative Agent, for the account of the Issuing Bank, in accordance with this Section 2.15 shall be absolute and unconditional and no Lender shall be relieved of its obligations to make such payments by reason of non-compliance by any other Person with the terms of the Letter of Credit or for any other reason other than the gross negligence or willful misconduct of the Issuing Bank, as determined by a final order of a court of competent jurisdiction. The Administrative Agent shall promptly remit to the Issuing Bank the amounts so received from the Lenders. Any overdue amounts payable by the Lenders to the Issuing Bank in respect of a draw under any Letter of Credit shall bear interest, payable on demand, at the Federal Funds rate, plus one percent (1%). 46 (f) The Borrower agrees to reimburse the Lenders for any Advances made pursuant to draws under any Letter of Credit, and each payment by the Borrower in respect of its obligation to reimburse the Lenders under this Section 2.15 shall be made on the date of such Advance in lawful money of the United States of America in immediately available funds. Any overdue amounts payable by the Borrower under this Section 2.15 shall bear interest, payable on the earlier of demand or the Revolving Loan Maturity Date, for each day from and including the date payment thereof was due to, but excluding, the date of actual payment, at the Default Rate. (g) The Borrower agrees that any action taken or omitted to be taken by the Issuing Bank in connection with any Letter of Credit, except for such actions or omissions as shall constitute gross negligence or willful misconduct on the part of the Issuing Bank as determined by a final order of a court of competent jurisdiction, shall be binding on the Borrower as between the Borrower and the Issuing Bank, and shall not result in any liability of the Issuing Bank to the Borrower. The obligation of the Borrower to reimburse the Lenders for Advances made to reimburse the Issuing Bank for draws under the Letter of Credit shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances whatsoever, including, without limitation, the following circumstances: (i) Any lack of validity or enforceability of any Loan Document; (ii) Any amendment or waiver of or consent to any departure from any or all of the Loan Documents; (iii) Any improper use which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or transferee of any Letter of Credit in connection therewith other than to the extent such use, action or omission is the result of the gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; (iv) The existence of any claim, set-off, defense or any right which the Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or Persons for whom any such beneficiary or any such transferee may be acting) or any Lender (other than the defense of payment to such Lender in accordance with the terms of this Agreement) or any other Person, whether in connection with any Letter of Credit, any transaction contemplated by any Letter of Credit, this Agreement, any other Loan Document or any unrelated transaction; (v) Any statement or any other documents presented under any Letter of Credit proving to be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever, provided that such payment shall not have constituted gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; 47 (vi) The insolvency of any Person issuing any documents in connection with any Letter of Credit; (vii) Any breach of any agreement between the Borrower and any beneficiary or transferee of any Letter of Credit, except to the extent such breach results from the gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; (viii) Any irregularity in the transaction with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any transferee of such Letter of Credit, but excluding any irregularity resulting from the gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; (ix) Any errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, wireless or otherwise, whether or not they are in code, provided that the same shall not be the result of the gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; (x) Any act, error, neglect or default, omission, insolvency or failure of business of any of the correspondents of the Issuing Bank, provided that the same shall not have constituted the gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; (xi) Any other circumstances arising from causes beyond the control of the Issuing Bank; (xii) Payment by the Issuing Bank under any Letter of Credit against presentation of a sight draft or a certificate which does not comply with the terms of such Letter of Credit, provided that such payment shall not have constituted gross negligence or willful misconduct of the Issuing Bank as determined by a final order of a court of competent jurisdiction; and (xiii) Any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, provided that such other circumstances or happenings shall not have been the result of gross negligence or willful misconduct of the Issuing Bank or any Lender, as determined by a final order of a court of competent jurisdiction. (h) If any change in Applicable Law (adopted after the Agreement Date), any change in the interpretation or administration thereof (adopted after the Agreement Date), or any change in compliance with Applicable Law by the Issuing Bank or any Lender as a result of any official request or directive of any governmental authority, central bank or comparable agency (whether or not having the force of law) (issued after the Agreement Date) shall (i) impose, 48 modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit, capital adequacy, assessment or other requirements or conditions against letters of credit issued by the Issuing Bank or against participations by any other Lender in the Letters of Credit or (ii) impose on the Issuing Bank or any other Lender any other condition regarding any Letter of Credit or any participation therein, and the result of any of the foregoing in the reasonable determination of the Issuing Bank or such Lender, as the case may be, is to increase the cost to the Issuing Bank or such Lender of issuing or maintaining any Letter of Credit or purchasing or maintaining any participation therein, as the case may be, by an amount (which amount shall be reasonably determined) deemed by the Issuing Bank or such Lender to be material, then, within ten (10) days after demand by the Issuing Bank or such Lender, the Borrower shall promptly pay the Issuing Bank or such Lender, as the case may be, such additional amount or amounts as shall be sufficient to compensate the Issuing Bank or such Lender for such increased costs, together with interest on such amount from the tenth (10th) day after the date of demand, until payment in full thereof at the Default Rate. A certificate of the Issuing Bank or such Lender setting forth the amount, and in reasonable detail the basis for the Issuing Bank or such Lender's determination of such amount, to be paid to the Issuing Bank or such Lender by the Borrower as a result of any event referred to in this paragraph shall be presumptively correct. (i) Each Lender shall be responsible (to the extent not reimbursed by the Borrower) for its pro rata share (based on such Lender's Commitment Ratio) of any and all reasonable out-of-pocket costs, expenses (including, without limitation, reasonable legal fees) and disbursements which may be incurred or made by the Issuing Bank in connection with the collection of any amounts due under, the administration of, or the presentation or enforcement of any rights conferred by any Letter of Credit, the Borrower's or any guarantor's obligations to reimburse or otherwise, except that no Lender shall be liable to the Issuing Bank for any portion of such out-of-pocket costs, expenses (including, without limitation, reasonable legal fees) and disbursements from the gross negligence or willful misconduct of the Issuing Bank, as determined by a final, non-appealable judicial order of a court of competent jurisdiction. In the event the Borrower shall fail to pay such expenses of the Issuing Bank within ten (10) days after demand for payment by the Issuing Bank, each Lender shall thereupon pay to the Issuing Bank its pro rata share (based on such Lender's Commitment Ratio) of such expenses within five (5) days from the date of the Issuing Bank's notice to the Lenders of the Borrower's failure to pay; provided, however, that if the Borrower or any guarantor shall thereafter pay such expense, the Issuing Bank will repay to each Lender the amounts received from such Lender hereunder. (j) The Borrower agrees that each Base Rate Advance by the Lenders to reimburse the Issuing Bank for draws under any Letter of Credit, shall, for all purposes hereunder, be deemed to be a Base Rate Advance under the Revolving Loan Commitment to the Borrower and shall be payable and bear interest in accordance with all other Loans to the Borrower. (k) The Borrower will indemnify and hold harmless the Administrative Agent, the Issuing Bank and each other Lender and each of their respective employees, representatives, 49 officers and directors from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever (including, without limitation, reasonable attorneys' fees, but excluding taxes) which may be imposed on, incurred by or asserted against the Administrative Agent, the Issuing Bank or any such other Lender in any way relating to or arising out of the issuance of a Letter of Credit; provided, however, that the Borrower shall not be liable to the Administrative Agent, the Issuing Bank or any such Lender for any portion of such claims, liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses, or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent, the Issuing Bank or such Lender, as the case may be, as determined by a final order of a court of competent jurisdiction. This Section 2.15(k) shall survive termination of this Agreement. (l) The Issuing Bank may resign as Issuing Bank upon sixty (60) days' prior written notice to the Administrative Agent, the Lenders and the Borrower. If the Issuing Bank shall resign as Issuing Bank under this Agreement, then the Borrower shall appoint from among the Lenders a successor issuer of Letters of Credit, whereupon such successor issuer shall succeed to the rights, powers and duties of the Issuing Bank, and the term "Issuing Bank" shall mean such successor issuer effective upon such appointment. At the time such resignation shall become effective, the Borrower shall pay to the resigning Issuing Bank all accrued and unpaid fees pursuant to Section 2.4(b)(i) hereof. The acceptance of any appointment as the Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement entered into by such successor, in a form satisfactory to the Borrower and the Administrative Agent and, from and after the effective date of such agreement, such successor Lender shall have all the rights and obligations of the previous Issuing Bank under this Agreement and the other Loan Documents. After the resignation of the Issuing Bank hereunder, the resigning Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit. After any retiring Issuing Bank's resignation as Issuing Bank, the provisions of this Agreement relating to the Issuing Bank shall inure to its benefit as to any actions taken or omitted to be taken by it (i) while it was Issuing Bank under this Agreement or (ii) at any time with respect to Letters of Credit issued by such Issuing Bank. ARTICLE 3 Conditions Precedent Section 3.1 Conditions Precedent to Effectiveness of Agreement. The obligation of the Lenders to undertake the Commitments and the effectiveness of this Agreement are subject to the prior or contemporaneous fulfillment of each of the following conditions: (a) The Administrative Agent and the Lenders shall have received, in form 50 and substance satisfactory to them, each of the following: (i) this Agreement duly executed; (ii) duly executed Notes; (iii) duly executed confirmations of the Loan Documents (as defined in the Prior Loan Agreement) by the Borrower, the Parent and the Borrower's Subsidiaries, including confirmation of: (A) Borrower's Pledge Agreement, (B) Borrower's Security Agreement, (C) Subsidiary Pledge Agreements, (D) Subsidiary Security Agreements, (E) Subsidiary Guaranties, (F) Parent Pledge Agreement, (G) Parent Guaranty Agreement, (H) Assignment of Rights, and (I) loan certificate for each of the Parent, the Borrower and each Subsidiary of the Borrower (including all License Subs); (iv) legal opinions of (w) Brown & Wood LLP, special New York counsel to the Parent, the Borrower and its Subsidiaries, (x) Young, Williams, Henderson and Fuselier, P.A., local counsel to the Parent, the Borrower and its Subsidiaries, (y) Vinson & Elkins, special Texas counsel to the Parent, the Borrower and its Subsidiaries, and (z) Lukas, Nace, Gutierrez & Sachs, special FCC counsel to the Parent, the Borrower and its Subsidiaries, each addressed to each of the Lenders and the Administrative Agent, and dated as of the Agreement Date; (v) copies of insurance binders or certificates covering the assets of the Borrower and its Subsidiaries and otherwise meeting the requirements of this Agreement; (vi) duly executed Certificate of Financial Condition for the Borrower and its Subsidiaries on a consolidated basis, given by the chief financial officer of the Borrower, and such other information pertaining to the capital and corporate structure of the Borrower or any of its Subsidiaries as the Administrative Agent or the Lenders shall request; (vii) lien and judgment search results with respect to the Borrower; (viii) delivery to the Administrative Agent of all possessory collateral, including, without limitation, any pledged notes or pledged stock; (ix) duly executed Performance Certificate for the Borrower and its Subsidiaries; (x) duly executed Master Assignment and Assumption Agreement in respect of the Prior Loan Agreement; and (xi) all such other documents as the Administrative Agent or any Lender may reasonably request, certified by an appropriate governmental official or an Authorized Signatory if so requested. 51 (b) The Administrative Agent and the Lenders shall have received evidence satisfactory to them that all Necessary Authorizations, including, without limitation, all necessary consents to the closing of this Agreement and the other Loan Documents, have been obtained or made, are in full force and effect and are not subject to any pending or, to the knowledge of the Borrower, threatened reversal or cancellation, and the Administrative Agent and the Lenders shall have received a certificate of an Authorized Signatory so stating. (c) The Borrower shall have certified to the Administrative Agent and the Lenders that each of the representations and warranties in Article 4 hereof and each other Loan Document are true and correct as of the Agreement Date and that no Default or Event of Default then exists or is continuing. (d) There shall not exist as of the Agreement Date, any action, suit, proceeding or investigation pending against, or, to the knowledge of the Borrower, threatened against or in any manner relating adversely to, the Borrower, any of its Subsidiaries, any of their respective properties or the transactions contemplated hereby, in each case, which reasonably could be expected to have a Materially Adverse Effect. (e) The Borrower has entered into (i) supply contracts with Qualified Vendors for the build out of the Borrower's Cellular System and the acquisition of related equipment, and, to the extent material, such contracts shall be reasonably satisfactory to the Lenders and (ii) such other agreements with third parties as may be reasonably necessary to the conduct of its proposed operations in accordance with its business plan. Section 3.2 Conditions Precedent to Each Advance. The obligation of the Lenders to make each Advance which, if funded, would increase the aggregate principal amount of Loans outstanding after the Agreement Date, is subject to the fulfillment of each of the following conditions immediately prior to or contemporaneously with such Advance: (a) All of the representations and warranties of the Borrower under this Agreement and the other Loan Documents (including, without limitation, all representations and warranties with respect to the Borrower's Subsidiaries), which, pursuant to Section 4.2 hereof, are made at and as of the time of such Advance (except to the extent previously fulfilled in accordance with the terms hereof and to the extent relating specifically to a specific prior date), shall be true and correct at such time in all material respects, both before and after giving effect to the application of the proceeds of such Advance, and after giving effect to any updates to information provided to the Lenders in accordance with the terms of such representations and warranties, and no Default hereunder shall then exist or be caused thereby; (b) The Administrative Agent and the Lenders shall have received a certificate of the Borrower stating that there is no Default or Event of Default, both before and after giving effect to the proposed Advance of the Loans hereunder; 52 (c) The Administrative Agent shall have received a duly executed Request for Advance, a Use of Proceeds Letter and a Performance Certificate; (d) If such Advance is in connection with an Acquisition, each of the Administrative Agent and the Lenders shall have received all such other certificates, reports, statements, opinions of counsel or other documents as the Administrative Agent or any Lender may reasonably request; and (e) With respect to any Advance in any way relating to any Acquisition or the formation of any Subsidiary which is permitted hereunder, the Administrative Agent and the Lenders shall have received such documents and instruments, if any, relating to the Acquisition, or the formation of such new Subsidiary, as are described in Sections 5.13 and 7.6 hereof or otherwise required herein. The acceptance of proceeds of any Advance which would increase the aggregate principal amount of Loans outstanding shall be deemed to be a representation and warranty by the Borrower as to compliance with this Section 3.2 on the date any such Loan is made. Section 3.3 Conditions Precedent to Issuance of Letters of Credit. The obligation of the Issuing Bank to issue each Letter of Credit hereunder is subject to the fulfillment of each of the following conditions immediately prior to or contemporaneously with such issuance: (a) All of the representations and warranties under this Agreement and the other Loan Documents (including, without limitation, all representations and warranties with respect to the Borrower's Subsidiaries), which, pursuant to Section 4.2 hereof, are made at and as of the time of the issuance of such Letter of Credit (except to the extent previously fulfilled in accordance with the terms hereof and to the extent relating specifically to a specific prior date), shall be true and correct at such time in all material respects, both before and after giving effect to the issuance of such Letter of Credit, and after giving effect to any updates to information provided to the Lenders in accordance with the terms of such representations and warranties; (b) There shall not exist, on the date of the issuance of such Letter of Credit and after giving effect thereto, a Default hereunder and the Administrative Agent shall have received a Request for Issuance of a Letter of Credit so certifying; and (c) Each of the Administrative Agent, the Issuing Bank and each of the Lenders shall have received all such other certificates, reports, statements or other documents as any of them may reasonably request. 53 ARTICLE 4 Representations and Warranties Section 4.1 Representations and Warranties. The Parent and the Borrower hereby represent and warrant, upon the Agreement Date, and at all times thereafter as required pursuant to the terms hereof, in favor of the Administrative Agent and each Lender that: (a) Organization; Ownership; Power; Qualification. Each of the Borrower and the Parent is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation. Each of the Borrower and the Parent has the corporate power and authority to own its properties and to carry on its business as now being conducted. Each Subsidiary of the Borrower is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of the state of its incorporation or formation, as the case may be, and has the corporate, limited liability company or partnership power and authority, as the case may be, to own its properties and to carry on its business as now being conducted. The Parent has no Subsidiaries other than the Borrower and its Subsidiaries. The Borrower, each of its Subsidiaries and the Parent are duly qualified, in good standing and authorized to do business in each jurisdiction in which the character of their respective properties or the nature of their respective businesses requires such qualification or authorization, except to the extent a failure to do so could not reasonably be expected to have a Materially Adverse Effect. (b) Authorization; Enforceability. The Borrower has the corporate power and has taken all necessary corporate action to authorize it to borrow hereunder, and each of the Borrower and the Parent has the corporate power and has taken all necessary corporate action to execute, deliver and perform this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by the Borrower and the Parent and is, and each of the other Loan Documents to which the Borrower and the Parent is party is, a legal, valid and binding obligation of the Borrower or the Parent, as applicable, enforceable against the Borrower or the Parent, as applicable, in accordance with its terms, subject to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law and (ii) applicable bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower and the Parent). (c) Subsidiaries: Authorization; Enforceability. The Borrower's Subsidiaries and the Borrower's direct and indirect ownership thereof as of the Agreement Date are as set forth on Schedule 2 attached hereto, and to the extent such Subsidiaries are corporations, the Borrower has the unrestricted right to vote the issued and outstanding shares of its Subsidiaries 54 shown thereon and such shares of such Subsidiaries have been duly authorized and issued and are fully paid and nonassessable. Each Subsidiary of the Borrower has the corporate, partnership or limited liability company power and has taken all necessary corporate, partnership or limited liability company action to authorize it to execute, deliver and perform each of the Loan Documents to which it is a party in accordance with their respective terms and to consummate the transactions contemplated by this Agreement and by such Loan Documents. Each of the Loan Documents to which any Subsidiary of the Borrower is party is a legal, valid and binding obligation of such Subsidiary enforceable against such Subsidiary in accordance with its terms, subject to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law and (ii) applicable bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of any such Subsidiary). Except as set forth on Schedule 2 attached hereto, the Borrower's ownership interest in each of its Subsidiaries represents a direct or indirect controlling interest of such Subsidiary for purposes of directing or causing the direction of the management and policies of each Subsidiary. (d) Compliance with Other Loan Documents and Contemplated Transactions. The execution, delivery and performance, in accordance with their respective terms, by the Parent and the Borrower of this Agreement and the Notes, and by the Parent, the Borrower and the Borrower's Subsidiaries of each of the other Loan Documents to which they are respectively party, and the consummation of the transactions contemplated hereby and thereby, do not and will not (i) require any consent or approval, governmental or otherwise, not already obtained, (ii) violate any Applicable Law respecting the Parent, the Borrower or any Subsidiary of the Borrower, (iii) conflict with, result in a breach of, or constitute a default under the certificate or articles of incorporation or certificate of formation, or by-laws, limited partnership agreement or operating agreement, each as amended, as the case may be, of the Parent, the Borrower or of any Subsidiary of the Borrower, or (iv) conflict with, result in a breach of, or constitute a default under any material indenture, agreement, or other instrument, including, without limitation, the Licenses, to which the Parent, the Borrower or any of the Borrower's Subsidiaries is a party or by which any of them or their respective properties may be bound, or (v) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by the Parent, the Borrower or any of the Borrower's Subsidiaries, except for Permitted Liens. (e) Business. The Borrower, together with its Subsidiaries, is engaged in the business of building, owning and operating a wireless communications network covering POPs primarily throughout the south-central United States and other related businesses. (f) Licenses Except as set forth on Schedule 1 attached hereto, the Licenses have been duly issued, are in full force and effect (excluding the Give-back Licenses) and, as of the Agreement Date, are held by a License Sub as set forth on Schedule 1 attached hereto. The Parent, the Borrower and the Borrower's Subsidiaries are in compliance in all material respects with all of the provisions thereof. Except as set forth on Schedule 1, neither any License nor any 55 Necessary Authorization is the subject of any pending or, to the best of the Parent's and the Borrower's knowledge, threatened revocation, which could reasonably be expected to have a Materially Adverse Effect. (g) Compliance with Applicable Law. The Parent, the Borrower and the Borrower's Subsidiaries are in compliance with all Applicable Law except to the extent that any noncompliance could not reasonably be expected to have a Materially Adverse Effect. (h) Title to Assets. The Parent, the Borrower and the Borrower's Subsidiaries have good, legal and marketable title to, or a valid leasehold interest in, all the Parent's, the Borrower's and such Subsidiaries' material assets, respectively. None of the properties or assets of the Parent, the Borrower or any of the Borrower's Subsidiaries is subject to any Liens, except for Permitted Liens. Except for financing statements evidencing Permitted Liens, no financing statement under the Uniform Commercial Code as in effect in any jurisdiction and no other filing which names the Parent, the Borrower or any of the Borrower's Subsidiaries as debtor or which covers or purports to cover any of the assets of the Parent, the Borrower or any of the Borrower's Subsidiaries is currently effective and on file in any state or other jurisdiction, and none of the Parent, the Borrower or any of the Borrower's Subsidiaries has signed any such financing statement or filing or any security agreement authorizing any secured party thereunder to file any such financing statement or filing. (i) Litigation. There is no action, suit, proceeding or investigation pending against, or, to the best of the Parent's or the Borrower's knowledge, threatened against or in any other manner relating materially adversely to, the Parent, the Borrower or any of the Borrower's Subsidiaries or, any of their respective properties, including, without limitation, the Licenses, in any court or before any arbitrator of any kind or before or by any governmental body (including, without limitation, the FCC), except as set forth on Schedule 4 attached hereto (as such schedule may be updated with the consent of the Required Lenders from time to time) or which could reasonably be expected to have a Materially Adverse Effect. No such action, suit, proceeding or investigation (i) calls into question the validity of this Agreement or any other Loan Document or (ii) individually or collectively involves the possibility of any judgment or liability not fully covered by insurance which, if determined adversely to the Parent, the Borrower or any of the Borrower's Subsidiaries, could reasonably be expected to have a Materially Adverse Effect. (j) Taxes. All federal, state and other income and other material tax returns of the Parent, the Borrower and each of the Borrower's Subsidiaries required by law to be filed have been duly filed and all federal, state and other taxes, including, without limitation, withholding taxes, assessments and other governmental charges or levies required to be paid by the Parent, the Borrower or any of the Borrower's Subsidiaries or imposed upon the Parent, the Borrower or any of the Borrower's Subsidiaries or any of their respective properties, income, profits or assets, which are due and payable, have been paid, except any such taxes (i) (x) the payment of which the Parent, the Borrower or any of the Borrower's Subsidiaries is diligently contesting in good faith by appropriate proceedings, (y) for which adequate reserves have been provided on the books of the Parent, the Borrower or the Subsidiary of the Borrower involved 56 and (z) as to which no Lien other than a Permitted Lien has attached or (ii) which may result from audits not yet conducted. The charges, accruals and reserves on the books of the Parent, the Borrower and each of the Borrower's Subsidiaries, as applicable, in respect of taxes are, in the judgment of the Parent and the Borrower, adequate. (k) Financial Statements. The Parent and the Borrower have furnished or caused to be furnished to the Administrative Agent and the Lenders unaudited pro forma consolidated balance sheets of the Borrower, the Subsidiaries of the Borrower and the Parent , dated as of September 30, 1998, which, together with other financial statements furnished to the Lenders subsequent to the Agreement Date have been prepared in accordance with GAAP and present fairly in all material respects the financial position of the Parent, the Borrower and the Borrower's Subsidiaries on a consolidated and consolidating basis, as the case may be, on and as at such dates and the results of operations for the periods then ended (subject, in the case of unaudited financial statements, to normal year-end and audit adjustments). None of the Parent, the Borrower or any of the Borrower's Subsidiaries has any material liabilities, contingent or otherwise, other than as disclosed in the financial statements most recently delivered on the Agreement Date or pursuant to Section 6.1 or 6.2 hereof, and there are no material unrealized losses of the Parent, the Borrower or any of the Borrower's Subsidiaries and no material anticipated losses of the Parent, the Borrower or any of the Borrower's Subsidiaries other than those which have been previously disclosed in writing to the Administrative Agent and the Lenders and identified as such. (l) No Material Adverse Change. Since September 30, 1998, there has occurred no event, condition, action, omission, status, situation or other change which has had or which could reasonably be expected to have a Materially Adverse Effect. (m) ERISA. The Borrower and each of its Subsidiaries and each of their respective Plans are in compliance with ERISA and the Code, except to the extent a failure to do so could not reasonably be expected to have a Materially Adverse Effect, and neither the Borrower nor any of its ERISA Affiliates, including its Subsidiaries, has incurred any accumulated funding deficiency with respect to any such Plan within the meaning of ERISA or the Code. The Borrower, each of its Subsidiaries, and each other ERISA Affiliate have complied with all requirements of COBRA, except to the extent a failure to do so could not reasonably be expected to have a Materially Adverse Effect. Neither the Borrower nor any of its Subsidiaries has made any promises of retirement or other benefits to employees, except as set forth in the Plans, in written agreements with such employees, or in the Borrower's employee handbook and memoranda to employees. Neither the Borrower nor any of its ERISA Affiliates, including its Subsidiaries, has incurred any material liability to PBGC in connection with any such Plan. The assets of each such Plan which is subject to Title IV of ERISA are sufficient to provide the benefits under such Plan, the payment of which PBGC would guarantee if such Plan were terminated, and such assets are also sufficient to provide all other "benefit liabilities" (within the meaning of Section 4041 of ERISA) due under the Plan upon termination. No Reportable Event has occurred and is continuing with respect to any such Plan. No such Plan or trust created thereunder, or party in interest (as defined in Section 3(14) of ERISA), or any fiduciary (as 57 defined in Section 3(21) of ERISA), has engaged in a "prohibited transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) which would subject such Plan or any other Plan of the Borrower or any of its Subsidiaries, any trust created thereunder, or any such party in interest or fiduciary, or any party dealing with any such Plan or any such trust, to the tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA or Section 4975 of the Code. Neither the Borrower nor any of its ERISA Affiliates, including its Subsidiaries, is or has been obligated to make any payment to a Multiemployer Plan. (n) Compliance with Regulations T, U and X. Neither the Borrower nor any of its Subsidiaries is engaged principally in, or has as one of its important activities, the business of extending credit for the purpose of purchasing or carrying, and neither the Borrower nor any of its Subsidiaries owns or presently intends to acquire, any "margin security" or "margin stock" (herein called "margin stock") as defined in Regulations T, U, and X (12 C.F.R. Parts 220, 221 and 224) of the Board of Governors of the Federal Reserve System (the "Regulations"). None of the proceeds of the Loans will be used, directly or indirectly, for the purpose of purchasing or carrying any margin stock or for the purpose of reducing or retiring any Indebtedness which was originally incurred to purchase or carry margin stock or for any other purpose which might constitute this transaction a "purpose credit" within the meaning of the Regulations. Neither the Borrower, its Subsidiaries, nor any bank acting on their behalf has taken, caused to be authorized or taken, or will take any action which might cause this Agreement or the Notes to violate the Regulations or any other regulation of the Board of Governors of the Federal Reserve System or to violate the applicable provisions of the Securities Exchange Act of 1934, in each case as now in effect or as the same may hereafter be in effect. If so requested by any Lender, the Borrower and its Subsidiaries will furnish such Lender with (i) a statement or statements in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U of said Board of Governors and (ii) other documents evidencing its compliance with the margin regulations, including, without limitation, an opinion of counsel in form and substance satisfactory to such Lender. Neither the making of the Loans nor the use of proceeds thereof will violate, or be inconsistent with, the provisions of the Regulations. (o) Investment Company Act. None of the Parent, the Borrower or any of the Borrower's Subsidiaries is required to register under the provisions of the Investment Company Act of 1940, as amended, and neither the entering into or performance by the Parent, the Borrower and the Borrower's Subsidiaries of this Agreement and the Loan Documents nor the issuance of the Notes violates any provision of such Act or requires any consent, approval or authorization of or registration with, the Securities and Exchange Commission or any other governmental or public body or authority pursuant to any provisions of such Act. (p) Governmental Regulation. None of the Parent, the Borrower or any of the Borrower's Subsidiaries is required to obtain any consent, approval, authorization, permit or license which has not already been obtained from, or effect any filing or registration which has not already been effected with, any federal, state or local regulatory authority in connection with the execution and delivery of this Agreement or any other Loan Document (other than filings required to be made under the Security Documents), in either case which if not obtained or made 58 would have a Materially Adverse Effect. None of the Parent, the Borrower or any of the Borrower's Subsidiaries is required to obtain any consent, approval, authorization, permit or license which has not already been obtained from, or effect any filing or registration which has not already been effected with, any federal, state or local regulatory authority in connection with the performance, in accordance with their respective terms, of this Agreement or any other Loan Document (other than filings required to be made under the Security Documents), in either case which if not obtained or made would have a Materially Adverse Effect. (q) Absence of Default, etc. The Parent, the Borrower and the Borrower's Subsidiaries are in compliance in all respects with all of the provisions of their respective certificates or articles of incorporation, organization or formation and by-laws, partnership agreements and operating agreements, as the case may be, and no action, event, condition or situation has occurred or failed to occur (including, without limitation, any matter which could create a Default hereunder by cross- default) which has not been remedied or waived, the occurrence or non-occurrence of which constitutes, (i) a Default or (ii) a material default by the Parent, the Borrower or any of the Borrower's Subsidiaries, or an action, event, condition or situation giving rise to any put right or other prepayment right of any holder of Indebtedness, under any indenture, agreement or other instrument relating to Indebtedness of the Parent, the Borrower or any of the Borrower's Subsidiaries (other than as set forth on Schedule 3 attached hereto), or a default under any License (which Default could reasonably be expected to result in an Event of Default under Section 8.1(l) hereof), or a default under any judgment, decree or order to which the Parent, the Borrower or any of the Borrower's Subsidiaries is a party or by which the Parent, the Borrower or any of the Borrower's Subsidiaries or any of their respective properties may be bound or affected, except to the extent any of the foregoing in this (ii) could not reasonably be expected to have a Materially Adverse Effect. None of the Parent, the Borrower or any of the Borrower's Subsidiaries is a party to or bound by any contract or agreement continuing after the Agreement Date, or bound by any Applicable Law, the performance of which or the compliance with which, as applicable, could reasonably be expected to have a Materially Adverse Effect or could reasonably be expected to result in the loss of any License (other than any Give-back License) issued by the FCC. (r) Accuracy and Completeness of Information. All material information, reports, and other papers relating to the Parent, the Borrower or any of the Borrower's Subsidiaries furnished by or on behalf of the Parent, the Borrower or any of the Borrower's Subsidiaries to the Administrative Agent or the Lenders were, at the time furnished, true, complete and correct in all material respects to the extent necessary to give the Administrative Agent and the Lenders true and accurate knowledge of the subject matter thereof in light of the circumstances under which they were made; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. No fact or situation is currently known to the Parent or the Borrower which has had or which could reasonably be expected to have a Materially Adverse Effect. (s) Insurance. As of the Agreement Date Schedule 8 sets forth a description 59 of all insurance maintained by or on behalf of the Parent, the Borrower and the Borrower's Subsidiaries as of the Agreement Date. As of the Agreement Date, all premiums in respect of such insurance have been paid. (t) Labor Matters. As of the Agreement Date, there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened. With such exceptions as could not reasonably be expected to result in a Materially Adverse Effect, (i) the hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters and (ii) all payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary. (u) Priority. The Security Interest is a valid and perfected first priority security interest in the Collateral in favor of the Administrative Agent, for the benefit of itself and the Lenders, securing, in accordance with the terms of the Security Documents, the Obligations, and the Collateral is subject to no Liens other than Permitted Liens. The Liens created by the Security Documents are enforceable as security for the Obligations in accordance with their terms with respect to the Collateral subject to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law; and (ii) applicable bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Parent, the Borrower or any of the Borrower's Subsidiaries, as the case may be). (v) Indebtedness for Money Borrowed. Except as described on Schedule 6 attached hereto and other than the Advances, if any, none of the Parent, the Borrower, or any of the Borrower's Subsidiaries has outstanding, as of the Agreement Date, any Indebtedness for Money Borrowed. (w) Solvency. As of the Agreement Date and after giving effect to the transactions contemplated by the Loan Documents: (i) the property of the Borrower, at a fair valuation, will exceed its debt; (ii) the capital of the Borrower will not be unreasonably small to conduct its business; (iii) the Borrower will not have incurred debts beyond its ability to pay such debts as they mature; and (iv) the present fair salable value of the assets of the Borrower will be greater than the amount that will be required to pay its probable liabilities (including debts) as they become absolute and matured. For purposes of this Section, "debt" means any liability on a claim, and "claim" means (a) the right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (b) the right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is 60 reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured or unsecured. (x) Patents, Trademarks, Copyrights, etc. The Borrower and each of its Subsidiaries owns, possesses, or has the right to use all material patents, trademarks, trademark rights, trade names, trade name rights, service marks and copyrights, and rights with respect thereof, necessary to conduct its respective business as now conducted, without known conflict with any patent, trademark, trade name, service mark, or copyright of any other Person, and in each case, subject to no mortgage, pledge, lien, lease, encumbrance, charge, security interest, title retention agreement, or option. All such patents, trademarks, trademark rights, trade names, trade name rights, service marks and copyrights are listed as of the Agreement Date on Schedule 1 attached hereto and are in full force and effect, the holder thereof is in full compliance in all material respects with all of the provisions thereof, and no such asset or agreement is subject to any pending or threatened attack or revocation. (y) Year 2000 Compliance. Each of the Parent and the Borrower has (i) initiated a review and assessment of all areas within the Parent's, the Borrower's and each of the Borrower's Subsidiaries' respective business and operations (including those affected by suppliers, vendors and customers) that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications used by the Parent, the Borrower or any of the Borrower's Subsidiaries (or suppliers, vendors and customers) may be unable to recognize and perform properly date-sensitive functions involving certain dates prior to and any date after December 31, 1999), (ii) developed a plan and timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan in accordance with that timetable. Based on the foregoing, the Parent and the Borrower believe that all computer applications (including those of its suppliers, vendors and customers) that are material to the Parent's, the Borrower's or any of the Borrower's Subsidiaries' business and operations are reasonably expected on a timely basis to be able to perform properly date-sensitive functions for all dates before and after January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure to do so could not reasonably be expected to have a Materially Adverse Effect. (z) Parent Assets. As of the Agreement Date, the Parent has no assets other than the Capital Stock of the Borrower, investments in the Borrower and/or the Borrower's Subsidiaries permitted hereunder, rights under the Securities Purchase Agreement, rights under the Stockholders Agreement, and the Bid Equity Commitments, so long as the proceeds of such Bid Equity Commitments are disposed of in accordance with Section 5.17(b) hereof. (aa) Parent Business. The Parent is engaged in no business other than holding the assets described in Section 4.1(z) hereof, incurring Indebtedness permitted under Section 7.1 hereof and incurring the Bid Equity Commitments, so long as the proceeds of such Bid Equity Commitments are disposed of in accordance with Section 5.17(b) hereof. Section 4.2 Survival of Representations and Warranties, etc. All representations and warranties made under this Agreement and any other Loan Document shall be deemed to be made, and shall be true and correct, at and as of the Agreement Date, on the date of each 61 Advance and on the date of issuance of each Letter of Credit, which, if funded, would increase the aggregate principal amount of the Loans outstanding, except to the extent previously fulfilled in accordance with the terms hereof and to the extent relating specifically to the Agreement Date. All representations and warranties made under this Agreement and the other Loan Documents shall survive, and not be waived by, the execution hereof by the Lenders and the Administrative Agent, any investigation or inquiry by any Lender or the Administrative Agent, or the making of any Advance under this Agreement. ARTICLE 5 General Covenants So long as any of the Obligations is outstanding and unpaid or the Lenders have an obligation to fund Advances hereunder (whether or not the conditions to borrowing have been or can be fulfilled), and unless the Required Lenders, or such greater number of Lenders as may be expressly provided herein, shall otherwise consent in writing: Section 5.1 Preservation of Existence and Similar Matters. Except as permitted under Section 7.4(b) hereof, the Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to: (a) preserve and maintain its existence, and its material rights, franchises, licenses and privileges in the state of its incorporation or formation, as the case may be; and (b) qualify and remain qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification or authorization, except for qualifications and authorizations the lack of which, singly or in the aggregate, has not had and, insofar as can reasonably be foreseen, will not have a Materially Adverse Effect on the Parent, the Borrower and the Borrower's Subsidiaries taken as a whole. Section 5.2 Business; Compliance with Applicable Law. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, (a) engage in the business of building and operating a wireless communications network and related businesses, and (b) comply with the requirements of all Applicable Law, except where the failure to do so individually or in the aggregate could not reasonably be expected to have a Materially Adverse Effect. Section 5.3 Maintenance of Properties. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, maintain or cause to be maintained in the ordinary course of business in good repair, working order and condition (reasonable wear and tear excepted) all properties used in their respective businesses (whether owned or held under lease), other than obsolete equipment or unused assets, and from time to time make or cause to be made all needed and appropriate repairs (it being understood that the Borrower shall be deemed to be 62 in compliance with this Section 5.3 if, in connection with any damage to its properties covered by insurance, the Borrower is diligently pursuing the repair or replacement of such damaged assets), renewals, replacements, additions, betterments and improvements thereto. Section 5.4 Accounting Methods and Financial Records. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, on a consolidated and consolidating basis, maintain a system of accounting established and administered in accordance with GAAP, keep adequate records and books of account in which complete entries will be made in accordance with GAAP and reflecting all transactions required to be reflected by GAAP, and keep accurate and complete records of their respective properties and assets. The Parent, the Borrower and the Borrower's Subsidiaries will maintain a fiscal year ending on December 31st. Section 5.5 Insurance. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to: (a) maintain insurance, including, but not limited to, business interruption coverage and public liability coverage insurance, from responsible companies in such amounts and against such risks to the Parent, the Borrower and each of the Borrower's Subsidiaries as is usual and customary for similarly situated companies engaged in the cellular telephone and wireless communications industry and as is reasonably acceptable to the Administrative Agent (including, without limitation, larceny, embezzlement or other criminal misappropriation insurance); (b) keep their respective assets insured by insurers on terms and in a manner acceptable to the Administrative Agent against loss or damage by fire, theft, burglary, loss in transit, explosions and hazards insured against by extended coverage, in amounts which are usual and customary for the cellular telephone and wireless communications industry and reasonably acceptable to the Administrative Agent, all premiums thereon to be paid by the Parent, the Borrower and the Borrower's Subsidiaries; and (c) require that each insurance policy provide for at least thirty (30) days' prior written notice to the Administrative Agent of any termination of or proposed cancellation or nonrenewal of such policy, and name the Administrative Agent as additional named lender loss payee and, as appropriate, additional insured, to the extent of the Obligations. In addition to the foregoing, in the event that any insurer distributes insurance proceeds, a condemnation award, or any other disbursement in connection with any of the foregoing insurance policies, the Administrative Agent is authorized to collect such distribution and, if received by the Parent, the Borrower or any of the Borrower's Subsidiaries, such distribution shall be paid over to the Administrative Agent; provided that (i) if the aggregate distribution (other than any proceeds of business interruption insurance) are less than $3,000,000, such distribution shall be paid over to the Borrower unless an Event of Default has occurred and is continuing, and (ii) all proceeds of business income insurance shall be paid over to the Borrower 63 unless an Event of Default has occurred and is continuing. Any such distribution retained by or paid over to the Administrative Agent shall be held by the Administrative Agent and released from time to time to pay the costs of repairing, restoring or replacing the affected property in accordance with the terms of the applicable Loan Document, subject to the provisions of the applicable Loan Document regarding application of such distribution during an Event of Default. If any such distribution retained by or paid over to the Administrative Agent as provided above continue to be held by the Administrative Agent on the date that is one hundred eighty (180) days after the occurrence of the event resulting in such distribution, then such distribution shall be applied to prepay the Loans as set forth in Section 8.3 hereof. Section 5.6 Payment of Taxes and Claims. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, pay and discharge all income and other material taxes, including, without limitation, withholding taxes, assessments and governmental charges or levies required to be paid by them or imposed upon them or their income or profits or upon any properties belonging to them, prior to the date on which penalties attach thereto, and all lawful claims for labor, materials and supplies which, if unpaid, might become a Lien or charge (other than a Permitted Lien) upon any of their properties; provided, however, that no such tax, assessment, charge, levy or claim need be paid which is being diligently contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on the appropriate books, but only so long as such tax, assessment, charge, levy or claim does not become a Lien or charge other than a Permitted Lien and no foreclosure, distraint, sale or similar proceedings shall have been commenced. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, timely file all material information returns required by federal, state or local tax authorities. Section 5.7 Compliance with ERISA. (a) The Borrower shall, and shall cause its Subsidiaries to, make all contributions to any Employee Pension Plan when such contributions are due and not incur any "accumulated funding deficiency" within the meaning of Section 412(a) of the Code, whether or not waived, and will otherwise comply in all material respects with the requirements of the Code and ERISA with respect to the operation of all Plans. (b) The Borrower shall, and shall cause its Subsidiaries to, comply in all material respects with the requirements of COBRA with respect to any Plans subject to the requirements thereof. (c) The Borrower shall furnish to the Administrative Agent (with copies for the Lenders) (i) within thirty (30) days after any officer of the Borrower obtains knowledge that a "prohibited transaction" (within the meaning of Section 406 of ERISA or Section 4975 of the Code) has occurred with respect to any Plan of the Borrower or its ERISA Affiliates, including its Subsidiaries, that any Reportable Event has occurred with respect to any Employee Pension Plan or that PBGC has instituted or will institute proceedings under Title IV of ERISA to terminate any Employee Pension Plan or to appoint a trustee to administer any Employee Pension 64 Plan, a statement setting forth the details as to such prohibited transaction, Reportable Event or termination or appointment proceedings and the action which it (or any other Employee Pension Plan sponsor if other than the Borrower) proposes to take with respect thereto, together with a copy of the notice of such Reportable Event given to PBGC if a copy of such notice is available to the Borrower, any of its Subsidiaries or any of its ERISA Affiliates, (ii) promptly after receipt thereof, a copy of any notice the Borrower, any of its Subsidiaries or any of its ERISA Affiliates or the sponsor of any Plan receives from PBGC, or the Internal Revenue Service or the Department of Labor which sets forth or proposes any action or determination with respect to such Plan, (iii) promptly after the filing thereof, any annual report required to be filed pursuant to ERISA in connection with each Plan maintained by the Borrower or any of its ERISA Affiliates, including its Subsidiaries, and (iv) promptly upon the Administrative Agent's or any Lender's request therefor, such additional information concerning any such Plan as may be reasonably requested by the Administrative Agent or any Lender. (d) The Borrower will promptly notify the Administrative Agent of any excise taxes which have been assessed or which the Borrower, any of its Subsidiaries or any of its ERISA Affiliates has reason to believe may be assessed against the Borrower, any of its Subsidiaries or any of its ERISA Affiliates by the Internal Revenue Service or the Department of Labor with respect to any Plan of the Borrower or its ERISA Affiliates, including its Subsidiaries which could reasonably be expected to have a Materially Adverse Effect. (e) Within the time required for notice to the PBGC under Section 302(f)(4)(A) of ERISA, the Borrower will notify the Administrative Agent and the Lenders of any lien arising under Section 302(f) of ERISA in favor of any Plan of the Borrower or its ERISA Affiliates, including its Subsidiaries which could reasonably be expected to have a Materially Adverse Effect. (f) The Borrower will not, and will not permit any of its Subsidiaries or any of its ERISA Affiliates to, take any of the following actions or permit any of the following events to occur if such action or event together with all other such actions or events would subject the Borrower, any of its Subsidiaries or any of its ERISA Affiliates to any tax, penalty or other liabilities which could reasonably be expected to have a Materially Adverse Effect: (i) engage in any transaction in connection with which the Borrower, any of its Subsidiaries or any ERISA Affiliate could be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code; (ii) terminate any Employee Pension Plan in a manner, or take any other action, which could result in any liability of the Borrower, any of its Subsidiaries or any ERISA Affiliate to the PBGC; (iii) fail to make full payment when due of all amounts which, under the provisions of any Plan, the Borrower, any of its Subsidiaries or any ERISA Affiliate is required to pay as contributions thereto, or permit to exist any accumulated funding deficiency 65 within the meaning of Section 412(a) of the Code, whether or not waived, with respect to any Employee Pension Plan; or (iv) permit the present value of all benefit liabilities under all Employee Pension Plans which are subject to Title IV of ERISA to exceed the present value of the assets of such Plans allocable to such benefit liabilities (within the meaning of Section 4041 of ERISA), except as may be permitted under actuarial funding standards adopted in accordance with Section 412 of the Code. Section 5.8 Visits and Inspections. The Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, permit representatives of the Administrative Agent and any of the Lenders, prior to the occurrence of an Event of Default upon reasonable notice and during business hours and at any time upon the occurrence and during the continuance of an Event of Default to: (i) visit and inspect the properties of the Parent, the Borrower or any of the Borrower's Subsidiaries; (ii) inspect and make extracts from and copies of their respective books and records; and (iii) discuss with their respective principal officers their respective businesses, assets, liabilities, financial positions, results of operations and business prospects. The Parent, the Borrower and each of the Borrower's Subsidiaries will also permit representatives of the Administrative Agent and any of the Lenders to discuss with their respective accountants the Parent's, the Borrower's and the Borrower's Subsidiaries' businesses, assets, liabilities, financial positions, results of operations and business prospects. Section 5.9 Payment of Indebtedness; Loans. Subject to any provisions herein or in any other Loan Document, the Parent and the Borrower will, and will cause each of the Borrower's Subsidiaries to, pay any and all of their respective Indebtedness when and as it becomes due or to the extent of trade payables of such Persons otherwise in accordance with ordinary business practices customary for the cellular telephone and wireless communications industry, other than amounts diligently disputed in good faith and for which adequate reserves have been set aside in accordance with GAAP. Section 5.10 Use of Proceeds. The Borrower will use the aggregate proceeds of all Advances under the Commitments directly or indirectly: (a) to fund Capital Expenditures and investments of the Borrower and its Subsidiaries; (b) for working capital needs and other general corporate purposes of the Borrower and its Subsidiaries which do not otherwise conflict with this Section 5.10 (including, without limitation, the payment of fees and expenses incurred in connection with the execution and delivery of this Agreement and the other Loan Documents); and (c) subject to compliance with Section 7.6 hereof, to finance Acquisitions and investments hereunder. No proceeds of Advances hereunder shall be used for the purchase or carrying or the extension of credit for the purpose of purchasing or carrying, any margin stock within the meaning of the Regulations. Section 5.11 Indemnity. The Borrower agrees to indemnify and hold harmless each Lender, the Administrative Agent, and each of their respective 66 Affiliates, employees, representatives, shareholders, officers, directors, trustees, investment advisors and counsel (any of the foregoing shall be an "Indemnitee") from and against any and all claims, liabilities, losses, damages, actions, attorneys' fees and expenses (as such fees and expenses are incurred) and demands by any party, including the costs of investigating and defending such claims, whether or not the Parent, the Borrower, any of the Borrower's Subsidiaries or the Person seeking indemnification is the prevailing party: (a) resulting from any breach or alleged breach by the Parent, the Borrower or any Subsidiary of the Borrower of any representation or warranty made hereunder; (b) otherwise arising out of the Commitments or otherwise under this Agreement, any Loan Document or any transaction contemplated hereby or thereby, including, without limitation, the use of the proceeds of Loans hereunder in any fashion by the Borrower or the performance of their respective obligations under the Loan Documents by the Parent, the Borrower or any of the Borrower's Subsidiaries; or (c) in connection with taxes (not including Excluded Taxes), fees, and other charges payable in connection with the Loans, or the execution, delivery, and enforcement of this Agreement, the Security Documents, the other Loan Documents, and any amendments thereto or waivers of any of the provisions thereof; unless the Person seeking indemnification hereunder is determined in such case to have acted with gross negligence or willful misconduct, in any case, by a final, non-appealable judicial order of a court of competent jurisdiction. The obligations of the Borrower under this Section 5.11 are in addition to, and shall not otherwise limit, any liabilities which the Borrower might otherwise have in connection with any warranties or similar obligations of the Borrower in any other Loan Document. Section 5.12 Interest Rate Hedging. Within ninety (90) days immediately following the Agreement Date, and at all times thereafter, the Borrower shall at all times maintain one (1) or more Interest Rate Hedge Agreements with respect to the Borrower's interest obligations on an aggregate principal amount of not less than fifty percent (50%) of the principal amount of Indebtedness for Money Borrowed outstanding from time to time (other then Indebtedness for Money Borrowed that bears interest at a fixed rate). Such Interest Rate Hedge Agreements shall provide interest rate protection in conformity with International Swap Dealers Association standards and for a period averaging at least eighteen (18) months from the date of such Interest Rate Hedge Agreements across all such Interest Rate Hedge Agreements or, if earlier, until the Maturity Date on terms acceptable to the Administrative Agent, such terms to include consideration of the creditworthiness of the other party to the proposed Interest Rate Hedge Agreement. All Obligations of the Borrower to the Administrative Agent or any of the Lenders or any of their Affiliates pursuant to any Interest Rate Hedge Agreement permitted hereunder and all Liens granted to secure such Obligations shall rank pari passu with all other Obligations and Liens securing such other Obligations; and any Interest Rate Hedge Agreement between the Borrower and any other Person shall be unsecured. Section 5.13 Covenants Regarding Formation of Subsidiaries and Acquisitions. (i) At the time of any Acquisition permitted hereunder or (ii) within thirty (30) days of the formation of any new Subsidiary of the Borrower or any of its Subsidiaries which is permitted under this Agreement, 67 including, without limitation, the formation of any License Sub, the Borrower will, and will cause its Subsidiaries, including each License Sub, as appropriate, to: (a) provide to the Administrative Agent (1) an executed Subsidiary Security Agreement for such new Subsidiary, in substantially the form of Exhibit J attached hereto, together with appropriate Uniform Commercial Code financing statements, and (2) an executed Subsidiary Guaranty for such new Subsidiary, in substantially the form of Exhibit K attached hereto, together with other appropriate documentation, all of which shall constitute both Security Documents and Loan Documents for purposes of this Agreement, as well as a loan certificate for such new Subsidiary, substantially in the form of Exhibit I attached hereto, together with appropriate attachments; (b) pledge to the Administrative Agent all of the Ownership Interests of such Subsidiary or Person which is acquired or formed, beneficially owned by the Borrower or any of the Borrower's Subsidiaries, as the case may be, as additional Collateral for the Obligations to be held by the Administrative Agent in accordance with the terms of the Borrower's Pledge Agreement, an existing Subsidiary Pledge Agreement, or a new Subsidiary Pledge Agreement in substantially the form of Exhibit L attached hereto, and execute and deliver to the Administrative Agent all such other documentation for such pledge as, in the reasonable opinion of the Administrative Agent, is necessary and appropriate; and (c) provide revised financial projections for the remainder of the fiscal year and for each subsequent year until the Maturity Date which reflect such Acquisition or, to the extent of any material change in the previous financial projections provided, formation, certified by the chief financial officer of the Borrower, together with a statement by such Authorized Officer of the Borrower that no Default exists or would be caused by such Acquisition or formation, and all other documentation, including one or more opinions of counsel, which are satisfactory to the Administrative Agent and which in its reasonable opinion are necessary and appropriate with respect to such Acquisition or the formation of such Subsidiary. Any document, agreement or instrument executed or issued pursuant to this Section 5.13 shall be a "Loan Document" for purposes of this Agreement. Section 5.14 Payment of Wages. The Borrower shall and shall cause each of its Subsidiaries to at all times comply, in all material respects, with the requirements of the Fair Labor Standards Act, as amended, including, without limitation, the provisions of such Act relating to the payment of minimum and overtime wages as the same may become due from time to time. Section 5.15 Further Assurances. The Parent and the Borrower will promptly cure, or cause to be cured, defects in the creation and issuance of any of the Notes and the execution and delivery of the Loan Documents (including this Agreement), resulting from any acts or failure to act by the Parent, the Borrower or any of the Borrower's Subsidiaries or any employee or officer thereof. The Parent and the Borrower at their expense will promptly execute and deliver to the Administrative Agent and the Lenders, or cause to be executed and delivered to the Administrative Agent and the Lenders, all such other and further documents, agreements, and instruments in compliance with or accomplishment of the covenants and agreements of the Parent and the Borrower in the Loan Documents, including this Agreement, or to correct any error, ambiguity or inconsistency in the Loan Documents, or more fully to state the obligations set out herein or in any of the Loan Documents, or to obtain any 68 consents, all as may be reasonably necessary or appropriate in connection therewith and as may be reasonably requested. Section 5.16 License Subs. At the time of any Acquisition permitted hereunder, the Borrower shall cause each of the Licenses being acquired by the Borrower or any of its Subsidiaries to be transferred to one or more License Subs, each of which License Subs shall have as its sole asset or assets the Licenses of the Borrower or any of its Subsidiaries and an agreement with the Borrower and such of its Subsidiaries subject to such License or Licenses, such that from and after such applicable date neither the Borrower nor its Subsidiaries (other than License Subs) shall hold any Licenses other than through one or more duly created and existing License Subs. The Borrower shall not permit the License Subs to have any business activities, operations, assets, Indebtedness, Guaranties or Liens (other than pursuant to a Subsidiary Guaranty and Subsidiary Security Agreement issued in connection herewith or any Agreement referred to in the preceding sentence and other than Indebtedness to the FCC which Indebtedness may be secured as permitted by Section 7.2 hereof). Promptly after the transfer of the Licenses to the License Subs, the Borrower shall provide to the Administrative Agent copies of any required consents to such transfer from the FCC and any other governmental authority, together with a certificate of an Authorized Signatory stating that all Necessary Authorizations relating to such transfer have been obtained or made, are in full force and effect and are not subject to any pending or threatened reversal or cancellation. Section 5.17 Business of the Parent; Immediate Contributions to the Borrower. (a) The Parent shall engage solely in the business of holding the assets described in Section 4.1(z) hereof, incurring Indebtedness permitted by Section 7.1 and incurring the Bid Equity Commitments, so long as the proceeds of such Bid Equity Commitments are disposed of in accordance with Section 5.17(b) hereof. (b) The Parent shall immediately (i) contribute to the Borrower upon receipt (A) any capital contributions and (B) net proceeds from the issuance of any Indebtedness (excluding Subordinated Debt) and (ii) lend to the Borrower the net proceeds of any Subordinated Debt, which loan shall be subordinate to the Obligations hereunder on terms reasonably satisfactory to the Required Lenders. Section 5.18 Year 2000 Compliance. The Parent and the Borrower will promptly notify the Lenders in the event the Parent or the Borrower discovers or determines that any computer application (including those of its suppliers, vendors and customers) that is material to the Parent's, the Borrower's or any of the Borrower's Subsidiaries' business and operations will not be Year 2000 Compliant, except to the extent that such failure could not reasonably be expected to have a Materially Adverse Effect. Section 5.19 Bidding Company Documentation. The Borrower will (a) cause the Bidding Company Documentation (i) to be in form and substance reasonably satisfactory to the 69 Administrative Agent and (ii) to become effective on or prior to April 1, 1999, (b) provide the Administrative Agent with (i) such proof of the effectiveness of the Bidding Company Documentation as the Administrative Agent may reasonably request and (ii) opinions of counsel to the Borrower, including, without limitation, special FCC counsel to the Borrower, as to the enforceability of the Bidding Company Documentation and such other matters as the Administrative Agent may reasonably request and (iii) pledge the Bidding Company Documentation to the Administrative Agent, for itself and on behalf of the Lenders, as additional security for the Obligations. Section 5.20 The Bid Equity Commitments. The Parent and the Borrower will (a) cause the Bid Equity Commitments (i) to be in form and substance reasonably satisfactory to the Administrative Agent and (ii) to become effective and (b) provide the Administrative Agent with such proof of the effectiveness as the Administrative Agent may reasonably request, in each case, on or prior to the date on which the Bidding Company submits a bid or bids on behalf of the Borrower in the Auction which singly or in the aggregate exceed $7,500,000; provided, however, that the Bid Equity Commitments need not become effective if the Bidding Company does not submit any bid or bids in the Auction that the Borrower has agreed to fund under the Bidding Company Documentation which singly or in the aggregate exceed $7,500,000, uses its best efforts to obtain prompt return of all funds placed in escrow with the FCC, and reimburses substantially all funds invested in it by the Borrower to the Borrower no later than the third (3rd) Business Day after the Bidding Company's receipt of such funds from the escrow account with the FCC. In the event that the Bid Equity Commitments are required to become effective pursuant to this Section 5.20, the Parent and the Borrower will cause the Bid Equity Commitments to be funded, and the Bid Equity Commitments Documentation to become effective and provide the Administrative Agent with such proof of the effectiveness of the Bid Equity Commitments Documentation as the Administrative Agent may reasonably request on or prior to December 31, 1999. ARTICLE 6 Information Covenants So long as any of the Obligations is outstanding and unpaid or the Lenders have an obligation to fund Advances hereunder (whether or not the conditions to borrowing have been or can be fulfilled) and unless the Required Lenders shall otherwise consent in writing, the Borrower will furnish or cause to be furnished to the Administrative Agent (with sufficient copies for each Lender), at its respective offices: Section 6.1 Quarterly Financial Statements and Information. Within sixty (60) days after the last day of each of the first three (3) fiscal quarters of the Borrower during any fiscal year, the balance sheets of the Borrower on a consolidated and consolidating basis with its Subsidiaries and the Parent, as at the end of such quarter and as of the end of the preceding fiscal year, and the related statements of 70 operations and the related statements of cash flows of the Borrower on a consolidated and consolidating basis with its Subsidiaries and the Parent, for such quarter and for the elapsed portion of the year ended with the last day of such quarter, which shall set forth in comparative form such figures as at the end of and for such quarter and appropriate prior period, shall provide consolidated and consolidating figures with respect to any Acquisitions consummated during such period, and shall be certified by the chief financial officer of the Borrower to have been prepared in accordance with GAAP and to present fairly in all material respects the financial position of the Borrower on a consolidated and consolidating basis with its Subsidiaries and the Parent, as at the end of such period and the results of operations for such period, and for the elapsed portion of the year ended with the last day of such period, subject only to normal year-end and audit adjustments and the absence of notes thereto. Section 6.2 Annual Financial Statements and Information. Within one hundred and twenty (120) days after the end of each fiscal year of the Borrower, the audited consolidated and consolidating balance sheets of the Parent, the Borrower and the Borrower's Subsidiaries, as of the end of such fiscal year and the related audited consolidated and consolidating (excluding License Subs) statements of operations of the Parent, the Borrower and the Borrower's Subsidiaries, for such fiscal year and for the previous fiscal year, the related audited consolidated and consolidating (excluding License Subs) statements of cash flow and stockholders' equity of the Parent, the Borrower and the Borrower's Subsidiaries, for such fiscal year and for the previous fiscal year, which shall be accompanied by an opinion of independent certified public accountants of recognized national standing acceptable to the Administrative Agent (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of the audit), together with a statement of such accountants that in connection with their audit, nothing came to their attention that caused them to believe that the Parent or the Borrower was not in compliance with or was otherwise in Default under the terms, covenants, provisions or conditions of Articles 7 and 8 hereof insofar as they relate to accounting or financial matters. Section 6.3 Performance Certificates. At the time the financial statements are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate of the president or chief financial officer of the Borrower as to its financial performance in substantially the form attached hereto as Exhibit E: (a) setting forth as and at the end of such quarterly period or fiscal year, as the case may be, the arithmetical calculations required to establish (i) any adjustment to the Applicable Margins, as provided for in Section 2.3(f) hereof and (ii) whether or not the Borrower was in compliance with the requirements of Sections 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16 and 7.17 hereof; (b) setting forth on a consolidated basis for the Borrower and its Subsidiaries for each such fiscal quarter (i) the number of Subscribers, POPs and market penetration at the beginning of the quarter, (ii) the number of gross new Subscribers added and deactivated Subscribers lost during the quarter and (iii) the number of Subscribers, POPs and market 71 penetration at the end of the quarter; and (c) stating that no Default has occurred as at the end of such quarterly period or year, as the case may be, or, if a Default has occurred, disclosing each such Default and its nature, when it occurred, whether it is continuing and the steps being taken by the Borrower with respect to such Default. Section 6.4 Copies of Other Reports. (a) Promptly upon receipt thereof, copies of all reports, if any, submitted to the Borrower or the Parent by the Borrower's or the Parent's independent public accountants regarding the Borrower or the Parent, including, without limitation, any management report prepared in connection with the annual audit referred to in Section 6.2 hereof. (b) Promptly upon receipt thereof, copies of any material adverse notice or report regarding any License from the FCC or any other governmental authority. (c) From time to time and promptly upon each request, such data, certificates, reports, statements, documents or further information regarding the business, assets, liabilities, financial position, projections, results of operations or business prospects of the Parent, the Borrower or any of the Borrower's Subsidiaries, as the Administrative Agent or any Lender may reasonably request. (d) Annually, certificates of insurance indicating that the requirements of Section 5.5 hereof remain satisfied for such fiscal year, together with copies of any new or replacement insurance policies obtained during such year. (e) Prior to March 31st of each year, an annual budget for each year after 1999 for the Parent, the Borrower and the Borrower's Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent. (f) Promptly after the sending thereof, copies of all material statements, reports and other material non-proprietary information which the Parent, the Borrower or any of the Borrower's Subsidiaries sends to security holders of the Parent or the Borrower generally or files with the Securities and Exchange Commission or any national securities exchange, or would be required to file therewith if it were a registered reporting company. (g) Within forty-five (45) days after the last day of each month prior to the delivery of financial statements of the Borrower, its Subsidiaries and the Parent as required pursuant to Section 6.1 hereof, (i) the balance sheet of the Borrower on a consolidated basis with its Subsidiaries and the Parent as at the end of such month, and the related statements of operations of the Borrower on a consolidated basis with its Subsidiaries and the Parent, certified by the chief financial officer of the Borrower to have been prepared in accordance with GAAP and to present fairly in all material respects the financial position of the Borrower, its 72 Subsidiaries and the Parent on a consolidated basis as at the end of such month and the results of operations for such month, subject only to normal year-end and audit adjustments and the absence of notes thereto, and (ii) a certificate of the chief financial officer of the Borrower setting forth (A) the aggregate number of Subscribers at the end of the calendar month preceding such calendar month and (B) the aggregate number of Subscribers at the end of such calendar month,. (h) Within five (5) Business Days after the same are sent, a copy of any financial statement, report or notice which the Parent, the Borrower or any Subsidiary of the Borrower sends to any Person under or pursuant to or in connection with the Securities Purchase Agreement, the Network License Agreement, the Stockholders Agreement, the Roaming Agreement, the Resale Agreement, or any other PCS Document, in each case if such statement, report or notice relates to an event that has resulted or could reasonably be expected to result in a Default, an Event of Default or a Materially Adverse Effect; and, within five (5) Business Days after the same are received by the Parent, the Borrower or any Subsidiary, copies of all notices sent to any such Person under or pursuant to or in connection with any such agreement or instrument which notice relates to an event that has resulted or could reasonably be expected to result in a Default, an Event of Default or a Materially Adverse Effect. Section 6.5 Notice of Litigation and Other Matters. Notice specifying the nature and status of any of the following events, promptly, but in any event not later than fifteen (15) days after the occurrence of any of the following events becomes known to a senior officer of the Parent or the Borrower: (a) the commencement of all proceedings and investigations by or before any governmental body and all actions and proceedings in any court or before any arbitrator against, or to the extent known to the Parent or the Borrower, in any other way relating materially adversely to the Parent, the Borrower, any Subsidiary of the Borrower or to the extent such action could reasonably be expected to have a Materially Adverse Effect; provided, however, that no such information that is subject to the attorney-client privilege need be disclosed; (b) any material adverse change with respect to the business, assets, liabilities, financial position, results of operations or business prospects of the Parent, the Borrower or any Subsidiary of the Borrower, other than changes in the ordinary course of business which have not had and would not reasonably be expected to have a Materially Adverse Effect; (c) any material amendment or change to the financial projections or annual budget provided to the Lenders by the Borrower; (d) the occurrence or non-occurrence of any event (A) which constitutes a Default or an Event of Default by the Parent, the Borrower or any Subsidiary of the Borrower, or an event or condition which gives rise to any put right or other prepayment right of any holder of Indebtedness, under any material agreement other than this Agreement and the other Loan Documents to which the Parent, the Borrower or any Subsidiary of the Borrower is party or by which any of their respective properties may be bound or (B) which could have a Materially 73 Adverse Effect, giving in each case the details thereof and specifying the action proposed to be taken with respect thereto; (e) the occurrence of any Reportable Event or a "prohibited transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan of the Borrower or any of its Subsidiaries or the institution or threatened institution by PBGC of proceedings under ERISA to terminate or to partially terminate any such Plan or the commencement or threatened commencement of any litigation regarding any such Plan or naming it or the trustee of any such Plan with respect to such Plan or any action taken by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate of the Borrower to withdraw or partially withdraw from any Plan or to terminate any Plan; and (f) the occurrence of any event subsequent to the Agreement Date which, if such event had occurred prior to the Agreement Date, would have constituted an exception to the representation and warranty in Section 4.1(l) hereof. ARTICLE 7 Negative Covenants So long as any of the Obligations is outstanding and unpaid or the Lenders have an obligation to fund Advances hereunder (whether or not the conditions to borrowing have been or can be fulfilled) and unless the Required Lenders, or such greater number of Lenders as may be expressly provided herein, shall otherwise give their prior consent in writing. Section 7.1 Indebtedness of the Parent, the Borrower and the Borrower's Subsidiaries. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, create, assume, incur or otherwise become or remain obligated in respect of, or permit to be outstanding, any Indebtedness except; (a) the Obligations; (b) operating accounts payable, accrued expenses and customer advance payments incurred in the ordinary course of business; (c) Indebtedness secured by Permitted Liens, provided that such Indebtedness was incurred to finance the asset on which such Permitted Lien exists; (d) obligations under Interest Hedge Agreements of the Borrower or its Subsidiaries with respect to the Loans; (e) unsecured Indebtedness of the Borrower or any of its Subsidiaries to the Borrower or any such Subsidiary so long as the corresponding debt instruments, if any, are 74 pledged to the Administrative Agent as security for the Obligations; (f) Capitalized Lease Obligations in an amount for the Borrower on a consolidated basis with its Subsidiaries not in excess of $20,000,000 in the aggregate at any one time outstanding; (g) the Subordinated Debt, provided that such Subordinated Debt is (a) issued on terms reasonably satisfactory to the Required Lenders, (b) is in an aggregate principal amount not to exceed $200,000,000, or such greater amount as may be approved by the Required Lenders, and (c) the proceeds of such Subordinated Debt shall be used by the Borrower solely to fund the build-out of the Borrower's Cellular System and working capital needs and other general corporate purposes of the Borrower and its Subsidiaries related to such build-out, except to the extent provided in Section 7.6(e)(vii) hereof, or as otherwise approved by the Required Lenders; (h) to the extent that the accrual of dividends with respect to the Series A Preferred Stock would be considered Indebtedness, the accrual of dividends with respect to such Series A Preferred Stock, provided that no dividends may be paid in respect thereof under any circumstances prior to the date that is six (6) months after the Maturity Date; (i) FCC Indebtedness assumed in connection with the Licenses set forth on Schedule 1 attached hereto in an aggregate principal amount not to exceed $48,000,000; (j) other unsecured Indebtedness of the Borrower and its Subsidiaries not to exceed an aggregate principal amount of $10,000,000 at any time outstanding; (k) Indebtedness of the Borrower to the Parent issued in accordance with Section 5.17(b)(ii) hereof; and (l) Bid Equity Commitments in the form of unsecured subordinated Indebtedness of the Parent, provided that such unsecured subordinated Indebtedness (a) has a maturity date that is not earlier than the date which is six (6) months subsequent to the Term Loan B Maturity Date, (b) is issued on terms reasonably satisfactory to the Administrative Agent, (c) is in an aggregate principal amount not to exceed the Aggregate Bid License Purchase Price, and (d) the proceeds of such unsecured subordinated Indebtedness shall be used by the Parent solely as provided in Section 5.17(b) hereof and by the Borrower solely to fund the Aggregate Bid License Purchase Price. Section 7.2 Limitation on Liens. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, create, assume, incur or permit to exist or to be created, assumed, incurred or permitted to exist, directly or indirectly, any Lien on any of its properties or assets, whether now owned or hereafter acquired, except for Permitted Liens. Section 7.3 Amendment and Waiver. The Parent 75 and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, enter into any amendment of, or agree to or accept or consent to any waiver of any of the provisions of its articles or certificate of incorporation, or its partnership agreement or its by-laws, as appropriate, or any of the Subordinated Debt Documents, PCS Documents, Bidding Company Documentation or the Bid Equity Commitments Documentation (other than immaterial amendments which could not reasonably be expected to have a Materially Adverse Effect on the Administrative Agent or any Lender or any of their rights or claims under any of the Loan Documents). Section 7.4 Liquidation, Merger or Disposition of Assets. (a) Disposition of Assets. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, at any time sell, lease, abandon or otherwise dispose of any assets (other than assets disposed of in the ordinary course of business or obsolete or worn out assets or assets no longer useful in the business of the Borrower or any of its Subsidiaries) without the prior written consent of the Required Lenders; provided, however, that the Parent and the Borrower may, and may permit any of the Borrower's Subsidiaries to, without the prior written consent of the Required Lenders: (i) transfer assets (including cash or Cash Equivalents) among the Borrower and its Subsidiaries (excluding Subsidiaries described in clause (b) of the definition of "Subsidiary" set forth in Article 1 hereof); (ii) transfer assets (including cash or Cash Equivalents) between or among Subsidiaries (excluding Subsidiaries described in clause (b) of the definition of "Subsidiary" set forth in Article 1 hereof) of the Borrower; (iii) sell or otherwise dispose of assets of the Borrower or its Subsidiaries under this clause (iii) in an aggregate amount not to exceed $1,000,000.00 in any fiscal year; or (iv) engage in Tower Sale/Leaseback Transactions not to exceed, in the aggregate, $25,000,000, provided that if any Revolving Loans are then outstanding, the Net Proceeds of any such Tower Sale/Leaseback Transaction are used to repay the Revolving Loans. (b) Liquidation or Merger. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, at any time liquidate or dissolve itself (or suffer any liquidation or dissolution) or otherwise wind up, or enter into any merger, other than (so long as no Default exists or is caused thereby): (i) a merger or consolidation among the Borrower and one (1) or more of its Subsidiaries, provided that the Borrower is the surviving corporation; (ii) a merger between or among two (2) or more Subsidiaries of the Borrower; (iii) in connection with an Acquisition permitted hereunder effected by a merger in which the Borrower or one of its Subsidiaries is the surviving corporation; or (iv) in a merger in which the Borrower is not a party, where the surviving corporation is a Subsidiary of the Borrower and the requirements of Section 5.13 hereof have been satisfied. Section 7.5 Limitation on Guaranties. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, at any time Guaranty, assume, be obligated with respect to, or permit to be outstanding any Guaranty of, any obligation of any other Person other than: (a) a guaranty by endorsement of negotiable instruments for collection in the ordinary course of business; (b) Guaranties 76 constituting Indebtedness permitted pursuant to Section 7.1 hereof; or (c) as may be contained in any Loan Document. Section 7.6 Investments and Acquisitions. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, directly or indirectly, make any loan, investment or advance, or otherwise acquire for consideration evidences of Indebtedness, Capital Stock or other securities of any Person or other assets or property (other than assets or property in the ordinary course of business), or make any Acquisition; provided, however, that so long as no Default then exists or would be caused thereby: (a) the Borrower and its Subsidiaries may, directly or through a brokerage account (i) purchase marketable, direct obligations of the United States of America, its agencies and instrumentalities maturing within three hundred sixty-five (365) days of the date of purchase, (ii) purchase commercial paper or other corporate Indebtedness issued by corporations, each of which shall have a combined net worth of at least $100,000,000 and each of which conducts a substantial part of its business in the United States of America, maturing within two hundred seventy (270) days from the date of the original issue thereof, and rated "P-2" or better by Moody's Investors Service, Inc., or any successor, or "A-2" or better by Standard and Poor's Ratings Group, a division of McGraw Hill, Inc., or any successor, and (iii) purchase repurchase agreements, bankers' acceptances, and certificates of deposit maturing within three hundred sixty-five (365) days of the date of purchase which are issued by, or time deposits maintained with, a United States national or state Lender the deposits of which are insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation and having capital, surplus and undivided profits totaling more than $100,000,000.00 and rated "A" or better by Moody's Investors Service, Inc., or any successor, or Standard and Poor's Ratings Group, a division of McGraw Hill, Inc., or any successor; and (b) (i) the Borrower and the Subsidiaries of the Borrower may incur intercompany Indebtedness under Section 7.1 (e) hereof, and (ii) subject to compliance with Section 5.13 hereof, the Borrower may own Capital Stock of the Subsidiaries of the Borrower existing on the Agreement Date, any new Subsidiary and, as permitted by Section 5.16 hereof, any License Sub; (c) the Borrower may make an Acquisition with the prior written consent of the Required Lenders, provided that the Borrower complies with Section 5.13 hereof in connection therewith, and provides to the Administrative Agent and the Lenders financial projections and calculations, in form and substance satisfactory to the Administrative Agent, specifically demonstrating the Borrower's compliance with Sections 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16, and 7.17 hereof and its ability to meet its repayment obligations hereunder through the Maturity Date, after giving effect thereto; (d) the Borrower may, directly or indirectly, make one or more investments, in an aggregate amount not to exceed $5,000,000, in Persons formed for the purpose of holding 78 intellectual property rights to be used by the Parent, the Borrower and the Borrower's Subsidiaries, or any of them; (e) the Borrower may make investments in the Bidding Company, provided that: (i) at no time shall the investments by the Borrower in the Bidding Company exceed the Aggregate Bid License Purchase Price; (ii) at no time shall the Aggregate Bid License Purchase Price exceed the lesser of (A) $25,000,000 and (B) the sum of (1) $7,500,000 and (2) the Bid Equity Commitments; (iii) at no time shall investments by the Borrower in the Bidding Company funded with the proceeds of an Advance under the Revolving Loan Commitment exceed $7,500,000, and the proceeds of such Advance shall be used solely to make the Deposit Loan and/or to fund all or a portion of the Aggregate Bid License Purchase Price; (iv) at no time shall the Bid License Purchase Price for any Bid License exceed $10.00 per POP with respect to the POPs covered by such Bid License; (v) if at any time all or any portion of the Deposit is refunded to the Bidding Company, then the Bidding Company shall, within three (3) Business Days thereof, make a payment to the Borrower under, and in accordance with the terms of, the Deposit Loan Note in an amount equal to the amount of the Deposit so refunded; (vi) if at any time the Borrower shall receive any payment on the Deposit Loan, then the Borrower shall, within five (5) Business Days thereof, repay, first, if an Advance under the Revolving Loan Commitment was used to fund all or any portion of such Deposit Loan, the Revolving Loans used to fund such Deposit Loan in an amount equal to the amount of the payment on the Deposit Loan so received, together with any accrued interest with respect thereto and, second, any source of the deposit Loan other than Revolving Loans; (vii) any Surplus Subordinated Debt shall be applied, first, to repay the Revolving Loans used to fund the Deposit Loan, if any, second, to repay any source of the Deposit Loan other than the Revolving Loans, third, to fund the Aggregate Bid License Purchase Price (or repay the source thereof if previously funded other than with the Bid Equity Commitments) in an amount equal to the excess, if any, of $7,500,000 over the Deposit, fourth, at the Borrower's election, to fund the balance of the Aggregate Bid License Purchase Price in an amount required to reduce the Bid Equity Commitments to $0.00 and, fifth, as provided in 78 Section 7.1(g) hereof; and (f) the Parent may make investments in and loans and advances to the Borrower as otherwise permitted hereunder. Section 7.7 Limitation on Distributions. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, make any Restricted Payment or Restricted Purchase; provided, however, that such Restricted Payments or Restricted Purchases may be made if (a) the Total Leverage Ratio is less than 5.00 to 1.00, (b) the Borrower has made all repayments from Excess Cash Flow required under Section 2.7(b)(iv) hereof, and (c) no Default or Event of Default exists, both before and after giving effect to such Restricted Payments or Restricted Purchases. Notwithstanding any of the foregoing, so long as no Default has occurred and is continuing both before and after giving effect to the following Restricted Payments or Restricted Purchases, the Borrower and its Subsidiaries shall be permitted to make Restricted Payments or Restricted Purchases (i) to the Parent to pay administrative and other similar costs and franchise and other similar taxes required to be paid by the Parent, in an aggregate amount not to exceed $1,000,000 per fiscal year, (ii) to fund, as and when due, payments of regularly scheduled interest and principal in respect of any Indebtedness incurred by the Parent that is permitted under Section 7.1 hereof, other than payments in respect of the Subordinated Debt prohibited by the subordination provisions thereof, and (iii) pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Parent, the Borrower or the Borrower's Subsidiaries, in an aggregate amount not to exceed $1,000,000 per fiscal year. Section 7.8 Senior Debt Capitalization Ratio. (a) As of the end of any calendar quarter, and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the Senior Debt Capitalization Ratio to exceed 0.50 to 1.00; provided, however, that if (i) all Unfunded Commitments (as defined in the Securities Purchase Agreement) have been contributed in full in cash to the Borrower and (ii) the ratio of Covered POPs to Total POPs, in each case within the Licensed Territory (as defined in the Network License Agreement), exceeds 0.60 to 1.00, then the ratio of Total Debt Capitalization Ratio may exceed 0.50 to 1.00, but shall not exceed 0.55 to 1.00. Section 7.9 Total Debt Capitalization Ratio. (a) As of the end of any calendar quarter, and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the Total Debt Capitalization Ratio to exceed, (1) from the Agreement Date through June 30, 2001, 0.70 to 1.00, and (2) at all times thereafter, 0.75 to 1.00. Section 7.10 Minimum Required Covered POPs. (a) As of each calendar quarter end and (b) at the time of any Advance hereunder which, if funded, would increase the aggregate 79 principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the ratio of (1) Covered POPs to (2) Total POPs to be less than or equal to the percentages set forth below for the periods indicated: Ratio of Covered Period POPs to Total POPs ------ ------------------ From September 30, 1999 through June 29, 2000 30% From June 30, 2000 through June 29, 2001 55% From June 30, 2001 through June 29, 2002 65% From June 30, 2002 through June 29, 2003 75% At all times thereafter 80% Section 7.11 Minimum Subscribers. (a) As of each calendar quarter end set forth below, and (b) at the time of any Advance hereunder which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the total number of Subscribers on such date to be less than the number of Subscribers set forth below for the periods indicated: Period Number of Subscribers ------ --------------------- From March 31, 2000 through June 29, 2000 30,000 From June 30, 2000 through September 29, 2000 53,000 From September 30, 2000 through December 30, 2000 95,000 From December 31, 2000 through March 30, 2001 137,000 From March 31, 2001 through June 29, 2001 190,000 From June 30, 2001 through September 29, 2001 220,000 From September 30, 2001 through December 30, 2001 247,000 From December 31, 2001 through March 30, 2002 277,000 From March 31, 2002 through June 29, 2002 315,000 80 Period Number of Subscribers ------ --------------------- From June 30, 2002 through September 29, 2002 345,000 At all times thereafter 400,000 Section 7.12 Aggregate Service Revenue. (a) As of each calendar quarter end set forth below, and (b) at the time of any Advance hereunder which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit its total Aggregate Service Revenue for the immediately preceding four (4) fiscal quarter period to be less than the following Aggregate Service Revenue amounts for the periods indicated: Total Aggregate Period Service Revenue ------ --------------- From March 31, 2000 through June 29, 2000 $5,800,000 From June 30, 2000 through September 29, 2000 $14,000,000 From September 30, 2000 through December 30, 2000 $23,000,000 From December 31, 2000 through March 30, 2001 $42,000,000 From March 31, 2001 through June 29, 2001 $69,000,000 From June 30, 2001 through September 29, 2001 $96,000,000 From September 30, 2001 through December 30, 2001 $123,000,000 From December 31, 2001 through March 30, 2002 $144,000,000 From March 31, 2002 through June 29, 2002 $164,000,000 From June 30, 2002 through September 29, 2002 $185,000,000 At all times thereafter $225,000,000 Section 7.13 Maximum Capital Expenditures. (a) As of each fiscal quarter end set forth below, and (b) at the time of any Advance hereunder which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit Capital Expenditures (excluding assets purchased with the proceeds of obsolete, worn out or no longer useful assets as permitted by Section 7.4(a) hereof) for the Borrower and its Subsidiaries to exceed in any period; 81 Period Total Capital Expenditures ------ -------------------------- The Agreement Date through December 31, 1999 $334,000,000 From January 1, 2000 through December 31, 2000 $167,000,000 From January 1, 2001 through December 31, 2001 $91,000,000 From January 1, 2002 through December 31, 2002 $15,000,000 From January 1, 2003 through December 31, 2003 $15,000,000 From January 1, 2004 through December 31, 2004 $15,000,000 From January 1, 2005 through December 31, 2005 $15,000,000 From January 1, 2006 through December 31, 2006 $15,000,000 From January 1, 2007 through December 31, 2007 $15,000,000 ; provided that any permitted amount which is not spent in any period specified above (excluding any amount carried forward from the immediately preceding period permitted to be spent during such period) may be carried forward to the immediately subsequent period, and may be spent in addition to the otherwise applicable limitation for such period; provided further that for purposes of calculating the amount of any carry-forward amount for any period under this Section 7.13, any amount carried forward from the preceding period shall be deemed to be the first amount spent during the current period. Section 7.14 Total Leverage Ratio. (a) As of the end of any calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, in each case, on and after the Go-Positive Date, the Borrower shall not permit the Total Leverage Ratio to exceed the ratios set forth below during the periods indicated: 82 Period Ratio ------ ----- Go-Positive Date through December 31, 2002 12.50:1 January 1, 2003 through March 31, 2003 12.00:1 April 1, 2003 through June 30, 2003 9.00:1 July 1, 2003 through December 31, 2003 7.00:1 January 1, 2004 and thereafter 5.00:1 Section 7.15 Senior Leverage Ratio. (a) As of the end of any calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, in each case, on and after the Go-Positive Date, the Borrower shall not permit the Senior Leverage Ratio to exceed the ratios set forth below during the periods indicated: Period Ratio ------ ----- Go-Positive Date through 10.00:1 December 31, 2002 January 1, 2003 through 9.00:1 March 31, 2003 April 1, 2003 through 6.00:1 June 30, 2003 July 1, 2003 through 5.00:1 December 31, 2003 January 1, 2004 and thereafter 4.00:1 Section 7.16 Fixed Charges Coverage Ratio. (a) As of the end of any calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit 83 the Fixed Charges Coverage Ratio to be less than the ratios set forth below for the periods indicated: Period Ratio ------ ----- January 1, 2003 through 1.00:1 March 31, 2004 April 1, 2004 and thereafter 1.10:1 Section 7.17 Interest Coverage Ratio. (a) As of the end of any calendar quarter and (b) at the time of any Advance hereunder (after giving effect to such Advance) which, if funded, would increase the aggregate principal amount of the Loans outstanding on such date of determination, the Borrower shall not permit the Interest Coverage Ratio to be less than the ratios set forth below for the periods indicated: Period Ratio ------ ----- January 1, 2002 through 1.25:1 September 30, 2003 October 1, 2003 through 1.50:1 September 30, 2004 October 1, 2004 2.00:1 and thereafter Section 7.18 Affiliate Transactions. Except as set forth on Schedule 5 attached hereto, and other than such management agreements between the Parent, the Borrower and/or any of the Borrower's Subsidiaries, on the one hand, and its License Subs, on the other hand, regarding the use of the Licenses and pursuant to the Management Agreement, the Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, at any time engage in any transaction with an Affiliate or make an assignment or other transfer of any of its properties or assets to any Affiliate (other than to the Borrower or a Subsidiary of the Borrower) on terms less advantageous to the Borrower or such Subsidiary than would be the case if such transaction had been effected with a non-Affiliate. Section 7.19 Real Estate. None of the Parent, the Borrower or any of the Borrower's Subsidiaries shall purchase any real estate or enter into any sale/leaseback transaction, except (a) as contemplated in an Acquisition permitted under Section 7.6 hereof or (b) in connection with a Tower Sale/Leaseback Transaction permitted under Section 7.4 hereof. 84 Section 7.20 ERISA Liabilities. The Borrower shall not, and shall cause each of its ERISA Affiliates not to, (i) permit the assets of any of their respective Plans to be less than the amount necessary to provide all accrued benefits under such Plans or (ii) enter into any Multiemployer Plan. Section 7.21 No Limitation on Upstream Dividends by Subsidiaries. The Borrower shall not permit any Subsidiary to enter into or agree, or otherwise become subject (other than pursuant to Applicable Law), to any agreement, contract or other arrangement with any Person pursuant to the terms of which (a) such Subsidiary is or would be prohibited from or limited in declaring or paying any cash dividends or distributions on any class of its Capital Stock or any other Ownership Interests owned directly or indirectly by the Borrower or from making any other distribution on account of any class of any such Capital Stock or Ownership Interests (herein referred to as "Upstream Dividends") or (b) the declaration or payment of Upstream Dividends by a Subsidiary to the Borrower or to another Subsidiary, on an annual or cumulative or other basis, is or would be otherwise limited or restricted. ARTICLE 8 Default Section 8.1 Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any order, rule or regulation of any governmental or non-governmental body: (a) Any representation or warranty made under this Agreement, any of the Loan Documents, or any of them, shall prove incorrect or misleading in any material respect when made or deemed to be made pursuant to Section 4.2 hereof; or (b) The Parent or the Borrower shall default in the payment of: (i) any interest, fees or other amounts payable hereunder or under the Notes, any of the Loan Documents, or any of them, to the Lenders, the Administrative Agent or the Issuing Bank, when due and such default is not cured within three (3) Business Days after the occurrence thereof; or (ii) any principal under any of the Notes, reimbursement obligations in respect of any Letter of Credit, or any of them, when due (including, without limitation, pursuant to Section 2.7 hereof); or (c) The Parent or the Borrower shall default in the performance or observance of any agreement or covenant contained in Sections 5.2(a), 5.10, 5.13, 5.16 or 5.17 hereof or in Article 6 (other than Section 6.4 hereof) or Article 7 hereof; or (d) The Parent or the Borrower shall default in the performance or observance 85 of any other agreement or covenant contained in this Agreement not specifically referred to elsewhere in this Section 8.1, and such default shall not be cured within a period of thirty (30) days from the occurrence of such default; or (e) There shall occur any default in the performance or observance of any agreement or covenant or breach of any representation or warranty contained in any of the Loan Documents (other than this Agreement or as otherwise provided in this Section 8.1) by the Borrower, any of its Subsidiaries, the Parent or any other obligor thereunder, which shall not be cured within a period of thirty (30) days from the occurrence of such default; or (f) There shall be entered and remain unstayed a decree or order for relief in respect of the Borrower, any of its Subsidiaries or the Parent under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy law or other similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or similar official of the Borrower, any of its Subsidiaries or the Parent, or of any substantial part of their respective properties; or ordering the winding-up or liquidation of the affairs of the Borrower, any of its Subsidiaries or the Parent; or an involuntary petition shall be filed against the Borrower, any of its Subsidiaries or the Parent and a temporary stay entered, and (i) such petition and stay shall not be diligently contested or (ii) any such petition and stay shall continue undismissed for a period of sixty (60) consecutive days; or (g) The Borrower, any of its Subsidiaries or the Parent shall file a petition, answer or consent seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other applicable Federal or state bankruptcy law or other similar law, or the Borrower, any of its Subsidiaries or the Parent shall consent to the institution of proceedings thereunder or to the filing of any such petition or to the appointment or taking of possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Borrower, any of its Subsidiaries or the Parent or of any substantial part of their respective properties, or the Borrower, any of its Subsidiaries or the Parent shall fail generally to pay their respective debts as they become due or shall be adjudicated insolvent; or the Borrower, any of its Subsidiaries or the Parent shall take any action in furtherance of any such action; or (h) A judgment not covered by insurance shall be entered by any court against the Borrower, any of its Subsidiaries or the Parent for the payment of money which exceeds singly or in the aggregate with other such judgments, $5,000,000 or a warrant of attachment or execution or similar process shall be issued or levied against property of the Borrower, any of its Subsidiaries or the Parent which, together with all other such property of the Borrower, any of the Borrower's Subsidiaries or the Parent subject to other such process, exceeds in value $5,000,000 in the aggregate, and if, within thirty (30) days after the entry, issue or levy thereof, such judgment, warrant or process shall not have been paid or discharged or stayed pending appeal or removed to bond, or if, after the expiration of any such stay, such judgment, warrant or process shall not have been paid or discharged or removed to bond; or (i) There shall be at any time any "accumulated funding deficiency," as 86 defined in ERISA or in Section 412 of the Code, with respect to any Plan maintained by the Borrower or any of its Subsidiaries or any ERISA Affiliate, or to which the Borrower or any of its Subsidiaries or any ERISA Affiliate has any liabilities, or any trust created thereunder; or a trustee shall be appointed by a United States District Court to administer any such Plan; or PBGC shall institute proceedings to terminate any such Plan; or the Borrower or any of its Subsidiaries or any ERISA Affiliate shall incur any liability to PBGC in connection with the termination of any such Plan; or any Plan or trust created under any Plan of the Borrower or any of its Subsidiaries or any ERISA Affiliate shall engage in a "prohibited transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of the Code) which would subject any such Plan, any trust created thereunder, any trustee or administrator thereof, or any party dealing with any such Plan or trust to the tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA or Section 4975 of the Code; to the extent any of the foregoing has had or could reasonably be expected to have a Materially Adverse Effect; or (j) There shall occur (i) any acceleration of the maturity of, or any failure to pay at final maturity, any Indebtedness of the Borrower, any of its Subsidiaries or the Parent in an aggregate principal amount exceeding $5,000,000; (ii) any event of default which would permit such acceleration of such Indebtedness described in clause (i) of this paragraph (j) and which event of default has not been cured within any applicable cure period or waived in writing prior to any declaration of an Event of Default or acceleration of the Loans hereunder; or (iii) any default under any Interest Rate Hedge Agreement having a notional principal amount of $5,000,000 or more; or (k) One or more Licenses (other than Give-back Licenses) shall be terminated or revoked, or any such License shall fail to be renewed at the stated expiration thereof; or (l) Any Loan Document or any material provision thereof, shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by the Parent, the Borrower or any of the Borrower's Subsidiaries seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or the Parent, the Borrower or any of the Borrower's Subsidiaries shall deny that it has any liability or obligation for the payment of principal or interest purported to be created under any Loan Document; or (m) Any Security Document shall for any reason, fail or cease (except by reason of lapse of time) to create a valid and perfected and first-priority Lien on or Security Interest in any portion of the Collateral purported to be covered thereby, subject only to Permitted Liens, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent's failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under any Security Document or the Administrative Agent's failure to file necessary continuation financing statements or make required filings with the Patent and Trademark Office of the United States after delivery to the Administrative Agent by the Parent, 87 the Borrower or the Borrower's Subsidiaries of executed copies of such financing statements and filings; or (n) The Borrower shall fail to make any payments required to be made to the FCC or any other Governmental Authority with respect to any License held by the Borrower or any of its Subsidiaries, or with respect to any Indebtedness or other payment obligations relating thereto as and when due, which failure could reasonably be expected to lead to the loss, termination, revocation, non-renewal or material impairment of any License (other than any Give-back License) or otherwise result in a Materially Adverse Effect; or (o) The Borrower's right to use any "AT&T" trademark pursuant to the Network License Agreement shall terminate (it being understood that, on or after the date which is five (5) years from the Agreement Date, neither the non-renewal of the Network License Agreement by AT&T Corp. nor the termination of the Network License Agreement by AT&T Corp. as a result of a Disqualifying Transaction (as defined in the Stockholders Agreement) shall constitute an Event of Default hereunder); or (p) The Borrower, any of its Subsidiaries or the Parent shall lose any rights to the benefit of, or the occurrence of any default or the termination of any rights under, any application, marketing or other material agreements, which loss, occurrence or termination could reasonably be expected to result in a Materially Adverse Effect (it being understood that, on or after the date which is five (5) years from the Agreement Date, neither the non-renewal of the Network License Agreement by AT&T Corp. nor the termination of the Network License Agreement by AT&T Corp. as a result of a Disqualifying Transaction (as defined in the Stockholders Agreement) shall in and of itself constitute an Event of Default hereunder); or (q) The failure of any party to the Securities Purchase Agreement, the Stockholders' Agreement or the Bid Equity Commitments Documentation to comply with any funding or contribution obligation under such Agreement and such failure shall continue unremedied for a period of thirty (30) days; or (r) Any Change of Control Event shall occur or exist; or (s) There shall occur any default or event of default under the Bidding Company Documentation by the Borrower or the Bidding Company in its obligations to the Borrower, after giving effect to any cure periods set forth therein, and such default or material event of default shall remain uncured for thirty (30) days immediately following the expiration of such cure periods, if any. Section 8.2 Remedies. (a) If an Event of Default specified in Section 8.1 hereof (other than an Event of Default under either Section 8.1(f) or (g) hereof) shall have occurred and shall be continuing, 88 the Administrative Agent, at the request of the Required Lenders subject to Section 9.8(a) hereof, shall, by notice to the Borrower, formally declare that an Event of Default has occurred, and (i) (A) terminate the Commitments, and/or (B) declare the principal of and interest on the Loans and the Notes and all other amounts owed to the Lenders and the Administrative Agent under this Agreement, the Notes and any other Loan Documents to be forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything in this Agreement, the Notes or any other Loan Document to the contrary notwithstanding, and the Commitments shall thereupon forthwith terminate and (ii) require the Borrower to, and the Borrower shall thereupon, deposit in an interest bearing account with the Administrative Agent, as cash collateral for the Obligations, an amount equal to the maximum amount currently or at any time thereafter to be drawn on all outstanding Letters of Credit, and the Borrower hereby pledges to the Administrative Agent, the Lenders and the Issuing Bank and grants to them a security interest in, all such cash as security for the Obligations. (b) Upon the occurrence and continuance of an Event of Default specified in either Section 8.1(f) or (g) hereof, all principal, interest and other amounts due hereunder and under the Notes, and all other Obligations, shall thereupon and concurrently therewith become due and payable and the Commitments shall forthwith terminate and the principal amount of the Loans outstanding hereunder shall bear interest at the Default Rate, all without any action by the Administrative Agent, the Lenders, the Required Lenders, the Issuing Bank or any of them, and without presentment, demand, protest or other notice of any kind, all of which are expressly waived, anything in this Agreement or in the other Loan Documents to the contrary notwithstanding. (c) Upon acceleration of the Notes, as provided in subsection (a) or (b) of this Section 8.2, the Administrative Agent and the Lenders shall have all of the post-default rights granted to them, or any of them, as applicable, under the Loan Documents and under Applicable Law. (d) Following acceleration of the Notes as provided in subsection (a) or (b) of this Section 8.2, provided the Required Lenders elect to initiate (or direct the Administrative Agent to initiate) either (i) a civil proceeding for the appointment of a receiver with respect to the Parent's or the Borrower's assets or (ii) an involuntary bankruptcy (or similar) petition against Parent or the Borrower, the Required Lenders shall have the right, but not the obligation, to direct the Administrative Agent, to the extent permitted under Applicable Law, to take possession of and to operate the Cellular Systems of the Borrower and its Subsidiaries during the Pre-receivership Period, in accordance with the terms of the Licenses and pursuant to the terms and subject to any limitations contained in the Security Documents and, within guidelines established by the Required Lenders prior to such action, to make any and all payments and expenditures necessary or desirable in connection therewith, including, without limitation, payment of wages as required under the Fair Labor Standards Act, as amended, and any necessary withholding taxes to state or federal authorities. In the event the guidelines referred to in the preceding sentence do not contemplate payments or expenditures that subsequently arise in the ordinary course after the 89 Administrative Agent has begun to operate the systems or in the event that the Required Lenders fail to agree upon the guidelines referred to in the preceding sentence within six (6) Business Days after the Administrative Agent has begun to operate any Cellular System, the Administrative Agent may, after giving three (3) Business Days' notice to the Lenders of its intention to do so, make such payments and expenditures as it deems reasonable and advisable in its sole discretion to maintain the normal day-to-day operation of such systems. All payments and expenditures incurred in connection with this provision in excess of receipts shall constitute costs and expenses of performance and/or collection reimbursable by the Parent and the Borrower pursuant to Section 11.2 hereof, which until paid by the Parent and the Borrower shall be reimbursed to the Administrative Agent by the Lenders pursuant to Section 9.11 hereof. Such payments and expenditures in excess of receipts shall constitute Advances under the Revolving Loan Commitment, not in excess of the Available Revolving Loan Commitment. Advances made pursuant to this Section 8.2(d) shall bear interest as provided in Section 2.3(d) hereof and shall be payable on demand. The making of one (1) or more Advances under this Section 8.2(d) shall not create any obligation on the part of the Lenders to make any additional Advances hereunder. No exercise by the Administrative Agent and the Required Lenders of the rights granted to any of them under this Section 8.2(d) shall constitute a waiver of any other rights and remedies granted to the Administrative Agent and the Lenders, or any of them, under this Agreement or any other Loan Document or at law. The Parent and the Borrower hereby irrevocably appoints the Administrative Agent, as administrative agent for the Lenders, the true and lawful attorney of the Parent and the Borrower, in its name and stead and on its behalf, to execute, receipt for or otherwise act in connection with any and all contracts, instruments or other documents in connection with the completion and operating of such systems in the exercise of the Administrative Agent and Lenders' rights under this Section 8.2(d). Such power of attorney is coupled with an interest and is irrevocable. The rights of the Administrative Agent and the Lenders under this Section 8.2(d) shall be subject to the prior compliance with the Communications Act and the FCC rules and policies promulgated thereunder to the extent applicable to the exercise of such rights. If the Administrative Agent (or the Lenders) take possession of the systems pursuant to this Section 8.2(d) prior to initiation of the actions described in the first sentence of this Section, the Administrative Agent shall initiate such action within the time period established by the Required Lenders prior to such action. (e) Upon acceleration of the Notes, as provided in subsection (a) or (b) of this Section 8.2, the Administrative Agent, upon request of the Required Lenders, shall, to the extent permitted by Applicable Law, have the right to the appointment of a receiver for the properties and assets of the Borrower, its Subsidiaries and the Parent, and the Borrower, for itself and, to the extent permitted by Applicable Law, on behalf of its Subsidiaries, and the Parent, hereby consent to such rights and such appointment and, to the extent permitted by Applicable Law, hereby waives any objection the Borrower, any Subsidiary and the Parent may have thereto or the right to have a bond or other security posted by the Administrative Agent on behalf of the Lenders, in connection therewith. The rights of the Administrative Agent under this Section 8.2(e) shall be subject to its prior compliance with the Communications Act and the FCC rules and policies promulgated thereunder to the extent applicable to the exercise of such rights. 90 (f) The rights and remedies of the Administrative Agent and the Lenders hereunder shall be cumulative, and not exclusive. Section 8.3 Payments Subsequent to Declaration of Event of Default. Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments and prepayments under this Agreement made to any of the Administrative Agent and the Lenders or otherwise received by any of such Persons (from realization on Collateral for the Obligations or otherwise) shall be paid over to the Administrative Agent (if necessary) and distributed by the Administrative Agent as follows: first, to the Administrative Agent's reasonable costs and expenses, if any, incurred in connection with the collection of such payment or prepayment, including, without limitation, any reasonable costs incurred by it in connection with the sale or disposition of any Collateral for the Obligations and all amounts under Section 11.2(b) and (c) hereof; second, to the Lenders and the Administrative Agent for any fees hereunder or under any of the other Loan Documents then due and payable; third, to the Lenders pro rata on the basis of their respective unpaid principal amounts (except as provided in Section 2.2(e) hereof), to the payment of any unpaid interest which may have accrued on the Obligations; fourth, to the Lenders pro rata until all Loans have been paid in full (and, for purposes of this clause, obligations under Interest Rate Hedge Agreements with the Lenders or their Affiliates or any of them shall be paid on a pro rata basis with the Loans); fifth, to the Lenders pro rata on the basis of their respective unpaid amounts, to the payment of any other unpaid Obligations; and sixth, to the Borrower or as otherwise required by law. ARTICLE 9 The Administrative Agent Section 9.1 Appointment and Authorization. Each Lender hereby irrevocably appoints and authorizes, and hereby agrees that it will require any transferee of any of its interest in its portion of the Loans and in its Notes irrevocably to appoint and authorize, the Administrative Agent and the Issuing Bank to take such actions as its agent on its behalf and to exercise such powers hereunder and under the other Loan Documents as are delegated by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. None of the Administrative Agent, the Issuing Bank, or any of their directors, officers, employees, agents or counsel, shall be liable for any action taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own gross negligence or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction. Section 9.2 Interest Holders. The Administrative Agent and the Issuing Bank may treat each Lender, or the Person designated in the last notice filed with the Administrative Agent, as the holder of all of the interests of such Lender in its portion of the Loans and in its Notes until written notice of transfer, signed by such Lender (or the Person 91 designated in the last notice filed with the Administrative Agent) and by the Person designated in such written notice of transfer, in form and substance satisfactory to the Administrative Agent, shall have been filed with the Administrative Agent. Section 9.3 Consultation with Counsel. The Administrative Agent and the Issuing Bank may consult with Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia, special counsel to the Administrative Agent and the Issuing Bank, or with other legal counsel selected by it and shall not be liable for any action taken or suffered by it in good faith in consultation with such counsel and in reasonable reliance on such consultations. Section 9.4 Documents. The Administrative Agent and the Issuing Bank shall be under no duty to examine, inquire into, or pass upon the validity, effectiveness or genuineness of this Agreement, any Note, any other Loan Document, or any instrument, document or communication furnished pursuant hereto or in connection herewith, and the Administrative Agent and the Issuing Bank shall be entitled to assume that they are valid, effective and genuine, have been signed or sent by the proper parties and are what they purport to be. Section 9.5 Administrative Agent and Affiliates. With respect to the Commitments and the Loans, the Lender which is an Affiliate of the Administrative Agent shall have the same rights and powers hereunder as any other Lender and the Administrative Agent and Affiliates of the Administrative Agent may accept deposits from, lend money to and generally engage in any kind of business with the Parent, the Borrower, any of the Borrower's Subsidiaries or any Affiliates of, or Persons doing business with, the Borrower and the Parent, as if they were not affiliated with the Administrative Agent and without any obligation to account therefor. Section 9.6 Responsibility of the Administrative Agent and the Issuing Bank. The duties and obligations of the Administrative Agent and the Issuing Bank under this Agreement are only those expressly set forth in this Agreement. The Administrative Agent and the Issuing Bank shall be entitled to assume that no Default or Event of Default has occurred and is continuing unless it has actual knowledge, or has been notified in writing by the Borrower or the Parent, of such fact, or has been notified by a Lender in writing that such Lender considers that a Default or an Event of Default has occurred and is continuing, and such Lender shall specify in detail the nature thereof in writing. The Administrative Agent shall not be liable hereunder for any action taken or omitted to be taken except for its own gross negligence or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction. The Administrative Agent shall provide each Lender with copies of all documents and reports received by it under Article 6 hereof promptly upon its receipt thereof. The Administrative Agent and the Issuing Bank shall provide each Lender with copies of such other documents received from the Borrower or the Parent as such Lender may reasonably request. 92 Section 9.7 Security Documents. The Administrative Agent and the Issuing Bank are hereby authorized to act on behalf of the Lenders, in its own capacity and through other agents and sub-agents appointed by it, under the Security Documents; provided, however, that the Administrative Agent and the Issuing Bank shall not agree to the release of any Collateral, or any property encumbered by any mortgage, pledge or security interest, except in compliance with Section 11.12 hereof. Section 9.8 Action by the Administrative Agent and the Issuing Bank. (a) The Administrative Agent and the Issuing Bank shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights which may be vested in it by, and with respect to taking or refraining from taking any action or actions which it may be able to take under or in respect of, this Agreement, unless the Administrative Agent or the Issuing Bank shall have been instructed by the Required Lenders to exercise or refrain from exercising such rights or to take or refrain from taking such action; provided, however, that the Administrative Agent and the Issuing Bank shall not exercise any rights under Section 8.2(a) hereof without the request of the Required Lenders (or, where expressly required, all the Lenders) unless time is of the essence. The Administrative Agent and the Issuing Bank shall incur no liability under or in respect of this Agreement with respect to anything which it may do or refrain from doing in the reasonable exercise of its judgment or which may seem to it to be necessary or desirable in the circumstances, except for its gross negligence or willful misconduct as determined by a final, non-appealable judicial order of a court of competent jurisdiction. (b) The Administrative Agent and the Issuing Bank shall not be liable to the Lenders or to any Lender or the Borrower, any of the Borrower's Subsidiaries or the Parent in acting or refraining from acting under this Agreement or any other Loan Document in accordance with the instructions of the Required Lenders (or, where expressly required, all the Lenders), and any action taken or failure to act pursuant to such instructions shall be binding on all Lenders. The Administrative Agent and the Issuing Bank shall not be obligated to take any action which is contrary to law or which would in the Administrative Agent's and the Issuing Bank's reasonable opinion subject the Administrative Agent and the Issuing Bank to liability. Section 9.9 Notice of Default or Event of Default. In the event that the Administrative Agent, the Issuing Bank or any Lender shall acquire actual knowledge, or shall have been notified, of any Default or Event of Default, the Administrative Agent and the Issuing Bank or such Lender shall promptly notify the Lenders and the Administrative Agent and the Issuing Bank, as applicable (provided that failure to give such notice shall not result in any liability on the part of such Lender or the Administrative Agent and the Issuing Bank), and the Administrative Agent and the Issuing Bank shall take such action and assert such rights under this Agreement and the other Loan Documents as the Required Lenders shall request in writing, and the Administrative Agent and the Issuing Bank shall not be subject to any liability by reason of its acting pursuant to any such request. If the Required Lenders shall fail to request the Administrative Agent and the Issuing Bank to take action or to 93 assert rights under this Agreement or any other Loan Documents in respect of any Default or Event of Default within ten (10) days after their receipt of the notice of any Default or Event of Default from the Administrative Agent, the Issuing Bank or any Lender, or shall request inconsistent action with respect to such Default or Event of Default, the Administrative Agent and the Issuing Bank may, but shall not be required to, take such action and assert such rights (other than rights under Article 8 hereof) as it deems in its discretion to be advisable for the protection of the Lenders; provided, however, that if the Required Lenders have instructed the Administrative Agent and the Issuing Bank not to take such action or assert such right, in no event shall the Administrative Agent act and the Issuing Bank contrary to such instructions. Section 9.10 Responsibility Disclaimed. The Administrative Agent and the Issuing Bank shall not be under any liability or responsibility whatsoever as Administrative Agent: (a) To the Borrower, the Parent or any other Person as a consequence of any failure or delay in performance by or any breach by, any Lender or Lenders of any of its or their obligations under this Agreement; (b) To any Lender or Lenders, as a consequence of any failure or delay in performance by, or any breach by, (i) the Borrower or the Parent of any of its obligations under this Agreement or the Notes or any other Loan Document or (ii) any Subsidiary of the Borrower or any other obligor under any other Loan Document; (c) To any Lender or Lenders, for any statements, representations or warranties in this Agreement, or any other document contemplated by this Agreement or any information provided pursuant to this Agreement, any other Loan Document or any other document contemplated by this Agreement, or for the validity, effectiveness, enforceability or sufficiency of this Agreement, the Notes, any other Loan Document or any other document contemplated by this Agreement; or (d) To any Person for any act or omission other than that arising from gross negligence or willful misconduct of the Administrative Agent as determined by a final, non-appealable judicial order of a court of competent jurisdiction. Section 9.11 Indemnification. The Lenders agree to indemnify the Administrative Agent and the Issuing Bank (to the extent not reimbursed by the Borrower) pro rata according to their respective Commitment Ratios, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including fees and expenses of experts, agents, consultants and counsel) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent and the Issuing Bank in any way relating to or arising out of this Agreement, any other Loan Document or any other document 94 contemplated by this Agreement or any other Loan Document or any action taken or omitted by the Administrative Agent and the Issuing Bank or under this Agreement, any other Loan Document or any other document contemplated by this Agreement; provided, however, that no Lender shall be liable to the Administrative Agent and the Issuing Bank or for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of such Person as determined by a final, non-appealable judicial order of a court of competent jurisdiction. Section 9.12 Credit Decision. Each Lender represents and warrants to each other and to the Administrative Agent and the Issuing Bank that: (a) In making its decision to enter into this Agreement and to make its portion of the Loans it has independently taken whatever steps it considers necessary to evaluate the financial condition and affairs of the Borrower and the Parent and that it has made an independent credit judgment, and that it has not relied upon the Administrative Agent, the Issuing Bank or information provided by the Administrative Agent and the Issuing Bank (other than information provided to the Administrative Agent and the Issuing Bank by the Borrower and the Parent and forwarded by the Administrative Agent and the Issuing Bank to the Lenders); and (b) So long as any portion of the Loans remains outstanding or such Lender has an obligation to make its portion of Advances hereunder, it will continue to make its own independent evaluation of the Collateral and of the financial condition and affairs of the Borrower and the Parent. Section 9.13 Successor Administrative Agent or Issuing Bank. Subject to the appointment and acceptance of a successor Administrative Agent or Issuing Bank as provided below, the Administrative Agent or Issuing Bank, as applicable, may resign at any time by giving written notice thereof to the Lenders and the Borrower and the Parent and may be removed at any time for cause by the Required Lenders. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent or Issuing Bank, as applicable, which appointment shall, prior to a Default, be subject to the consent of the Borrower and the Parent, acting reasonably. If no successor Administrative Agent or Issuing Bank, as applicable, shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent or Issuing Bank, as applicable, gave notice of resignation or the Required Lenders' removal of the retiring Administrative Agent or Issuing Bank, as applicable, then the retiring Administrative Agent or Issuing Bank, as applicable, may, on behalf of the Lenders, appoint a successor Administrative Agent or Issuing Bank, as applicable, which shall be any Lender or a commercial Lender organized or licensed under the laws of the United States of America or any political subdivision thereof which has combined capital and reserves in excess of $250,000,000. Such appointment shall, prior to a Default, be subject to the consent of the Borrower and the Parent, acting reasonably. Upon the acceptance of any appointment as Administrative Agent or Issuing Bank, as applicable, hereunder by a successor Administrative Agent or Issuing Bank, as applicable, such successor Administrative Agent or Issuing Bank, as applicable, shall thereupon succeed to and become vested with all the rights, powers, privileges, duties and obligations of the retiring Administrative 95 Agent or Issuing Bank, as applicable, and the retiring Administrative Agent or Issuing Bank, as applicable, shall be discharged from its duties and obligations hereunder and under the other Loan Documents. After any retiring Administrative Agent's or Issuing Bank's, as applicable, resignation or removal hereunder as Administrative Agent or Issuing Bank, as applicable, the provisions of this Article shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent or Issuing Bank, as applicable. Section 9.14 Collateral Actions. Each of the parties hereto acknowledges and agrees that all provisions herein and under any Security Document relating to rights and remedies under any Security Document shall be exercised only upon the direction of the Required Lenders (except as expressly set forth in Section 9.8 hereof), and that the provisions of this Section 9.14 may not be amended except with the consent of the Required Lenders. Section 9.15 Delegation of Duties. The Administrative Agent and the Issuing Bank may execute any of its duties under the Loan Documents by or through agents or attorneys selected by it using reasonable care, and shall be entitled to advice of counsel concerning all matters pertaining to such duties. ARTICLE 10 Change in Circumstances Affecting Eurodollar Advances Section 10.1 Eurodollar Basis Determination Inadequate or Unfair. If with respect to any proposed Eurodollar Advance for any Interest Period, the Administrative Agent determines after consultation with the Lenders that deposits in dollars (in the applicable amount) are not being offered to each of the Lenders in the relevant market for such Interest Period, the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders, whereupon until the Administrative Agent notifies the Borrower that the circumstances giving rise to such situation no longer exist, the obligations of any affected Lender to make its portion of such type of Eurodollar Advances shall be suspended. Section 10.2 Illegality. If after the date hereof, the adoption of any Applicable Law, or any change in any Applicable Law (adopted after the Agreement Date), or any change (after the Agreement Date) in interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender with any directive (whether or not having the force of law) of any such authority, central bank or comparable agency (issued after the Agreement Date), shall make it unlawful or impossible for any Lender to make, maintain or fund its portion of Eurodollar Advances, such Lender shall so notify the Administrative Agent, and the 96 Administrative Agent shall forthwith give notice thereof to the other Lenders and the Borrower. Before giving any notice to the Administrative Agent pursuant to this Section 10.2, such Lender shall designate a different lending office if such designation will avoid the need for giving such notice and will not, in the sole judgment of such Lender, be otherwise materially disadvantageous to such Lender. Upon receipt of such notice, notwithstanding anything contained in Article 2 hereof, the Borrower shall repay in full the then outstanding principal amount of such Lender's portion of each affected Eurodollar Advance, together with accrued interest thereon, on either (a) the last day of the then current Interest Period applicable to such affected Eurodollar Advances if such Lender may lawfully continue to maintain and fund its portion of such Eurodollar Advance to such day or (b) immediately if such Lender may not lawfully continue to fund and maintain its portion of such affected Eurodollar Advances to such day. Concurrently with repaying such portion of each affected Eurodollar Advance, the Borrower may borrow a Base Rate Advance from such Lender, and such Lender shall make such Advance, if so requested, in an amount such that the outstanding principal amount of the affected Note or Notes held by such Lender shall equal the outstanding principal amount of such Note or Notes immediately prior to such repayment. Section 10.3 Increased Costs. (a) If after the date hereof, the adoption of any Applicable Law, or any change in any Applicable Law (adopted after the Agreement Date), or any change (after the Agreement Date) in interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof or compliance by any Lender with any directive (whether or not having the force of law) of any such authority, central bank or comparable agency (issued after the Agreement Date): (1) shall subject any Lender to any tax, duty or other charge with respect to its obligation to make its portion of Eurodollar Advances, or its portion of existing Eurodollar Advances, or shall change the basis of taxation of payments to any Lender of the principal of or interest on its portion of Eurodollar Advances or in respect of any other amounts due under this Agreement, in respect of its portion of Eurodollar Advances or its obligation to make its portion of Eurodollar Advances (except for changes in the rate or method of calculation of tax on the overall net income of such Lender and except other Excluded Taxes); or (2) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System, but excluding any included in an applicable Eurodollar Reserve Percentage), special deposit, capital adequacy, assessment or other requirement or condition against assets of, deposits with or for the account of, or commitments or credit extended by, any Lender or shall impose on any Lender or the London interbank borrowing market any other condition affecting its obligation to make its portion of such Eurodollar Advances or its portion of existing Advances; and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining any of its portion of Eurodollar Advances, or to reduce the amount of any sum 97 received or receivable by such Lender under this Agreement or under its Note with respect thereto, then, on the earlier of a date within ten (10) days after demand by such Lender or the Maturity Date, the Borrower agrees to pay to such Lender such additional amount or amounts as will compensate such Lender for such increased costs. Each Lender will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 10.3 and will designate a different lending office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole judgment of such Lender made in good faith, be otherwise disadvantageous to such Lender. (b) Any Lender claiming compensation under this Section 10.3 shall provide the Borrower with a written certificate setting forth the additional amount or amounts to be paid to it hereunder and calculations therefor in reasonable detail. Such certificate shall be presumptively correct absent manifest error. Notwithstanding the foregoing, the Borrower shall only be obligated to compensate such Lender for any amount under this subsection arising or occurring during (i) in the case of each such request for compensation, any time or period commencing not more than ninety (90) days prior to the date on which such Lender submits such request and (ii) any other time or period during which, because of the unannounced retroactive application of such law, regulation, interpretation, request or directive, such Lender could not have known that the resulting reduction in return might arise. In determining such amount, such Lender may use any reasonable averaging and attribution methods. If any Lender demands compensation under this Section 10.3, the Borrower may at any time, upon at least five (5) Business Days' prior notice to such Lender, prepay in full such Lender's portion of the then outstanding Eurodollar Advances, together with accrued interest thereon to the date of prepayment, along with any reimbursement required under Section 2.11 hereof. Concurrently with prepaying such portion of Eurodollar Advances the Borrower may borrow a Base Rate Advance, or a Eurodollar Advance not so affected, from such Lender, and such Lender shall, if so requested, make such Advance in an amount such that the outstanding principal amount of the affected Note or Notes held by such Lender shall equal the outstanding principal amount of such Note or Notes immediately prior to such prepayment. (c) The Administrative Agent shall use reasonable efforts to determine whether or not the circumstances which have caused the claim for compensation under this Section 10.3 shall continue and shall notify the Lenders and the Borrower immediately if it shall determine that such circumstances no longer exist. Section 10.4 Effect On Other Advances. If notice has been given pursuant to Section 10.1, 10.2 or 10.3 hereof suspending the obligation of any Lender to make its portion of any type of Eurodollar Advance, or requiring such Lender's portion of Eurodollar Advances to be repaid or prepaid, then, unless and until such Lender notifies the Borrower that the circumstances giving rise to such repayment no longer apply, all amounts which would otherwise be made by such Lender as its portion of Eurodollar Advances shall, unless otherwise notified by the Borrower, be made instead as Base Rate Advances. 98 Section 10.5 Claims for Increased Costs and Taxes. In the event that any Lender shall decline to make Eurodollar Rate Loans pursuant to Sections 10.1 and 10.2 hereof or shall have notified the Borrower that it is entitled to claim compensation pursuant to Section 10.3, 2.10(b) or 2.13 hereof or is unable to complete the form required or subject to withholding as provided in Section 2.14 hereof (each such lender being an "Affected Lender"), the Borrower at its own cost and expense may designate a replacement lender (a "Replacement Lender") to assume the Commitment and the obligations of any such Affected Lender hereunder, and to purchase the outstanding Loans of such Affected Lender and such Affected Lender's rights hereunder and with respect thereto, and within ten (10) Business Days of such designation the Affected Lender shall (a) sell to such Replacement Lender, without recourse upon, warranty by or expense to such Affected Lender, by way of an Assignment and Assumption Agreement substantially in the form of Exhibit M attached hereto, for a purchase price equal to (unless such Lender agrees to a lesser amount) the outstanding principal amount of the Loans of such Affected Lender, plus all interest accrued and unpaid thereon and all other amounts owing to such Affected Lender hereunder, including without limitation, any amount which would be payable to such Affected Lender pursuant to Section 2.11 hereof, and (b) assign the Commitment of such Affected Lender and upon such assumption and purchase by the Replacement Lender, such Replacement Lender shall be deemed to be a "Lender" for purposes of this Agreement and such Affected Lender shall cease to be a "Lender" for purposes of this Agreement and shall no longer have any obligations or rights hereunder (other than any obligations or rights which according to this Agreement shall survive the termination of the Commitment). ARTICLE 11 Miscellaneous Section 11.1 Notices. (a) Except as otherwise expressly provided herein, all notices and other communications under this Agreement and the other Loan Documents (unless otherwise specifically stated therein) shall be in writing and shall be deemed to have been given three (3) Business Days after deposit in the mail, designated as certified mail, return receipt requested, postage-prepaid, or one (1) Business Day after being entrusted to a reputable commercial overnight delivery service for next day delivery, or when sent on a Business Day prior to 5:00 p.m. (New York, New York time) by telecopy addressed to the party to which such notice is directed at its address determined as provided in this Section 11.1. All notices and other communications under this Agreement shall be given to the parties hereto at the following addresses: 99 (i) If to the Borrower or the Parent, to it at: Tritel Holding Corp./Tritel, Inc. 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Attn: E. B. Martin, Jr. and Karlen Turbeville Telecopy No.: (601) 936-6045 with a copy to: Brown & Wood LLP One World Trade Center New York, New York 10048-0557 Attn: Patricia A. Murphy, Esq. Michael A. King, Esq. Telecopy No.: (212) 839-5599 Tritel, Inc. 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Attn: General Counsel Telecopy No.: (601) 936-6045 (ii) If to the Administrative Agent, to it at: Toronto Dominion (Texas), Inc. 909 Fannin, Suite 1700 Houston, Texas 77010 Attn: Jano Mott Telecopy No.: (713) 951-9921 with a copy to: Powell, Goldstein, Frazer & Murphy LLP Sixteenth Floor 191 Peachtree Street, N.E. Atlanta, Georgia 30303 Attn: Cindy A. Brazell, Esq. Telecopy No.: (404) 572-6999 (iii) If to the Lenders or the Issuing Bank, to them at the addresses set forth on Schedule 9 attached hereto. 100 Copies shall be provided to persons other than parties hereto only in the case of notices under Article 8 hereof and the failure to provide such copies shall not affect the validity of the notice given to the primary recipient. (b) Any party hereto may change the address to which notices shall be directed under this Section 11.1 by giving ten (10) days' prior written notice of such change to the other parties. Section 11.2 Expenses. The Borrower will promptly pay, or reimburse: (a) all reasonable out-of-pocket expenses of the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Loan Documents, and any waiver, amendment or consent in connection with any of the foregoing, and the transactions contemplated hereunder and thereunder and the making of the initial Advance hereunder (whether or not such Advance is made), including, but not limited to, the fees and disbursements of Powell, Goldstein, Frazer & Murphy LLP, Atlanta, Georgia special counsel for the Administrative Agent; (b) all reasonable out-of-pocket expenses of the Administrative Agent and the Lenders in connection with the restructuring and "work out" of the transactions contemplated in this Agreement or the other Loan Documents, including, but not limited to, the reasonable fees and disbursements of any experts, agents or consultants and of special counsel for the Administrative Agent and the Lenders; and (c) all reasonable out-of-pocket costs and expenses of obtaining performance under this Agreement or the other Loan Documents and all reasonable out-of-pocket costs and expenses of collection if an Event of Default occurs in the payment of the Notes, which in each case shall include reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent and the Lenders. Section 11.3 Waivers. The rights and remedies of the Administrative Agent and the Lenders under this Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies which they would otherwise have. No failure or delay by the Administrative Agent, the Required Lenders, or the Lenders, or any of them, in exercising any right, shall operate as a waiver of such right. The Administrative Agent and the Lenders expressly reserve the right to require strict compliance with the terms of this Agreement in connection with any future funding of a Request for Advance. In the event the Lenders decide to fund a Request for Advance at a time when the Borrower is not in strict compliance with the terms of this Agreement, such decision by the Lenders shall not be deemed to constitute an undertaking by the Lenders to fund any further Request for Advance or preclude the Lenders or the Administrative Agent from exercising any rights available under the Loan Documents or at law or equity. Any waiver or indulgence granted by the Administrative Agent, the Lenders, or the Required Lenders, or any of them, shall not constitute a modification of this 101 Agreement or any other Loan Document, except to the extent expressly provided in such waiver or indulgence, or constitute a course of dealing at variance with the terms of this Agreement or any other Loan Document such as to require further notice of their intent to require strict adherence to the terms of this Agreement or any other Loan Document in the future. Section 11.4 Set-Off. In addition to any rights now or hereafter granted under Applicable Law and not by way of limitation of any such rights, upon the occurrence of an Event of Default and during the continuation thereof, the Administrative Agent and each of the Lenders are hereby authorized by the Borrower at any time or from time to time, without notice to the Borrower or to any other Person, any such notice being hereby expressly waived to the extent permitted by Applicable Law, to set off and to appropriate and to apply any and all deposits (general or special, time or demand, including, but not limited to, Indebtedness evidenced by certificates of deposit, in each case whether matured or unmatured) and any other Indebtedness at any time held or owing by any Lender or the Administrative Agent, to or for the credit or the account of the Borrower or any of its Subsidiaries, against and on account of the obligations and liabilities of the Borrower to the Lenders and the Administrative Agent, including, but not limited to, all Obligations and any other claims of any nature or description arising out of or connected with this Agreement, the Notes or any other Loan Document, irrespective of whether (a) any Lender or the Administrative Agent shall have made any demand hereunder or (b) any Lender or the Administrative Agent shall have declared the principal of and interest on the Loans and other amounts due hereunder to be due and payable as permitted by Section 8.2 hereof and although such obligations and liabilities or any of them shall be contingent or unmatured. Upon direction by the Administrative Agent with the consent of the Lenders, each Lender holding deposits of the Borrower or any of its Subsidiaries shall exercise its set-off rights as so directed. Section 11.5 Assignment. (a) The Borrower may not assign or transfer any of its rights or obligations hereunder, under the Notes or under any other Loan Document without the prior written consent of each of the Lenders. (b) Each Lender may (A) sell assignments or participations of one hundred percent (100%) or less of its interests hereunder to one or more Affiliates of such Lender or an Approved Fund, (B) grant any Federal Reserve Bank collateral security pursuant to Regulation A of the Board of Governors of the Federal Reserve System and any Operating Circular issued by such Federal Reserve Bank without limitation and (C) in the case of any Lender that is a fund that invests in bank loans, such Lender may pledge all or any portion of its Loans and Notes to any trustee for, or any other representative of, holders of obligations owed, by such fund, as security for such obligations; provided that any foreclosure or similar action by such trustee or representatives shall be subject to the provisions of this Section concerning assignments; provided, however, that no such collateral assignment shall relieve such Lender of its rights and obligations hereunder. 102 (c) Each of the Lenders may at any time enter into assignment agreements or participations with one or more other Lenders or other Persons pursuant to which such Lender may assign or participate its interests under this Agreement and the other Loan Documents, including its interest in any particular Advance or portion thereof, provided that all assignments and participations (other than assignments to another Lender or an Approved Fund, which may be made without limitation, whether as to dollar amount or otherwise, so long as, if such assignment takes place after the occurrence and during the continuance of an Event of Default such assignment is made with the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld or delayed, and other assignments and participations described in Section 11.5(b) hereof which may be made without any limitation whatsoever) shall be in minimum principal amounts of the lesser of (x) the entire remaining amount of such Lender's Loans and Commitments; (y) $5,000,000 and (z) such other amount as may be agreed to in writing by the Administrative Agent and the Borrower, and shall be subject to the following additional terms and conditions: (i) No assignment shall be sold without the prior consent of the Administrative Agent and, prior to the occurrence of and during the continuation of an Event of Default, the consent of the Borrower, which consents shall not be unreasonably withheld or delayed; provided, however, that during an Event of Default the Borrower shall receive notice of such assignment; (ii) Any Person purchasing a participation or an assignment of any portion of the Loans from any Lender shall be required to represent and warrant that its purchase shall not constitute a "prohibited transaction" (as defined in Section 4.1(m) hereof); (iii) Assignments permitted hereunder (including the assignment of any Advance or portion thereof) may be made with all voting rights, and shall be made pursuant to an Assignment and Assumption Agreement substantially in the form of Exhibit M attached hereto; (iv) An administrative fee of $3,500 shall be payable to the Administrative Agent by the assigning Lender at the time of any assignment hereunder; (v) Any Lender making an assignment of its rights and obligations under the Revolving Loan Commitment shall also make an assignment of an equal percentage of its outstanding loans under its Revolving Loan Commitment; (vi) No participation agreement shall confer any rights under this Agreement or any other Loan Document to any purchaser thereof, or relieve any issuing Lender from any of its obligations under this Agreement, and all actions hereunder shall be conducted as if no such participation had been granted; provided, however, that any participation agreement may confer on the participant the right to approve or disapprove decreases in the interest rate or fees or in the dates of payment thereof, increases in the principal amount of the Loans participated in by such participant, decreases in fees, extensions of the Maturity Date or other principal payment date for the Loans or of a scheduled reduction of either Commitment or 103 releases of all or substantially all of the Collateral or any Subsidiary Guaranty (other than in accordance with Section 11.12(d) hereof); and provided further, however, that, notwithstanding the foregoing, prior to the occurrence and during the continuance of an Event of Default, no participation agreement may be made under this Section 11.5(c)(vi) with any Competitor of the Borrower without the prior written consent of the Borrower, such consent not to be unreasonably withheld; (vii) Each Lender agrees to provide the Administrative Agent and the Borrower with prompt written notice of any issuance of participations in or assignments of its interests hereunder; (viii) No assignment, participation or other transfer of any rights hereunder or under the Notes shall be effected that would result in any interest requiring registration under the Securities Act of 1933, as amended, or qualification under any state securities law; (ix) No such assignment may be made to (A) any bank or other financial institution (excluding funds) unless (1) such bank or other financial institution either (x) has a minimum capital and surplus of $500,000,000, or (y) is "adequately capitalized" (as such term is defined in 12 USCA Section 1831(b)(1)(B) as in effect on the Agreement Date) and (2) a receiver or conservator (including, without limitation, the Federal Deposit Insurance Corporation, the Resolution Trust Company or the Office of Thrift Supervision) has not been appointed with respect to such bank or other financial institution, (B) any fund unless such fund either (1) invests in commercial loans or (2) has total assets in excess of $125,000,000, or (C) any other Person unless such Person either (1) is an "accredited investor" (as defined in Regulation D of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder) or (2) has total assets in excess of $100,000,000; and (x) If applicable, each Lender shall, and shall cause each of its assignees to, provide to the Administrative Agent on or prior to the effective date of any assignment an appropriate Internal Revenue Service form as required by Applicable Law supporting such Lender's or assignee's position that no withholding by the Borrower or the Administrative Agent for United States income tax payable by such Lender or assignee in respect of amounts received by it hereunder is required. For purposes of this Agreement, an appropriate Internal Revenue Service form shall mean Form 1001 (Ownership Exemption or Reduced Rate Certificate of the United States Department of Treasury), Form 4224 (Exemption from Withholding of Tax on Income Effectively Connected with the Conduct of a Trade or Business in the United States), Form W-8 (Certificate of Foreign Status) or any successor or related forms adopted by the relevant United States taxing authorities. (d) Except as specifically set forth in Section 11.5(c) hereof, nothing in this Agreement or the Notes, expressed or implied, is intended to or shall confer on any Person other than the respective parties hereto and thereto and their successors and assignees permitted hereunder and thereunder any benefit or any legal or equitable right, remedy or other claim under 104 this Agreement or the Notes. (e) In the case of any participation, all amounts payable by the Borrower under the Loan Documents shall be calculated and made in the manner and to the parties hereto as if no such participation had been sold. (f) The provisions of this Section 11.5 shall not apply to any purchase of participations among the Lenders pursuant to Section 2.12(b) hereof. (g) The Administrative Agent, acting, for this purpose only, as agent of the Borrower shall maintain, at no extra charge or cost to the Borrower, a register (the "Register") at the address to which notices to the Administrative Agent are to be sent under Section 11.1 hereof on which Register the Administrative Agent shall enter the name, address and taxpayer identification number (if provided) of the registered owner of the Loans evidenced by a Registered Note or, upon the request of the registered owner, for which a Registered Note has been requested. A Registered Note and the Loans evidenced thereby may be assigned or otherwise transferred in whole or in part only by registration of such assignment or transfer of such Registered Note and the Loans evidenced thereby on the Register. Any assignment or transfer of all or part of such Loans and the Registered Note evidencing the same shall be registered on the Register only upon compliance with the other provisions of this Section 11.5 and surrender for registration of assignment or transfer of the Registered Note evidencing such Loans, duly endorsed by (or accompanied by a written instrument of assignment or transfer duly executed by) the Registered Noteholder thereof, and thereupon one or more new Registered Notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s) and, if less than the aggregate principal amount of such Registered Notes is thereby transferred, the assignor or transferor. Prior to the due presentment for registration of transfer of any Registered Note, the Borrower and the Administrative Agent shall treat the Person in whose name such Loans and the Registered Note evidencing the same is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding any notice to the contrary. (h) The Register shall be available for inspection by the Borrower and any Lender at any reasonable time during the Administrative Agent's regular business hours upon reasonable prior notice. Section 11.6 Accounting Principles. All references in this Agreement to GAAP shall be to such principles as in effect from time to time. All accounting terms used herein without definition shall be used as defined under GAAP as in effect from time to time; provided, however, that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operations of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose) regardless of whether any such notice is given before or after such change in GAAP or in the application 105 thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. All references to the financial statements of the Borrower and to its Net Income, Operating Cash Flow, Indebtedness for Money Borrowed, Interest Expense, and other such terms shall be deemed to refer to such items of the Borrower and its Subsidiaries, on a fully consolidated basis. Section 11.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Section 11.8 Governing Law. This Agreement and the Notes shall be construed in accordance with and governed by the internal laws of the State of New York applicable to agreements made and to be performed in the State of New York. If any action or proceeding shall be brought by the Administrative Agent or any Lender hereunder or under any other Loan Document in order to enforce any right or remedy under this Agreement or under any Note or any other Loan Document, the Borrower hereby consents and will, and the Borrower will cause each Subsidiary to, submit to the jurisdiction of any state or federal court of competent jurisdiction sitting within the area comprising the Southern District of New York on the Agreement Date. To the extent permitted by Applicable Law, the Borrower, for itself and on behalf of its Subsidiaries, hereby agrees that service of the summons and complaint and all other process which may be served in any such suit, action or proceeding may be effected by mailing by registered mail a copy of such process to the offices of the Borrower at the address given in Section 11.1 hereof and that personal service of process shall not be required. Nothing herein shall be construed to prohibit service of process by any other method permitted by law, or the bringing of any suit, action or proceeding in any other jurisdiction. To the extent permitted by Applicable Law, the Borrower agrees that final judgment in such suit, action or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by Applicable Law. The Borrower, for itself and on behalf of its Subsidiaries, hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Section 11.9 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Section 11.10 Interest. (a) In no event shall the amount of interest due or payable hereunder or under the Notes exceed the maximum rate of interest allowed by Applicable Law, and in the event any 106 such payment is inadvertently made by the Borrower or inadvertently received by the Administrative Agent or any Lender, then such excess sum shall be credited as a payment of principal, unless the Borrower shall notify the Administrative Agent or such Lender, in writing, that it elects to have such excess sum returned forthwith. It is the express intent hereof that the Borrower not pay and the Administrative Agent and the Lenders not receive, directly or indirectly in any manner whatsoever, interest in excess of that which may legally be paid by the Borrower under Applicable Law. (b) Notwithstanding the use by the Lenders of the Base Rate and the Eurodollar Rate as reference rates for the determination of interest on the Loans, the Lenders shall be under no obligation to obtain funds from any particular source in order to charge interest to the Borrower at interest rates related to such reference rates. Section 11.11 Table of Contents and Headings. The Table of Contents and the headings of the various subdivisions used in this Agreement are for convenience only and shall not in any way modify or amend any of the terms or provisions hereof, nor be used in connection with the interpretation of any provision hereof. Section 11.12 Amendment and Waiver. Neither this Agreement nor any term hereof may be amended orally, nor may any provision hereof be waived orally but only by an instrument in writing signed by the Required Lenders and the Administrative Agent at the direction of the Required Lenders and, in the case of an amendment, by the Parent and the Borrower, except that in the event of (a) any increase in the amount of any Commitment, (b) any delay or extension in the terms of repayment of the Loans or any mandatory reductions in either Commitment provided in Sections 2.5 or 2.7 hereof, (c) any reduction in principal, interest or fees due hereunder or postponement of the payment thereof without a corresponding payment by the Borrower, (d) any release of all or a substantial part of the Collateral for the Loans, except in connection with a merger, sale or other disposition otherwise permitted hereunder (in which case such release shall require no further approval by the Lenders), (e) any waiver of any Default due to the failure by the Borrower to pay any sum due to any of the Lenders hereunder, (f) any release of any Guaranty of all or any portion of the Obligations, except in connection with a merger, sale or other disposition otherwise permitted hereunder (in which case, such release shall require no further approval by the Lenders) or (g) any amendment of this Section 11.12, the definition of Required Lenders or of any Section herein to the extent that such Section requires action by all Lenders, any such amendment or waiver or consent may be made only by an instrument in writing signed by each of the Lenders and the Administrative Agent and, in the case of an amendment, by the Parent and the Borrower. Any amendment to any provision hereunder governing the rights, obligations or liabilities of the Administrative Agent may be made only by an instrument in writing signed by the Administrative Agent and by each of the Lenders. In addition to, and not in derogation of, Section 2.15 hereof, the parties hereto hereby agree that (a) the provisions of Section 2.15 hereof may be modified or waived only by a writing signed by the Issuing Banks and (b) that the terms "Revolving Loan Commitment" and "Available Revolving Loan Commitment may only be modified or amended by a writing signed by the Issuing Bank and such other Persons as 107 determined in accordance with this Section 11.12. No term or provision of any Security Document may be amended or waived orally, but only by an instrument in writing signed by the Administrative Agent with the direction of the Required Lenders and, in the case of an amendment, by such of the Parent, the Borrower and the Borrower's Subsidiaries as are party thereto; provided, however, that the written consent of all of the Lenders shall be required with respect to any amendment to or waiver of the provisions of any Security Document which would have the effect of (i) releasing all or a substantial part of the Collateral for the Loans, other than in connection with any merger, sale or other disposition otherwise permitted hereunder (which shall require no further approval by the Lenders) or (ii) releasing any Guarantor from all or any portion of the Obligations, except in connection with a merger, sale or other disposition otherwise permitted hereunder (in which case, such release shall require no further approval by the Lenders). The Lenders hereby instruct and authorize the Administrative Agent to enter into the Security Documents (and all other Loan Documents) referred to in Section 3.1 hereof as of the Agreement Date and any other Security Documents required to be entered into by the Borrower or any of its Subsidiaries hereunder. Section 11.13 Entire Agreement. Except as otherwise expressly provided herein, this Agreement and the other documents described or contemplated herein will embody the entire agreement and understanding among the parties hereto and thereto and supersede all prior agreements and understandings relating to the subject matter hereof and thereof. Section 11.14 Other Relationships. No relationship created hereunder or under any other Loan Document shall in any way affect the ability of the Administrative Agent and each Lender to enter into or maintain business relationships with the Borrower or any of its Affiliates beyond the relationships specifically contemplated by this Agreement and the other Loan Documents. Section 11.15 Directly or Indirectly. If any provision in this Agreement refers to any action taken or to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person, whether or not expressly specified in such provision. Section 11.16 Reliance on and Survival of Various Provisions. All covenants, agreements, statements, representations and warranties made herein or in any certificate delivered pursuant hereto (i) shall be deemed to have been relied upon by the Administrative Agent and each of the Lenders notwithstanding any investigation heretofore or hereafter made by any of them and (ii) shall survive the execution and delivery of the Notes and shall continue in full force and effect so long as any Note is outstanding and unpaid. Any right to indemnification hereunder, including, without limitation, rights pursuant to Sections 2.11, 2.13, 5.11, 10.3 and 11.2 hereof, shall, except to the extent specifically provided therein, survive the termination of this Agreement and the payment and performance of all Obligations. 108 Section 11.17 Senior Debt. The Obligations are secured by the Security Documents and are intended by the parties hereto to be senior in right of payment to all other Indebtedness of the Borrower. Section 11.18 Obligations Several. The obligations of the Administrative Agent and each of the Lenders hereunder are several, not joint. Section 11.19 Confidentiality. Each of the Administrative Agent and the Lenders shall hold all non-public, proprietary or confidential information (which has been identified as such by the Borrower) obtained pursuant to the requirements of this Agreement in accordance with their customary procedures for handling confidential information of this nature and in accordance with safe and sound banking or investing practices; provided, however, that each of the Administrative Agent and the Lenders may make disclosure of any such information to their examiners, regulators, Affiliates, outside auditors, counsel, consultants, appraisers and other professional advisors in connection with this Agreement or as reasonably required by any proposed syndicate member or any proposed transferee or participant in connection with the contemplated transfer of any Note or participation therein, provided each of the foregoing is advised of this provision and agrees to be bound by the terms hereof; and provided further, however, that, notwithstanding the foregoing, prior to the occurrence and during the continuance of an Event of Default, no disclosure may be made to any Competitor of the Borrower without (i) the prior written consent of the Borrower, such consent not to be unreasonably withheld, or (ii) as required or requested by any governmental authority or representative thereof, including any securities exchange or self-regulatory organization, having examination authority over such Person or in connection with the enforcement hereof or of any Loan Document or related document or pursuant to legal process or with respect to any litigation between or among the Borrower and any of the Lenders or involving any Lender. In no event shall any Lenders be obligated or required to return any materials furnished to it by the Borrower. The foregoing provisions shall not apply to a Lender with respect to information that (i) is or becomes generally available to the public (other than through such Lender) or (ii) comes into the possession of such Lender in a manner not involving a breach of a duty of confidentiality owing to the Borrower. ARTICLE 12 Waiver of Jury Trial Section 12.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF, AND ON BEHALF OF ITS SUBSIDIARIES, THE PARENT AND EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ISSUING BANK, HEREBY AGREE TO WAIVE AND HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH THE BORROWER, ANY OF THE BORROWER'S SUBSIDIARIES, THE PARENT, ANY OF THE LENDERS, THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR 109 ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, ANY OF THE NOTES OR THE OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION 12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS AGREEMENT (i) CERTIFIES THAT NEITHER ANY REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 110 IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused it to be executed by their duly authorized officers, all as of the day and year first above written. BORROWER: TRITEL HOLDING CORP., a Delaware corporation By: -------------------------------------- Name: Title: PARENT: TRITEL, INC., a Delaware corporation By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 1 ADMINISTRATIVE AGENT, TORONTO DOMINION (TEXAS), INC., LENDERS AND ISSUING BANK: as Administrative Agent and Lender By: -------------------------------------- Name: Title: THE TORONTO-DOMINION BANK, HOUSTON AGENCY, as Issuing Bank By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 2 BARCLAYS BANK PLC, as Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 3 NATIONSBANK, N.A., as Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 4 ABN AMRO BANK N.V., as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 5 THE BANK OF NEW YORK, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 6 THE BANK OF NOVA SCOTIA, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 7 THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 8 CIBC INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 9 THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 10 CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 11 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 12 FIRST UNION NATIONAL BANK, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 13 HELLER FINANCIAL, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 14 MEESPIERSON CAPITAL CORP., as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 15 MERITA BANK PLC, as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 16 PNC BANK NATIONAL ASSOCIATION, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 17 ROYAL BANK OF CANADA, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 18 SOCIETE GENERALE, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 19 AG CAPITAL FUNDING PARTNERS, L.P., as a Lender By: Angelo, Gordon & Co., L.P. as Investment Adviser By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 20 BANKBOSTON, N.A., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 21 BDC FINANCE, LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 22 CYPRESSTREE INVESTMENT FUND, LLC, as a Lender By: CypressTree Investment Management Company, Inc., its Managing Member By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 23 DEBT STRATEGIES FUND II, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 24 DEBT STRATEGIES FUND III, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 25 FLOATING RATE PORTFOLIO, as a Lender By: INVESCO Senior Secured Management, Inc. as attorney in fact By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 26 FRANKLIN FLOATING RATE TRUST, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 27 KZH CYPRESSTREE-1 LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 28 [SIGNATURE PAGE INTENTIONALLY LEFT BLANK] TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 29 [SIGNATURE PAGE INTENTIONALLY LEFT BLANK] TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 30 MERRILL LYNCH SENIOR FLOATING RATE FUND, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 31 METROPOLITAN LIFE INSURANCE COMPANY, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 32 MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 33 [SIGNATURE PAGE INTENTIONALLY LEFT BLANK] TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 34 NORTH AMERICAN SENIOR FLOATING RATE FUND, as a Lender By: CypressTree Investment Management Company, Inc. as Portfolio Manager By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 35 PARIBAS CAPITAL FUNDING LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 36 SENIOR DEBT PORTFOLIO, as a Lender By: Boston Management and Research, as Investment Advisor By: -------------------------------------- Name: Title: EATON VANCE SENIOR INCOME TRUST, as a Lender By: Eaton Vance Management, as Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 37 STEIN ROE & FARNHAM, INCORPORATED, as Agent for KEYPORT LIFE INSURANCE COMPANY, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 38 MERRILL LYNCH SENIOR FLOATING RATE FUND II, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AMENDED AND RESTATED LOAN AGREEMENT Signature Page 39 EX-10.11 14 FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Exhibit 10.11 FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (the "Amendment") is made as of this 21st day of April, 1999 by and among TRITEL PCS, INC. (formerly known as Tritel Holding Corp.), a Delaware corporation (the "Borrower"), TRITEL, INC., a Delaware corporation (the "Parent"), the Lenders (as defined in the Loan Agreement defined below) and Toronto Dominion (Texas), Inc. (the "Administrative Agent"), as administrative agent for the Lenders. W I T N E S S E T H: WHEREAS, the Borrower, the Parent, the Lenders and the Administrative Agent are all parties to that certain Amended and Restated Loan Agreement dated as of March 31, 1999 (the "Loan Agreement"); and WHEREAS, the Borrower desires to issue subordinated indebtedness pursuant to Section 7.1(g) of the Loan Agreement (the "Subordinated Debt") and to have such subordinated indebtedness guaranteed by its Subsidiaries and the Parent on a subordinated basis; and WHEREAS, the Borrower has requested the Administrative Agent and the Lenders, and the Administrative Agent and the Lenders have agreed, subject to the terms hereof, to amend the Loan Agreement and to consent to the terms of the Subordinated Debt, in each case, as provided herein; NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree that all capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed thereto in the Loan Agreement and further agree as follows: 1. Amendment to Article 1, Definitions, of the Loan Agreement. Section 1.1, Defined Terms, of the Loan Agreement is hereby amended by deleting the definition "License Subs" in its entirety and by substituting, in lieu thereof, the following: "'License Subs' shall mean, collectively, Tritel A/B Holding Corp., Tritel C/F Holding Corp., NexCom, Inc., Clearcall, Inc., Global PCS, Inc., Clearwave, Inc., DigiNet PCS, Inc., DigiCom, Inc. 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 the Borrower designated as a License Sub by notice to the Administrative Agent, in each case, the Capital Stock of which is pledged to the Administrative Agent pursuant to a Borrower's Pledge Agreement or a Subsidiary Pledge Agreement, as appropriate; and 'License Sub' shall mean any one of the foregoing License Subs." 2. Amendment to Article 5, Affirmative Covenants, of the Loan Agreement. Section 5.16, License Subs, of the Loan Agreement is hereby amended by deleting such section in its entirety and by substituting, in lieu thereof, the following: "Section 5.16 License Subs. At the time of any Acquisition permitted hereunder, the Borrower shall cause each of the Licenses being acquired by the Borrower or any of its Subsidiaries to be transferred to one or more License Subs, each of which License Subs shall have as its sole asset or assets the Licenses of the Borrower or any of its Subsidiaries and an agreement with the Borrower and such of its Subsidiaries subject to such License or Licenses, such that from and after such applicable date neither the Borrower nor its Subsidiaries (other than License Subs) shall hold any Licenses other than through one or more duly created and existing License Subs. The Borrower shall not permit the License Subs to have any business activities, operations, assets, Indebtedness, Guaranties or Liens (other than holding Licenses and owning the Capital Stock or other ownership interests of other License Subs, and other than pursuant to a Subsidiary Guaranty and Subsidiary Security Agreement issued in connection herewith or any Agreement referred to in the preceding sentence and other than Indebtedness to the FCC which Indebtedness may be secured as permitted by Section 7.2 hereof). Promptly after the transfer of the Licenses to the License Subs, the Borrower shall provide to the Administrative Agent copies of any required consents to such transfer from the FCC and any other governmental authority, together with a certificate of an Authorized Signatory stating that all Necessary Authorizations relating to such transfer have been obtained or made, are in full force and effect and are not subject to any pending or threatened reversal or cancellation." 3. Amendments to Article 7, Negative Covenants, of the Loan Agreement. (a) Section 7.1, Indebtedness of the Parent, the Borrower and the Borrower's Subsidiaries, of the Loan Agreement is hereby amended by deleting subsection 7.1(g) thereof in its entirety and by substituting, in lieu thereof, the following: "(g) the Subordinated Debt, provided that (i) such Subordinated Debt (A) is issued on terms reasonably satisfactory to the Required Lenders and (B) has an aggregate initial price to investors not to exceed $250,000,000, or such greater amount as may be approved by the Required Lenders, and (ii) the proceeds of such Subordinated Debt shall be used by the Borrower solely to fund the transaction costs related to such Subordinated Debt, build-out of the Borrower's Cellular System and working capital needs and other general corporate purposes of the Borrower and its Subsidiaries related to such build-out, except to the extent provided in Section 7.6(e)(vii) hereof, or as otherwise approved by the Required Lenders;" (b) Section 7.5, Limitation on Guaranties, of the Loan Agreement is hereby amended -2- by deleting such section in its entirety and by substituting, in lieu thereof, the following: "Section 7.5 Limitation on Guaranties. The Parent and the Borrower shall not, and shall not permit any of the Borrower's Subsidiaries to, at any time Guaranty, assume, be obligated with respect to, or permit to be outstanding any Guaranty of, any obligation of any other Person other than: (a) a guaranty by endorsement of negotiable instruments for collection in the ordinary course of business; (b) Guaranties constituting Indebtedness permitted pursuant to Section 7.1 hereof; (c) a may be contained in any Loan Document; and (d) Guaranties by the Borrower's Subsidiaries (excluding License Subs) and the Parent of the Subordinated Debt issued under Section 7.1(g) hereof, provided that neither the Borrower's Subsidiaries nor the Parent may Guaranty such Subordinated Debt unless (i) such Subsidiaries and the Parent have also Guaranteed the Obligations pursuant to Subsidiary Guaranties or a Parent Guaranty Agreement, respectively, (ii) each such Guaranty of such Subordinated Debt is subordinated to such Subsidiary Guaranties or such Parent Guaranty Agreement, respectively, on terms no less favorable to the Lenders than the subordination provisions of such Subordinated Debt, and (iii) each such Guaranty of such Subordinated Debt provides for the release and termination thereof, without action by any party, upon any release and termination (except a release or termination by or as a result of payment in full of the Obligations) of such Subsidiary Guaranties or such Parent Guaranty Agreement, respectively." 4. Consent to Terms of Subordinated Debt. Subject to the terms and conditions hereof, the Lenders hereby consent to the terms of the Subordinated Debt set forth in the description of notes attached hereto as Exhibit A and made a part hereof (or on terms substantially as set forth in the description of notes attached hereto as Exhibit A and in no event materially less favorable to the interests of the Lenders than are the terms set forth in such description of notes). On or prior to the issuance of such Subordinated Debt, the Borrower and the Parent shall provide to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, (a) certification to the Lenders (i) of the Borrower's and the Parent's compliance with Sections 7.8 through and including 7.17 of the Loan Agreement both before and after giving effect to the issuance of the Subordinated Debt, (ii) that neither a Default or an Event of Default exists or will be caused by the issuance of the Subordinated Debt, (iii) that the aggregate initial public offering price or purchase price of such Subordinated Debt does not exceed $250,000,000.00, and (iv) that the proceeds of such Subordinated Debt will be used by the Borrower solely to fund the transaction costs related to such Subordinated Debt, the build-out of the Borrower's Cellular System and working capital needs and other general corporate purposes of the Borrower and its Subsidiaries related to such build-out, except to the extent provided in Section 7.6(e)(vii) of the Loan Agreement, (b) pro forma projections both before and after giving effect to such Subordinated Debt, and (c) evidence that the documentation evidencing such Subordinated Debt shall be on the terms of such Subordinated Debt set forth in the description of notes attached hereto as Exhibit A (or on terms substantially as set forth in the description of notes attached hereto as Exhibit A and in no event materially less favorable to the interests of the Lenders than are the terms set forth in such description of notes). -3- 5. No Other Amendment or Waiver. Notwithstanding the agreement of the Lenders to the terms and provisions of this Amendment, the Borrower and the Parent acknowledge and expressly agree that this Amendment is limited to the extent expressly set forth herein and shall not constitute a modification of the Loan Agreement or any other Loan Documents or a course of dealing at variance with the terms of the Loan Agreement or any other Loan Documents (other than as expressly set forth above) so as to require further notice by the Administrative Agent or the Lenders, or any of them, of its or their intent to require strict adherence to the terms of the Loan Agreement and the other Loan Documents in the future. All of the terms, conditions, provisions and covenants of the Loan Agreement and the other Loan Documents shall remain unaltered and in full force and effect except as expressly modified by this Amendment. 6. Representations and Warranties. Each of the Borrower and the Parent hereby represents and warrants to and in favor of the Administrative Agent and the Lenders as follows: (a) each representation and warranty set forth in Article 4 of the Loan Agreement is hereby restated and affirmed as true and correct in all material respects as of the date hereof, except to the extent previously fulfilled in accordance with the terms of the Loan Agreement or to the extent relating specifically to the Agreement Date (or date prior thereto) or otherwise inapplicable; (b) each of the Borrower and the Parent has the corporate power and authority (i) to enter into this Amendment and (ii) to do all acts and things as are required or contemplated hereunder to be done, observed and performed by it; (c) this Amendment has been duly authorized, validly executed and delivered by one or more Authorized Signatories of each of the Borrower and the Parent, and this Amendment and the Loan Agreement, as amended hereby, constitute the legal, valid and binding obligations of each of the Borrower and the Parent, enforceable against each of the Borrower and the Parent in accordance with their respective terms, subject, as to enforcement of remedies, to the following qualifications: (i) an order of specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered an adequate remedy at law and (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other similar laws affecting enforcement of creditors' rights generally (insofar as any such law relates to the bankruptcy, insolvency or similar event of the Borrower or the Parent); and (d) the execution and delivery of this Amendment and performance by each of the Borrower and the Parent under the Loan Agreement, as amended hereby, does not and will not require the consent or approval of any regulatory authority or governmental authority or agency having jurisdiction over the Borrower and/or the Parent which has not already been obtained, nor be in contravention of or in conflict with the certificate of incorporation or by-laws of either of the Borrower and the Parent, or any provision of any statute, judgment, order, indenture, instrument, agreement, or undertaking, to which the Borrower and/or the Parent is party or by which the Borrower's and/or the Parent's respective assets or properties are bound. -4- 7. Conditions Precedent to Effectiveness of Amendment. The effectiveness of this Amendment is subject to: (a) the execution and delivery of this Amendment by the Borrower, the Parent, the Administrative Agent and the Required Lenders; (b) all of the representations and warranties of each of the Borrower and the Parent under Section 6 hereof, which are made as of the date hereof, being true and correct in all material respects; (c) receipt by the Administrative Agent and each of the Lenders of a certificate of the chief financial officer of each of the Borrower and the Parent certifying that no Default exists both before and after giving effect to this Amendment; (d) receipt by the Administrative Agent and each of the Lenders of a signed legal opinion of counsel to the Parent, the Borrower and the Borrower's Subsidiaries, in form and substance satisfactory to the Administrative Agent and its counsel; and (e) receipt of any other documents or instruments that the Administrative Agent, the Lenders, or any of them, may reasonably request, certified by an officer of each of the Borrower and the Parent if so requested. 8. Counterparts. This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. 9. Loan Documents. Each reference in the Loan Agreement or any other Loan Document to the term "Loan Agreement" shall hereafter mean and refer to the Loan Agreement as amended hereby and as the same may hereafter be amended. 10. Governing Law. This Amendment shall be construed in accordance with and governed by the internal laws of the State of New York applicable to agreements made and to be performed in New York. 11. Effective Date. Upon satisfaction of the conditions precedent referred to in Section 7 above, this Amendment shall be effective as of the date first above written. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] -5- IN WITNESS WHEREOF, the parties hereto have caused their respective duly authorized officers or representatives to execute and deliver this Amendment all as of the day and year first above written. BORROWER: TRITEL PCS, INC. By: -------------------------------------- Name: Title: PARENT: TRITEL, INC. By: -------------------------------------- Name: Title: ADMINISTRATIVE AGENT AND LENDERS: TORONTO DOMINION (TEXAS), INC., as Administrative Agent and Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 1 BARCLAYS BANK PLC, as Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 2 NATIONSBANK, N.A., as Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 3 ABN AMRO BANK N.V., as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 4 THE BANK OF NEW YORK, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 5 THE BANK OF NOVA SCOTIA, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 6 THE BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 7 CIBC INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 8 THE CIT GROUP/EQUIPMENT FINANCING, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 9 CREDIT LYONNAIS NEW YORK BRANCH, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 10 DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 11 FIRST UNION NATIONAL BANK, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 12 HELLER FINANCIAL, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 13 MEESPIERSON CAPITAL CORP., as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 14 MERITA BANK PLC, as a Lender By: -------------------------------------- Name: Title: By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 15 PNC BANK NATIONAL ASSOCIATION, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 16 ROYAL BANK OF CANADA, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 17 SOCIETE GENERALE, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 18 ATHENA CDO, LIMITED, as a Lender By: Pacific Investment Management Company, as its Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 19 AG CAPITAL FUNDING PARTNERS, L.P., as a Lender By: Angelo, Gordon & Co., L.P. as Investment Adviser By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 20 BANKBOSTON, N.A., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 21 BDC FINANCE, LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 22 CAPTIVA III FINANCE LTD., as a Lender as advised by Pacific Investment Management Company By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 23 CYPRESSTREE INVESTMENT FUND, LLC, as a Lender By: CypressTree Investment Management Company, Inc., its Managing Member By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 24 DEBT STRATEGIES FUND II, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 25 DEBT STRATEGIES FUND III, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 26 DELANO COMPANY, as a Lender By: Pacific Investment Management Company, as its Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 27 EATON VANCE SENIOR INCOME TRUST, as a Lender By: Eaton Vance Management, as Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 28 FLOATING RATE PORTFOLIO, as a Lender By: INVESCO Senior Secured Management, Inc. as attorney in fact By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 29 FRANKLIN FLOATING RATE TRUST, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 30 KZH CYPRESSTREE-1 LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 31 MAGNETITE ASSET INVESTORS LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 32 MERRILL LYNCH GLOBAL INVESTMENT SERIES: INCOME STRATEGIES PORTFOLIO, as a Lender By: Merrill Lynch Asset Management, L.P., as Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 33 MERRILL LYNCH PRIME RATE PORTFOLIO, as a Lender By: Merrill Lynch Asset Management, L.P., as Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 34 MERRILL LYNCH SENIOR FLOATING RATE FUND, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 35 MERRILL LYNCH SENIOR FLOATING RATE FUND II, INC., as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 36 METROPOLITAN LIFE INSURANCE COMPANY, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 37 MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 38 NATIONAL WESTMINSTER BANK PLC, as a Lender By: NatWest Capital Markets Limited, its Agent By: Greenwich Capital Markets, Inc., its Agent By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 39 NORTH AMERICAN SENIOR FLOATING RATE FUND, as a Lender By: CypressTree Investment Management Company, Inc. as Portfolio Manager By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 40 PARIBAS CAPITAL FUNDING LLC, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 41 PILGRIM PRIME RATE TRUST, as a Lender By: Pilgrim Investments, Inc., as its investment manager By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 42 SENIOR DEBT PORTFOLIO, as a Lender By: Boston Management and Research, as Investment Advisor By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 43 STEIN ROE & FARNHAM, INCORPORATED, as Agent for KEYPORT LIFE INSURANCE COMPANY, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 44 VAN KAMPEN PRIME RATE INCOME TRUST, as a Lender By: -------------------------------------- Name: Title: TRITEL HOLDING CORP. AND TRITEL, INC. FIRST AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT Signature Page 45 EX-10.12 15 MASTER LEASE AGREEMENT MASTER LEASE AGREEMENT ---------------------- THIS AGREEMENT is made this ____ day of October, 1998, between TRITEL COMMUNICATIONS, INC., a Delaware corporation, with its principal offices located at 1410 Livingston Lane, Jackson, Mississippi 39213 ("TRITEL") and CROWN COMMUNICATION INC., a Delaware corporation, with its principal offices located at Southpointe, 375 Southpointe Boulevard, Canonsburg, Pennsylvania 15317 ("CROWN"). WITNESSETH: WHEREAS, CROWN owns, controls and will be constructing communications facilities throughout the United States; WHEREAS, TRITEL desires to lease space on certain communications facilities owned or otherwise controlled by CROWN (hereinafter generally referred to as "Leased Premises"); and WHEREAS, CROWN and TRITEL are desirous of establishing terms and conditions which will apply to multiple sites located in the United States which are to be leased by CROWN to TRITEL. NOW, THEREFORE, in consideration of the mutual covenants contained herein and intending to be legally bound hereby, the parties hereto agree as follows: 1. SITE LEASES 1.1. SITE LEASE ACKNOWLEDGMENTS. This Agreement contains the basic terms and conditions upon which each communications facility is leased by CROWN to TRITEL. That portion of each location wherein CROWN owns or otherwise controls a communications facility which is leased by TRITEL pursuant to this Agreement will be individually referred to as a "Site." When the parties agree on the particular terms for the lease of a Site, the parties will execute a Site Lease Acknowledgment ("SLA") in the form attached hereto as Exhibit "A" which describes the specific location, description and size of the Site for each particular communications facility. TRITEL shall indicate its interest in a particular communications facility by completing and forwarding an executed SLA to CROWN. The SLA shall become effective and become part of this Agreement upon its execution by both CROWN and TRITEL. The parties acknowledge and agree that, notwithstanding any other language in this Agreement to the contrary, TRITEL's use of a Site pursuant to this Agreement does not constitute a conveyance of any interest in real estate to TRITEL. The relationship between CROWN and TRITEL is not one of tenancy and no leasehold interest or other interest in real estate has been or will be created. 1.2. INITIAL SITES. TRITEL is interested in leasing from CROWN the Sites set forth on Exhibit "B" attached hereto. CROWN shall use its best efforts to provide SLAs for all Sites listed on Exhibit "B". 2. USE The Site may be used by TRITEL only for the installation, operation and maintenance of unmanned radio communications equipment consistent with the terms of the SLA. TRITEL must, at TRITEL's sole expense, comply with all laws, orders, ordinances, regulations and directives of applicable federal, state, county and municipal authorities or regulatory agencies including, without limitation, the Federal Communications Commission ("FCC"). TRITEL must operate its equipment in a manner that does not interfere with the operations at the communications facility or any other prior existing users of the communications facility. CROWN agrees to cooperate with TRITEL, at TRITEL's expense, in executing such documents or applications required in order for TRITEL to obtain such licenses, permits or other governmental approval needed for TRITEL's permitted use of the Site. Notwithstanding the foregoing, CROWN shall obtain, at CROWN's expense, any municipal permits necessary for the initial installation of the Site. TRITEL will maintain the Site in a reasonable condition and in a manner that will not interfere with other uses of the communications facility. 3. TERM 3.1. TERM OF AGREEMENT. The term of this Agreement shall be five (5) years commencing on the date first written above with up to five (5) automatic annual extensions unless either party gives the other party written notice of its intent to terminate at least six (6) months prior to the end of the then current term. 3.2. TERM OF SLA. Each Site leased by CROWN to TRITEL pursuant to an SLA shall be leased for an initial term (the "Initial Term") of five (5) years with the commencement date as of the first (lst) day of the month following the commencement of the installation of TRITEL's antennas and transmission lines at the Site so long as the installation continues in a timely fashion ("Commencement Date"). The term of each particular SLA shall automatically be extended for up to four (4) additional five (5) year terms (each a "Renewal Term") unless TRITEL terminates it at the end of the then current term by giving CROWN written notice of the intent to terminate at least six (6) months prior to the end of the then current term; provided, however, that the term of all SLAs shall continue for their respective terms and shall not necessarily terminate upon the expiration of the term of this Agreement. Notwithstanding the foregoing, if CROWN's rights in the Site are derived from a prime lease or other agreement with a third party ("Prime Lease") and such Prime Lease has a shorter term or extension terms than those provided for under this paragraph, then TRITEL's right to extend any particular SLA shall only be for as long as CROWN retains its interest in the same applicable property pursuant to said Prime Lease. 2 4. FEES 4.1. ANNUAL FEE. The annual fee shall be paid in equal monthly installments beginning on the Commencement Date and continuing on the first day of each and every month thereafter. Payments shall be made to CROWN, or such other person, firm or place as CROWN may, from time to time, designate in writing at least thirty (30) days in advance of any fee payment date. The amount of the annual fee shall be that amount designated on the applicable SLA. The fee amounts for an SLA shall be calculated according to the schedule set forth in Exhibit "C" attached hereto which amounts shall be adjusted on each Adjustment Date according to the formula set forth in Section 4.2. 4.2. FEE ADJUSTMENT. The annual fee and other fees identified in this Agreement (including those fees listed in Exhibit "C") shall be adjusted upward (collectively "Adjusted Fee") on the second anniversary of the date of this Agreement and every annual anniversary thereafter ("Adjustment Date") by [CONFIDENTIAL TREATMENT REQUESTED]. 4.3. ADDITIONAL FEES. TRITEL shall pay as additional fees any increase in taxes or other assessment, including but not limited to real estate taxes, and any new taxes or assessments levied against the Leased Premises. The additional fee paid by TRITEL shall be determined based upon TRITEL's percentage of the total tax or assessment or increase thereof, wherein the numerator is the monthly fee payment made by TRITEL for the Site and the denominator is the total monthly fee payments received by CROWN from all users of that which occur as a direct result of the placement of TRITEL's equipment, antennae and communications facility upon the Site. CROWN will provide reasonable documentation of real estate taxes attributable to the improvements, or portions thereof, that are constructed or installed by or on behalf of TRITEL. 4.4. INTEREST. Any fee not paid within ten (10) business days of when due may, at CROWN's option, bear interest until paid at the lesser of: 4.4.1. The rate of [CONFIDENTIAL TREATMENT REQUESTED] per annum; or 4.4.2. The maximum rate allowed under the laws of the jurisdiction in which the Site is located. 4.5. OTHER AMOUNTS. Any sums due to CROWN under this Agreement which are not specifically defined as "Fees" are hereby deemed additional fees and are subject to the interest charges and adjustments as specified herein and in the other provisions of this Agreement which address fees. 5. ACCESS TRITEL shall have free access during the term of an SLA to the Site twentyfour (24) hours per day, seven (7) days per week. TRITEL acknowledges that the foregoing access rights are subject to any restrictions identified in the underlying real estate interests related to the communications facility, including but not limited to any restrictions identified in the Prime Lease; provided, however, CROWN will provide TRITEL prior written notice of any such restrictions that are not indicated in the Prime Lease attached to the applicable SLA. In the event TRITEL, its agents or contractors perform any work at a Site, TRITEL will indemnify and 3 reimburse CROWN for any and all claims of liability or losses by any third party resulting from any actual damages or losses sustained by CROWN resulting from any down time in operation directly attributable to TRITEL's work at a Site. CROWN shall furnish TRITEL with necessary devices for the purpose of ingress and egress to the said Site and communications facility. It is agreed, however, that only authorized engineers, employees or properly authorized contractors of TRITEL or persons under their direct supervision will be permitted to enter said Site. TRITEL will retain ownership of all buildings, equipment and appurtenances TRITEL installs at any Site; provided, however, that the removal of said equipment will not adversely affect the integrity of any structures. 6. IMPROVEMENTS AND CONSTRUCTION 6.1. APPROVED COMMUNICATIONS FACILITY. TRITEL has the right, at TRITEL's sole cost and expense, to erect, maintain, replace and operate at the Site only that communications equipment specified on the SLA. It is understood that TRITEL shall have the right at each and every Site, subject to compliance with the terms of this Agreement and particularly those set forth in this Section, to replace the equipment described in an SLA with similar and comparable equipment so long as: (a) there is no greater wind loading, structural loading, size, weight or height; and, (b) the equipment operates at the frequency or range of frequencies designated in the applicable SLA, or at the frequency or range of frequencies identified in TRITEL's current FCC licenses or successor licenses thereto, for the transmission of wireless communications signals at that given Site. It is understood that any such replacement equipment must be frequency compatible with then existing uses of the Site and that any change in frequency shall not interfere with the then existing equipment upon the Site. Prior to commencing any installation or material alteration of a communications facility TRITEL must obtain CROWN's approval of: 6.1.1. TRITEL's plans for installation or alteration work; and, 6.1.2. The identity of the contractor performing the installation or material alteration or in any way accessing the tower structure itself. CROWN's approval must not be unreasonably withheld, conditioned or delayed. All of TRITEL's installation and alteration work must be performed: 6.1.3. At TRITEL's sole cost and expense; 6.1.4. In a good and workmanlike manner, using the care and skill ordinarily used by members of the profession practicing under similar conditions at the same time and in the same geographic area; 6.1.5. In accordance with applicable building codes and with the provisions of Exhibit "D" attached hereto; and, 6.1.6. Must not adversely affect the structural integrity or maintenance of the Site or any structure on or use of the Leased Premises. Any alterations to a structure on the Leased Premises must be designed, at TRITEL's sole cost and expense, by an engineer licensed or authorized in the jurisdiction where the Site is 4 located. Notwithstanding the foregoing, for any structural alterations of the communications facility, such engineer must be approved by CROWN which approval will not be unreasonably withheld, conditioned, or delayed. For structural alterations requiring a municipal permit, the engineer must be satisfactory to the local municipality, to the extent required by such municipality. Following the initial installation of a Site, any installation, maintenance, material alteration or removal of equipment at a Site by TRITEL and any activities whatsoever requiring access to a tower structure, must be performed by a contractor reasonably acceptable to CROWN (which acceptance may specifically include a requirement that all such contractors provide to CROWN, in advance of any such work, certificates of insurance consistent with the provisions of this Agreement). CROWN's consent thereto shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing contained through section 6.1, TRITEL shall have the right to access and perform routine maintenance upon its equipment without notice to or approval by CROWN. Any erection, maintenance, replacement and removal will in no way damage or interfere with CROWN's use of or any operations at the communications facility. If damage or interference is caused by TRITEL and TRITEL fails to make such repair or commence the repairs within thirty (30) days after notice by CROWN, CROWN may make the repairs and the reasonable costs thereof shall be payable to CROWN by TRITEL upon written notice. If TRITEL does not make payment to CROWN within thirty (30) days after such notice, CROWN shall have the right to immediately terminate the applicable SLA. No materials may be used in the installation of the antennas or transmission lines that will cause corrosion or rust or deterioration of the tower structure or its appurtenances. 6.2. LIENS. TRITEL must keep the Site free from any liens arising from any work performed, materials furnished or obligations incurred by or at the request of TRITEL. If any lien is filed against the Site as a result of the acts or omissions of TRITEL's employees, agents or contractors, TRITEL must discharge the lien or bond the lien off in a manner reasonably satisfactory to CROWN within thirty (30) days after TRITEL receives written notice from any party that the lien has been filed. If TRITEL fails to discharge or bond any lien within such period, then, in addition to any other right or remedy of CROWN, CROWN may, at CROWN's election, discharge the lien by either paying the amount claimed to be due or obtaining the discharge by deposit with a court or a title company or by bonding. TRITEL must pay on demand any amount paid by CROWN for the discharge or satisfaction of any lien, and all reasonable attorneys' fees and other legal expenses of CROWN incurred in defending any such action or in obtaining the discharge of such lien, together with all necessary and reasonable disbursements in connection therewith. 6.3. WAIVER OF CROWN'S LIEN. CROWN waives any lien rights it may have concerning TRITEL's improvements which are deemed TRITEL's personal property and TRITEL has the right to remove the same at any time without CROWN's consent. 6.4. POSSESSION. Taking possession of the Site by TRITEL is conclusive evidence that TRITEL: 5 6.4.1. Accepts the Site as suitable for the purposes for which they are leased; 6.4.2. Accepts the Site and any structure on the Site and every part and appurtenance thereof AS IS, with all faults; and, 6.4.3. Waives any claims against CROWN in respect of defects in the Site or the Leased Premises and its appurtenances, their habitability or suitability for any permitted purposes, except: 6.4.3.1. If otherwise expressly provided hereunder; 6.4.3.2. If resulting from the negligence or willful misconduct of CROWN, CROWN's employees, agents or contractors; 6.4.3.3. If resulting from any known claim by a third party not identified by CROWN in CROWN's representations under this Agreement; or, 6.4.3.4. If CROWN had actual or constructive knowledge or should have known of defects and did not disclose those defects to TRITEL. For the purposes of this provision, TRITEL is deemed to take possession upon the Commencement Date of the respective SLA. Conducting tests and inspections on the Site is not the commencement of construction. 7. INTERFERENCE TRITEL agrees to have installed transmitting and receiving equipment of the type and frequency which will not cause Measurable Interference as defined by the FCC to CROWN and/or other users of the communications facility at the Site whose equipment is properly tuned and operating. A "present user" of the communications facility at the Site shall be defined as a telecommunications provider licensed by the FCC which is located on the communications facility at the Site as of the Commencement Date of each SLA and specifically identified in each SLA and may include without limitation, Crown. In the event TRITEL's equipment causes such interference, with any Present User whose equipment is properly tuned and operating, TRITEL will take all steps necessary to correct and eliminate the interference within fortyeight (48) hours of the notice of such interference by CROWN via facsimile, or via other notice defined in this Agreement, to TRITEL's Director of Network Engineering. CROWN agrees that any future users of the Leased Premises who take possession after the date of execution of any SLA will have installed transmitting and receiving equipment of the type and frequency which will not cause Measurable Interference to TRITEL. If any user of the Site causes Measurable Interference to TRITEL and CROWN does not commence efforts to facilitate the cure of that Measurable Interference, then TRITEL may terminate the applicable SLA after 48 hours written notice from TRITEL. TRITEL will reasonably cooperate with CROWN and any user to help eliminate Measurable Interference provided that reasonable cooperation shall include the expenditure of time and not the expenditure of money. In the event of such termination, TRITEL agrees to waive any other available remedies. 6 8. INDEMNIFICATION TRITEL shall indemnify and hold CROWN and all subsidiary companies and affiliates harmless against any claim of liability or loss from bodily injury and/or property damage resulting from or arising out TRITEL's and/or any of its subcontractors', servants', agents' or invitees' use or occupancy of the Site, including but not limited to any claim of liability or loss associated with any Environmental Hazards as defined in this Agreement, excepting, however, such claims or damages as may be due to or caused by the negligence or willful misconduct of CROWN, or its subcontractors, servants, agents or invitees. If CROWN is made a party to any litigation commenced by or against TRITEL for any of the above reasons, then TRITEL shall protect and hold CROWN harmless and pay all reasonable costs, penalties, charges, damages, expenses and reasonable attorneys' fees incurred or paid by CROWN in connection therewith. CROWN shall indemnify and hold TRITEL and all subsidiary companies and affiliates harmless against any claim of liability or loss from bodily injury and/or property damage resulting from or arising out CROWN's and/or any of its subcontractors', servants', agents' or invitees' use or occupancy of the Site, including but not limited to any claim of liability or loss associated with any Environmental Hazards as defined in this Agreement, excepting, however, such claims or damages as may be due to or caused by the negligence or willful misconduct of TRITEL, or its subcontractors, servants, agents or invitees. If TRITEL is made a party to any litigation commenced by or against CROWN for any of the above reasons, then CROWN shall protect and hold TRITEL harmless and pay all reasonable costs, penalties, charges, damages, expenses and reasonable attorneys' fees incurred or paid by TRITEL in connection therewith. 9. INSURANCE TRITEL shall maintain at its expense throughout the term of this Agreement, general liability insurance with a combined single limit of Five Million ($5,000,000.00) Dollars for bodily injury and property damage. At execution of this Agreement, TRITEL shall provide to CROWN a Certificate of Insurance evidencing CROWN as an additional insured and which shall contain a provision for thirty (30) day notice to CROWN of cancellation or material change. TRITEL shall also maintain Auto Liability insurance in an amount no less than One Million ($1,000,000.00) Dollars combined single limit for bodily injury and/or property damage. TRITEL must also maintain statutory Workers' Compensation Insurance and Employee's Liability for the statutory limit but in no event less than One Million ($1,000,000.00) Dollars. The amount of the insurance limits identified above shall be increased on every fifth anniversary of the date of this Agreement by twentyfive (25%) percent over the amount of the insurance limits for the immediately preceding five (5) year period. All insurers will be rated AX(10) or better and must be licensed to do business in the jurisdiction where the respective Sites are located. The provision of insurance required in this Agreement shall not be construed to limit or otherwise affect the liability of TRITEL. TRITEL will not do or permit to be done in or about the Leased Premises nor bring or keep or permit to be brought to the Leased Premises anything that will increase the existing premiums for any insurance policy carried by CROWN covering the Site, any improvements thereon, or the Leased Premises; or, (b) will increase the existing premiums for any such policy 7 Crown covering the Site beyond that contemplated for the addition of TRITEL's communications equipment and cabinet or building. CROWN acknowledges and agrees that the installation of TRITEL's communications equipment upon the Leased Premises in accordance with the terms and conditions of this Agreement will be considered within the underwriting requirements of any of CROWN's insurers and such premiums contemplate the addition of the communications equipment. The parties hereby waive any and all rights of action for negligence against the other which may hereafter arise on account of damages to the premises or Site resulting from any fire, or other casualty of the kind covered by standard fire insurance policies, regardless of whether or not, or in what amounts, such insurance is now or hereafter carried by the parties, or either of them. TRITEL and CROWN shall each obtain a Waiver of Subrogation from their respective insurance companies in which said insurance companies also waive their respective rights to recover. TRITEL's contractors will maintain Independent Contractor Insurance in the amounts indicated above. 10. SURRENDER OF PREMISES TRITEL, upon termination of the Agreement or the applicable SLA, shall have removed its equipment, personal property and all fixtures and have restored the Site to its original Condition, reasonable wear and tear excepted. If such time for removal causes TRITEL to remain on the Site after termination of this Agreement or the applicable SLA, the annual fee shall be increased to one and onehalf times the then existing annual fee until such time as the removal of all equipment is completed. Nothing in this provision shall be construed as providing TRITEL the right to hold over and CROWN, immediately upon the termination or expiration of the Agreement or the applicable SLA, shall have the right to remove TRITEL from the Leased Premises. 11. COVENANTS AND WARRANTIES 11.1. CROWN. CROWN warrants, with respect to each particular SLA that: 11.1.1. CROWN, or the entity for which CROWN possesses the management rights, owns good, marketable fee simple title, has a good and marketable leasehold interest, has the right as a manager or has a valid lease, easement, or other interest in the land on which the Site is located and has the right of access thereto; 11.1.2. CROWN will not permit or suffer the installation and existence of any other improvement upon the structure or land of which the Site is a portion if such improvement materially interferes with transmission or reception by TRITEL's communications equipment; 11.1.3. The Leased Premises, to the best knowledge of CROWN, is not contaminated by any Environmental Hazards as defined below; 8 11.1.4. Telephone service and electrical service are available to TRITEL at each and every Site with the understanding that TRITEL will pay for utility services needed to operate its communications equipment; and, 11.1.5. CROWN will keep, at CROWN's expense, the communications structure upon which TRITEL's antennas are installed in good repair as required by law and applicable state and local codes and regulations and shall also comply with all rules and regulations enforced by the FCC and FAA with regard to the lighting, marking and painting. 11.1.6. CROWN shall also maintain during the term of each SLA property insurance, including coverage for fire, extended coverage, vandalism and malicious mischief on the Site, in an amount not less than 90% of the full replacement cost of the tower and related facilities (excluding, however, all communications equipment at the Site). 11.2. TRITEL. TRITEL warrants, with respect to each particular SLA that: 11.2.1. TRITEL will maintain the antennas, transmission lines and other appurtenances in proper operating condition and maintain same as to appearance and safety; and, 11.2.2. All installations and operations by TRITEL in connection with this Agreement shall meet with all applicable rules and regulations of the FCC and all applicable state and local codes and regulations. CROWN specifically assumes no responsibility for the licensing, operation. and/or maintenance of TRITEL's radio equipment, except as specifically provided herein. 11.3. MUTUAL. Each party represents and warrants to the other party that: 11.3.1. It has full right, power and authority to make this Agreement and to enter into the SLAs; 11.3.2. The making of this Agreement and the performance thereof will not violate any laws, ordinances, restrictive covenants, or other agreements under which such party is bound; 11.3.3. That such party is qualified to do business in any states in which the Sites are located; and, 11.3.4. All persons signing on behalf of such party were authorized to do so by appropriate corporate or partnership action. 11.4. NO BROKERS. CROWN and TRITEL represent to each other that neither has had any dealings with any real estate brokers or other brokers or agents in connection with this Agreement; however if TRITEL subsequently obtains a realtor who will represent TRITEL in 9 regards to this transaction, and then TRITEL shall be responsible for the compensation of that realtor. 11.5. WARRANTIES AND REPRESENTATIONS. The warranties and representations made in paragraphs 11.1 and 11.3 shall be deemed to be made, reaffirmed, ratified, rewarranted and re-represented upon the execution of each SLA. 12. CASUALTY OR CONDEMNATION 12.1. CASUALTY. If there is a casualty to any structure upon which a TRITEL communications facility is located, CROWN must within ninety (90) days repair or restore the structure. During said period of repair or restoration, fees identified in this Agreement applicable to that Site shall be abated. Upon completion of such repair or restoration, TRITEL is entitled to reinstall TRITEL's communications equipment. In the event such repairs or restoration will reasonably require more than ninety (90) days to complete, TRITEL is entitled to terminate the applicable SLA upon thirty (30) day's prior written notice. During such restoration period, TRITEL may request to install or place a temporary communications facility upon the Site to operate its communications facility. Such installation shall be approved by CROWN and TRITEL, and rental reduction shall be negotiated prior to such installation. 12.2. CONDEMNATION. If there is a condemnation of the Site which renders the Site unusable, including without limitation a transfer of the Site by consensual deed in lieu of condemnation, then the SLA for the condemned Site will terminate upon transfer of title to the condemning authority, without further liability to either party under this Agreement. TRITEL is entitled to pursue a separate condemnation award for TRITEL's communications equipment and interest in the Site, from the condemning authority. 13. DEFAULT 13.1. TRITEL'S DEFAULT. The occurrence of any one or more of the following shall constitute an "Event of Default" by TRITEL under this Agreement: 13.1.1. If TRITEL fails with respect to any Site to pay any fee or other sums payable by TRITEL within twenty (20) business days of TRITEL's receipt of written request for payment; 13.1.2. Breach of any representation, warranty or covenant set forth in this Agreement including any SLA, with the exception of the nonpayment of any fee or other sums by TRITEL, which is not cured within thirty (30) days of receipt of written notice, except such thirty (30) day cure period will be extended as reasonably necessary to permit TRITEL to complete the cure so long as TRITEL commences the cure within such thirty (30) day period and thereafter continuously and diligently pursues and completes such cure; 13.1.3. If any petition is filed by or against TRITEL, under any section or chapter of the present or any future federal Bankruptcy Code or under any similar law or statute of the United States or any state thereof (and with respect to 10 any petition filed against TRITEL, such petition is not dismissed within sixty (60) days after the filing thereof), or TRITEL is adjudged bankrupt, or insolvent in proceedings filed under any section or chapter of the present or any future Bankruptcy Code or under any similar law or statute of the United States or any state thereof; 13.1.4. If a receiver, custodian or trustee is appointed for TRITEL or for any of the assets of TRITEL and such appointment is not vacated within sixty (60) days of the date of appointment; 13.1.5. If TRITEL makes a transfer in fraud of creditors; or, 13.1.6. If TRITEL's equipment is found to be interfering as described in this Agreement and said interference is not timely corrected as provided herein. 13.2. CROWN'S REMEDIES. If an Event of Default occurs, in addition to any other remedy at law or equity, CROWN (without notice or demand except as expressly required above) may terminate this Agreement or the applicable SLAs, in which event TRITEL will immediately surrender the Sites to CROWN. TRITEL will become liable for damages equal to the total of: 13.2.1. The actual and reasonable costs of recovering the Sites; 13.2.2. The fee earned as of the date of termination, plus interest thereon from the date due until paid; 13.2.3. The amount by which any fees and other benefits that CROWN would have received under the SLAs for the remainder of the term under the SLAs; and 13.2.4. All other sums of money and damages owing by to CROWN. CROWN may elect any one or more of the foregoing remedies with respect to this Agreement or to any particular SLA. CROWN agrees to waive recovery of consequential damages. 13.3. CROWN'S DEFAULT. The occurrence of any one or more of the following shall constitute an "Event of Default": 13.3.1. If CROWN is in breach of any representation, warranty or covenant set forth in this Agreement and such breach is not cured within thirty (30) days of receipt of written notice thereof, except such thirty (30) day cure period will be extended as reasonably necessary to permit CROWN to complete the cure so long as CROWN commences the cure within such thirty (30) day period and thereafter continuously and diligently pursues and completes such cure; 11 13.3.2. If any petition is filed by or against CROWN, under any section or chapter of the present or any future federal Bankruptcy Code or under any similar law or statute of the United States or any state thereof (and with the respect to any petition filed against CROWN, such petition is not dismissed within sixty (60) days after the filing thereof), or CROWN is adjudged bankrupt or insolvent in proceedings filed under any section or chapter of the present or any future Bankruptcy Code or under any similar law or statute of the United States or any state thereof; 13.3.3. If a receiver, custodian or trustee is appointed for CROWN or for any of the assets of CROWN and such appointment is not vacated within sixty (60) days of the date of appointment; or, 13.3.4. If CROWN makes a transfer in fraud of creditors. 13.4. If an Event of Default occurs, TRITEL may, in addition to any other remedy available at law or in equity, at TRITEL's option upon written notice: 13.4.1. Terminate the applicable SLA; 13.4.2. Incur any reasonable expense necessary to perform the obligation of CROWN specified in such notice and invoice CROWN for the reasonable expenses, together with interest as set forth herein from the date named. Any invoice shall be accompanied by documentation detailing reasonable expenses. If CROWN fails to reimburse the costs within thirty (30) days of receipt of written notice, then TRITEL is entitled to offset and deduct such expenses from the fees or other charges next becoming due under any SLA. TRITEL may elect any one or more of the foregoing remedies with respect to any particular SLA. TRITEL agrees to waive recovery of consequential damages. 14. ENVIRONMENTAL MATTERS CROWN represents and warrants that to the best of CROWN's knowledge there are no Environmental Hazards on any Site. Nothing in this Agreement or in any SLA will be construed or interpreted to require that TRITEL remediate any Environmental Hazards located at any Site unless TRITEL or TRITEL's officers, employee, agents or contractors placed the Environmental Hazards on the Site. TRITEL will not bring to, transport across or dispose of any Environmental Hazards on any particular Leased Premises or Site without CROWN's prior written approval, which approval shall not unduly be withheld or delayed. TRITEL's use of any approved substances constituting Environmental Hazards must comply with all applicable laws, ordinances and regulations governing such use. The term "Environmental Hazards" means hazardous substances, hazardous wastes, pollutants, asbestos, polychlorinated biphenyl (PCB), petroleum or other fuels (including crude oil or any fraction or derivative thereof) and underground storage tanks. The term "hazardous substances" shall be defined in the Comprehensive Environmental Response, Compensation, and 12 Liability Act, and any regulations promulgated pursuant thereto. The term "pollutants" shall be as defined in the Clean Water Act, and any regulations promulgated pursuant thereto. This Section shall survive termination of the Agreement and any particular SLA. 15. COVENANT OF QUIET ENJOYMENT CROWN covenants that TRITEL, on paying the rent and performing all the terms, covenants and conditions of this Agreement, shall peaceably and quietly have, hold and enjoy the Leased Premises. 16. ENTIRE AGREEMENT It is agreed and understood that this Agreement, including all SLAs, contain all the agreements, promises and understandings between CROWN and TRITEL and that no verbal or oral agreements, promises or understandings shall be binding upon either CROWN or TRITEL in any dispute, controversy or proceeding at law, and any addition, variation or modification to this Agreement shall be void and ineffective unless made in writing signed by the parties. 17. GOVERNING LAW The laws of the Commonwealth of Kentucky, disregarding conflict of law principles, shall govern this Agreement. Further, each party submits to the jurisdiction of any federal or commonwealth court sitting in Louisville, Kentucky. 18. ASSIGNMENT This Agreement may not be sold, assigned or transferred, in whole or in part, by TRITEL without prior approval or consent of CROWN which consent may not be unreasonably withheld, delayed or conditioned; provided, however, that TRITEL may assign its interest in this Agreement to its parent company, any subsidiary or affiliate, or to any successor-in-interest or entity acquiring 51% or more of its stock or assets, or that has net worth of at least $25,000,000.00. It is understood that any such assignment shall not relieve TRITEL of any liability for performance of this Agreement. TRITEL acknowledges that TRITEL is the current holder of all FCC Licenses for the Sites and for the equipment installed at the Sites pursuant to this Agreement. 19. SEVERABILITY If any provision of this Agreement or any SLA is invalid or unenforceable with respect to any party, the remainder of this Agreement, or the application of such provision to persons other than those as to whom it is held invalid or unenforceable, is not to be affected and each provision of this Agreement is valid and enforceable to the fullest extent permitted by law. 20. NO WAIVER No provision of this Agreement will be deemed to have been waived by either party unless the waiver is in writing and signed by the party against whom enforcement is attempted. The rights granted in this Agreement are cumulative of every other right or remedy that the 13 enforcing party may otherwise have at law or in equity or by statute and the exercise of one or more rights or remedies will not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. 21. REPRESENTATION The parties acknowledge and agree that they have been represented by counsel and that each of the parties has participated in the drafting of this Agreement. Accordingly, it is the intention and agreement of the parties that the language, terms and conditions of this Agreement are not be construed in any way against or in favor of any party hereto by reason of the responsibilities in connection with the preparation of this Agreement. 22. NOTICES All notices hereunder shall be in writing and shall be given by (i) established express delivery service which maintains delivery records, (ii) hand delivery, or (iii) certified or registered mail, postage prepaid, return receipt requested. Notices may also be given by facsimile transmission, provided the notice is concurrently given by one of the above methods. Notices are effective upon receipt, or upon attempted delivery if delivery is refused or if delivery is impossible because of failure to provide reasonable means for accomplishing delivery. The notices shall be sent to the parties at the following addresses: As to Licensee: Tritel Communications, Inc. 1410 Livingston Lane Jackson, MS 39213 Attn: Kenneth F. Harris As to CROWN: Crown Communication Inc. Crown Square at Southpointe 375 Southpointe Boulevard Canonsburg, PA 15317 Attention: Legal Department CROWN or TRITEL may from time to time designate any other additional address for this purpose by giving written notice to the other party. 23. BINDING EFFECT This Agreement shall extend to and bind the heirs, personal representatives, successors and assigns of the parties hereto. 24. PRIME LEASE AGREEMENT The parties acknowledge that CROWN's rights in the Site may be derived from a separate agreement with a third party hereinafter referred to generally as a "Prime Lease" in which CROWN is lessee, grantee or licensee therein. If this is the case, a copy of said Prime Lease shall be attached as Exhibit "4" to the SLA, and the following provisions shall be 14 applicable. In the event approval of the prime lessor, grantor or licensor is required in the Prime Lease, the effectiveness of any SLA concerning such property shall be specifically subject to the obtaining of such approval and CROWN will exercise its reasonable efforts to obtain such approval at no additional cost to CROWN. Further, all the terms, conditions and covenants contained in this Agreement shall be specifically subject to and subordinate to the terms and conditions of any Prime Lease affecting the Site which is the subject of the particular SLA. In the event any of the provisions of the Prime Lease supersede or contradict the terms of this Agreement, such terms of this Agreement shall be deemed deleted or superseded to the extent of the contradiction as applicable to the Site utilized by TRITEL. Further, TRITEL agrees that the SLA shall be subject to the terms of the Prime Lease. Lastly, in the event the Prime Lease terminates for any reason, the SLA relating to the Site covered by said Prime Lease shall be deemed to have terminated effective the date of the termination of the Prime Lease. 25. TERMINATION In the event any previously approved zoning or governmental permit affecting the use of the property or the Site as a communications facility is withdrawn or terminated, the SLA relating to the property covered by said permit or approval shall be deemed to have been terminated effective the date of the termination of the permit or approval. In addition to any other rights to terminate an SLA, CROWN has the right to terminate an SLA and all of TRITEL's rights to the premises pursuant to the SLA if any equipment placed on the Site by TRITEL unreasonably interferes with any equipment located on said Leased Premises and TRITEL fails to resolve such interference problem as provided herein. 26. MAINTENANCE OF TOWER AND COMPLIANCE WITH LAW CROWN, at CROWN's sole cost and expense, shall maintain the tower, and any other portions of the Property and improvements thereto, in good order and repair, wear and tear, damage by fire, the elements or other casualty excepted. CROWN shall be responsible for compliance with any applicable marking and lighting requirements of the FAA and the FCC and any and all other applicable rules, laws, regulations which are applicable to any tower or other structure and any property under each SLA. Notwithstanding the foregoing, TRITEL shall be responsible for compliance with all applicable rules, laws, regulations which are applicable to TRITEL's equipment, antennae, cabinet and other items and property belonging to TRITEL. 27. SUPERSEDES This Agreement revokes and supersedes any other oral or written agreements between the parties, whether or not in writing, that pertain to the subject matter described herein. Notwithstanding the foregoing, the parties agree to be bound by that Confidentiality Agreement dated October 8, 1998. Notwithstanding anything contained in these exhibits and schedules, in the event that there is any conflict between the terms of these exhibits and schedules and paragraph 7 of this Agreement, the terms and provisions of the exhibits and schedules shall control. 15 28. COMPLIANCE WITH FCC RADIO FREQUENCY RADIATION REQUIREMENTS 28.1. TRITEL'S INSTALLATION OR MODIFICATION OF EQUIPMENT AT THE SITES. If TRITEL's installation or modification of equipment at a Site would put any user of the Site into noncompliance with the FCC's exposure limits for radio frequency radiation, then (i) in the event that such noncompliance can be cured by limiting the general public's access to the Site, TRITEL shall pay its prorata costs associated with limiting access to the Site prior to making such installation and/or modification; or, (ii) in the event such noncompliance can be cured by modifying the equipment of existing users of the Site, and such users consent to such modifications, TRITEL shall pay its prorata costs associated with making such modifications. 28.2. FUTURE COOPERATION. In the event that future installations and/or modifications proposed by third parties would put any user of the Site into noncompliance with the FCC's exposure limits for radio frequency radiation and cannot be cured by limiting access to the Site, TRITEL shall not unreasonably withhold its consent, when requested by CROWN, to modify its equipment so long as all costs associated with making such modifications to TRITEL's equipment are borne by the party proposing such installation and/or modification. TRITEL further agrees that in the event that there is any change to applicable rules, regulations and procedures governing radio frequency radiation which put the Site into noncompliance with the FCC's or any other governmental agency's exposure limits for radio frequency radiation, TRITEL will cooperate with CROWN and other users of the Site to bring the Site into compliance, which cooperation shall include but not be limited to sharing pro rata the costs associated with bringing the Site into compliance. 28.3. PROTECTION OF WORKERS. TRITEL agrees to reduce power or suspend operation if necessary and upon reasonable notice to prevent possible overexposure of workers or the public to RF radiation. In the event that such reduction or suspension causes a material reduction or impairment in service and/or impairs in building coverage and the coverage objectives of TRITEL to the applicable communications facility at the applicable Site for a period of ten (10) days or more, TRITEL shall have the right to terminate the applicable SLA (without further remedy or right of recovery). 28.4. CROWN'S OBLIGATIONS. CROWN agrees not to permit any subsequent installation and/or modification on or to the Site if such installation and/or modification would put any user of the Site into noncompliance with the FCC's exposure limits for radio frequency radiation. CROWN further agrees to limit access to the general public in areas where the FCC's exposure limits are exceeded and agrees to post appropriate signs warning the general population of such limited access. 28.5. MUTUAL CERTIFICATIONS. CROWN and TRITEL each certifies to the other that it has adopted a safety plan for its employees and requires certification of its subcontractors working in the vicinity of the Site to ensure that no such person is exposed to RF emissions in excess of the limits specified by the FCC, its employees and subcontractors, have been directed to comply with their respective safety plan. 29. THIRD PARTIES 16 Any obligations imposed on TRITEL in this Agreement shall be equally and fully applicable to any other third parties that TRITEL brings on to the property or comes upon the property through or under the authority of TRITEL. Any breach by such other third parties shall be deemed a breach by TRITEL of this Agreement and TRITEL shall be fully liable and responsible to CROWN pursuant to the terms of this Agreement for such breach. [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK] 17 IN WITNESS WHEREOF, the parties hereto have set their hands and affixed their respective seals the day and year first above written. TRITEL COMMUNICATIONS, INC. By: _____________________________________ Jerry M. Sullivan, Jr. Executive Vice President and Chief Operating Officer CROWN COMMUNICATION INC. By: _____________________________________ John P. Kelly, Executive Vice President and Chief Operating Officer 18 Echo 013 KY-LEX, Lexington EXHIBIT "A" TO THE MASTER LEASE AGREEMENT ----------------------------------------- SITE LEASE ACKNOWLEDGMENT This Master Lease Site Lease Acknowledgment ("SLA") is made and entered into as of this ____ day of _______, 1999, by and between TRITEL COMMUNICATIONS, INC., a Delaware corporation ("TRITEL") and CROWN COMMUNICATION INC., a Delaware corporation, d/b/a CROWN COMMUNICATIONS ("CROWN"), pursuant and subject to that certain Master Lease Agreement (the "Agreement") by and between the parties hereto, dated as of October 30, 1998. All capitalized terms have the meanings ascribed to them in the Agreement. 1. The Site shall consist of a portion of that certain parcel of property, located in the City of Lexington, the County of Fayette, and the State of Kentucky, more particularly described as all of Lot 3-C1 Block "A", Unit 3, Lakeview Industrial Subdivision, together with the non-exclusive right for ingress and egress, seven (7) days a week twentyfour (24) hours a day, on foot or motor vehicle, including trucks, and for the installation and maintenance of utility wires, poles, cables, conduits, and pipes over, under, or along a rightofway extending from the nearest public rightofway to the premises, said premises and rightofway for access being substantially as described herein in Exhibit "4" (collectively the "Site") to the SLA attached hereto and made a part hereof. 2. TRITEL shall have the right to install its antennas and equipment consistent with the specifications and in the locations described below:
Manufacturer and type-number: Tx: Three (3) Allgon 7200.01 Rx: Three (3) Allgon 7251.01 Number of antennas: Six (6) Weight and dimension of antenna(s) (LxWxD): Tx: 13.2 lbs., 74.8" x 5.5" x 2" Rx: 17.6 lbs., 75" x 5" x 3.2" Transmission line mfr. & type no.: Comscope CR50-1873PE Diameter & length of transmission line: 1 5/8", 315' Location of antennas (as described in Exhibit "2" attached hereto and made a part hereof): Echo 013 KY-LEX, Lexington Centerline height of antenna(s) on structure: 265' Direction of radiation: 0(o), 0(o), 120(o), 120(o), 240(o), 240(o)
18 Echo 013 KY-LEX, Lexington Equipment building/floor space dimensions (as described in Exhibit "3" attached hereto and made part hereof): To be mounted in Room A in a 9' x 10' lease area within CROWN's equipment building. Frequencies/Max Power Output Tx: 1950-1965 Rx: 1950-1965 3. The first (1st) annual fee payment due and payable by TRITEL to CROWN is [CONFIDENTIAL TREATMENT REQUESTED] per year, payable in equal monthly installments of [CONFIDENTIAL TREATMENT REQUESTED], in accordance with the Agreement. Any future fee adjustments shall be calculated in accordance with the Agreement. 4. The parties acknowledge that CROWN's rights in the property derive from a certain agreement dated August 15, 1997 between CROWN herein and Robert A. Crown d/b/a Crown Communications, hereinafter referred to as the "Prime Lease" and attached hereto as Exhibit "4" to the SLA. IN WITNESS WHEREOF, the parties hereto have set their hands and affixed their respective seals the day and year first above written. TRITEL COMMUNICATIONS, INC. By: _____________________________________ Jerry M. Sullivan, Jr. Executive Vice President and Chief Operating Officer CROWN COMMUNICATION INC. D/B/A/ CROWN COMMUNICATIONS By: _____________________________________ John P. Kelly, Executive Vice President and Chief Operating Officer Echo 013 KY-LEX, Lexington EXHIBIT "1" TO THE SLA SITE DESCRIPTION Street Address: 2599 Palumbo Drive Lexington, KY 40509 Fayette County Latitude: 38(o) 0' 54" Longitude: 84(o) 26' 18" Echo 013 KY-LEX, Lexington EXHIBIT "2" TO THE SLA LOCATION OF ANTENNAS SEE ATTACHED ENGINEERING SHEET CROWN COMMUNICATIONS, INC ENGINEERING SHEET CUSTOMER: Tritel Communications JOB NUMBER 3199 SITE OF INTEREST: ECHO-013 KY-LEX LEXINGTON REQUESTED INSTALLATION DATE: ________________ Crown Project Manager Marshall Boyd Phone Number 502-240-0044 Ext. 15 Network Manager John Eigenbrode Phone Number 724-416-2255 ----------------------- Latitude: 38(0) 00' 55.00" N Rev. Date ----------------------- Longitude: 84(0) 26' 17.00" W 12/17/98 ----------------------- ANTENNA INFORMATION: *See Key Below
- ------------------------------------------------------------------------------------------------------------------------------------ ANTENNA USE ANT. ANTENNA LEVEL UPRIGHT AZIMUTH DOWN TOWER FEEDLINE FEEDLINE COLOR ID CODE TYPE MODEL (FEET) /INVERT (0)T/M TILT MOUNT TYPE LENGTH CODE * * CTR LINE (0) PREAmp - ------------------------------------------------------------------------------------------------------------------------------------ 1 A1 T P 7200.01 265' Upright 0(0) - - 1 5/8" 315' 2 - ------------------------------------------------------------------------------------------------------------------------------------ 2 A4 R P 7251.01 265' Upright 0(0) - Yes 2 x 1 5/8" 315' 2222 - ------------------------------------------------------------------------------------------------------------------------------------ 3 B1 T P 7200.01 265' Upright 120(0) - - 1 5/8" 315' 6 - ------------------------------------------------------------------------------------------------------------------------------------ 4 B4 R P 7251.01 265' Upright 120(0) - Yes 2 x 1 5/8" 315' 6666 - ------------------------------------------------------------------------------------------------------------------------------------ 5 C1 T P 7200.01 265' Upright 240(0) - - 1 5/8" 315' 9 - ------------------------------------------------------------------------------------------------------------------------------------ 6 C4 R P 7251.01 265' Upright 240(0) - Yes 2 x 1 5/8" 315' 9999 - ------------------------------------------------------------------------------------------------------------------------------------ 7 - ------------------------------------------------------------------------------------------------------------------------------------ 8 - ------------------------------------------------------------------------------------------------------------------------------------ 9 - ------------------------------------------------------------------------------------------------------------------------------------ 10 - ------------------------------------------------------------------------------------------------------------------------------------ 11 - ------------------------------------------------------------------------------------------------------------------------------------ 12 - ------------------------------------------------------------------------------------------------------------------------------------
T-TRANSMIT O-OMNI M-MICROWAVE DISH G-GPS R-RECEIVE P-PANEL Y-YAGI D-DUPLEX D-DIPOLE S-SAT. DISH
ANTENNA SPECIFICATIONS: - ------------------------------------------------------------------------------------------------------------------------------------ ANT. MODEL MANUFACTURER CONNECTOR TYPE DIMENSIONS WEIGHT WIND LOADING MOUNT (H X W X D) WEIGHT - ------------------------------------------------------------------------------------------------------------------------------------ 7251.01 Allgon DIN Female 75"x5x3.2" 17.6 lbs 2.6 ft2 -- - ------------------------------------------------------------------------------------------------------------------------------------ 7200.01 Allgon DIN Female 74.8"x5.5"x2" 13.2 lbs 2.85 ft2 -- - ------------------------------------------------------------------------------------------------------------------------------------
FEEDLINE MANUFACTURER: COMSCOPE CR5O-1873PE 1 5/8" COAX LIGHTNING SUPPRESSOR:
- ------------------------------------------------------------------------------------------------------------------------------------ MANUFACTURER MODEL - ------------------------------------------------------------------------------------------------------------------------------------ Polyphaser - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT "2" CROWN COMMUNICATIONS, INC ENGINEERING SHEET Base Station Equipment: Manufacturer: Ericsson Model Number: Power Output (Watts): Connector Type(s): N Female Floor Space Assign: 9' x 10' leased area per floor plan Frequencies (Mhz): Transmit Receive ---------------------------------------------- 1950-1965 1950-1965 ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- TRANSMITTER INTERMOD PROTECTION: Bandpass Filter Mfg.: Bandpass Filter Model #: Bandpass Filter Range: Duplexer Mfg.: Duplexer Model #: Duplexer TXRX Isolation: LAND/BUILDING/POWER REQUIREMENTS: Building/Shelter Size: Equipment to be mounted in Room A as per floor plan in 9'x 10' lease area Building/Shelter Type: Required AC Power: 100 amp service House or Metered Power: Metered Generator / Non Generator: Non-Generator NETWORK ENGINEERING APPROVAL: JJE DATE: 12/18/98 COMMENTS / SPECIAL INSTRUCTIONS Echo 013 KY-LEX, Lexington EXHIBIT "3" TO THE SLA DESCRIPTION OF EQUIPMENT BUILDING/FLOOR SPACE SEE ATTACHED SITE PLAN Echo 013 KY-LEX, Lexington GRAPHIC OMITTED Echo 013 KY-LEX, Lexington EXHIBIT "4" TO THE SLA PRIME LEASE AGREEMENT SEE ATTACHED SPECIAL WARRANTY DEED SPECIAL WARRANTY DEED THIS DEED MADE the ____ day of ________, 1997 by and between ROBERT A. CROWN D/B/A CROWN COMMUNICATIONS, [a married man], with an address of the Township of Collier, County of Allegheny and Commonwealth of Pennsylvania (hereinafter called "Grantor") AND CROWN COMMUNICATION INC., a Delaware corporation, with an address of 510 Bering Drive, Suite 301, Houston, TX 77057 (hereinafter called "Grantee") WITNESSETH, that for valuable consideration in the total amount of __________ paid in cash, the receipt of which is hereby acknowledged, Grantor does hereby grant, bargain, sell, convey and transfer, unto Grantee, its successors and assigns, the following described real estate situated in Fayette County, Kentucky, and being more particularly described as follows: All of Lot 3C1 Block "A", Unit 3, Lakeview Industrial Subdivision, in Lexington, Fayette County, Kentucky, as shown on the Fourth Amended Final Record Plat of Lot 3, Block "A", Lakeview Industrial Subdivision, of record in the Fayette County Clerk's Office, Plat Cabinet J, Slide 196. Being the same property conveyed to Crown Communications, a sole proprietorship, by deed dated July 30, 1991, of record in Deed Book 1594, Page 578 and being the same property conveyed to Robert A. Crown d/b/a Crown Communications, by Deed of Correction, dated December 23, 1991, of record in Deed Book 1614, page 58, both in the Office of the Clerk of the County Court of Fayette County, Kentucky. Exhibit 2 Exhibit 4 Echo 013 KY-LEX, Lexington TO HAVE AND TO HOLD, Said land, with its appurtenances, unto said Grantee, its successors and assigns forever, with covenant of Special Warranty, and said Grantor further covenants with said Grantee, its successors and assigns, that Grantor is lawfully seized of said land in fee simple, and has full right and power to convey the same, and that said land is free from all encumbrances. PROVIDED, however, there is excepted from the foregoing covenants and warranties, all reservations, building and use restrictions in prior deeds or instruments of record; public utility easements and other easements as shown of record; all matters apparent upon an inspection of the property hereby conveyed and all zoning and land use laws; and all coal, mineral and mining rights and oil and gas leases heretofore granted. WITNESS, Whereof said Grantor has hereunto set his hand on the day and date first above written. ------------------------------- ROBERT A. CROWN D/B/A CROWN COMMUNICATIONS COMMONWEALTH OF PENNSYLVANIA ) ) ss: COUNTY OF ALLEGHENY ) The foregoing instrument was acknowledged before me this ____ day of August, 1997, by Robert A. Crown, d/b/a Crown Communications. My commission expires: ________________________ ------------------------ Notary Public Echo 013 KY-LEX, Lexington CONSIDERATION CERTIFICATE We, Robert A. Crown, d/b/a Crown Communications, Grantor, and _______________________, ______________________ of Crown Communication Inc., do hereby certificate pursuant to KRS Chapter 382, that the abovestated consideration in the amount of ______________, is true, correct and full consideration paid for the property herein conveyed. ------------------------------------ ROBERT A. CROWN D/B/A CROWN COMMUNICATIONS ------------------------------------ CROWN COMMUNICATION INC. By: ________________________________ Its: _______________________________ COMMONWEALTH OF PENNSYLVANIA ) ) SS: COUNTY OF ALLEGHENY ) The foregoing consideration certificate was subscribed and sworn to before me this ____ day of August, 1997, by Robert A. Crown, d/b/a Crown Communications, Grantor, and _____________________________, _________________, of Crown Communication Inc., a Delaware corporation, Grantee, on behalf of the corporation. My commission expires: ________________________ ------------------------ Notary Public (SEAL) This instrument was prepared by: - ----------------------------- Donald A. Kortlandt Kirkpatrick & Lockhart LLP 1500 Oliver Building Pittsburgh, Pennsylvania 15222-2312 (412) 355-6546 EX-10.13 16 MASTER LICENSE AGREEMENT MASTER LICENSE AGREEMENT Between Signal One, LLC And Tritel Communications, Inc. Dated: , 199__ Table of Contents Page ---- 1. Master License..................................................1 2. Premises........................................................1 3. Use.............................................................1 4. Provision of Information........................................2 5. Term............................................................2 6. License Fees....................................................2 7. Facilities; Utilities; Access...................................3 8. Interference....................................................4 9. Tests and Contingencies.........................................4 10. Taxes...........................................................5 11. Waive of Licensor's Lien........................................5 12. Termination.....................................................6 13. Event of Default; Remedies......................................6 14. Destruction or Condemnation.....................................7 15. Insurance.......................................................7 16. Waiver of Subrogation...........................................7 17. Assignment and Subletting.......................................7 18. Warranty of Title and Quiet Enjoyment...........................8 19. Repairs.........................................................8 20. Hazardous Substances............................................8 21. Liability and Indemnity.........................................9 22. Miscellaneous...................................................9 23. Marking and Lighting Requirements..............................10 24. Radio Frequency Exposure Safety Plan...........................11 Exhibit A Site License Exhibit B Non-Disturbance Agreement Exhibit C Memorandum of Lease. Exhibit D RF Radiation MPE Evaluation Questionnaire 2 MASTER LICENSE AGREEMENT ------------------------ (MULTIPLE LOCATIONS) -------------------- This Master License Agreement ("Agreement") is entered into as of the __ day of December, 1998 between Signal One, LLC, a Delaware Limited Liability Corporation, ("Licensor") and Tritel Communications, Inc., a Delaware corporation ("Licensee"). R-1. Licensee is licensed by the Federal Communications Commission ("FCC") to construct and operate communications systems throughout the United States. R-2. Licensor owns, leases from a prime landlord under a lease agreement ("Prime Lease"), operates and/or manages real estate, buildings, towers, tanks, and/or other improvements ("Improvements") on real property (each a "Site") throughout the United States and wishes to grant the right to use portions of a number of the Sites to Licensee for the purpose of locating and operating communications facilities and services thereon. R-3. Licensee desires to obtain the right to use from Licensor portions of such Sites for such purpose. NOW, THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. MASTER LICENSE. This Agreement sets forth the basic terms and conditions upon which the right to use each Site or portion thereof is licensed by Licensor to Licensee. Upon the parties' agreement as to the particular terms of any such license, the parties shall execute and attach hereto a completed site license ("Site License") in substantially the form attached hereto as EXHIBIT A, which is incorporated herein by this reference. The terms and conditions of any Site License shall govern and control in the event of a discrepancy or inconsistency with the terms and conditions of this Agreement. 2. PREMISES. Licensor either owns, leases or licenses the Sites and Improvements. Upon request of Licensee, Licensor shall obtain the written consent of the prime landlord, if consent is required under the Prime Lease, to the Site License within thirty (30) days of the Site License. Upon execution of a Site License and subject to the terms and conditions of this Agreement and the Site License for the particular Site, Licensor hereby grants to Licensee, the right to use space on the Site as more particularly described in each Site License and space on the related Improvements (collectively, the "Premises") together with easements for access and utilities and grants Licensee the right to install and maintain transmission and utility wires, poles, cables, conduits and pipes on the Site including over, under or along a right-of-way extending from the nearest public right-of-way to the Premises. 3. USE. The Premises may be used by Licensee for any activity in connection with the provision of communications services for which they are licensed by the FCC to provide, including the right to install, maintain, operate, service, modify and replace Licensee Facilities, without notice or Licensor's prior approval except as may be provided in the Site License; provided however, if any modification would alter the RF signature or the load factor on the tower, such shall require the prior approval of Licensor, which approval shall not be unreasonably withheld, delayed or conditioned. Following the completion of any installation and any modification, Licensee shall provide to Licensor, at Licensee's expense, updated, as-built drawings, initialed by Licensee, documenting all installed Licensee Facilities on the Site, including the configuration thereof and any other information reasonably requested by Licensor. The as-built drawings shall include an as-built survey locating the Site to a monument or the tower (the "As-Built Survey"). Licensor agrees to cooperate with Licensee, at Licensee's expense, in making application for and obtaining all licenses, permits and any and all other necessary approvals that may be required for Licensee's intended use of the Premises. Licensee shall at all times take affirmative action to maintain all necessary permits, licenses and government approvals. 4. PROVISION OF INFORMATION. Licensor shall provide Licensee with such information regarding each Site which it operates throughout the United States as may be necessary for Licensee to evaluate the usefulness of such Site for its purposes. Licensor agrees to use reasonable efforts to cause each of its subsidiaries and managers at each such Site to cooperate fully with Licensee and its agents for the purpose of making appropriate engineering and boundary surveys, inspections, soil test borings, other reasonably necessary tests and constructing the Licensee Facilities (as defined in Paragraph 7(a) below), including providing Licensee and such agents with access to such Sites and the opportunity to conduct limited testing at any such Site, subject to reasonable limitations imposed by Licensor and/or any of such managers. 5. TERM. The term of this Agreement shall be five (5) years commencing as of the date contained in the Site License ("Commencement Date") and shall remain in effect until expiration or termination of the last Site License entered into pursuant to this Agreement. The term of each Site License shall be as identified in the Site License terminating on the fifth (5th) anniversary of the Commencement Date as identified in the Site License (the "Term") unless otherwise terminated as provided herein. Licensee shall have the right to extend the Term for four (4) successive five (5) year periods (the "Renewal Terms") on the same terms and conditions as set forth herein. Each Site License shall automatically be extended for each successive Renewal Term unless Licensee notifies Licensor of its intention not to renew at least sixty (60) days prior to commencement of the succeeding Renewal Term. 6. LICENSE FEES. Within fifteen (15) days of the Commencement Date and on the first day of each month thereafter, Licensee shall pay to Licensor license fees in accordance with each Site License ("License Fees"). License Fees for any fractional month at the beginning or at the end of the Term or Renewal Term shall be prorated. Any installment of License Fees shall be considered late if not received by Licensor within fifteen (15) days of the due date and shall be subject to a late payment charge in the amount of [CONFIDENTIAL TREATMENT REQUESTED]of the amount of such installment. Interest shall accrue after the date any installment of License Fees is considered late at the rate of [CONFIDENTIAL TREATMENT REQUESTED] per month or the maximum effective variable contract rate of interest which Licensor may from time to time lawfully charge, whichever is less. License Fees shall escalate by [CONFIDENTIAL TREATMENT REQUESTED]or CPI (not to exceed [CONFIDENTIAL TREATMENT REQUESTED]per year), whichever is greater, on the yearly anniversary of the Site License. 2 7. FACILITIES; UTILITIES; ACCESS. (a) Upon execution of a Site License, Licensee shall have the right to erect, maintain, repair, replace, modify and operate on the applicable Premises radio communications facilities, including without limitation air conditioned equipment shelters and rooms, utility lines, transmission lines, electronic equipment, radio transmitting and receiving antennas and supporting equipment and structures thereto ("Licensee Facilities"). Upon execution of a Site License, Licensee may install on any Site the antennas/dishes, if any, described on the field drawings attached as EXHIBIT 1 to the applicable Site License and the equipment shelter/room/cabinets, if any, described on the field drawings attached as EXHIBIT 2 to such Site License and shall be entitled to replace any thereof from time to time. In connection therewith, Licensee has the right to do all work necessary to prepare, maintain and alter the Premises for Licensee's business operations and to install transmission lines connecting the antennas to the transmitters and receivers. If deemed necessary or desirable by Licensee, Licensee may submit architectural and/or engineering plans and specifications for each Site to Licensor, which shall be deemed approved if no response is received from Licensor within fifteen (15) days, and which shall be incorporated in each Site License as EXHIBIT 3 upon approval. All of Licensee's construction and installation work shall be performed at Licensee's sole cost and expense and in a good and workmanlike manner. Title to the Licensee Facilities shall be held by Licensee. All of Licensee's Facilities shall remain Licensee's personal property and are not fixtures. Licensee has the right to remove all Licensee Facilities at its sole expense on or before the expiration or earlier termination of each Site License; provided, Licensee repairs any damage to the Premises caused by such removal. (b) Licensee shall have the right to draw electricity and other utilities from the existing utilities on the Site or obtain separate utility service from any utility company that will provide service to the Site (Including a standby power generator for Licensee's exclusive use). Payment of electricity shall be made in accordance with each Site License. Licensor agrees to sign such documents or easements as may be required by said utility companies to provide such service to the Premises, including (if Licensor owns the site) the grant to Licensee or to the servicing utility company at no cost to the Licensee, of an easement in, over, across or through the Site as required by such servicing utility company to provide utility services as provided herein. Any easement necessary for such power or other utilities will be at a location acceptable to Licensor and the servicing utility company. (c) Licensee, Licensee's employees, agents, subcontractors, lenders and invitees shall have access to the Premises without notice to Licensor twenty-four (24) hours a day, seven (7) days a week, at no charge, subject to reasonable security, control and safety procedures adopted from time to time by Licensor to install, maintain, repair, modify and replace Licensee Facilities, without the payment of additional rent. Licensor grants to Licensee, and its agents, employees, contracts, guests and invitees, a non-exclusive right for pedestrian and vehicular ingress and egress described in the Site License. (d) Unless otherwise specified in the Site License, Licensor shall maintain the Premises and tower and surrounding area in a safe condition and shall maintain all access roadways from the nearest public roadway to the Premises in a manner sufficient to allow pedestrian and vehicular access at all times under normal weather conditions. Licensor shall be responsible for 3 maintaining and repairing such roadway, at its sole expense, except for any damage caused by Licensee's use of such roadways, normal wear and tear excepted. (e) Licensee, at its expense, may use appropriate means of restricting access to the Licensee Facilities, provided that Licensor shall have access to the Site and the Improvements (but not necessarily the Licensee Facilities themselves) at all times. (f) Licensor shall take no action which would adversely affect Licensee's use of the Site and not violate any term of the Prime Lease, if any, which would give the prime landlord the right, with passage of time and/or giving of notice to terminate the Prime Lease and comply with all rules and regulations of the FCC and FAA and all federal, state and local laws governing the Premises and the Site. 8. INTERFERENCE. (a) Based upon information which shall be supplied by Licensor prior to the execution of any Site License and included in such Site License as EXHIBIT 5, Licensee will evaluate the possibility of interference to the Licensee Facilities at the Site from Licensor's current use of the Site and from other existing uses of the Site. Licensee shall operate the Licensee Facilities in a manner that will not cause interference to Licensor and other licensees of the Site, provided that their installations predate that of the Licensee Facilities. All operations by Licensee shall be in compliance with all FCC requirements. (b) Subsequent to the installation of the Licensee Facilities, Licensor shall not permit itself or its licensees to install new equipment on the Premises or property contiguous thereto owned or controlled by Licensor, if such equipment is likely to cause interference with Licensee's operations. Such interference shall be deemed a material breach by Licensor. In the event interference occurs, Licensor agrees to take all action necessary to eliminate such interference, within thirty (30) days; provided, however, that if such interference cannot reasonably be eliminated within such 30-day period, then Licensor shall have such additional time as is necessary for the Licensor to eliminate such interference, as long as Licensor promptly institutes the action necessary to eliminate such interference and diligently pursues such action to completion. In the event Licensor fails to comply with this paragraph, Licensee may terminate the affected Site License and/or pursue any other remedies available under this Agreement and the Site License, at law, and/or at equity, including injunctive relief. 9. TESTS AND CONTINGENCIES. (a) Licensor acknowledges that Licensee's ability to use any Premises is contingent upon their suitability for Licensee's intended use from both an economic and a technical engineering basis and Licensee's ability to obtain any and all governmental licenses, permits, approvals, or other relief required or deemed necessary or appropriate by Licensee for such use (the "Governmental Approvals") and any other consents required for Licensee's use of such Premises by the contingency date set forth in the Site License; provided that Licensee shall have the right, without obligation, to appeal any denial of any such Governmental Approval and the contingency date for obtaining Governmental Approvals shall be extended until such time as a final non-appealable decision is rendered. 4 (b) Licensee may within ninety (90) days from the date of any Site License, order a title search and/or survey of the Site or the Premises which is a part thereof to determine if there are any conditions, liens, easements, restrictions, encroachments, overlaps or other rights or grants which interfere with Licensee's intended use and enjoyment of the Premises. If a survey is performed, in the event of any inconsistency between the Site License and the survey, Licensor shall make such amendments to the Site License and adjustments in the location of the Premises as shall be reasonably necessary for Licensee's use and satisfactory to Licensor and Licensee. If the title search or the survey discloses any matters which Licensee deems unsuitable or which interfere with Licensee's use and enjoyment of the Premises, Licensor shall cure such defects within sixty (60) days or elect to allow Licensee to terminate the Site License. The cost and expense for any title or survey work shall be borne by Licensee. Licensee may obtain title insurance on its interest in the Premises. Licensor shall cooperate by executing documentation required by the title insurance company and reasonably acceptable to Licensor. (c) Licensee is permitted, at its option, to obtain within ninety (90) days after the date of any Site License, at Licensee's expense, satisfactory soil boring, percolation or other tests or reports of the Premises as are deemed appropriate by Licensee to determine the physical characteristics and conditions thereof. Any such tests or reports shall indicate, to Licensee's reasonable satisfaction, that the Premises are suitable for Licensee's use. (d) Upon written request given by Licensee to Licensor, Licensor shall use diligent efforts to obtain within ninety (90) days from the date of any Site License and, at its sole expense, a non-disturbance agreement from each mortgagee of any interest in the Premises and the prime landlord, if any, of the Premises, other than for a mortgagee of Licensee's leasehold interest in the Premises, which non-disturbance agreement shall be in substantially the form attached hereto as EXHIBIT B or other form acceptable to Licensee. (e) Licensee may perform radio frequency propagation tests, confirm availability of utilities and easements for ingress and egress, tower capacity and the environmental conditions of the Premises. (f) If any of the contingencies of this Paragraph 9 are not satisfied within any applicable time period or waived by Licensee in writing, Licensee shall have the right, without obligation, to terminate the related Site License thereafter and render it null and void from and after the date of termination. 10. TAXES. If personal property taxes are assessed against the Premises, Licensee shall pay any portion of such taxes directly attributable to the Licensee Facilities located on a particular Site. Licensor shall pay all real property taxes, assessments and deferred taxes on the Site. 11. WAIVE OF LICENSOR'S LIEN. (a) Licensor waives any lien rights it may have against the Licensee Facilities and Licensee has the right to remove the same at any time without Licensor's consent. (b) Licensor acknowledges that Licensee may have entered into a financing arrangement including promissory notes and financial and security agreements for the financing of the Licensee Facilities (the "Collateral") with a third party financing entity (and may in the future 5 enter into additional financing arrangements with other financing entities). In connection therewith, Licensor (i) consents to the installation of the Collateral; (ii) disclaims any interest in the Collateral, as fixtures or otherwise; and (iii) agrees that the Collateral shall be exempt from execution, foreclosure, sale, levy, attachment, or distress for any License Fees due or to become due and that such Collateral may be removed at any time without recourse to legal proceedings. 12. TERMINATION. A Site License may be terminated as follows: (i) by either party upon a default of any covenant or term thereof by the other party, which default is not cured within sixty (60) days of receipt of written notice of default, provided that the grace period for any monetary default is ten (10) days from receipt of notice of such default; or (ii) upon giving Licensor thirty (30) days prior written notice if Licensee is unable to obtain or maintain any license, permit or other approval necessary for the construction and operation of Licensee Facilities without further liability under such Site License after the effective date of termination; or (iii) upon giving Licensor thirty (30) days prior written notice if Licensee is unable to occupy and utilize the Premises due to an action of the FCC which adversely and economically affects Licensee's business at this Site, including without limitation, a take back of channels or change in frequencies, without further liability under such Site License after the effective date of termination; or (iv) on or prior to the first anniversary of the Commencement Date, upon giving Licensor one hundred eighty (180) days prior written notice if Licensee determines that the Premises are not appropriate for its operations for economic or technological reasons, including, without limitation, signal interference, without further liability under such Site License after the effective date of termination. Upon any default by Licensor, in addition to the foregoing remedies, Licensee may, at its option, elect to cure Licensor's default, in which event Licensee shall have the right to offset any and all reasonable costs incurred in curing Licensor's default against any License Fees or other amounts due Licensor. 13. EVENT OF DEFAULT; REMEDIES. (a) In the event of a monetary default by the Licensee, Licensor shall give Licensee written notice of said default, and Licensee shall have ten (10) days from the date of receipt of said notice within which to cure the default. In the event of any other default by the Licensee, Licensor shall give Licensee written notice of said default, and Licensee shall have sixty (60) days from the date of receipt of said notice within which to cure the default. If the Licensee fails to cure the default, Licensor shall have the right to enter the Site and to disable and remove any and all of the Licensee's Facilities from the Site. Licensor shall then have the right to store the Licensee's Facilities, and the Licensee shall indemnify and hold the Licensor harmless from the costs of removal and storage. (b) In addition to the remedies contained in paragraph (a), Licensor shall have available to it all rights and remedies provided by law, in equity or by statute. No right or remedy is intended to be exclusive of any other right or remedy, and the Licensor's election of a specific remedy shall not preclude it from using any other remedy available to it by statute or equity. (c) In the event that the Licensor uses collection action to recover any money owed to it by Licensee, Licensee agrees to pay the costs of collection, including Licensor's reasonable attorney's fees. 6 14. DESTRUCTION OR CONDEMNATION. If the Premises or Licensee Facilities are damaged, destroyed, condemned or transferred in lieu of condemnation, Licensee may elect to terminate the affected Site License as of the date of the damage, destruction, condemnation or transfer in lieu of condemnation by giving notice to Licensor no more than forty-five (45) days following the date of such damage, destruction, condemnation or transfer in lieu of condemnation. If Licensee chooses not to terminate the Site License, License Fees shall be reduced or abated on a per diem basis in proportion to the actual reduction or abatement of use of the Premises. Licensor and Licensee shall each be entitled to pursue their own separate awards in the event of a taking of a Site. Notwithstanding the foregoing, in the event the Premises are damaged or destroyed, Licensee shall not terminate the Site License covering such Premises if: (a) within forty-five (45) days after the date of such damage or destruction, Licensor elects to repair, restore or rehabilitate the Premises; (b) so notifies Licensee in writing; (c) commences and diligently pursues such repair; (d) such repair can be reasonably completed within a period of time not to exceed thirty (30) days, but if it cannot be reasonably completed within that period of time, in no event longer than ninety (90) days; and (e) Licensor secures, at Licensor's expense, a suitable temporary facility for Licensee. 15. INSURANCE. Licensee, at Licensee's sole cost and expense, shall procure and maintain on the Premises and on the Licensee Facilities (to include the equipment, shelter, room and cabinets), bodily injury and property damage insurance with a combined single limit of at least One Million and 00/100 Dollars ($1,000,000.00) per occurrence. Such insurance shall insure, on an occurrence basis, against liability of Licensee, its employees and agents arising out of or in connection with Licensee's use of the Premises, all as provided for herein. Licensor, at Licensor's sole cost and expense, shall procure and maintain on the Site, bodily injury and property damage insurance with a combined single limit of at least One Million Dollars ($1,000,000.00) per occurrence. Such insurance shall insure, on an occurrence basis, against liability of Licensor, its employees and agents arising out of or in connection with Licensor's use, occupancy and maintenance of the Site. Each party shall be named as an additional insured on the other's policy. Each party shall provide to the other a certificate of insurance evidencing the coverage required by this paragraph within thirty (30) days of the Commencement Date. 16. WAIVER OF SUBROGATION. Licensor and Licensee release each other and their respective principals, officers, directors, employees, representatives and agents, from any claims for damage to any person or to the Premises or to the Licensee Facilities thereon caused by, or that result from, risks insured against under any insurance policies carried by the parties and in force at the time of any such damage. Licensor and Licensee shall cause each insurance policy obtained by them to provide that the insurance company waives all right of recovery by way of subrogation against the other in connection with any damage covered by any policy. Neither Licensor nor Licensee shall be liable to the other for any damage caused by fire or any of the risks insured against under any insurance policy required by Paragraph 15. 17. ASSIGNMENT AND SUBLETTING. Licensee may not assign, or otherwise transfer all or any part of its interest in this Agreement or any Site License or in the Premises without the prior written consent of Licensor; provided, however, that Licensee may assign its interest to its parent company, any subsidiary or affiliate of it or its parent company or to any successor-in-interest or entity acquiring fifty-one percent (51%) or more of its stock or assets, subject to any financing entity's interest, if any, in this Agreement as set forth in Paragraph 11 above. Licensor may 7 assign this Agreement or any Site License upon written notice to Licensee, subject to the assignee assuming all of Licensor's obligations herein, including but not limited to, those set forth in Paragraph 11 above. Notwithstanding anything to the contrary contained in this Agreement, Licensee may assign, mortgage, pledge, hypothecate or otherwise transfer without consent its interest in this Agreement or Site License to any financing entity, or agent on behalf of any financing entity to whom Licensee (i) has obligations for borrowed money or in respect of guaranties thereof, (ii) has obligations evidenced by bonds, debentures, notes or similar instruments, or (iii) has obligations under or with respect to letters of credit, bankers acceptances and similar facilities or in respect of guaranties thereof. Upon notification to Licensor by Licensee of any such assignment, Licensee shall be relieved of all future performance, liabilities and obligations under such Site License. Licensee may not otherwise assign or sublet any Site License without Licensor's consent, which shall not be unreasonably withheld or delayed. 18. WARRANTY OF TITLE AND QUIET ENJOYMENT. Licensor warrants that: (i) Licensor owns or has good leasehold interests in the Sites and has unrestricted rights, based upon the public deed records, of access, ingress and egress thereto; (ii) Licensor has full right to make and perform this Agreement and each Site License entered into pursuant to the terms hereof; and (iii) Licensor covenants and agrees with Licensee that upon Licensee paying the License Fees and observing and performing all the terms, covenants and conditions on Licensee's part to be observed and performed, Licensee may peacefully and quietly enjoy the Premises. Licensor agrees to indemnify and hold harmless Licensee from any and all claims against Licensee's interest in each Site License made by persons lawfully claiming from, through or under Licensor, but not otherwise. 19. REPAIRS. Licensee shall not be required to make any repairs to the Premises or Site unless such repairs shall be necessitated by reason of the default or neglect of Licensee. Upon expiration or termination of each Site License, Licensee shall restore the Premises to the condition in which it existed upon execution hereof, reasonable wear and tear and loss by casualty or other causes beyond Licensee's control excepted. 20. HAZARDOUS SUBSTANCES. Licensee agrees that it will not use, generate, store or dispose of any Hazardous Material on, under, about or within any Site in violation of any law or regulation. Licensor represents, warrants and agrees (1) that neither Licensor nor, to Licensor's knowledge, any third party has used, generated, stored or disposed of, or permitted the use, generation, storage or disposal of, any Hazardous Material on, under, about or within any Site except as disclosed on any Site License, and (2) that Licensor will not, and will not permit any third party to use, generate, store or dispose of any Hazardous Material on, under, about or within any Site in violation of any law or regulation. Licensor and Licensee each agree to defend, indemnify and hold harmless the other and the other's partners, affiliates, agents and employees against any and all losses, liabilities, claims and/or costs (including reasonable attorneys' fees and cost) arising from any breach of any representation, warranty or agreement contained in this paragraph. In addition, Licensor shall defend, indemnify and hold harmless Licensee from all other losses, liabilities, claims and/or costs arising from or related to the environmental condition of the Site, including costs of remediation, which are not the result of any act of Licensee. As used in this paragraph, "Hazardous Material" shall mean petroleum or any petroleum product, asbestos, any substance known by the state in which any Site is located to cause cancer and/or reproductive toxicity, and/or any substance, chemical or waste that is identified as hazardous, toxic or 8 dangerous in any applicable federal, state or local law or regulation. This paragraph shall survive the termination of this Agreement. 21. LIABILITY AND INDEMNITY. Licensee shall indemnify and hold Licensor harmless from all claims (including attorney's fees, costs and expenses of defending against such claims) arising or alleged to arise from the acts or omissions of Licensee or Licensee's agents, employees, licensees, invitees or contractors occurring in or about the Site. Licensor shall indemnify and hold Licensee harmless from all claims (including attorneys' fees, costs and expenses of defending against such claims) arising or alleged to arise from the acts or omissions of Licensor or Licensor's agents, employees, licensees, invitees, contractors or other tenants occurring in or about the Premises. In no event shall the liability of Licensee or Licensor under this Agreement include damages for lost profits, consequential or punitive damages. The duties and liabilities described in this Paragraph 21 survive termination of this Agreement. 22. MISCELLANEOUS. (a) This Agreement together with each Site License entered into pursuant to the terms hereof constitutes the entire agreement and understanding between the parties, and supersedes all offers, negotiations and other agreements concerning the subject matter contained herein. Any amendments to this Agreement and each Site License must be in writing and executed by both parties. (b) If any provision of this Agreement or any Site License is invalid or unenforceable with respect to any party, the remainder of this of this Agreement and/or Site License or the application of such provision to persons other than those as to whom it is held invalid or unenforceable, shall not be affected and each provision of this Agreement and/or Site License shall be valid and enforceable to the fullest extent permitted by law. (c) This Agreement and each Site License shall be binding on and inure to the benefit of the successors and permitted assignees of the respective parties. (d) Any notice or demand required to be given herein shall be made by certified or registered mail, return receipt requested, or reliable overnight courier to the address of the respective parties set forth below: Licensor: SIGNAL ONE, LLC 5751 Uptain Road Uptain Building, Suite 407 Chattanooga, TN 37411-5647 423-954-1111 Licensee: TRITEL COMMUNICATIONS, INC. Kenneth F. Harris, Director of Site Acquisition 1410 Livingston Lane Jackson, MS 39213 (601) 362-2200 9 Any such notice or demand shall be deemed to have been given if mailed, on the expiration of forty-eight (48) hours after the date mailed, or if sent by overnight courier, on the expiration of twenty-four (24) hours after the date sent by overnight courier. Any party may change such party's address for purposes of this Agreement by giving notice of such change to the other parties pursuant to this paragraph. (e) Each Site License and this Agreement as applied to that Site License shall be construed in accordance with the laws of the State of Tennessee. (f) Licensor acknowledges that a Memorandum of Lease in substantially the form annexed hereto as EXHIBIT C may be recorded by Licensee, at Licensee's sole expense, in the Official Records of the city or county where the Premises is located. (g) In any case where the approval or consent of one party hereto is required, requested or otherwise to be given under this Agreement or any Site License, such party shall not unreasonably delay or withhold its approval or consent. (h) The prevailing party in any litigation arising hereunder or under any Site License shall be entitled to its reasonable attorney's fees, expert witness fees and court costs, including appeals, if any. (i) If either party is represented by a real estate broker in this transaction, that party shall be fully responsible for any fee due such broker, and shall hold the other party harmless from any claims for commission by such broker. (j) All Riders and Exhibits annexed hereto form material parts of this Agreement and each Site License. (k) This Agreement and any Site License may be executed in duplicate counterparts, each of which shall be deemed an original. 23. MARKING AND LIGHTING REQUIREMENTS. (a) Licensor shall be responsible for compliance with all marking and lighting requirements of the Federal Aviation Administration ("FAA") and the FCC provided that if the requirement for compliance results from Licensee's Facilities, Licensee shall pay for such reasonable costs and expenses (including for any lighting automated alarm system). Should Licensee be cited because the Site is not in compliance and, should Licensor fail to cure the conditions of noncompliance, Licensee may either terminate the affected Site License or proceed to cure the conditions of noncompliance at Licensor's expense, which amounts may be deducted from the License Fees or otherwise obtained from Licensor. (b) If lighting requirements apply and a lighting automatic alarm system has been installed by Licensor, Licensor shall allow Licensee to bridge-in to the system to permit a parallel alarm or to install a second alarm (to the extent permitted under the Prime Lease) if a bridge would interfere with Licensor's alarm. Licensee shall be responsible for the cost and expense of maintaining the bridge or parallel alarm. Notwithstanding anything in this Paragraph 10 23(b), the responsibility for compliance with FAA and FCC requirements shall remain with Licensor as provided in Paragraph 23(a) above. 24. RADIO FREQUENCY EXPOSURE SAFETY PLAN. Licensee acknowledges and understands that Licensor has installed or may install certain signage and/or physical barriers pertaining to radio frequency exposure from Licensor's transmitter and other equipment. Licensee shall instruct all of its personnel and its contractors performing work at the Site to read carefully all such signage, to follow the instructions provided in such signage, and to honor all physical barriers. In no event shall Licensee's personnel or contractors tamper with any such signage or barriers. Licensee shall be responsible for placement of signage or physical barriers at or near Licensee's Facilities at the Site in order to comply with applicable FCC radio frequency exposure guidelines. Licensor agrees that it shall cooperate with Licensee in these efforts and that Licensor shall instruct its personnel and contractors performing work at the Site to read carefully all such signage, to follow the instructions provided in such signage, and to honor all physical barriers. In no event shall Licensor's personnel or contractors tamper with any such signage or barriers. Licensor and Licensee shall cooperate in good faith to minimize any confusion or unnecessary duplication that could result from similar signage being posted respecting other carriers' transmission equipment (if any) at or near the Site. Licensee shall complete the Questionnaire in substantially the form annexed hereto as EXHIBIT D may be recorded by Licensee, at Licensee's sole expense, in the Official Records of the city or county where the Premises is located. IN WITNESS WHEREOF, the parties have executed this Master License Agreement as of the date first above written. LICENSOR: LICENSEE: By:.............................. By:................................... Jerry M. Sullivan, Jr Title:........................... Title: Executive Vice President and Chief Operating Offer Date:............................ Date:................................. Tax ID#.......................... Tax ID#............................... 11 License ID #: TN0504T0791 Tenant ID #:T079 EXHIBIT A SITE LICENSE This Site License to the Master License Agreement dated December 31, 1998 ("Agreement"), between SIGNAL ONE, LLC ("Licensor") and TRITEL COMMUNICATIONS, INC. ("Licensee") is executed this ____ day of March, 1999. This License Supersedes all previous Agreements, both verbal and written between the parties for this Site. 1. Site Name/Number: TN0504 Chattanooga/Standifer Gap Park 2. Name of Licensor: Signal One, LLC 3. Name of Licensee: Tritel Communications, Inc. 4. Site Street Address: 1225 Firedog Drive 5. Equipment: See Exhibit 1 attached 6. Site Latitude and Longitude: 35(degree) 01' 58" 85(degree) 06' 14" 7. Mounting Height: 170 feet (portal at 160 feet) AGL 8. Commencement Date: Upon installation of equipment, but no later than 5/1/99 9. Monthly License Fees: [CONFIDENTIAL TREATMENT REQUESTED] 10. Escalation: The greater of [CONFIDENTIAL TREATMENT REQUESTED] or [CONFIDENTIAL TREATMENT REQUESTED], but not to exceed [CONFIDENTIAL TREATMENT REQUESTED] annually 11. Term: Five (5) Years 12. Electricity: By Separate Meter 13. Site Ownership: LicensorLeased (Copy of Underlying Land Lease Attached as Exhibit 5 14. Special Access Requirements: N/A 15. Existingc Environmental Issues: N/A 16. Licensor Contact Misty Audier Day(423) 9541111 Emergency Access: Pager (888) 9547784 17. Licensee Contact for Emergency: Ken Harris Ph # (601) 3622210 LICENSOR: LICENSEE: SIGNAL ONE, LLC TRITEL COMMUNICATIONS, INC. By:_________________________________ By:________________________________ Printed Name: C. John Enloe Printed Name: Jerry M. Sullivan, Jr. Title: Chief Operating Officer Title: Executive Vice President/COO Date:_______________________________ Date:_______________________________ 2 EXHIBITS The following Exhibits are acknowledged and are hereby incorporated In this Site License Agreement Exhibit 1 Licensee's Equipment to be installed at that site Exhibit 2 RF MPE Questionnaire to be completed by Licensee Exhibit 3 Tritel Standard Entry Agreement Exhibit 4 Copy of Site Development Plan/Survey Exhibit 5 Copy of Underlying Land Lease Licensor Licensee - ------------------ ---------------- Initials Initials 3 EXHIBIT 1 Licensee's Equipment to be installed at the Site (Attached) Licensor Licensee - ------------------ ---------------- Initials Initials 4 EXHIBIT 2 RF MPE Questionnaire to be completed by Licensee (Attached) Licensor Licensee - ------------------ ---------------- Initials Initials 5 SIGNAL ONE RF RADIATION MPE EVALUATION QUESTIONNAIRE (MAXIMUM PERMISSIBLE EXPOSURE) Name of Licensee:_________________________ Contact:______________________________ License Today's Date:_____________ Expiration Date:___________________________________ Call Sign: ____________ Site Name: ________________________________________ Antenna Location:_____________________________________________________________ (Lat., long., or UTM) Mailing Address: _____________________________________________________________ Phone No: (____) ______________________Fax No: (____) _______________________ email: ______________________________________________________________________ Emission Transmit Frequency (MHz): _____________________ Designator: _______________ Transmitter RF Output Power (W): ____________________________________________ Antenna Gain (DB): _________________________Line Loss:_______________________ Type of Antenna Feed Line:____________________________________________________ (e.g. coax, hardline, openwire, direct end feed, waveguide) Type of Antenna: ______________________________________________________________________________ (e.g. dipole, vertical, beam, parabolic dish) Height of Antenna on Tower:___________________________________________________ Is this a Directional Antenna? Yes [ ] No [ ] If Yes, what is the Beam Width (Degrees)?__________________ Return Completed Questionnaire To: Signal One, LLC 5751 Uptain Road Suite 407 Chattanooga, TN 37411 OR Via Facsimile to: (423) 9541182 ATTN: Kimberly Price 6 EXHIBIT 3 Tritel Standard Entry Agreement (Attached) Licensor Licensee - ------------------ ---------------- Initials Initials 7 Site: Chattanooga/Standifer Gap Park Site ID: TN0504 ENTRY AGREEMENT THIS AGREEMENT ("Agreement") is made and entered into as of the ____ day of March, 1999 by and between Signal One, LLC, "Landowner or Ground Lessor", and Tritel Communications, Inc. "TRITEL", concerning the Site identified above. A. TRITEL has an interest in subleasing the Property for use as a tower or antenna site for the receipt and transmission of wireless communications signals; and B. In order for TRITEL to determine the viability and feasibility of the Property as a tower or antenna site, it is necessary for employees, agents or independent contractors of TRITEL to enter upon and inspect the Property and/or temporarily locate communications equipment on the Property to conduct short term radio propagation tests. C. TRITEL desires to provide for the entry upon, inspection and/or testing activities, and other applications concerning the Property pursuant to the terms contained in this Agreement. NOW, THEREFORE, in consideration of the mutual promises, covenants, undertakings, and other considerations set forth in this Agreement, Landowner or Ground Lessor and TRITEL agree as follows: 1. Consent. Landowner or Ground Lessor consents and agrees that TRITEL, its employees, agents, and independent contractors ("Authorized Parties") may enter upon the Property to conduct and perform the following activities ("Permitted Activities"): radio propagation studies. TRITEL agrees to be responsible for any and all costs related to the Permitted Activities, including installation on and operation and removal of equipment on the Property. 2. Access. Landowner or Ground Lessor agrees that the Authorized Parties may enter upon 24 hours prior notice to Landowner or Ground Lessor. TRITEL shall conduct the Permitted Activities with minimal interference with the business activities being conducted on the Property. 3. Removal of Property. TRITEL agrees that it will, upon the conclusion of the term of this Agreement, remove any equipment installed on the Property as a part of the Permitted Activities, repair any damage to the Property that might have been caused in connection with any of the Permitted Activities, and will return the Property to the condition it was in before TRITEL's entry onto the Property. In the event that any equipment installed on the Property by TRITEL is not timely removed, Landowner or Ground Lessor will have the right to remove such equipment and TRITEL agrees to be responsible for the reasonable costs of such removal. 4. Indemnity. TRITEL agrees to indemnify, save harmless, and defend its directors, officers, employees, and property management agent, if any, from and against any and all claims, actions, damages, liability and expense in connection with personal injury and/or damage to property arising from or out of any occurrence in, upon or at the Property caused by the act or 8 omission of the Authorized Parties in conducting the Permitted Activities. Any defense conducted by TRITEL of any such claims, actions, damages, liability, and expense will be conducted by attorneys chosen by TRITEL, and TRITEL will be liable for the payment of any and all court costs, expenses of litigation, reasonable attorneys' fees and any judgment that may be entered therein. 5. Governing Law. The parties agree that the interpretation and construction of this Agreement shall be governed by the laws of the state in which the Property is located, without regard to such state's conflict of laws provisions. IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective as of the day and year first above written. TRITEL COMMUNICATIONS, INC. SIGNAL ONE, LLC By:________________________________ By: _______________________________ Name: Jerry M. Sullivan, Jr. Name: C. John Enloe ------------------------------ ------------------------------ Title: Executive Vice President/COO Title: Chief Operating Officer ----------------------------- ------------------------------ Date:______________________________ Date:______________________________ 9 EXHIBIT 4 Copy of Site Development Plan/Survey (Attached) Licensor Licensee - ------------------ ---------------- Initials Initials 10 SITE SURVEY HERE 11 EXHIBIT 5 Copy of Underlying Land Lease (Attached) Licensor Licensee - ------------------ ---------------- Initials Initials 12 LAND LEASE AGREEMENT Summit, TN Site No.: TN-060-98 THIS AGREEMENT, made this ___ day of _______________, 1997, between the City of Chattanooga, Department of Public Works ("Landlord"), and SIGNAL ONE CORPORATION, a Tennessee Corporation ("Tenant"): 1. PROPERTY. Landlord is the owner of certain real property located in Hamilton County, State of Tennessee, and Tenant desires to lease a portion of such real property, together with a rightofway thereto as hereinafter described (such portion of real property and such rightofway being hereinafter called the "Premises"). The Premises are more specifically depicted in, and substantially shown on Exhibit "A" attached hereto and made a part hereof. A copy of the survey of the property will be provided upon its completion and attached hereto as Exhibit "B. " 2. PREMISES AND TERM. In consideration of the obligation of Tenant to pay rent as hereinafter provided and in consideration of the other terms, provisions and covenants hereof, Landlord hereby demises and leases to Tenant and Tenant hereby takes from Landlord, the Premises, together with all rights, privileges, easements, and appurtenances belonging or in any way pertaining thereto, TO HAVE AND TO HOLD the same for a primary term of twenty (20) years, commencing upon the receipt of building permits by Signal One Corporation or on February 1, 1998, whichever first occurs. 3. RENEWAL. The term of this Lease Agreement will automatically renew for ONE renewal term of twenty (20) years to begin upon the expiration of the Primary Term unless either party gives a sixty (60) day notice of cancellation. All of the other terms, provisions and covenants of this Lease Agreement shall apply to the Renewal Term. 4. RENT. (a) Tenant shall pay rent to Landlord at the rate of DOLLARS PER MONTH commencing upon the receipt of building permits by Signal One Corporation or on February 1, 1998, whichever first occurs. A monthly rental payment shall be due and payable on or before the tenth day of each succeeding calendar month during the Primary Term and any Renewal Term. The rent shall escalate at the rate of each year on the anniversary date of the Lease. (b) All payments of rent shall be made to Landlord as the same shall become due in lawful money of the United States of America at the address specified in Section 18 of this Lease Agreement, or to such other party or at such other address as may be designated by Landlord by written notice delivered to Tenant at least ten (10) days prior to the next ensuing monthly rental payment date. 5. USE. (a) The premises are being leased for the purposes of erecting, installing, operating, and maintaining radio and communications towers, buildings, and equipment. At all times during the term of this Lease Agreement, Tenant shall have free access to the Premises 13 seven days a week, 24 hours a day, for these purposes and, if the Premises are not conterminous with the entire parcel for which a legal description is provided on Exhibit "A" and "B", shall at all times have an easement over the parcel of land owned by Landlord that contains the Premises in order to have free access to the Premises and for necessary utilities. (b) Tenant shall have the right to sublease or grant licenses to use the radio tower or any structure or equipment on the Premises but no such sublease or license shall relieve Lessee from its obligation under this Lease Agreement. (c) If, at any time during the term of this Lease Agreement, the Federal Aviation Administration, Federal Communications Commission, or other governmental agency changes its regulations and requirements so that Tenant may no longer use the Premises for the purposes originally intended, Tenant shall have the right to terminate this Lease Agreement upon written notice to Landlord and payment of rent through date of removal of the radio and communications tower, building, equipment, and related items. In the event tenant terminates this lease for any reason, then tenant shall have the responsibility to remove all said property at its own expense. 6. UTILITY CHARGES. Tenant shall pay all charges incurred for the use by Tenant of utility services at the Premises including, without limitation, gas, electricity, water, sewer, and telephone. 7 INSURANCE. (a) Tenant shall insure against property damage and bodily injury arising by reason of occurrences on or about the Premises in the amount of not less than One Million ($1,000,000.00) Dollars. (b) The insurance coverage provided for herein may be maintained pursuant to master policies of insurance covering other tower locations of Tenant and its corporate affiliates. All insurance policies required to be maintained by Tenant hereunder shall be with responsible insurance companies authorized to do business in the state where the Premises are located if required by law, shall name the Landlord as an additional insured, as appropriate, and shall provide for cancellation only upon ten (10) days' prior written notice to Landlord. Tenant shall evidence such insurance coverage by delivering to Landlord, if requested, a copy of all such policies or, at Tenant's option, certificates in lieu thereof issued by the insurance companies underwriting such risks. PLEASE NOTE - PAGE 5 MISSING 12. DEFAULT. (a) The following events shall be "Events of Default" under this Lease Agreement: (1) Tenant shall fail to pay any installment of rent hereby reserved as and when the same shall become due and shall not cure such default within ten (10) days after written notice thereof is given by Landlord to Tenant; 14 (2) Tenant shall fail to comply with any term, provision or covenant of this Lease Agreement, other than the payment of rent, and shall not cure such failure within thirty (30) days after written notice thereof is given by Landlord to Tenant. (b) Upon occurrence of any Event of Default, Landlord shall have the option to pursue any one or more of the following remedies without any notice or demand whatsoever: (1) Terminate this Lease Agreement, in which event Tenant shall immediately surrender the Premises; (2) Enter upon and take possession of the Premises and remove Tenant and other persons who may be occupying the Premises, by force if necessary; (3) Enter upon the Premises, without being liable for any claim for damages, and do whatever Tenant is obligated to do under the terms of this Lease Agreement; and Tenant agrees to reimburse Landlord on demand for any expenses which Landlord may incur in thus effecting compliance with Tenant's obligations hereunder. 13. RIGHT OF INSPECTION. Landlord and its agents and representatives shall be entitled to enter upon and inspect the Premises at any time during normal business hours, provided only that such inspection shall not unreasonably interfere with Tenant's business. 14. WARRANTY OF TITLE AND QUIET ENJOYMENT. (a) Landlord represents and warrants that it is the owner in fee simple of the Premises, and that it alone has the full right to lease the Premises for the term set out herein. Landlord further represents and warrants that Tenant, on paying the rent and performing its obligations hereunder, shall peaceably and quietly hold and enjoy the Premises for the term of this Lease Agreement, including the Renewal Term, without any hindrance, molestation or ejection by Landlord, its successors or assigns, or those claiming through them. (b) During the term of this Lease Agreement, Landlord covenants and agrees that it will not grant, create or suffer any claim, lien, encumbrance, easement, restriction, or other charge or exception to title to the Premises without the prior written consent of Tenant; provided, however, that it is expressly agreed and understood that Landlord may subject its interest in the Premises to a first mortgage loan if the lender shall agree for itself, its successors and assigns, by written instrument to be bound by the terms of this Lease Agreement; not to disturb Tenant's use or possession of the Premises in the event of a foreclosure of such lien or encumbrance so long as Tenant is not in default hereunder; and not to join Tenant as a party defendant in any such foreclosure proceeding taken by it. 15. HOLDING OVER BY TENANT. Should Tenant or any assigns, sublessee or licensee of Tenant hold over the Premises or any part thereof after the expiration of the Primary Term or Renewal Term hereof, unless otherwise agreed to in writing, such holdover shall constitute and be construed as a tenancy from monthtomonth only, but otherwise upon the same terms and conditions. 15 16. RIGHT OF FIRST REFUSAL. If during the term of this Lease Agreement, including the Renewal Term, the Landlords shall have received a bona fide offer to purchase the Premises from any third party, the Landlord shall serve a notice upon the Tenant. The notice shall set forth the exact terms of the offer so received, together with a copy of such offer, and shall state the desire of the Landlord to sell the Premises on such terms and conditions. Thereafter, the Tenant shall have the right and option to purchase the Premises at the price and upon the terms and conditions specified in the offer. If the Tenant desires to exercise its option, it shall give notice to that effect to the Landlord within thirty (30) days after receipt of the Landlord's notice. The Tenant's failure to give timely notice shall be deemed a waiver of its right of first refusal. 17. LENDERS' CONTINUATION RIGHTS. (a) Landlord recognizes the leases of all tower lessees and will permit each of such lessees to remain in occupancy of its premises notwithstanding any default hereunder by Lessee, so long as each such respective lessee is not in default under the lease covering its premises. (b) Landlord hereby agrees to subordinate any lien or security interest which it may have which arises by law or pursuant to this Lease Agreement to the lien and security interest of Tenant's mortgagee in the collateral securing all indebtedness at any time owed by Tenant to its mortgagee, and furthermore agrees that upon an event of default under the loan documents between Tenant and its mortgagee or this Lease Agreement, Tenant's mortgagee shall be fully entitled to exercise its rights against the Collateral prior to the exercise by the Landlord of any rights which it may have therein, including, but not limited to, entry upon the Premises and removal of the Collateral free and clear of the Landlords' lien and security interest. 18. NOTICE AND PAYMENTS. Any notice, document or payment required or permitted to be delivered or remitted hereunder or by law shall be deemed to be delivered or remitted when deposited in the United States mail, postage prepaid, addressed to the parties hereto at the respective addresses set out below, or at such other address as they shall have theretofore specified by written notice delivered in accordance herewith: LANDLORD: City of Chattanooga Department of Public Works Suite 210, City Hall Chattanooga, TN 37402 TENANT: Signal One Corporation 5751 Uptain Road, Ste. 407 Chattanooga, TN 37411 19. PROPERTY TAXES. TENANT SHALL BE RESPONSIBLE FOR MAKING ANY NECESSARY RETURNS FOR AND PAYING ANY AND ALL PROPERTY TAXES OF ANY KIND OR NATURE. THE TENANT SHALL NOTIFY THE HAMILTON COUNTY ASSESSOR OF TAXES OF ITS LEASE HOLD INTEREST IN THE PROPERTY SO THAT A TIMELY ASSESSMENT OF ITS INTEREST MAY BE MADE. 20. MISCELLANEOUS. This Lease Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof and can be altered, amended, or modified 16 only by written consent executed by all parties, and shall be governed by the laws of the state of Tennessee. 17 IN WITNESS WHEREOF, the parties have executed this Land Lease Agreement, the day and year first above written. SIGNAL ONE CORPORATION By:__________________________________ G. Larry Wells President STATE OF TENNESSEE COUNTY OF HAMILTON Before me, the undersigned authority, on this day personally appeared G. LARRY WELLS, known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and in consideration therein expressed. Given under my hand and seal of office this ___ day of ___________________ 1998. - ----------------------------- Notary Public My commission expires:_________ By: Jack Marcellis Administrator STATE OF TENNESSEE COUNTY OF HAMILTON Before me, the undersigned authority, on this day personally appeared ___________________, known to me (or proved to me) to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and in consideration therein expressed. Given under my hand and seal of office this _________ day of ___________________1998. - ----------------------------- Notary Public My commission expires:_________ 18 EXHIBIT "A" The property referenced in the Lease Agreement between SIGNAL ONE CORPORATION and the City of Chattanooga Department of Public Works is described in the records of the Register of Deeds for the County of Hamilton in Deed Book 3392 page 30 belonging to The City of Chattanooga. SIGNAL ONE CORPORATION is leasing a 100' X 100' portion of that property, shown as Tax Map 140 , parcel 141 a copy of which is attached, including the thirty (30') foot easement indicated thereon, and any easement necessary utility easements. Upon completion of a survey, a copy of said survey will be provided as Exhibit "B." The 100' x 100' site must be approved by the City of Chattanooga. 19 EX-10.14 17 MANAGEMENT AGREEMENT ================================================================================ MANAGEMENT AGREEMENT between TRITEL MANAGEMENT, LLC and TRITEL, INC. Dated as of January 7, 1999 ================================================================================ MANAGEMENT AGREEMENT -------------------- This Management Agreement (the "Agreement") is entered into as of January 7, 1999 (the "Effective Date") by and between TRITEL MANAGEMENT, LLC, a Mississippi limited liability company ("Manager"), and TRITEL, INC., a Delaware corporation (the "Company"). Capitalized terms used but not defined in this Agreement shall have the meanings given to such terms in the Stockholders Agreement of the Company, dated as of the date hereof (the "Stockholders Agreement"). W I T N E S S E T H: WHEREAS, the operation of the Business, including, without limitation, the determination of policy, the preparation and filing of any and all applications and other filings with the FCC, the hiring, supervision and dismissal of personnel, day-to-day system operations, and the payment of financial obligations and operating expenses, shall be controlled by the Company, and Manager shall assist the Company in connection therewith and any action undertaken by Manager shall be under the Company's continuing oversight, review, control and approval, and the Company shall retain unfettered control of, access to, and use of the Business, including its facilities and equipment and shall be entitled to receive all profits from the operation of the Business; WHEREAS, William M. Mounger, II, E.B. Martin, Jr., Jerry M. Sullivan, Jr. (collectively, the "Senior Executives") are the owners of all of the ownership interests in Manager and are each employed by the Company pursuant to their respective employment agreements with the Company of even date herewith (collectively, the "Employment Agreements"); WHEREAS, the Senior Executives are the owners of all of the issued and outstanding shares of Voting Preference Stock and of 100% of the issued and outstanding shares of Class C Common Stock; WHEREAS, the Senior Executives are willing to cause Manager to provide management services for the Company and its Subsidiaries on the terms and subject to the conditions contained in this Agreement; and WHEREAS, the parties desire to execute this Agreement to specify the terms upon which Manager will perform services to the Company hereunder. NOW, THEREFORE, for and in consideration of the premises, the covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the execution and delivery hereof, the parties agree as follows: Section 1. Engagement. The Company hereby engages Manager to oversee, manage and supervise the Company and the development and operation of the Business, and Manager hereby accepts such engagement, subject to and upon the terms and conditions hereof. Section 2. Management Standards. Manager shall discharge its duties hereunder in compliance with the Stockholders' Agreement, the Network Membership License Agreement, the Resale Agreement and the Roaming Agreement (collectively the "Operating Agreements") and all applicable Law. In performing its obligations hereunder, Manager shall act in a manner that it reasonably believes to be in or not opposed to the best interests of the Company consistent with the standards set forth herein. Nothing in this Agreement shall be construed as constituting Manager an agent of the Company beyond the extent expressly provided in, and as limited by, this Agreement. Section 3. Services to be Provided. (a) Scope of Services. Subject to the Company's oversight, review and ultimate control and approval and the limitations of Section 3(d) below, Manager shall be responsible for the design, construction and operation of the Company and the Business in accordance with the Operating Agreements, which shall be carried out by the Company's employees under the supervision and control of the Senior Executives. To this end Manager shall provide generally, on the terms and subject to the conditions set forth herein and in a manner consistent with the standards set forth herein and in the Operating Agreements, supervisory services with respect to (I) all administrative, accounting, billing, credit, collection, insurance, purchasing, clerical and such other general services as may be necessary to the administration of the Business, (II) operational, engineering, maintenance, construction, repair and such other technical services as may be necessary to the construction and operation of the Business, and (III) marketing, sales, advertising and such other promotional services as may be necessary to the marketing of the Business. The services for which Manager shall be responsible, subject in each case to the Operating Agreements, the Company's oversight, review and ultimate control and approval and to the limitations of Section 3(d) below, shall include but shall not be limited to the following: (i) the marketing of Company Communications Services to be offered and provided by the Company; (ii) the management, tax compliance, accounting and financial reporting for the Company including, but not limited to, the preparation and presentation of reports and reviews of the business, financial results and condition, regulatory status, competitive position and strategic prospects of the Company as requested by the Board of Directors; (iii) the regulatory processing for the Company, including without limitation the preparation and filing of all appropriate regulatory filings, certificates, tariffs and reports that are required by, and participation in any hearings or other proceedings before, local, state and federal governmental regulatory bodies; (iv) the engineering, design, planning, construction and installation, maintenance and repair (both emergency and routine) and operation of, and equipment purchases for, the Company; (v) assisting the Company in the development and preparation of budgets, including, without limitation, preparing and presenting, not later than 90 days before the 2 beginning of each fiscal year, a proposed draft of an annual operating budget for the Company's review, evaluation and approval setting forth in reasonable detail the anticipated capital expenditures and other projected costs and expenses of constructing and operating the Business during the period covered by the budget, as well as projected revenues for that period, and generally describing all contracts and commitments which Manager expects to enter into on behalf of the Company during the period covered thereby; (vi) services relating to sales of the products and services offered by the Company, including without limitation processing orders for service, customer support, billing for services provided by the Company and collection of receivables for the Company; (vii) management information services for the Company; (viii) monitoring and controlling the Business and its PCS and Cellular Systems; (ix) negotiating contracts, issuing purchase orders and otherwise entering into agreements on behalf of the Company for the purchase, lease, license or use of such properties, services and rights as may be necessary or desirable in the judgment of Manager for the operation of the Company; (x) supervising, recruiting and training all necessary personnel to be employed by the Company, and determining salaries, wages and benefits for the Company's employees; (xi) administering the Company's employee benefit programs and the Company's programs for compliance with applicable laws governing the administration and operation of such plans and programs; (xii) administering the Company's risk management programs, including negotiating the terms of property and casualty insurance and preparing a comprehensive disaster recovery program; and (xiii) in furtherance of the foregoing, making or committing to make expenditures (including capital expenditures) on behalf of the Company. (b) Accounts. Subject to the foregoing, the Company shall be responsible for payment of all costs and expenses necessary to fund the ongoing business and operations of the Business and for the provision of all services of Manager hereunder, which shall include, but not be limited to, expenses arising under Article 3, payments to independent contractors, payments to vendors and suppliers of the Business, and interest payments to creditors who have financed the construction or operation of the Business. To the extent provided herein, Manager shall make such payments on the Company's behalf from one or more accounts maintained in the name of the Company at one or more banks acceptable to the Board of Directors, into which all Company revenues shall be deposited (the "Accounts"). All funds of the Company shall be promptly deposited in such bank accounts. All disbursements made by the Company as permitted under this Agreement shall be made by checks drawn on the Accounts, and all funds on deposit in the Accounts shall at all times be the property of the Company. Manager will have the right and 3 authority to make deposits to and disbursements and withdrawals from the Accounts as required in connection with the performance of its services hereunder, provided that all signatories on the Accounts shall be subject to the approval of the Board of Directors. (c) Restrictions on Manager's Authority. Any provision to the contrary in this Agreement notwithstanding, unless such action is within (or on terms more favorable to the Company than) parameters set forth in a budget or business plan approved by the Board of Directors, Manager shall not do, or cause or permit to be done, any of the following for or on behalf of the Company without the prior written consent of the Board of Directors (excluding the Senior Executives that are directors of the Company): (i) settle any claim or litigation by or against the Company if the settlement involves a payment of $100,000 or more, or any regulatory proceedings involving the Company, unless such action is consistent with the Company's regulatory strategy as set forth in a budget approved by the Board of Directors; (ii) lend money or guarantee debts of others (other than wholly-owned Subsidiaries of the Company) on behalf of the Company, or assign, transfer, or pledge any debts due the Company, or release or discharge any debt due or compromise any claim of the Company, other than trade credit and advances to employees in the ordinary course of business; (iii) invest in or otherwise acquire any debt or equity securities of any other Person, enter into any binding agreement for the acquisition of any interest in any business entity or other Person (whether by purchase of assets, purchase of stock or other securities, merger, loan or otherwise), or enter into any joint venture or partnership with any other Person; (iv) take any tax reporting position or make any related election on behalf of the Company which is inconsistent with the directions given by the Board of Directors; (v) formally assert a strategic position with respect to a material matter before the Federal Communications Commission or any Governmental Authority on behalf of the Company with respect to any such matter; (vi) knowingly take or fail to take any action that violates (A) any Law relating to the Business, (B) any agreement, arrangement or understanding to which the Company is a party, including an Operating Agreement, (C) any License or other governmental authorization granted to the Company in connection with its ownership and operation of the Business, or (D) any judicial or administrative order or decree to which the Company is subject, in each case unless such violation would not be reasonably expected (so far as can be foreseen at the time) to have a material adverse effect on the Company or the Business; (vii) sell, assign, transfer, or otherwise dispose of, or hypothecate or grant a Lien on any assets belonging to the Company (other than the disposal of assets or equipment in the ordinary course of business); (viii) take any action amending or agreeing to amend any License granted to the Company in connection with its ownership and operation of the Business; 4 (ix) borrow money on behalf of the Company or enter into other forms of financing for the Business, including any capital lease; (x) commingle any funds of the Company with funds of any other entity or Person; (xi) hire or fire the independent certified public accountants of the Company; (xii) pay to any employee or agent of, or consultant or advisor to, the Company, compensation in any form in excess of $100,000 in any fiscal year; (xiii) establish any reserves; or (xiv) enter into any contract, agreement or other commitment or issue any purchase order, which contract or other agreement or purchase order (i) is not in the ordinary course of business, (ii) obligates the Company to make payments of $100,000 or more or (iii) will create a material variance (greater than 15%) relative to (x) in the case of a capital expenditure, the total budget for capital expenditures contained in any budget approved by the Board of Directors and (y) in the case of an operating expense, the total operating expense budget contained in any budget approved by the Board of Directors, in each case for the year-to-date period in which the expenditure is made or incurred and taking into account all previous expenditures and commitments in such year-to-date period, provided, that the approval of the Board of Directors shall not be required for any contract, purchase order or agreement the material terms of which are within (or on terms more favorable to the Company than) the parameters set forth in any budget approved by the Board of Directors; or terminate or amend in any material respect any contract, agreement or other commitment or purchase order, in each case if the execution and delivery or issuance thereof requires approval pursuant to this Section 3(d). Section 4. Compensation. (a) Reimbursement. The Company shall reimburse Manager for all out-of-pocket expenses ("Out-of-Pocket Expenses") reasonably incurred by Manager for goods and services provided by third parties to, for or on behalf of the Company. Manager shall provide the Company with a statement setting forth in reasonable detail (and with copies of invoices or other supporting documentation) the Out-of-Pocket Expenses claimed and the Company shall pay to Manager each such amount within thirty (30) days of receipt of the statement. Notwithstanding anything to the contrary contained in this Agreement, (i) no portion of the salaries of the Senior Executives or the general overhead expenses of Manager shall be subject to reimbursement as Out-of-Pocket Expenses and (ii) in no event will Manager be responsible for the payment from its own funds of any expenses, obligations or liabilities of the Company. (b) Management Fees. In consideration of Manager's performance of its responsibilities with respect to the Business, the Company shall pay Manager, commencing on the date hereof, a management fee per annum equal to $10,000 (the "Management Fee"). 5 (c) Disputes, etc. If the Company disputes the amount of expenses or fees claimed by Manager, the Company shall notify Manager in writing before payment is due, and if the matter cannot be resolved informally between the parties, either the Company or Manager may request resolution of the dispute pursuant to Section 9. The Company shall pay when due the portion of any such amounts that is not in dispute. Section 5. Term and Termination. (a) Term. This Agreement shall commence on the Effective Date and, unless earlier terminated in accordance herewith, shall terminate on the fifth (5th) anniversary of the Effective Date (the "Term"). (b) Termination. (i) By Either Party. Either party may terminate this Agreement in the event that a Governmental Authority shall enter an order appointing a custodian, receiver, trustee, intervenor or other officer with similar powers with respect to the other party or with respect to any substantial part of its property, or constituting an order for relief or approving a petition in bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding up or liquidation of such party; or if a party files a petition seeking any such order; or if any such petition shall be filed against such party and shall not be dismissed within sixty (60) days thereafter; or an order shall have been issued granting such party a suspension of payments under applicable law and any such order is not dismissed within sixty (60) days thereafter. (ii) By Company. The Company may terminate this Agreement: (A) immediately in the event of a material breach of this Agreement by Manager (as determined by a majority vote of the Board of Directors (excluding the Senior Executives that are directors of the Company)), which has not been cured within thirty (30) days following notice thereof from the Company, including, without limitation, the failure of the Company to meet any of the objectives set forth on Schedule I hereto; (B) immediately in the event that the Company shall fail to comply with the terms of any representation, warranty, covenant or agreement contained in the Credit Documents or in any other agreement or instrument pursuant to which the Company has incurred indebtedness for borrowed money in the principal amount of $25,000,000 or more, which failure to comply results in (unless such failure to comply has been waived or cured in the applicable cure period) an event of default thereunder; (C) immediately in the event that the indebtedness incurred pursuant to the Credit Documents or any other indebtedness for borrowed money of the Company in the principal amount of $25,000,000 or more shall have been accelerated by the holder thereof; or 6 (D) immediately in the event that the Employment Agreements of any two of the three Senior Executives are terminated for any reason pursuant to their respective terms. (iii) By Manager. Manager may terminate this Agreement: (A) in the event of a material breach of this Agreement by the Company (other than a payment default) which has not been cured within thirty (30) days following notice thereof from the Company; or (B) voluntarily upon thirty (30) days prior written notice to the Company. (c) Remedies. The remedies set forth herein are not intended to be exclusive, and all remedies shall be cumulative and may be exercised concurrently with any other remedy available to Manager or the Company at law or in equity. (d) Continuing Obligations. After receipt of written notice of termination, but prior to the effective date of such termination, Manager shall continue to perform under this Agreement unless specifically instructed to discontinue such performance. In the event of termination, Manager and the Company shall remain liable for their respective obligations accrued under this Agreement prior to the effective date of termination. (e) Transition Arrangements. (i) In the event of termination of the Manager for any reason, Manager shall at the Company's expense cooperate with the Company in order to facilitate the transition to a new management service provider (the "New Provider"). Upon such termination, the Board of Directors (excluding the Senior Executives that are directors of the Company) shall nominate a New Provider that would not cause a significant detrimental effect on the eligibility of the Company to realize the benefits, if any, that the Company derives from its status as a "very small business," as defined in 47 CFR Section 24.720(b)(2), which New Provider shall be acceptable to Manager. Manager shall at the Company's expense take whatever steps are commercially reasonable to assist the New Provider in assuming the management of the Company and the operation of the Business including, without limitation, transferring to the New Provider all historical financial, tax, accounting and other data in the possession of Manager, and giving such consents, assigning such permits and executing such instruments as may be necessary to vest in the New Provider those rights that were necessary for Manager to perform its services hereunder. (ii) Within five (5) business days after the nomination by the Board of Directors of a New Provider, the Senior Executives agree to nominate a successor Person or group of Persons (collectively, a "Successor Control Group") that would not cause a significant detrimental effect on the eligibility of the Company to hold a Block F PCS license and to realize the benefits, if any, that the Company derives from its status as a "very small business," as defined in 47 CFR Section 24.720(b)(2), to whom the Voting Preference Common Stock and Class C Common Stock shall be transferred by the Senior Executives, which Successor Control Group shall be reasonably acceptable to the Board of Directors (excluding the Senior Executives 7 that are directors of the Company); it being understood that the New Provider shall be deemed to be a Successor Control Group reasonably acceptable to the Board of Directors. Immediately after a Successor Control Group reasonably acceptable to the Board of Directors is nominated, the Company, the Senior Executives and the Manager shall take, or cause to be taken, all actions necessary or required, including, without limitation, filing of all applications with the FCC, to obtain all requisite consents and authorizations to permit the transfer of the Voting Preference Common Stock and Class C Common Stock to the Successor Control Group. On the first business day after all such consents and authorizations shall have been obtained, the Senior Executives agree to resign as directors and officers of the Company and to sell to the Successor Control Group all of the shares of Voting Preference Common Stock for the per share price paid by them for such shares and exchange with the Company the shares of Class C Common Stock beneficially owned by them for an equal number of shares of Class A Voting Common Stock of the Company. If at any time, whether by reason of the inability of the Company to obtain all requisite consents and authorizations to permit the transfer of the Voting Preference Common Stock to the Successor Control Group or otherwise, the Board of Directors withdraws its consent to the nomination of a Successor Control Group, the procedure outlined in Sections 5(e)(i) and (ii) shall be repeated commencing with the nomination by the Senior Executives of a Successor Control Group within five (5) business days after the nomination by the Board of Directors of a successor New Provider. (f) Return of Information. Upon termination of this Agreement, all books and records in the possession of Manager relating to the maintenance and operation of and accounting for the Company, together with all supplies and other items of property owned by the Company and in Manager's possession, shall be delivered to the Company. Section 6. Noncompetition and Confidentiality. (a) Noncompetition. During the Term and for one year thereafter if after the expiration of the Term on the fifth (5th) anniversary of the Effective Date the Company offers to extend this Agreement for at least one (1) year on terms and conditions no less favorable than those contained herein and the Manager rejects such offer, neither of Manager nor any of its respective Affiliates shall, without the consent of the Company, assist or become associated with any person or entity, whether as a principal, partner, employee, consultant or shareholder (other than as a holder of not in excess of 5% of the outstanding voting shares of any publicly traded company) that is actively engaged in the business of providing mobile wireless telecommunications services in the Territory. (b) Confidentiality. Without the prior written consent of the Company, except to the extent required by an order of a court having competent jurisdiction or under subpoena from a governmental body or agency, none of Manager, the Senior Executives, nor any of their respective Affiliates shall disclose any trade secrets, customer lists, drawings, designs, information regarding product development, marketing plans, sales plans, manufacturing plans, financial records, packaging design or other financial, commercial, business or technical information relating to the Company or any of its subsidiaries or affiliates (collectively, "Confidential Information"), to any third person, unless such Confidential Information has been previously disclosed to the public by the Company or is in the public domain (other than by reason of Manager's, the Senior Executives' or any of their respective Affiliates' breach of this 8 Section 6(b)), except that Manager, the Senior Executives and their respective Affiliates may disclose Confidential Information to the extent advisable in their sole discretion in connection with (i) the performance of Manager's duties hereunder, or (ii) the issuance of Company securities, or (iii) obtaining financing for the Company, or (iv) the enforcement of Manager's rights under this Agreement, or (v) any disclosures that may be required by law, including securities laws. (c) Company Property. Promptly following the termination of this Agreement, Manager and the Senior Executives shall return to the Company all property of the Company, and all copies thereof in its possession or under its control, and all tangible embodiments of Confidential Information in its possession in whatever media such Confidential Information is maintained. (d) Non-Solicitation of Employees. During the Term and for one year thereafter, none of Manager, the Senior Executives nor any of their respective Affiliates will directly or indirectly induce any employee of the Company or any of its subsidiaries or affiliates to terminate employment with such entity, and will not directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, employ or offer employment to any person who is or was employed by the Company or a subsidiary thereof, unless such person shall have ceased to be employed by such entity for a period of at least six months. (e) Injunctive Relief with Respect to Covenants. Manager and each Senior Executive acknowledge and agree that the covenants and obligations with respect to noncompetition, inventions, confidentiality and Company property contained in this Section 6 relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, Manager and the Senior Executives agree that the Company shall be entitled to an injunction, restraining order, or such other equitable relief as a court of competent jurisdiction may deem necessary or appropriate to restrain Manager and the Senior Executives from committing any violation of the covenants and obligations contained in this Section 6. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity. Section 7. Limitations of Liability. (a) Force Majeure. Neither of the parties will be liable for nonperformance or defective or late performance of any of its obligations hereunder to the extent and for such periods of time as such nonperformance, defective performance or late performance is due to reasons outside such party's control, including acts of God, war (declared or undeclared), acts (including failure to act) of any governmental authority, riots, revolutions, fire, floods, explosions, sabotage, nuclear incidents, lightning, weather, earthquakes, storms, sinkholes, epidemics, strikes, or delays of suppliers or subcontractors for the same causes. Neither party shall be required to settle any labor dispute in any manner which is deemed by that party to be less than totally advantageous, in that party's sole discretion. (b) Exculpation of Manager. Notwithstanding any other provision of this Agreement, Manager shall not be liable for any failure or delay in its performance hereunder, 9 (except with respect to its performance of its obligations under Section 5(e)) or for any performance which is substandard, except where such failure, delay or substandard performance is the result of willful misconduct or gross negligence on the part of Manager. (c) No Consequential or Special Damages. Manager shall not be responsible to the Company or any other Person for any indirect, incidental, consequential or special damages to the Company, the Business or any subscriber or customer of any Business or any other person, including any damage to or loss of revenues, business or goodwill, suffered by any person or entity for any failure of any system or failure of performance hereunder. Manager's liability to the Company in respect of any such failure shall be limited to the amounts paid by the Company to Manager pursuant to this Agreement for the period of any such failure. Section 8. Books and Records. Manager shall keep or cause to be kept accounts and complete books and records with respect to its management of the operation of the Business, showing all costs, expenditures, allocations, receipts, revenues, assets, and liabilities; any and all other records necessary, convenient or incidental to recording the financial aspects of the operation of the Business and sufficient to record the profits and losses generated by the operation of the Business. Within fifteen (15) days after the end of each month Manager shall prepare or cause to be prepared and transmit to the Company unaudited statements, which shall include a general ledger and a trial balance. Manager shall also provide at the Company's request and expense any and all such additional statements or reports as may be reasonably necessary to the Company's oversight and control of the Business. The Company shall have control over and access, at all reasonable times during normal business hours, to the books and records maintained by Manager pursuant to this Section 9. Section 9. Dispute Resolution. (a) Dispute Resolution. The parties desire to resolve disputes arising out of this Agreement without litigation. Accordingly, except for action seeking a temporary restraining order injunction related to the purposes of this Agreement, or suit to compel compliance with this dispute resolution process, the parties agree to use the dispute resolution procedures set forth in Section 9 as their sole remedy with respect to any controversy or claim arising out of or relating to this Agreement or its breach. At the written request of any party, the parties to the dispute will appoint knowledgeable, responsible representatives to meet and negotiate in good faith to resolve any dispute arising under this Agreement. The parties intend that these negotiations be conducted by non-lawyer, business representatives, including at least one senior executive of each party to the dispute. The location, format, frequency, duration and conclusion of these discussions shall be left to the discretion of the representatives. Discussion and correspondence among the representatives for purposes of these negotiations shall be treated as confidential information developed for purposes of settlement, exempt from discovery and production, which shall not be admissible in the arbitration described below. Documents identified in or provided with such communications, which are not prepared for purposes of the negotiations, are not so exempted and may, if otherwise admissible, be admitted in evidence in the arbitration or lawsuit. 10 (b) Mediation. If the negotiations set forth in Section 9(a) do not resolve the dispute within thirty (30) days of the initial written request, the parties agree to work in good faith to settle the dispute by mediation under the commercial mediation rules of the American Arbitration Association. The parties will attempt to agree on a mediator. If they are unable to do so, the mediation will be referred to the New York, New York office of the American Arbitration Association for mediation which will appoint a qualified mediator to serve. The mediation shall take place in New York, New York or such other location as mutually agreed upon by the parties. Unless the parties agree otherwise, the first mediation session shall take place no later than ten (10) days after the initial written request to negotiate. The mediation shall continue until the dispute is resolved or until such time as the mediator makes a good faith determination that the likelihood of resolution is sufficiently remote that continuation of the mediation is not warranted. (c) Arbitration. If the mediation conducted pursuant to Section 9(b) does not resolve the dispute within thirty (30) days of the commencement of mediation, or if prior to the expiration of such thirty (30) day period the mediator determines that continuation of the mediation process is not warranted, the dispute shall be submitted to binding arbitration by a panel of three arbitrators pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Any party may demand such arbitration in accordance with the procedures set out in those rules. Each party shall have the right to take the deposition of up to five individuals (or a larger number of individuals with the consent of two of the three arbitrators), and any expert witness designated by the other party. Each party shall also have the right to request production of relevant documents, the scope and enforcement of which shall be governed by the arbitrator. Additional discovery may be only by order of the arbitrator, and only upon a showing of substantial need. The arbitrator shall be authorized to issue subpoenas for the purpose of requiring attendance of witnesses at depositions. The arbitration hearing shall be commenced within ten (10) days of the determination that mediation is not going to be successful. The arbitration shall be held in New York, New York or such other location as mutually agreed upon by the parties. The arbitrator shall control the scheduling so as to process the matter expeditiously. The parties may submit written briefs. The arbitrator shall rule on the dispute by issuing a written opinion within thirty (30) days after the close of hearings. The times specified in this section may be extended upon mutual agreement of the parties or by the arbitrator upon a showing of good cause. The award rendered by arbitration shall be final, binding and nonappealable judgment and the aware may be entered in any court of competent jurisdiction in the United States. Special, consequential or punitive damages shall not be awarded by the arbitrator. (d) Confidentiality. The parties agree that all communications and negotiations between the parties during the dispute resolution process, any settlements agreed upon during the dispute resolution process and any information regarding the other party obtained during the dispute resolution process (that are not already public knowledge) are confidential and may be disclosed only to employees and agents of the parties who shall have a "need to know" the information and who shall have been made aware of the confidentiality obligations set forth in this Section, unless the party is required by law to disclose such information. 11 (e) Fees and Expenses. The parties shall equally split the fees of the mediator and the arbitrator. Any party found by the arbitrator to have breached this Agreement shall pay all other out-of-pocket costs and expenses, including reasonable attorneys' fees and expenses, of the other party incurred in connection with the dispute resolution process. If the arbitrator does not find that any party has breached this Agreement, then each party shall bear its own costs and expenses, including attorneys' fees and expenses. Section 10. Inspection Rights; Delivery of Information. (a) Company's Right to Inspect. Manager will permit representatives of the Company, at the Company's cost, during normal business hours and upon not less than five business days' advanced written request, to (i) visit and inspect during normal business hours Manager's properties and facilities which are utilized in connection with Manager's provision of services to the Company pursuant to this Agreement, including without limitation access to, and the right to make copies of, books and records of the Company located at such properties and facilities, and (ii) discuss with Manager's officers and employees such properties and facilities and Manager's provision of services to the Company pursuant to this Agreement. All such information shall be held in confidence by the Company, except for disclosures made to the Company's advisors, lenders and investors, or as required to be disclosed by process of law or other applicable law. (b) Notice of Certain Events. Promptly, and in any event within three (3) business days after Manager has received notice or has otherwise become aware thereof, Manager shall give the Company notice of (i) the commencement of any material proceeding or investigation against the Company or Manager by or before any governmental body or in any court or before any arbitrator which would be likely to have a material adverse effect on Manager, the Business or the Company, or on Manager's ability to perform its obligations hereunder, and (ii) the occurrence or non-occurrence of any event (x) which constitutes, or which with the passage of time or giving of notice or both would constitute, a default by the Company or Manager under this Agreement or under any other material agreement to which the Company or Manager is a party or by which its properties may be bound, and (y) would be likely to have a material adverse effect on Manager, the Business or the Company, or on Manager's ability to perform its obligations hereunder, giving in each case the details thereof and specifying the action being taken or proposed to be taken with respect thereto. Promptly upon receipt thereof, Manager shall deliver to the Company copies of any material notice or report regarding any License from the grantor of such license or from any Governmental authority regarding the Business or the Company. (c) Other Information. From time to time and promptly upon each request, Manager shall provide the Company with such data, certificates, reports, statements, financial projections, documents or further information regarding the business, equity owners, assets, liabilities, financial position or results of operations of Manager, as may be reasonably requested by the Company. Section 11. Representations and Warranties. Each party makes the following representations and warranties to the other party, as a material inducement to the other party to enter into this Agreement. 12 (a) Organization and Standing of Parties. Each party is duly organized, validly existing and in good standing under the laws of the State of its formation referenced in the first paragraph of this Agreement. Each party has full limited liability company or corporate power and authority to own its assets and carry on its business as now conducted by it. (b) Execution, Delivery, Performance and Binding Effect. The execution, delivery and performance by each party of this Agreement have been duly authorized by all necessary limited liability company or corporate action, as appropriate, including by such party's members or managers or stockholders or directors, as appropriate. Each party has full power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance by such party of this Agreement will not (with the passage of time or giving of notice or both) conflict with, violate any provision of, result in the breach of, or constitute a default under (i) such party's articles of organization, certificate of incorporation, regulations, or other constituent, organizational or governing documents, as applicable, (ii) any License held by such party, (iii) any Law, (iv) any order, writ, injunction, decree, judgment or regulation of any Governmental Agency or (v) any contract, agreement, arrangement or understanding, (A) to which such party is a party, (B) to which or by which such party is subject or bound, or (C) to which or by which such party's assets are subject or bound. The execution, delivery and performance of this Agreement will not (with the passage of time or giving of notice or both) (i) create or impose any Lien upon the assets of such party, (ii) result in the termination, suspension, modification or impairment of any contract, agreement, arrangement or understanding (A) to which such party is a party, (B) to which, or by which, such party is subject or bound, or (C) to which or by which such party's assets are subject or bound, or (iii) result in the termination, suspension, modification or impairment of any governmental license, permit, authorization or certificate held by such party or relating to its assets or businesses. This Agreement constitutes the legal, valid and binding obligation of such party enforceable against it in accordance with its terms. (c) Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any Governmental Authority or other Person is required on the part of each party in connection with the execution, delivery and performance of this Agreement. (d) Litigation; Claims. With respect to each party, there is no claim, action, audit, arbitration, dispute, investigation, suit, litigation or legal proceeding pending, or to the best of such party's knowledge threatened, against such party (i) relating to or otherwise affecting such party's ability to execute and deliver this Agreement or to perform such party's obligations hereunder, or (ii) which would materially adversely affect the Company or the Company's contemplated business. (e) Court Orders, Decrees, Judgments, etc. There is outstanding no order, writ, injunction, decree or judgment of any court, governmental agency or arbitration tribunal against a party (i) relating to or otherwise affecting such party's ability to execute and deliver this Agreement or to perform such party's obligations hereunder or (ii) which would materially adversely affect the Company or the Company's contemplated business. 13 Section 12. Miscellaneous. (a) Counterparts. This Agreement may be executed by one or more of the parties hereto in any number of counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. (b) Construction. Each of the parties hereto acknowledge that it has reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendments hereto. (c) Benefit; Assignment. This Agreement shall be binding upon and inure to the benefit of all parties hereto and their respective successors and permitted assigns; provided, however, that Manager shall not assign or otherwise transfer its rights and obligations under this Agreement without the Company's prior written consent. Any sale, assignment, sublease or other transfer in violation of this Section 12(c) shall be null and void. Each of the Stockholders shall be deemed a third party beneficiary of the Company's rights under this Agreement and shall be permitted to exercise any rights pursuant to this provision with the consent of AT&T and two-thirds in interest of the Cash Equity Investors. (d) Complete Agreement. This document, the exhibits attached hereto and each of the documents referred to herein, embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements, or representations by or among the parties written or oral, which may have related to the subject matter hereof in any way. (e) Amendment. This Agreement may not be amended except by a writing signed by each of the parties. (f) Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws, and not the laws of conflict, of the State of New York. (g) Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall for any reason or to any extent be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected thereby, but, rather, shall be enforced to the extent permitted by law. Furthermore, in lieu of such an illegal, invalid or unenforceable provision, there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid or enforceable. (h) Further Assurances. The parties agree that they will take all such further actions and execute and deliver all such further instruments and documents as may be required in order to effectuate the agreements set forth in this Agreement. (i) Waiver. No failure or delay on the part of the parties or any of them in exercising any right, power or privilege hereunder, nor any course of dealing among the parties or any of them shall operate as a waiver of any such right, power or privilege nor shall any single or partial exercise of any such right, power or privilege preclude the simultaneous or later 14 exercise of any other right, power or privilege. The rights and remedies herein expressly provided are cumulative and are not exclusive of any rights or remedies which the parties or any of them would otherwise have. (j) Notices. All notices and communications hereunder shall be in writing and shall be deemed to have been duly given to a party when delivered in person (including delivery by an express delivery service or by facsimile transmission during the recipient's regular business hours) to an officer of the Company or to Manager, respectively, or three (3) business days after such notice is enclosed in a properly sealed envelope, certified or registered, and deposited (postage and certification or registration prepaid) in a post office or collection facility regularly maintained by the United States Postal Service and addressed as follows: If to Manager: Tritel, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: Chief Executive Officer Telephone: (601) 936-0893 Facsimile: (601) 936-6045 with a copy to: Tritel, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: General Counsel Telephone: (601) 936-0893 Facsimile: (601) 936-6045 If to the Company: Tritel, Inc. 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 Attn: Chief Executive Officer Telephone: (601) 936-0893 Facsimile: (601) 936-6045 With copies to: Tritel Management, LLC 1080 River Oaks Drive Suite B-100 Jackson, MS 39208 15 Attention: General Counsel Telephone: (601) 936-0893 Facsimile: (601) 936-6045 AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, Washington 98033 Attention: William W. Hague Telephone: (425) 828-8461 Facsimile: (425) 828-8451 and AT&T Corp. 295 North Maple Avenue Basking Ridge, NJ 07920 Attention: Corporate Secretary Telephone: Facsimile: (908) 953-4657 and Friedman Kaplan & Seiler LLP 875 Third Avenue, 8th Floor New York, New York 10022 Attention: Daniel M. Taitz Telephone: (212) 833-1109 Facsimile: (212) 355-6401 and Rubin Baum Levin Constant & Friedman 30 Rockefeller Plaza New York, New York 10112 Attention: Gregg S. Lerner, Esq. Telephone: (212) 698-7705 Facsimile: (212) 698-7825 and To each Cash Equity Investor, to its address set forth on Schedule I to the Stockholders Agreement. and Mayer, Brown & Platt 1675 Broadway New York, New York 10019 16 Attention: Mark S. Wojciechowski, Esq. Telephone: (212) 506-2525 Facsimile: (212) 262-1910 or to such other addresses as either party may designate in a written notice served upon the other party in the manner provided herein. * * * 17 IN WITNESS WHEREOF, the parties have set their hands effective as of the date first written above. COMPANY: TRITEL, INC. By: ---------------------------------------- Name: Title: MANAGER: TRITEL MANAGEMENT, LLC By: ---------------------------------------- Name: Title: In order to induce the Company to execute and deliver the foregoing Management Agreement, by their execution in the spaces provided below each of the undersigned hereby agrees to be bound by the provisions of Sections 5(e) and 6 of this Agreement and to use good faith efforts to cause the Manager to perform all of its obligations pursuant to this Agreement. SENIOR EXECUTIVES By: ---------------------------------------- William M. Mounger, II By: ---------------------------------------- E.B. Martin, Jr. By: ---------------------------------------- Jerry M. Sullivan, Jr. 18 SCHEDULE I ---------- Objectives ---------- [TO BE ESTABLISHED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS] I-1 Table of Contents Page Section 1. Engagement.....................................................1 Section 2. Management Standards...........................................2 Section 3. Services to be Provided.2 (a) Scope of Services..............................................2 (b) Accounts.......................................................3 (c) Restrictions on Manager's Authority............................4 Section 4. Compensation.5 (a) Reimbursement..................................................5 (b) Management Fees................................................5 (c) Disputes, etc..................................................6 Section 5. Term and Termination.6 (a) Term...........................................................6 (b) Termination.6 (c) Remedies.......................................................7 (d) Continuing Obligations.........................................7 (e) Transition Arrangements.7 (f) Return of Information..........................................8 Section 6. Noncompetition and Confidentiality.8 (a) Noncompetition.................................................8 (b) Confidentiality................................................8 (c) Company Property...............................................9 (d) Non-Solicitation of Employees..................................9 (e) Injunctive Relief with Respect to Covenants....................9 Section 7. Limitations of Liability.9 (a) Force Majeure..................................................9 (b) Exculpation of Manager.........................................9 (c) No Consequential or Special Damages...........................10 Section 8. Books and Records.............................................10 Section 9. Dispute Resolution............................................10 (a) Dispute Resolution............................................10 (b) Mediation.....................................................11 (c) Arbitration...................................................11 (d) Confidentiality...............................................11 (e) Fees and Expenses.............................................12 I-i Section 10. Inspection Rights; Delivery of Information....................12 (a) Company's Right to Inspect....................................12 (b) Notice of Certain Events......................................12 (c) Other Information.............................................12 Section 11. Representations and Warranties................................12 (a) Organization and Standing of Parties..........................13 (b) Execution, Delivery, Performance and Binding Effect...........13 (c) Consents......................................................13 (d) Litigation; Claims............................................13 (e) Court Orders, Decrees, Judgments, etc.........................13 Section 12. Miscellaneous.................................................14 (a) Counterparts..................................................14 (b) Construction..................................................14 (c) Benefit; Assignment...........................................14 (d) Complete Agreement............................................14 (e) Amendment.....................................................14 (f) Governing Law.................................................14 (g) Severability..................................................14 (h) Further Assurances............................................14 (i) Waiver........................................................14 (j) Notices.......................................................15 Schedule I - Objectives I-ii EX-10.15 18 MASTER ANTENNA SITE LEASE MASTER ANTENNA SITE LEASE NO. D41 - -------------------------------------------------------------------------------- LESSOR: PINNACLE TOWERS INC. LESSEE: TRITEL COMMUNICATIONS, INC. 1549 RINGLING BOULEVARD 1410 LIVINGSTON LANE THIRD FLOOR JACKSON, MS 39213-8003 SARASOTA, FL 34236 - -------------------------------------------------------------------------------- Lessor operates the antenna site(s) described in the Antenna Site Lease Schedule(s) executed and delivered by Lessor and Lessee pursuant to this Lease from time to time (each a "Schedule" and, collectively, the "Schedules"). Lessor desires to lease to Lessee and Lessee desires to lease from Lessor certain space at the site for installation and operation of Lessee's equipment on the terms set forth in the Schedule(s) and herein. If the terms of a Schedule conflict with this Lease, the Schedule shall control. 1. LEASED PREMISES. Lessor hereby leases to Lessee space at the site as specified and described in a Schedule. If a Schedule provides that Lessee's equipment will be connected to a multiplexer, Lessee shall be responsible for all costs of multiplexer modules and other equipment required for the connection. So long as Lessee has made the rental payments provided for in the specific Schedule, the Lessee shall have quiet enjoyment of the site or sites described in each Schedule. 2. TERM. (a) The initial term and, if applicable, renewal terms of this Lease for any antenna system shall be as specified on a Schedule. If a Schedule provides for renewal terms, then, provided Lessee is not in default, the lease term for the antenna system identified in the Schedule shall automatically renew at the commencement of each such renewal term unless, upon written notice to Lessor no later than ninety (90) days before the expiration of the term then current Lessee terminates the Schedule. (b) If Lessee holds over the lease premises after the final term of a Schedule, the Schedule shall revert to a month-to-month term, and rent shall be 150% of the rent for the last month of the preceding term. Lessor shall have the right during such month-to-month term to terminate the Schedule without cause upon thirty (30) days notice to Lessee. 3. RENT. (a) Lessee shall pay rent at the rate(s) specified in a Schedule. Rent for any fractional month at the beginning or end of a term shall be prorated. (b) Lessee shall pay rent by electronic transfer or direct to Lessor's lockbox account at Pinnacle Towers Inc., P.O. Box 550094, Tampa, FL 33655-0094 no later than the first day of each calendar month with respect to which it is payable. If payment is not received by the 10th of any month, Lessor has the option to charge a late fee equal to the greater of [CONFIDENTIAL TREATMENT REQUESTED] or [CONFIDENTIAL TREATMENT REQUESTED] per month of the amount due. (c) Any security deposit required by a Schedule will be held in a non-interest bearing account and shall be returned to Lessee thirty (30) days following the conclusion of the lease term of the Schedule, provided Lessee is not in default. (d) Lessee shall pay all sales or use taxes applicable to rent payable under this Lease or as a direct result of Lessee's equipment being located on the leased premises. 4. INSTALLATION. (a) Lessee shall install and operate only the equipment identified in the Schedule(s), and the cost of Lessee's installation and licensing fees shall be borne solely by Lessee. Lessee shall comply with all site rules and standards contained in Exhibit A to this Lease. (b) During installation, Lessee shall not cause interference of any kind to the activities of Lessor or lessees on the site. If such interference is caused by Lessee and cannot be reduced to levels reasonably acceptable to Lessor, Lessee shall immediately halt all installation work, and Lessor may elect to terminate this Lease by giving Lessee ten (10) days written notice. 5. USES OF LEASED PREMISES. (a) Lessee shall use the leased premises and conduct its communications operations in compliance with the terms of its FCC license and applicable regulations imposed by any other governmental agency. Lessee shall, if requested, provide Lessor with copies of such permits. If, through no fault of Lessee, a license is denied, and Lessee promptly notifies and provides evidence to Lessor of the denial, this Lease may be terminated by Lessee thirty (30) days following such written notification. (b) Lessee shall have a non-exclusive right to access the premises twenty-four (24) hours a day, 365 days a year for its employees, agents, or representatives as designated. In accordance with procedures in Exhibit A, Lessee will be issued a key, key card, and/or access code to unlock the gate and transmitter room for maintenance purposes. This key may not be duplicated, loaned, or transferred to any other entity. If this key or keycard is lost or the integrity of security is breached by Lessee, Lessee will bear the expense for Lessor to re-tool the locks, reprogram the security system, and provide new keys and/or keycards for all authorized persons. Lessee shall provide Lessor the name of Lessee's custodian of the key or keycard; should the custodian change, Lessee shall notify Lessor, in writing, of the new custodian's identity within twenty-four (24) hours. (c) Before performing any installation or maintenance work at a site, Lessee shall notify Lessor and obtain Lessor's approval of the work to be performed and the persons to perform the work, which approval shall not be unreasonably withheld, delayed or conditioned. All contractors and subcontractors of Lessee who perform any services on the leased premises must be approved by Lessor in advance which approval shall not be unreasonably withheld, delayed or conditioned and must hold all licenses necessary for the work being performed. Lessee shall maintain a log of the entry and exit of its employees and agents and shall make the log available to Lessor upon request. (d) Lessee shall not bring onto the site any hazardous substances or hazardous wastes. (e) Lessee shall not cause interference of any kind to the operations of the Lessor or other lessees at the site in excess of levels permitted by the FCC, to the extent that Lessor or such lessee had equipment installed at the site prior to the execution of the particular Schedule (the "Present Users") as well as interference to consumer electronic devices and blanketing interference as defined by section 73.318 of the FCC rules. If Lessee is notified that its operations are causing objectionable interference to the legally and properly tuned and operating equipment of the Present Users, Lessee shall immediately undertake all necessary steps to determine the cause of and eliminate such interference. If the interference continues for a period in excess of forty-eight (48) hours following notification, Lessor shall have the right to cause Lessee to cease operating the offending equipment or to reduce the power sufficiently to remove the interference until the condition can be remedied. Lessee shall continue to be obligated to pay rent, and Lessor shall not be held liable for any damages or loss of revenues. If Lessee is required to discontinue its operation under this section for a period of sixty (60) days, and provided Lessee has diligently pursued all reasonable cures and is unable to eliminate the interference, then Lessee shall have the right to terminate this Lease. Provided Lessee's equipment is operating properly, if the operations of any equipment installed after Lessee's equipment cause objectionable interference to Lessee's operation, then Lessor shall require the interfering lessee or party to remedy the interference and bear the costs thereof. (f) Lessee understands that it is the intention of Lessor to accommodate as many users as possible at its sites. Lessee shall cooperate with Lessor in rescheduling its transmitting activities, reducing power, or interrupting its activities for limited periods of time in order to permit the safe installation of new equipment or new facilities at the site or to permit repairs to facilities of any user of the site or to the site or related. (g) Lessor makes no guaranty or warranty, including any implied warranty of merchantability or fitness for a particular use except as specifically stated in this Agreement or the Schedules. Lessee has examined the leased premises and determined that they are suitable for its purposes. 6. UTILITIES. Lessee shall pay all installation costs for electrical power feeds, phone lines, and other utilities to its equipment. Lessee shall pay for all Lessee's electrical power usage either directly to the utility company or as a reimbursement to Lessor. 7. INSURANCE. (a) Insurance requirements for Lessee and Lessee's contractors contained in exhibit B. (b) Insurance requirements for Lessor and Lessor's contractors contained in exhibit C. 8. MAINTENANCE OF SITE. (a) Lessor shall maintain the site(s) in good repair, ordinary wear and tear excepted, and in compliance with applicable sections of Part 17 of the FCC's rules pertaining to lighting, marking, inspection, and maintenance. In cases where such FCC regulations require the painting of Lessee's feedlines, Lessee hereby consents to such painting. (b) Lessee shall maintain its equipment in accordance with standards of good engineering practice to assure that it conforms with the site standards in Exhibit A and shall at the conclusion of a Schedule surrender possession of the leased premises to Lessor in the same condition they were at the commencement of the Schedule, ordinary wear and tear excepted. 9. ALTERATION BY LESSEE. (a) Lessee may not make improvements or alterations to the tower(s), building(s), or any portion of the premises without the expressed written permission of Lessor, which approval shall not be unreasonably withheld, delayed or conditioned. Any such improvements that are approved by Lessor and made by Lessee shall become the property of Lessor upon termination or expiration of this Lease, provided however, that any cabinets, equipment shelters, equipment, antennae, antennae systems, etc. shall remain the property of Lessee. (b) Lessee may make changes and alterations in its equipment provided that (i) such changes or alterations conform with standards of good engineering practice and the provisions of Section 5, (ii) plans and specifications are first submitted to and approved in writing by Lessor, which approval shall not be unreasonably withheld, delayed or conditioned and (iii) any proposed changes or alterations do not increase the "wind loading" of the tower. At Lessor's request, Lessee will provide an independent professional analysis of "wind loading" and stress to determine any changes that equipment replacements or alterations would cause. Notwithstanding the foregoing, the Lessee shall have the right to perform and do routine maintenance upon its equipment. 10. SITE DAMAGE; DAMAGE TO LESSEE'S EQUIPMENT; SERVICE INTERRUPTION. (a) If a site is fully or partially destroyed or damaged, Lessor, at its option, may elect to terminate a Schedule upon ten (10) days written notice to the Lessee. In this event, Lessee shall owe rent only up to the date on which Lessee was unable to conduct its normal operations solely due to the damage or destruction of the site. (b) Lessor, at its option, may elect to repair or rebuild the site, in which case, the Schedule shall remain in force. If reconstruction or repair cannot reasonably be undertaken without dismantling Lessee's antenna, then Lessor may remove Lessee's antenna and interrupt Lessee's operations, thereafter replacing the antenna as soon as reasonably possible. Lessee shall be entitled to a pro rata abatement of rent for the time it is unable to conduct its normal operations as a result of such total or partial destruction or damage or need of repair. (c) Under no circumstances whatsoever shall Lessor be responsible for damage to or loss of Lessee's equipment, or for financial loss due to business interruption, unless by Lessor's willful misconduct or neglect. (d) Lessor shall incur no liability to Lessee for failure to furnish space and/or electrical power if prevented by war, fires, accidents, acts of God, or other causes beyond its reasonable control. During such period, Lessee shall be entitled only to a pro rata abatement of rent for the time it is unable to conduct substantially normal operations as a result of such circumstances, except that Lessee shall not be entitled to any abatement for outages of less than twenty-four (24) hours consecutive duration. 11. EMINENT DOMAIN. If the land or leased premises upon which a tower, foundation, or building is located are acquired or condemned under the power of eminent domain, whether by public authority, public utility, or otherwise, then the applicable Schedule shall terminate as of the date of the acquisition. Lessor shall be entitled to the entire amount of any condemnation award, and Lessee shall be entitled to make claim for and retain a condemnation award based on and attributable to the expense and damage of removing its fixtures. 12. INDEMNIFICATION. (a) Lessee shall indemnify, hold harmless, and defend Lessor for and against any and all liabilities, claims, demands, suits, damages, actions, recoveries, judgments, and expenses (including court costs, reasonable attorneys' fees, and costs of investigation) resulting from injuries to or death of any person or any damage to property or loss of revenues due to discontinuance of operations at the leased premises resulting from, or that is claimed to result from or arise out of any act or omission of Lessee or its contractors, subcontractors, agents, or representatives in or around the leased premises or any breach of this Lease by Lessee, except to the extent such liabilities are caused by the negligence, willful misconduct or gross negligence of Lessor or its contractors, subcontractors, agents, employees or representatives. (b) Lessor shall indemnify, hold harmless, and defend Lessee for and against any and all liabilities, claims, demands, suits, damages, actions, recoveries, judgments, and expenses (including court costs, reasonable attorneys' fees, and costs of investigation) resulting from injuries, to or death of any person or any damage to property or loss of revenues due to discontinuance of operations at the leased premises resulting from, or that is claimed to result from or arise out of any act or omission of Lessor or its contractors, subcontractors, agents, or representatives in or around the leased premises or any breach of this Lease by Lessor, except to the extent such liabilities are caused by the negligence, willful misconduct or gross negligence of Lessee or its contractors, subcontractors, agents, employees or representatives. 13 ASSIGNMENT. Lessee shall not assign, mortgage, or encumber this Lease and shall not sublet or permit the leased premises or any part thereof to be used by others without the express written approval of Lessor, which consent shall not be unreasonably withheld, delayed. or conditioned. No sublease or authorized use by others shall relieve Lessee of its obligations under this Lease. Lessor may assign, mortgage, or encumber its rights under this Lease at any time. 14. DEFAULT BY LESSEE. If Lessee fails to make payments within ten (10) days of date due, or fails to comply with any other term of this Lease and does not cure such other failure within thirty (30) days after Lessor provides Lessee with written notice, Lessor shall have the option to terminate this Lease or any Schedule, in which event Lessee shall surrender possession of the leased premises within ten (10) days, or to pursue any other remedy available to Lessor under this Lease or otherwise provided by law or equity. If any default cannot be reasonably cured within thirty (30) days, Lessee will not be deemed to be in default if Lessee commences curing such default and thereafter diligently pursues such cure to completion. Lessor may also apply any or all of the deposit or prepaid rent to cure a default. Lessee shall be liable for all expenses incurred by Lessor for recovery, and repossession by Lessor shall not affect the obligations of Lessee for the unexpired term of a Schedule unless Lessor terminates the Schedule or this Lease. 15. DEFAULT BY LESSOR. If Lessor fails to cure any monetary defaults within ten (10) days of written notice from the Lessee, or fails to comply with any other term of this Lease and does not cure such other failure within thirty (30) days after Lessee provides Lessor with written notice, Lessee shall have the option to terminate this Lease or any Schedule, or to pursue any other remedy available to Lessor under this Lease or otherwise provided by law or equity, including without limitation an action for damages. If any default cannot be reasonably cured within thirty (30) days, Lessor will not be deemed to be in default if Lessor commences curing such default and thereafter diligently pursues such cure to completion. 16. REMOVAL OF LESSEE'S EQUIPMENT. At the termination of a Schedule, provided Lessee is not in default, Lessee shall have thirty (30) days to remove its equipment. Lessee shall pay all costs in connection with the removal. 17. SUBORDINATION. This Lease is and shall be subject and subordinate to all mortgages that may now or hereafter affect the leased premises and to all renewals, modifications, consolidations, replacements, and extensions thereof; provided, however, as a condition precedent to any such subordination, the party secured by such instrument shall covenant for itself and any purchaser at foreclosure not to disturb Lessee's quiet enjoyment so long as Lessee is not in default hereunder. This subordination shall be self-operative and no further instrument of subordination shall be required by any mortgagee. However, upon written request from Lessor, Lessee shall execute a certificate confirming such subordination. 18. LIENS. Lessee shall not suffer or permit any liens to stand against the leased premises or any part thereof by reason of any work, labor, service, or materials done for, or supplied for, or supplied to or claimed to have been done for, or supplied to, Lessee or anyone holding Lessee's property or any part thereof through or under Lessee ( "Mechanics' Liens"). If any Mechanics' Lien shall at any time be filed against the leased premises, Lessee shall cause it to be discharged of record within thirty (30) days after the date of filing by either payment, deposit, or bond. If Lessee fails to discharge any such Mechanics' Lien within such period, then, in addition to any other right or remedy of Lessor, Lessor may, but shall not be obligated to, procure the discharge of the Mechanics' Lien. All amounts incurred by Lessor, including reasonable attorneys' fees, in procuring the discharge of such Mechanics' Lien, together with interest thereon at 12% per annum from the date of incurrence, shall become due and payable immediately by Lessee to Lessor. 19. ESTOPPEL CERTIFICATES. At any time, but not with less than ten (10) days prior notice, Lessee shall execute, acknowledge, and deliver to Lessor a statement in writing certifying that this Lease and applicable Schedule(s) are unmodified and in full force and effect (or, if there have been any modifications, that the Lease is in full force and effect as modified and stating the modifications), and the dates to which rent and other charges, if any, have been paid in advance. 20. MISCELLANEOUS. (a) The remedies provided herein shall be cumulative and shall not preclude the assertion by any party hereto of any other rights or the seeking of any other remedies against the other parties hereto. (b) Should Lessor permit a continuing default by Lessee under this Lease, the obligations of Lessee hereunder shall continue, and such permissive default shall not be construed as a renewal of the term hereof nor as a waiver of any of the rights of Lessor or obligations of Lessee hereunder. (c) In addition to the other remedies in this Lease, and anything contained herein to the contrary notwithstanding, Lessor shall be entitled to specific performance or injunctive relief of any violation or attempted or threatened violation of this Lease by Lessee without the necessity to post a bond. (d) This Lease may be executed in counterparts, and any number of counterparts signed in the aggregate by the parties will constitute a single, original instrument. (e) This Lease, including the exhibits, schedules, lists and other documents referred to herein, contain the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants, or understandings other than expressly set forth herein or therein. This Lease supersedes all prior agreements and understandings between the parties with respect to its subject matter. No modification of this Lease shall be effective unless contained in a writing signed, dated and fully witnessed by the authorized representative of both parties. (f) All notices, requests, claims, demands, and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally by FAX by courier or mailed (certified mail, postage prepaid, return receipt requested) to Lessor at the address shown herein and to Lessee at the address shown on a Schedule or to such other address as any party may have furnished to the other in writing in accordance with this provision. (g) This Lease shall be governed by, construed and enforced in accordance with the laws of the state of Florida without regard to its conflict of laws rules. [SIGNATURE PAGE ONLY] IN WITNESS THEREOF, this Lease has been duly executed and delivered by Lessor and Lessee on the date indicated below. LESSOR: PINNACLE TOWERS INC. WITNESS:____________________________ BY:_______________________________ Veronica E. Allgeier Regional Sales Manager WITNESS:____________________________ DATE:_____________________________ LESSEE: TRITEL COMMUNICATIONS, INC. WITNESS:____________________________ BY:_______________________________ Jerry M. Sullivan, Jr. Executive Vice President, COO WITNESS:____________________________ DATE:_____________________________ EXHIBIT A TO PINNACLE TOWERS INC. MASTER ANTENNA SITE LEASE #D41 ANTENNA SITE STANDARDS 1. PURPOSE: In order to minimize interference to every Lessee's operations and equipment, and to maintain good engineering practice, the following installation and maintenance standards are being established and may be amended by Lessor when deemed necessary. 2. PRE-INSTALLATION STANDARDS: Prior to any installation, Lessee must provide Lessor with complete plans for approval, including list of proposed equipment and subcontractors, and no work may be performed until approval has been given and all criteria has been met. All equipment must be placed in approved locations only, and any changes must be approved by Lessor before the installation begins. The Lessor or its representative shall be on-site during major work on the tower. Such approvals must not be unreasonably withheld, delayed or conditioned. Lessee shall provide the Lessor such plans and in the event that the Lessor does not object to such plans prior to the expiration of thirty (30) days, the Lessor will be deemed to have approved such plans. Lessee must notify the Lessor at least five (5) days in advance of any installation work. Following initial installation, routine maintenance work to Lessee's equipment may be performed without prior notice. 3. INSTALLATION: (a) The following minimum protective devices must be properly installed: (1) Lightning arrestor in feedline at wall feedthru plate for all non-broadcast antennas. (2) Surge protectors in any AC & phone line circuit. (3) Transmitter RF shielding kit if applicable. (4) Isolator and harmonic filter. (5) Duplexer or cavity bandpass filter. (b) All transmitters, duplexers, isolators, multicouplers, etc. must be housed in a metal cabinet or rack-mounted. (c) All transmission lines entering the building must be 1/2' Heliax/Wellflex or better via a wall feedthru plate, terminating in a properly installed lightning arrestor with an ID tag on both ends of the line. (d) Solid outer shield cable such as Superflex or Heliax/Wellflex must be used for all intercabling outside the cabinet. The use of braided RF cable (eg; RG8) will NOT be permitted outside the cabinet to minimize RF leakage which could cause interference. (e) All antenna, power and phone cables shall be routed to the base station in a neat manner using routes provided for that purpose. All phone lines shall use shielded cable properly grounded. (f) All stations are to obtain power from the power panel and/or AC receptacle provided for their specific use. (g) All RF equipment cabinets must be grounded to the site ground system using copper strap or ribbon cable with cadweld or silver solder connections. (h) All antenna lines shall be electrically bonded to the tower at the antenna and at the bottom of the tower using grounding kits installed per manufacturer's specifications, and all antenna brackets must be pre-approved. (i) All equipment cabinets shall be identified with a typed label under plastic on which the Lessee's name, address and 24-hour phone number must be listed, in addition to a copy of Lessee's FCC license. (j) Monitor speakers shall be disabled except when maintenance is being performed. (k) All antenna lines will be tagged within twelve (12) inches of the antenna, at the entrance to the building, at the repeater or base station cabinet, and/or at the multicoupler/combiner ports. (l) No drilling, welding or alteration of the tower is permitted for any reason. (m) All ferrous metals located outside of the building or on the tower shall be either stainless steel or hot-dipped galvanized, not plated. (n) Painted towers will require the painting of feedline by the Lessee prior to or before completion of the install. 4. GENERAL: Lessee must comply with any applicable instructions regarding any site security system. (a) Gates shall remain closed at all times unless entering or exiting the premises. When leaving the building, ensure that all doors are locked and the security system is armed. (b) Any tower elevator may be used only after receiving proper instruction on its use, signing a waiver and receiving authorization from the Lessor. (c) This lease does not guarantee parking space. If space is available, park only in the designated areas. Do not park so as to block any ingress or egress except as may be necessary to load or unload equipment. Parking is for temporary use while working at the site. (d) Do not adjust or tamper with the thermostats or HVAC systems. (e) Access to the building roof is restricted to authorized maintenance personnel. EXHIBIT B TO PINNACLE TOWERS INC. MASTER ANTENNA SITE LEASE #D41 INSURANCE FOR LESSEE AND LESSEE'S CONTRACTORS AND SUBCONTRACTORS Lessee, its contractors and its subcontractors will provide certificates of insurance with Lessor named as "additionally insured" on policies except workers compensation showing the insurance in force with a thirty (30) days day notice of cancellation, non-renewal or material change. Certificate must be site specific. In addition, it is the Lessee's responsibility to communicate to Lessor, forty eight (48) hours in advance, when any work (other than emergency work) will be taking place at tower site. Coverage for Lessee, Lessee's contractors and subcontractors are as follows: Insurance: Before commencement of any lease term under the schedule, Lessee, Lessee's contractors and subcontractors operations shall procure and maintain insurance coverage covering all of Lessee's, its contractors and subcontractors operations and activities in, upon or in conjunction with the leased premise. The insurance shall be provided in companies legally qualified to transact business in the State where the site is located in companies with an AM Best Rating of A-: VIII or greater with the following minimum limits. Lessor shall be added as an additional insured on Lessee's policies except workers compensation. A certificate of insurance naming the Lessor as an additional insured and showing the insurance in force shall be delivered to the Lessor with a thirty (30) day notice of cancellation, non-renewal or material change. Lessee agrees that the insurance coverage's outlined above may be maintained pursuant to master policies of insurance covering the specific site locations but requires that limits shall not be reduced at the Lessor's site by activities at the Lessee's other sites or operations. Limits of coverage are named site specific. Primary Insurance Requirements - Lessee and all Lessee's contractors and / or subcontractors. Property: Lessee is responsible for insuring for all loss or damage to their property or the property of others for which they are responsible including loss of use or business interruption. Lessor assumes no responsibility for damage occurring to Lessee's, Lessee's contractors and / or subcontractors real, personal property and / or business interruption regardless of location. Business Automobile Liability: Bodily Injury and Property Damage Liability or owned, hired and non-owned vehicles: Combine Single Limit $ 1,000,000.00 Commercial General Liability: Including but not limited to bodily injury liability, property damage liability, products and completed operations liability, broad form property damage liability and personal injury liability: Policy Form Occurrence General Aggregate Limit $ 1,000,000.00 Products & Completed Operations Limit $ 1,000,000.00 Personal Injury & Advertising Injury Limit $ 1,000,000.00 Each Occurrence Limit $ 1,000,000.00 Fire Damage Limit $ 50,000.00 Medical Expense Limit $ 5,000.00 EXHIBIT B (CONT.) TO PINNACLE TOWERS INC. MASTER ANTENNA SITE LEASE # D41 INSURANCE FOR LESSEE AND LESSEE'S CONTRACTORS AND SUBCONTRACTORS Workers Compensation: Requirements for the State of the site location Statutory Employers Liability Limit each accident $ 100,000.00 Limit disease aggregate $ 500,000.00 Limit disease each employee $ 100,000.00 Excess Insurance Requirements - Lessee and all Lessee's contractors and / or subcontractors - Specific Functions Lessee will require contractors working on the leased site in the capacity of General Site Maintenance limited to: Grounds and vegetation maintenance and installation not requiring heavy equipment. Minor repairs and installations to existing facilities (locks, plumbing, fencing, air conditioning, etc.) will carry an umbrella / excess liability in excess of the business automobile, commercial general liability and workers compensation of a minimum of: Each occurrence limit $1,000,000.00 General aggregate limit $1,000,000.00 Lessee will require contractors working at the Tower site only but not on the Tower itself, excluding the above functions, to carry an umbrella excess liability in excess of the business automobile, commercial general liability and workers compensation with total minimum limits of: Each occurrence limit $3,000,000.00 General aggregate limit $3,000,000.00 Lessee will require contractors working at the Tower site in any capacity which requires climbing the tower, to carry an umbrella/excess liability in excess of the business automobile, commercial general liability and workers compensation totaling of a minimum of: Each occurrence limit $5,000,000.00 General aggregate limit $5,000,000.00 The Lessee and Lessee's representatives, contractors and independent contractors, are not related to the Lessor other than by this lease of space at the site. ANTENNA SITE LEASE SCHEDULING NO.: 070210006D4101 MASTER ANTENNA SITE LEASE NO.: D41 Lease Reference: Page (1) of (2) This Antenna Site Lease Schedule is an integral part of the Master Antenna Site Lease referred to above, the terms of which are hereby incorporated herein. If there is a conflict between the terms of this Schedule and the Lease, this Schedule shall prevail.
LESSOR: Name: Pinnacle Towers Inc. Address: 1549 Ringling Boulevard, Third Floor City/State/Zip: Sarasota, FL 34236 Phone: (941) 364-8886 Fax: (941) 364-8761 LESSEE: Name: Tritel Communications, Inc. Address: 1410 Livinston Lane City/State/Zip: Jackson, MS 39213-8003 Entity Type: Corporation Business Type: PCS Contact(s): Ken Harris Phone: (601) 362-2200 Fax: (601)362-2664 SITE: Name: Clarksville (#0210-006) Address: Toliver Court City/County/State: Clarksville/Montgomery/TN 37040 Coordinates: Latitude: 36-35-26.93 Longitude: 087-20-48.18
INITIAL MONTHLY RENTAL RATE: $[CONFIDENTIAL TREATMENT REQUESTED] per month plus any additional rent as specified herein. STRUCTURAL ANALYSIS FEE: $[CONFIDENTIAL TREATMENT REQUESTED] (Engineering assessment letter only) due prior to commencement of Initial Term. Lessor hereby warrants that it shall commence in good faith efforts to structurally analyze improve if be necessary, the above named facility, for use by Lessee in the operation of its communications systems as described herein. INITIAL TERM: Five (5) years commencing on the earlier of the start date of installation, but not later than December 1, 1998. RENEWAL TERM(S): Five (5 ) automatic terms of five (5) years each unless written notice is given by Lessee to Lessor ninety (90) days prior to the end of the then-current term, of Lessee's intent to not renew next term. ESCALATION FEE: An annual [CONFIDENTIAL TREATMENT REQUESTED] escalation fee or will automatically go into effect each anniversary of the "commencing" date throughout the initial and each successive term. INSURANCE: Within five (5) days from the signing of this agreement, Lessee will provide Lessor with a "Certificate of Insurance" naming Pinnacle Towers Inc. as "Additionally Insured". Such certificate will be specific to this site only and shall carry general liability in the amounts as specified on attached Exhibit "B" titled "Insurance for Lessee's Contractors and Subcontractors". UTILITIES: Lessee shall be solely liable for all utility expenses relating to its installation and equipment. Lessee's electrical service shall be separately metered, and Lessee shall be fully responsible for all costs associated with metering, including the cost of its installation and usage. GROUND SPACE: The placement of Lessee's slab and / or building on available ground space must be pre-approved by Lessor prior to installation. No changes to this placement shall be allowed without prior written approval. All pre-installation of said pad will be coordinated through the appropriate site manager of said facility. No changes to this placement slab/platform will be allowed without prior approval from Lessor. Lessee shall be solely liable for all expenses related to installation of said pad/platform as well as modifications to compound fending to enclose Lessee's equipment. PARTIAL INVALIDITY: The invalidity of one or more phrases sentences, clauses, sections or articles contained in this Schedule shall not affect the remaining portions so long as the material purposes of this Schedule can be determined and effectuated. Lessee's FCC License/Call Sign:____________Expiration Date:_______________ INITIALS:_________ ANTENNA SITE LEASE SCHEDULE NO.: 070210006D4101 MASTER ANTENNA SITE LEASE NO.: D41 Lease Reference:________________________ Page (2) of (2) [X] Lessee owned antenna(s) OR _____________Multiplexer port of Lessor's antenna (1) TO BE INSTALLED ON TOWER: # of Antennas: 6 # of Feedlines: 6 Ant # 1 -6 Transmit: [X] Receive: [X] Mounting Height: 290 feet Tower leg: _____ Antenna Weight:_____ lbs ea Antenna Mfg/Model: DAPA / 59000 Length: 70.3" Antenna Mount: Pipe Mount Fix 904 Weight: 14.6 lbs . Feedline Mfg/Type: Andrew Diameter: 1-5/8" (2) TO BE INSTALLED: LESSEE'S BUILDING / OUTDOOR PAD/SLAB: [X] Equipment Mfg/Model: Lucent PCS TDMA Type III Digital:[X] Type (Terminal, Transmitter, Repeater, etc,): PCS Radio Base Station # of Cabinets: 2 # of Channels: 3 Ground Space Requested: 9x 13 or 117 sq ft Power Requirements (Voltage): 220 Volts AC BTU Requirements: N/A Required AC Breaker Amps: 125 AC Line Voltage: 220 Transmit Power of Equipment: 30 Watts Effective Radiated Power (ERP): 375 Watts Transmit Frequencies: PCS "B" Band Receive Frequencies: PCS "B" Band Filters/Duplexers: _______________ D) TOWER CREW Company Name: ______________Contact Name: ____________Phone #: __________Fax #: INSTALLATION: Lessee shall install and operate only the equipment identified in the Schedule(s), and the cost of Lessee's installation and licensing fees shall be borne solely by Lessee. Lessee shall comply with all site rules and standards contained in Exhibit A to this Lease. During installation, Lessee shall not cause interference of any kind to the activities of Lessor or lessees on the site. If such interference is caused by Lessee and cannot be reduced to levels reasonably acceptable to Lessor, Lessee shall immediately halt all installation work, and Lessor may elect to terminate this Lease by giving Lessee ten (10) days written notice. NOTE: - ----- For additional site standards please refer to attached Exhibit "A" titled "Antenna Site Standards" For additional insurance requirements, please refer to attached Exhibit "B" titled "Insurance for Lessee's Contractors and Subcontractors". THIS SCHEDULE CONTAINS, IN ITS ENTIRETY, LESSEE'S INVENTORY OF EQUIPMENT SPECIFTC TO THIS RENTAL AGREEMENT.
LESSOR: PINNACLE TOWERS INC. WITNESS:_______________________________ BY:___________________________________________ Veronica E. Allgeier, Regional Sales Manager WITNESS:_______________________________ DATE:_________________________________________ LESSEE: TRITEL COMMUNICATIONS, INC. WITNESS:_______________________________ BY:____________________________________________ WITNESS:_______________________________ DATE: October 19, 1998 Jerry M. Sullivan, Jr. PRINT NAME & TITLE Executive Vice President/ Chief Operating Officer
ADDENDUM MASTER LEASE #D41 PAGE 1 OF 2 Notwithstanding anything to the contrary contained in the master lease, Lessor and Lessee agree to the following caveats: 1. Notwithstanding anything contained in Paragraph 5(c), Lessee maintains the right to perform routine maintenance on its equipment at the Site without the prior notice to and the consent of the Lessor. 2. Notwithstanding anything contained in Paragraph 5(g) , Lessee is unable to unilaterally determine that each site is or will be suitable for its purposes. Lessee agrees however, by virtue of each executed Site specific Lease Schedule that it thereby individually acknowledges Site suitability and acceptability. 3. Notwithstanding anything contained in Paragraph 10(c), Lessor shall not be responsible for any incidental or consequential damages incurred resulting from (i) Lessee's (or any party claiming by, through or under Lessee) use or Lessee's (or any party claiming by, through or under Lessee) inability to use the Premises (or any portion thereof), or from (ii) damage to Lessee's (or any party claiming by, through or under Lessee) equipment which is caused by the negligence of Lessor. Lessee shall not be responsible for any incidental or consequential damages incurred resulting from (I) Lessor's (or any party claiming by, through or under Lessor) use or Lessor's (or any party claiming by, through or under Lessor) inability to use the Property, the Tower or the Premises (or any portion thereof) or from (ii) damage to the Tower, the Property, the Premises, or equipment or property of the Lessor (or any party claiming by, through or under the Lessor) which is caused by the negligence of Lessee. 4. Lessor hereby represents and warrants to Lessee that Lessor has good and marketable title to its leasehold interest in the Premises on each schedule and to its interest in an access easement and utility easement to each site on each schedule and that it has complete, good and marketable access to each site on each schedule, free and clear of all liens and encumbrances except those described herein to each Schedule. Lessor will warrant and defend the same to Lessee against the claims and demands of all persons and entities. Lessor, upon request of Lessee, will make available to Lessee any and all title insurance policies or commitments regarding each site on each Schedule as may be in Lessor's possession. Further, Lessor will assist Lessee, at no cost or expense to Lessor, in obtaining a commitment or title insurance policy covering the Premises on each site on each schedule. Lessor further represents and warrants that all utilities (including without limitation telephone and electricity) are connected to and available at each site on each Schedule. 5. Lessor hereby represents and warrants that all operations conducted by Lessor in connection with the Tower and the premises located on each Schedule meet all applicable state, federal, county, and local codes and regulations and that all permits and approvals necessary for the operation of each tower and communications facility at each site on each Schedule have been obtained, are in full force and effect and have not been rescinded, modified, revoked, altered or terminated. Lessor agrees that it will conduct its operations in the future in accordance with all such codes and regulations. Lessor is not required to obtain any consent under any ground lease, mortgage, deed of trust, or other instrument encumbering the leased premises located on each Schedule in order for Lessee to construct, operate, maintain, or access Lessee's communications facility on each site on each Schedule. 6. During the term of the Lease, Lessee will substantially comply with all applicable state, federal, county, and local laws, codes, and regulations relating to Lessor's use of the leased premises on each Schedule. Lessor will not commit or suffer to be committed any waste on the Premises or any nuisance on each site on each Schedule. Master Lease #D41 PAGE 2 OF 2 7. Pursuant to paragraph 20(g), the terms and conditions of the Lease will be governed by the laws of the State within which the Leased Premises is located.
LESSOR: PINNACLE TOWERS INC. WITNESS:_______________________________ BY:___________________________________________ WITNESS:_______________________________ DATE:_________________________________________ LESSEE: TRITEL COMMUNICATIONS, INC. WITNESS:_______________________________ BY:____________________________________________ JERRY M. SULLIVAN, JR. EXECUTIVE VICE PRESIDENT/ CHIEF OPERATING OFFICER WITNESS:_______________________________ DATE:__________________________________________
ANTENNA SITE LEASE SCHEDULE #055097001N0003 MASTER ANTENNA SITE LEASE NO.: D41 TriTel Ref # Page (1) of (2) This Antenna Site Lease Schedule is an integral part of the Master Antenna Site Lease referred to above, the term of which are incorporated herein. If there is a conflict between the terms of this Schedule and the Lease, this Schedule shall prevail.
LESSOR: Name: Pinnacle Towers Inc. Phone: (941)364-8886 Address: 1549 Ringling Boulevard, Third Floor Fax: (941)364-8761 City/State/Zip: Sarasota, FL 34236 Phone: (601) 362-2200 LESSEE: Name: TriTel Communications, Inc. Address: 1410 Livingston Lane Fax: (601)362-2664 City/State/Zip: Jackson, MS 39213-8003 Entity Type: Business Type: Corporation Business Type: PCS CONTACT(S): Turpin Mott, AgentMgr (SpectraSite); E/M: mottt@spectrasiteservices.com / P: 601-898-6283 / F: 601-898-6286 Ken Harris, Dir/Site Acquis (TriTel) E/M: kharris@suncompcs.net; Phone: 601-898-6209 / F: 601-898-6216 SITE: Name: Ridgeland INITIAL RENTAL RATE: $[CONFIDENTIAL TREATMENT REQUESTED] PER MONTH plus any applicable sales tax and additional rent, as specified herein. CAPITAL EXPENSE (NON-REFUNDABLE): $[CONFIDENTIAL TREATMENT REQUESTED] DUE PRIOR TO COMMENCEMENT OF THE INITIAL TERM FOR UTILITIES ACCESS. LESSEE WILL BE RESPONSIBLE FOR ALL CONTRACTOR EXPENSES RELATIVE TO CONNECTING ITS EQUIPMENT TO THE UTILITIES SERVICE NOW PRESENT AT THE SITE. DUE DILIGENCE (NON-REFUNDABLE FEE): $[CONFIDENTIAL TREATMENT REQUESTED] DUE BY 3/L/99. Lessee shall have a Due Diligence period beginning 3/L/99, not to exceed 5/31/99 for Lessee and its agents, surveyors and other representatives to have full access to the Site for the sole purpose of determining through geological, radio frequency, and engineering testing the feasibility or suitability of the Site for Lessee's permitted use. If, in the sole and absolute opinion of Lessee, the Site is deemed unsuitable for such use, Lessee shall have the right at any time prior to the expiration of the Due Diligence period to terminate this Schedule by providing written notice of termination to Lessor, and Lessee shall remove all testing equipment and restore any disturbance to the Site caused by such testing within ten (10) days following such written notification. INITIAL TERM: Five (5) years commencing on the earlier of the start date of install but no later than 6/1/99. RENEWAL TERM(S): Up to four (4) automatic terms of five (5) years each unless written notice is given by Lessee tol essor no less than ninety (90) days prior to the end of the then-current term, of Lessee's intent to not renew next term. ESCALATION FEE: An annual escalation fee of [CONFIDENTIAL TREATMENT REQUESTED] or the Consumer Price Index, whichever is larger, will automatically go into effect on the anniversary of the commencement date throughout the Initial Term and each successive Renewal Terms. INSURANCE: Within five (5) days from the signing of this agreement, Lessee will provide Lessor with "Certificate of Insurance" naming Pinnacle Towers Inc. as "Additionally Insured". Such certificate will be specific to this site only and shall carry general liability in the amounts as specified on attached Exhibit "A" entitled "Insurance for Lessee and Lessee's Contractors and Subcontractors". THIS AGREEMENT IS THE INITIAL AGREEMENT FOR THIS SITE BETWEEN LESSEE AND LESSOR. IT DOES NOT SUPERSEDE ANY OTHER. INITIALS:_______ ANTENNA SITE LEASE SCHEDULE #055097001N0003 MASTER ANTENNA SITE LEASE NO.: D41 TriTel Ref # Page (2) of (2) LESSEE'S FCC LICENSE/CALL SIGN: ______________ EXPIRATION DATE: _________ X LESSEE OWNED ANTENNA(S) OR ___ MULTIPLEXER PORT OF LESSOR'S ANTENNA A) TO BE MOUNTED ON THE TOWER: # of Antennas: Six (6) # of Feedlines: Six (6) ANT #1 - #3: Transmit Only: X Mounting Height: 250' Azimuths: 10, 130 & 250 degrees Antenna Mfg/Model: ALLGON 7200.01 Length 74.8" ea. Antenna Weight: 22.1 lbs ea Antenna Mount: Antenna Mount Weight: ____ Feedline Mfg/Type: CommScope or Trilogy Feedline Diameter: 1-5/8" ANT #4 - #6: Receive Only: [X] Mounting Height: 250' Azimuths: 10, 130 & 250 degrees Antenna Mfg/Model: ALLGON 7251.01 Length 75" ea. Antenna Weight. 17.6 lbs ea Antenna Mount: Antenna Mount Weight: Feedline Mfg/Type: CommScope or Trilogy Feedline Diameter: 1-5/8" B) TO BE INSTALLED IN LESSEE'S OUTDOOR SHELTER ON PAD: Equipment Mfg/Model: Ericsson/SCCB RBS 884 Macro Digital: [X] Analog: [ ] Type (Terminal, Transmitter, etc,): Transceiver #of Cabinets: One (1) Cabinet Dimen: N/A Ground space requested: Up to 12' x 18' <234 sq ft>* Power Requirements: 220 Volts AC BTU Requirements: N/A Required AC Breaker Amps: 100 Amps AC Line Voltage: 220 Volts Maximum AC Current Draw @ Given Line Voltage: 42 Amps Transmit Power of Equipment: 30Watts Effective Radiated Power (ERP): 500 Watts # of Channels: PCS "B" Block Transmit Frequencies: 1950 - 1965 MHz Receive Frequencies:1870 - 1885 MHz Filters: As required Note: N/A . C) TOWER CREW... Company Name: _______________________________________________ Contact Name: ____________________ Phone #: _____________ Fax #:______________ NOTE: * THE PLACEMENT AND SIZE OF LESSEE'S SLAB AND/OR BUILDING ON AVAILABLE GROUND SPACE WILL BE PRE-APPROVED BY LESSOR PRIOR TO INSTALL AND SHALL BE INCLUDED IN THIS SCHEDULE AS "EXHIBIT B". NO CHANGES TO THIS PLACEMENT SHALL BE ALLOWED WITHOUT PRIOR APPROVAL AND AN AMENDED "EXHIBIT B" TO THIS SCHEDULE. LESSEE SHALL BE SOLELY LIABLE FOR ALL UTILITY COSTS RELATING TO THE INSTALLATION AND OPERATION OF ITS EQUIPMENT. LESSEE'S SERVICE SHALL BE SEPARATELY METERED AND LESSEE SHALL BE FULLY RESPONSIBLE FOR ALL COSTS ASSOCIATED WITH THE INSTALLATION OF THAT METER AND ITS USAGE. THIS SCHEDULE CONTAINS, IN ITS ENTIRETY, LESSEE'S LISTING OF EQUIPMENT AT THIS SITE.
LESSOR: PINNACLE TOWERS INC. WITNESS:_______________________________ BY:___________________________________________ Barbara H. Gonshor Senior Regional Sales Manager WITNESS:_______________________________ DATE:_________________________________________ LESSEE: TRITEL COMMUNICATIONS, INC. WITNESS:_______________________________ BY:____________________________________________ Jerry M. Sullivan, Jr. Executive Vice President & COO WITNESS:_______________________________ DATE:__________________________________________
EXHIB1T A TO PINNACLE TOWERS INC. ANTENNA SITE LEASE SCHEDULE #055097001N0003 MASTER ANTENNA SITE LEASE NO.: D41 TriTel Ref # Page (1) of (2) INSURANCE FOR LESSEE AND LESSEE'S CONTRACTORS AND SUBCONTRACTORS ---------------------------------------------------------------- Lessee, its contractors and its subcontractors will provide certificates of insurance with Lessor named as "Additionally Insured" on policies except workers compensation showing the insurance in force with a thirty (30) days day notice of cancellation, non-renewal or material change. Certificate must be site specific. In addition, it is the Lessee's responsibility to communicate to Lessor, forty eight (48) hours in advance, when any work (other than emergency work) will be taking place at tower site. Coverage for Lessee, Lessee's contractors and subcontractors are as follows: Insurance: Before commencement of any lease term under the schedule, Lessee, Lessee's contractors and subcontractors operations shall procure and maintain insurance coverage covering all of Lessee's, its contractors and subcontractors operations and activities in, upon or in conjunction with the leased premise. The insurance shall be provided in companies legally qualified to transact business in the State where the site is located in companies with an AM Best Rating of A-: VIII or greater with the following minimum limits. Lessor shall be added as an "Additional Insured" on Lessee's policies except workers compensation. A certificate of insurance naming the Lessor as an "Additional Insured" and showing the insurance in force shall be delivered to the Lessor with a thirty (30) day notice of cancellation, non-renewal or material change. Lessee agrees that the insurance coverage's outlined above may be maintained pursuant to master policies of insurance covering the specific site locations but requires that limits shall not be reduced at the Lessor's site by activities at the Lessee's other sites or operations. Limits of coverage are named site specific. Primary Insurance Requirements - Lessee and all Lessee's contractors and / or subcontractors. Property: Lessee is responsible for insuring for all loss or damage to their property or the property of others for which they are responsible including loss of use or business interruption. Lessor assumes no responsibility for damage occurring to Lessee's, Lessee's contractors and / or subcontractors real, personal property and / or business interruption regardless of location. Business Automobile Liability: Bodily Injury and Property Damage Liability or owned, hired and non-owned vehicles: Combined Single Limit $ 1,000,000.00 Commercial General Liability: Including but not limited to bodily injury liability, property damage liability, products and completed operations liability, broad form property damage liability and personal injury liability: Policy Form Occurrence General Aggregate Limit $ 1,000,000.00 Products & Completed Operations Limit $ 1,000,000.00 Personal Injury & Advertising Injury Limit $ 1,000,000.00 Each Occurrence Limit $ 1,000,000.00 Fire Damage Limit $ 50,000.00 Medical Expense Limit $ 5,000.00 Workers Compensation: Requirements for the State of the site location Statutory Employers Liability Limit each accidenT $ 100,000.00 Limit disease aggregate $ 500,000.00 Limit disease each employee $ 100,000.00 INITIALS: __________/____________ EXHIBIT A TO PINNACLE TOWER INC. ANTENNA SITE LEASE SCHEDULE #055097001N0003 MASTER ANTENNA SITE LEASE NO.: D41 TriTel Ref # Page (2) of (2) INSURANCE FOR LESSEE AND LESSEE'S CONTRACTORS AND SUBCONTRACTORS (CONTINUED) - ---------------------------------------------------------------------------- Excess Insurance Requirements - Lessee and all Lessee's contractors and / or subcontractors - Specific Functions: Lessee will require contractors working on the leased site in the capacity of General Site Maintenance limited to: Grounds and vegetation maintenance and installation not requiring heavy equipment. Minor repairs and installations to existing facilities (locks, plumbing, fencing, air conditioning, etc.) will carry an umbrella / excess liability in excess of the business automobile, commercial general liability and workers compensation of a minimum of: Each occurrence limit $1,000,000.00 General aggregate limit $1,000,000.00 Lessee will require contractors working at the Tower site only but not on the Tower itself, excluding the above fianctions, to carry an umbrella / excess liability in excess of the business automobile, commercial general liability and workers compensation with total minimum limits of: Each occurrence limit $3,000,000.00 General aggregate limit $3,000,000.00 Lessee will require contractors working at the Tower site in any capacity which requires climbing the tower, to carry an umbrella/excess liability in excess of the business automobile, commercial general liability and workers compensation totaling of a minimum of: Each occurrence limit $5,000,000.00 General aggregate limit $5,000,000.00 The Lessee and Lessee's representatives, contractors and independent contractors, are not related to the Lessor other than by this lease of space at the site. INITIAL:_________/___________ EX-10.17 19 INSTALLMENT PAYMENT PLAN NOTE INSTALLMENT PAYMENT PLAN NOTE (Broadband Personal Communications Service, C Block): Auction Event No. 5) US $42,525,211.95 Washington, D.C. License No.: PBB044C FOR VALUE RECEIVED, the undersigned, Mercury PCS, L L C, a Mississippi Limited Liability Company, ("Maker"), promises to pay to the order of the FEDERAL COMMUNICATIONS COMMISSION, an independent regulatory agency of the United States ("Payee" or "Commission"), the principal sum of 42,525,211.95 DOLLARS ("Principal Amount"), together with accrued interest, computed at the annual rate of seven percent (7.0%) per annum, ("Annual Rate") on the unpaid Principal Amount hereof, from the date of this Note until the date the entire Principal Amount has been paid in full. Interest and principal shall be payable as set forth below and in accordance with Schedule A attached hereto and made a part hereof: Interest only, at the Annual Rate from the date hereof until the last day of the month ninety (90) days hence, shall be due and payable on December 31, 1996. Commencing December 31, 1996, Maker shall pay interest only at the Annual Rate, in equal consecutive quarterly installments of $744,191.21 due on the last day of the month and every ninety (90) days thereafter from December 31, 1996 through September 30, 2002. Commencing December 31, 2002, Maker shall pay principal and interest in equal quarterly installments of $3,070,302.29 due on the last day of each month ninety (90) days hence through and including September 30, 2006 ("Maturity Date"). The entire unpaid Principal Amount, together with accrued and unpaid interest thereon, and all remaining obligations of Maker hereunder, shall be due and payable on the Maturity Date. All interest shall be computed on the basis of a 360-day year for actual days elapsed. All payments to be made hereunder, of principal, interest, costs, expenses, or other sums due hereunder, shall be made to the holder of this Note in lawful money of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts, free and clear and without reduction by reason of any present or future income, stamp or other taxes, levies, imposts, deductions, charges, compulsory loans or withholdings whatsoever, including interest thereon or penalties with respect thereto, if any imposed, assessed, levied or collected by any political subdivision or taxing authority thereof or therein, on or in respect of this Note or the obligations it evidences. All payments shall be made during normal business hours at the Commission's designated lockbox location as set forth from time to time in the Commission's then-applicable orders and regulations and/or public notices. This Note is secured by, and entitled to the benefits of, a Security Agreement (the "Security Agreement") of even date between Maker and Payee. All the terms, covenants, conditions and agreements contained in the Security Agreement are hereby incorporated herein and made part of this Note to the same extent and effect as if fully set forth herein. It is expressly understood by Maker that all of the terms of the Security Agreement apply to this Note and that reference in the Security Agreement to "this Agreement" includes both the Security Agreement and this Note. IT IS HEREBY EXPRESSLY AGREED THAT TIME IS OF THE ESSENCE FOR THE PERFORMANCE OF ALL TERMS AND CONDITIONS UNDER THIS NOTE AND THE SECURITY AGREEMENT. A default under this Note ("Event of Default") shall occur upon any or all of the following: a. non-payment by Maker of any Principal or Interest on the due date as specified hereinabove if the Maker remains delinquent. for more than 90 days and (1) Maker has not submitted a request, in writing, for a grace period or extension of payments, if any such grace period or extension of payments is provided for in the then-applicable orders and regulations of the Commission; or (2) Maker has submitted a request, in writing, for a grace period or extension of payments, if any such grace period or extension of payments is provided for in the then-applicable orders and regulations of the Commission, and following the expiration of the grant of such grace period or extension or upon denial of such a request for a grace period or extension, Maker has not resumed payments of Interest and Principal in accordance with the terms of this Note; or; b. failure by Maker to comply with any other condition for holding the above referenced license (as defined in the Security Agreement) as set forth in the license or in the Communications Act of 1934, as amended, or the then-applicable orders and regulations of the Commission; or c. violation by Maker of any other covenant or term of this Note or the Security Agreement. Upon any Event of Default under this Note, Payee may assess a late fee and/or administrative charge, plus the costs of collection, litigation, attorneys' fees, and default payment as specified in the then-applicable orders and regulations of the Commission, as amended, and Maker acknowledges that it is liable and herein expressly promises to pay on demand such additional costs, expenses, late charges, administrative charges, attorneys fees, and default payment. Upon a default under this Note, the unpaid Principal Amount, plus all unpaid interest accrued thereon, together with any late fee and/or administrative charge, plus the costs of collection, litigation, attorneys' fees, and default payment as specified in the then-applicable orders and regulations of the Commission, as amended, shall become immediately due and payable. The Maker hereby acknowledges that the Commission has issued Maker the above referenced license pursuant to the Communications Act of 1934, as amended, that is conditioned upon full and timely payment of financial obligations under the Commission's installment payment plan, as set forth in the then-applicable orders and regulations of the Commission, as amended, and that the sanctions and enforcement authority of the Commission shall remain applicable in the event of a failure to comply with the terms and conditions of the license, regardless of the enforceability of this Note or the Security Agreement. No delay or omission on the part of Payee in exercising any right under this Note, the Security Agreement, or any other instrument securing this Note, shall operate as a waiver of such right or of any other right of Payee, nor shall any waiver by Payee of any such right or rights on any one occasion be deemed a bar to or waiver of the same right or rights on any future occasion. The Maker is liable for all costs of collection or enforcement of the Payee's rights under this Note or under the Security Agreement or under any other instrument now or hereafter executed by Maker in favor of Payee which in any manner evidences or constitutes additional security for this Note, including reasonable attorneys' fees, whether suit is brought or not, and all such costs shall be paid by the Maker on demand, and whether or not such collection or enforcement occurs in any bankruptcy, reorganization, receivership or other proceedings involving creditors' rights or involving a claim under this Note or any of the other loan documents. Maker, all endorsers and guarantors hereof and any other party who may become liable for all or any part of the obligation evidenced hereby, waive presentment for payment, notice or dishonor, protest and notice of protest, notice of nonpayment and any and all lack of diligence or delays in collection or enforcement of this Note. If Maker is comprised of more than one party, all such parties shall be jointly and severally bound and liable as Maker under this Note. Maker may prepay all or any part of the Principal Amount without premium or penalty upon ten (10) days' prior written notice to Payee, given in the manner provided in the Security Agreement. Partial prepayments shall not postpone or reduce regular payments to be made hereunder. All such prepayments shall be applicable first to the payment of late charges, if any, costs and expenses, and administrative penalties due hereunder, then to accrued and unpaid interest, then to that portion of the unpaid Principal Amount due on the Maturity Date and then, if applicable, to any unpaid installments of principal in the inverse order of installment maturities. The Payee may require that any partial prepayments be made on the dates installments of principal and interest are due hereunder. Anything to the contrary notwithstanding, Payee shall not charge, take or receive, and Maker shall not be obligated to pay to Payee, any amounts constituting interest on the Principal Amount in excess of the maximum rate permitted by applicable law. If by reason of the acceleration of the unpaid Principal Amount or otherwise, interest in excess of the highest legal contract rate permitted by applicable law shall at any time be paid, any such excess shall constitute and be treated as a payment of outstanding principal hereunder and shall operate to reduce such outstanding Principal Amount. ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS NOTE, THE SECURITY AGREEMENT, OR OTHER DOCUMENTS EVIDENCING OR SECURING THE DEBT TRANSACTION EVIDENCED HEREBY MAY ONLY BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA, AND, BY EXECUTION AND DELIVERY OF THIS NOTE AND SECURITY AGREEMENT, THE MAKER HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURT. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN THE DISTRICT OF COLUMBIA. THE MAKER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF THE AFOREMENTIONED COURT IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF A COPY THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO THE MAKER AT ITS ADDRESS PROVIDED HEREIN. SUCH SERVICE SHALL BE DEEMED TO HAVE OCCURRED ON THE THIRD DAY AFTER SUCH MAILING. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF PAYEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE MAKER IN ANY OTHER JURISDICTION. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, WILLINGLY, VOLUNTARILY, UNCONDITIONALLY, IRREVOCABLY AND INTENTIONALLY FOREVER WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE SECURITY AGREEMENT, OR OTHER DOCUMENTS EVIDENCING OR SECURING THE DEBT TRANSACTION EVIDENCED HEREBY, ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (VERBAL OR WRITTEN) OR ACTION OF ANY PERSON OR ANY EXERCISE BY ANY PARTY OF THEIR RESPECTIVE RIGHTS UNDER THIS TRANSACTION, DOCUMENT OR ANY RELATED DOCUMENT OR IN ANY WAY RELATING TO THE COLLATERAL (INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS TRANSACTION OR ANY CLAIMS OR DEFENSES ASSERTING THAT THIS TRANSACTION, IN WHOLE OR IN PART, WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR VOIDABLE). MAKER REPRESENTS THAT NO ORAL OR WRITTEN STATEMENTS HAVE BEEN MADE BY ANY PARTY TO INCLUDE THIS SUBMISSION OR JURISDICTION AND WAIVER OF TRAIL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS STATED EFFECT. MAKER FURTHER REPRESENTS THAT IT HAS BEEN REPRESENTED BY INDEPENDENT COUNSEL, SELECTED BY ITS OWN FREE WILL, IN SIGNING THIS NOTE AND IN THE MAKING OF THIS WAIVER AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH SUCH COUNSEL. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PAYEE TO ENTER INTO THIS TRANSACTION AND THE VARIOUS DOCUMENTS RELATED THERETO. Maker acknowledges that this Note and Security Agreement (any any attachements affixed thereto by the Commission with the permission and knowledge of the Maker/Debtor), along with the then-current applicable Commission orders and regulations and the Communications Act of 1934, as amended, set forth the entire agreement, written and oral, of the parties, and all inconsistent prior statements, understandings, notices, representations and agreements between the parties, oral or written, are superseded by and merged in this Note, the Security Agreement or other documents evidencing or securing the debt transaction evidenced hereby. Except as otherwise expressly provided herein, all of Payee's representations, warranties, covenants and agreements in this Note and Security Agreement shall merge in the documents and agreements executed by the Maker and shall not survive said execution. If any provision or part of this Note and/or the Security Agreement shall for any reason be held or deemed to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note and this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein and the remaining provisions of this Note shall remain in full force and effect. The enforceability of the Note and/or the Security Agreement do not alter the rights and obligations of the Maker and Payee under the Communications Act of 1934, as amended, or under the then-applicable orders and regulations of the Commission, as amended. Any notice demand or request hereunder shall be given in the manner set forth in the Security Agreement. This Note shall be governed by and construed in accordance with the Communications Act of 1934, as amended, the then-applicable orders and regulations of the Commission, and federal law. Nothing in this Note shall be deemed to modify any then-applicable orders and regulations of the Commission, and nothing in this Note shall be deemed to release the Maker from compliance therewith. This Note may not be changed, modified, waived, terminated or discharged orally, but only by an agreement in writing executed by the party against whom enforcement of any such change, modification, waiver, termination, or discharge is sought. Maker represents and warrants that any statements made by or on behalf of Maker in connection with this Note: (i) are true and accurate in all material respects; and (ii) do not omit any material facts or information that would make such statement misleading in the context of Payee's evaluation of the note, and acknowledges and agrees that Payee is entitled to and his relied on such statements in agreeing to the Note. Payee shall have the right at any time to assign, endorse, pledge, convey or otherwise transfer this Note and all of the other loan documents to any party. From and after the date of such assignment, endorsement, pledge, conveyance or other transfer, such transferee shall be entitled to exercise any and all rights and remedies of Payee hereunder. Maker shall not assign, convey or otherwise transfer its rights and obligations hereunder. Date: NOVEMBER 1, 1996 ------------------------------------------- MERCURY PCS, LLC BY MSM, INC., MANAGER By: ---------------------------------------- JERRY M. SULLIVAN, JR. Its: VICE PRESIDENT LICENSE NUMBER: PBB044C INSTALLMENT PLAN C AMORTIZATION SCHEDULE FOR FEDERAL COMMUNICATIONS COMMISSION BROADBAND PERSONAL COMMUNICATIONS SERVICE, C-BLOCK LICENSES (INTEREST-ONLY PAYMENTS FOR THE FIRST SIX YEARS) ORIG BALANCE ORIG RATE TERM (YRS) 1ST PMT FUTURE VALUE --------------------------------------------------------------------- $42,525,211.95 7.00% 10 DEC-96 $0 ---------------------------------------------------------------------
NEW BALANCE - ------------------------------------------------------------------------------------------------------------------------------------ PMT# DATE YR RATE P&I PAYMENT PRINCIPAL INTEREST EXTRA PRIN (Prin Only) CUM. INTEREST YEARLY TOTAL INT - ------------------------------------------------------------------------------------------------------------------------------------ 1 Dec-96 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $744,191.21 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 2 Mar-97 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $1,488,382.42 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 3 Jun-97 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $2,232,573.63 $1,488,382.42 - ------------------------------------------------------------------------------------------------------------------------------------ 4 Sep-97 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $2,976,764.84 $2,232,573.83 - ------------------------------------------------------------------------------------------------------------------------------------ 5 Dec-97 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $3,720,956.05 $2,976,764.84 - ------------------------------------------------------------------------------------------------------------------------------------ 6 Mar-98 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $4,465,147.25 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 7 Jun-98 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $5,209,338.46 $1,488,382.42 - ------------------------------------------------------------------------------------------------------------------------------------ 8 Sep-98 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $5,953,529.67 $2,232,573.63 - ------------------------------------------------------------------------------------------------------------------------------------ 9 Dec-98 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $6,697,720.88 $2,976,764.84 - ------------------------------------------------------------------------------------------------------------------------------------ 10 Mar-99 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $7,441,912.09 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 11 Jun-99 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $8,186,103.30 $1,488,382.42 - ------------------------------------------------------------------------------------------------------------------------------------ 12 Sep-99 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $8,930,294.51 $2,232,573.63 - ------------------------------------------------------------------------------------------------------------------------------------ 13 Deo-99 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $9,674,485.72 $2,976,764.84 - ------------------------------------------------------------------------------------------------------------------------------------ 14 Mar-2000 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $10,418,676.93 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 15 Jun-2000 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $11,162,868.14 $1,488,382.42 - ------------------------------------------------------------------------------------------------------------------------------------ 16 Sep-2000 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $11,907,059.35 $2,232,573.63 - ------------------------------------------------------------------------------------------------------------------------------------ 17 Deo-2000 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $12,651,250.56 $2,976,764.84 - ------------------------------------------------------------------------------------------------------------------------------------ 18 Mar-2001 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $13,395,441.76 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 19 Jun-2001 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $14,139,632.97 $1,488,382.42 - ------------------------------------------------------------------------------------------------------------------------------------ 20 Sep-2001 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $14,883,824.18 $2,232,573.63 - ------------------------------------------------------------------------------------------------------------------------------------ 21 Dec-2001 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $15,628,015.39 $2,976,764.84 - ------------------------------------------------------------------------------------------------------------------------------------ 22 Mar-2002 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $16,372,206.60 $744,191.21 - ------------------------------------------------------------------------------------------------------------------------------------ 23 Jun-2002 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $17,116,397.81 $1,488,382.42 - ------------------------------------------------------------------------------------------------------------------------------------ 24 Sep-2002 7.00% $744,191.21 $0.00 $744,191.21 $0.00 $42,525,211.95 $17,860,589.02 $2,232,573.63 - ------------------------------------------------------------------------------------------------------------------------------------ 25 Dec-2002 7.00% $3,070,302.29 $2,326,111.08 $744,191.21 $0.00 $40,199,100.87 $18,604,780.23 $2,976,764.84 - ------------------------------------------------------------------------------------------------------------------------------------ 26 Mar-2003 7.00% $3,070,302.29 $2,366,818.02 $703,484.27 $0.00 $37,832,282.85 $19,308,264.50 $703,484.27 - ------------------------------------------------------------------------------------------------------------------------------------ 27 Jun-2003 7.00% $3,070,302.29 $2,408,237.34 $662,064.95 $0.00 $35,424,045.51 $19,970,329.45 $1,365,549.22 - ------------------------------------------------------------------------------------------------------------------------------------ 28 Sep-2003 7.00% $3,070,302.29 $2,450,381.49 $619,920.80 $0.00 $32,973,664.02 $20,590,250.25 $1,985,470.02 - ------------------------------------------------------------------------------------------------------------------------------------ 29 Dec-2003 7.00% $3,070,302.29 $2,493,263.17 $577,039.12 $0.00 $30,480,400.85 $21,167,289.37 $2,562,509.14 - ------------------------------------------------------------------------------------------------------------------------------------ 30 Mar-2004 7.00% $3,070,302.29 $2,536,895.28 $533,407.01 $0.00 $27,943,505.57 $21,700,696.38 $533,407.01 - ------------------------------------------------------------------------------------------------------------------------------------ 31 Jun-2004 7.00% $3,070,302.29 $2,581,290.94 $489,011.35 $0.00 $25,362,214.63 $22,189,707.73 $1,022,418.36 - ------------------------------------------------------------------------------------------------------------------------------------ 32 Sep-2004 7.00% $3,070,302.29 $2,626,463.53 $443,838.76 $0.00 $22,735,751.10 $22,633,546.49 $1,466,257.12 - ------------------------------------------------------------------------------------------------------------------------------------ 33 Dec-2004 7.00% $3,070,302.29 $2,672,426.65 $397,875.64 $0.00 $20,063,324.45 $23,031,422.13 $1,864,132.76 - ------------------------------------------------------------------------------------------------------------------------------------ 34 Mar-2005 7.00% $3,070,302.29 $2,719,194.11 $351,108.18 $0.00 $17,344,130.34 $23,382,530.31 $351,108.18 - ------------------------------------------------------------------------------------------------------------------------------------ 35 Jun-2005 7.00% $3,070,302.29 $2,766,780.01 $303,522.28 $0.00 $14,577,350.33 $23,686,052.59 $654,630.46 - ------------------------------------------------------------------------------------------------------------------------------------ 36 Sep-2005 7.00% $3,070,302.29 $2,815,198.66 $255,103.63 $0.00 $11,762,151.67 $23,941,156.22 $909,734.09 - ------------------------------------------------------------------------------------------------------------------------------------ 37 Dec,2005 7.00% $3,070,302.29 $2,864,464.64 $205,837.65 $0.00 $8,897,687.03 $24,146,993.87 $205,837.65 - ------------------------------------------------------------------------------------------------------------------------------------ 38 Mar-2006 7.00% $3,070,302.29 $2,914,592.77 $155,709.52 $0.00 $5,983,094.26 $24,302,703.39 $361,547.17 - ------------------------------------------------------------------------------------------------------------------------------------ 39 Jun-2006 7.00% $3,070,302.29 $2,965,598.14 $104,704.15 $0.00 $3,017,496.12 $24,407,407.54 $466,251.32 - ------------------------------------------------------------------------------------------------------------------------------------ 40 Sep-2006 7.00% $3,070,302.29 $3,017,496.11 $52,806.18 $0.00 $0.01 $24,460,213.72 $519,057.50 - ------------------------------------------------------------------------------------------------------------------------------------
EX-10.18 20 FIRST MODIFICATION OF INSTALLMENT PAYMENT PLAN NOTE License No.: CWB269F FIRST MODIFICATION OF --------------------- INSTALLMENT PAYMENT PLAN NOTE ----------------------------- FOR BROADBAND PCS F BLOCK ------------------------- THIS FIRST MODIFICATION OF INSTALLMENT PAYMENT PLAN NOTE ("First Modification") is executed on the _____ day of _______________, 1998, and is intended to be effective for all purposes as of the 31st day of July, 1998 ("Effective Date"), by and between: (i) MERCURY PCS II, L.L.C., a ___________________ ("Maker"); and (ii) FEDERAL COMMUNICATIONS COMMISSION, an independent regulatory agency of the United States ("Payee" or "Commission"). W I T N E S S E T H: - - - - - - - - - - RECITALS: R-1. Reference is made to that certain Installment Payment Plan Note made by Maker, payable to the order of the Commission, in the original principal amount of $ 377,404.80 ("Original Note"). The Original Note is secured by, amongst other things: (i) that certain Security Agreement by and between the Maker and the Commission ("Security Agreement"); and (ii) those certain Financing Statements related thereto (collectively, "Financing Statements"). The Original Note, Security Agreement, Financing Statements and all other documents evidencing, governing or securing the Original Note, together with any and all amendments, modifications or supplements thereto, are hereinafter collectively referred to as the "Loan Documents". All of the terms, conditions and provisions of the Loan Documents are hereby incorporated herein and made a part hereof in their entireties by this reference. R-2. The Security Agreement and Financing Statements created a first lien security interest in the "License" and the "Collateral" (as those terms are defined in the Security Agreement). R-3. Pursuant to that certain Public Notice, DA 97-883 (rel. April 28, 1997) ("Suspension Order"), the Commission suspended the deadline for payment of installment payments required to be made under the Original Note. Pursuant to that certain Second Report and Order and Further Notice of Proposed Rule Making adopted September 25, 1997 and released October 16, 1997 ("Second Report and Order"), the Commission rescinded the Suspension Order and ordered the reinstatement of payments under the Original Note effective March 31, 1998 and agreed to a schedule for payment of all accrued and unpaid interest due under the Original Note. The Second Report and Order was subsequently modified by that certain Order on Reconsideration of the Second Report and Order adopted March 23, 1998 and released March 24, 1998 ("Order on Reconsideration"). Pursuant to the Order on Reconsideration and the Public Notice, DA-98-741 (rel. April 17, 1998), the date for the resumption of payments under the Original Note was changed to July 31, 1998 as well as certain other modifications to the terms contained in the Second Report and Order. R-4. Maker and the Commission are entering into this First Modification for the purpose of modifying the Original Note to provide for the repayment of all accrued and unpaid interest due under the Original Note and to make certain other conforming changes to the Original Note as provided herein. It is the intention of the Maker and the Payee that except as specifically modified by this First Modification, the Original Note shall continue in full force and effect. NOW, THEREFORE, in consideration of the covenants and agreements herein contained, the sum of Ten dollars ($10.00) and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned parties hereby covenant and agree and amend the Original Note as follows: 1. The foregoing Recitals, including all terms defined therein, are hereby incorporated in this First Modification to the same extent as if they had been herein stated in full. The documents referred to in the Original Note shall include the documents referred to therein, as well as any and all modifications, amendments, additions and/or supplements thereto and/or replacements thereof. 2. This First Modification shall amplify and modify where specifically provided herein but shall not replace the Original Note. Except as specifically modified herein, all of the terms, conditions and obligations of the Original Note shall remain in full force and effect, and all of the rights and remedies provided for therein shall be preserved to the Commission. If there is any conflict between the provisions of this First Modification and the provisions of the Original Note, the provisions of this First Modification shall govern and prevail. THE COMMISSION AND MAKER COVENANT AND AGREE THAT THIS FIRST MODIFICATION ONLY MODIFIES THE TERMS OF THE ORIGINAL NOTE AND IS NOT A NOVATION OF THE ORIGINAL NOTE. 3. The Security Agreement and Financing Statements will continue to encumber the License and Collateral with a first lien security interest. The Original Note, as modified by this First Modification (hereinafter collectively referred to as the "Note"), and all extensions, renewals, modifications and amendments and consolidations thereof or substitutions therefore shall continue to be secured by the Security Agreement and all other documents, instruments, certifications, security agreements and financing statements executed and delivered in connection therewith by the Maker or by its successors. The Original Note and this First Modification shall be entitled to the benefits of, and to the security required to be provided by, the aforesaid documents, some of which contain provisions for the acceleration of the maturity of the Note upon the happening of certain stated events. 4. The Amortization Schedule attached to the Original Note as Schedule A is hereby deleted in its entirety. All references in the Original Note to Schedule A are hereby deleted. All payments under the Note shall continue to be made in accordance with the terms of the Original Note, as modified by the provisions of this First Modification. 2 5. Maker and the Commission covenant and agree that pursuant to the terms of the Suspension Order and the Second Report and Order, interest payments under the Original Note were suspended for the period effective as of April 28, 1997 through and including March 31, 1998. The entire amount of unpaid interest that accrued during the period beginning with the grant date of the License through and including March 31, 1998 is hereinafter referred to as the "Suspension Interest". All Suspension Interest is to be repaid in eight (8) equal payments with the first such payment being due on the Effective Date. In addition, pursuant to the terms of the Order on Reconsideration, (i) all interest accrued on the Original Note from April 1, 1998 through the Effective Date ("Deferred Interest") is due and payable in full on the Effective Date, (ii) all payments under the Note were reinstated as of the Effective Date, and (iii) the schedule for making quarterly interest and/or principal payments under the Note was changed to require quarterly payments on October 31, January 31, April 30 and July 31 of each year without any modification to the amounts for each payment as provided in the Original Note, with the first such payment being due and payable on October 31, 1998. Based upon the foregoing, the Original Note is hereby amended to provide that the payments of interest and principal shall be as follows: a. On the Effective Date, Maker shall make a payment to Payee in the amount of all Deferred Interest ("Deferred Interest Payment"). b. On the Effective Date, and continuing on each following October 31, January 31, April 30 and July 31 thereafter until all Suspension Interest has been paid in full, Maker shall make a payment equal to one-eighth (1/8th) of the Suspension Interest outstanding as of March 31, 1998 ("Suspension Interest Payment"). c. Thereafter, except as provided in Sections 5.a and 5.b above, Maker shall continue to make interest only payments to the Commission at the "Annual Rate" (as that term is defined in the Original Note) in equal consecutive quarterly installments, and principal and interest payments to the Commission in equal quarterly installments in the amount provided in the Original Note, all as provided in the Original Note, except for the following modifications: (i) payments of interest accruing from and after the Effective Date shall now be due on October 31, January 31, April 30 and July 31 of each year (such quarterly dates are hereinafter referred to as the "New Quarterly Payment Dates" or individually a "New Quarterly Payment Date"); (ii) the last quarterly interest only payment shall be due on the New Quarterly Payment Date occurring immediately prior to the date that the first payment of principal and interest is due; (iii) if the first quarterly payment of principal and interest required under the Original Note is due on a New Quarterly Payment Date, the first quarterly payment of principal and interest shall be due on such New Quarterly Payment Date as provided in the Original Note and thereafter, Maker shall be required to make its payments of principal and interest in equal quarterly installments in the amount provided in the Original Note on each succeeding New Quarterly Payment Date; and 3 (iv) if the first quarterly payment of principal and interest required under the Original Note is due on a day other than one of the New Quarterly Payment Dates, the Original Note is hereby modified to provide that the first quarterly payment of principal and interest shall be due on the first New Quarterly Payment Date following the date currently provided in the Original Note for the first payment of principal and interest and thereafter, Maker shall be required to make its payments of principal and interest in equal quarterly installments in the amount provided in the Original Note on each succeeding New Quarterly Payment Date. The Maker and the Commission acknowledge and agree that no modification is being made to the "Maturity Date" (as that term is defined in the Original Note) and that the entire "Principal Amount" (as that term is defined in the Original Note), together with accrued and unpaid interest thereon, and all other remaining obligations of Maker under the Note, if not sooner paid, shall be due and payable on the Maturity Date. 6. The sixth (6th) paragraph of the Original Note reading "All interest shall be computed on the basis of a 360-day year for actual days elapsed." is hereby deleted in its entirety and replaced with the following: Interest on the Principal Amount of this Note shall be computed at the Annual Rate on the basis of a three hundred sixty (360) -day year composed of twelve (12) months of thirty (30) days each, except that interest due and payable for a period of less than a full quarterly payment period shall be calculated by dividing the full quarterly payment by the actual number of calendar days in the applicable quarterly payment period to create a daily rate that is multiplied by the actual number of days elapsed since the last day of the previous quarterly payment period. 7. If the Suspension Interest Payment and Deferred Interest Payment due on the Effective Date are received by the Commission on or before October 29, 1998, together with any applicable late fee, Maker and the Commission agree that the paragraphs of the Original Note defining when an "Event of Default" occurs will be modified by deleting in their entirety the provisions beginning with the phrase "a. Any non-payment by Maker of any Principal and/or Interest on the due date..." and continuing through "... Maker has not resumed payments of Principal and/or Interest in accordance with the terms of this Note; or" and replaced with the following: a. Any non-payment by Maker of any Principal and/or Interest on the due date specified hereinabove, and the failure to make such payment, together with all applicable "Late Fees" (as hereinafter defined) within one hundred eighty (180) days after such Principal and/or Interest payment due date; or 8. The Original Note is hereby amended to provide that in addition to the Events of Default listed therein, as modified by this First Modification, it shall be an Event of Default under the Note if either the Suspension Interest Payment due on the Effective Date or the Deferred Interest Payment due on the Effective Date is not received by the Commission on or before October 29, 1998. No additional grace or cure period shall be applicable to such payment. 4 All other payments of Suspension Interest shall be subject to the same terms and conditions as the remaining Principal and/or Interest payments under the Note. 9. The paragraph of the Original Note which imposes a late fee upon the occurrence of any Event of Default is hereby modified by deleting in its entirety the provision beginning with the phrase "Upon any Event of Default under this Note, Payee may assess a late fee and/or administrative charge,..." and continuing through "... 5% (five percent) of the payment shall be added to each payment of monies due under this Note that is not timely paid under the terms of this Note." and substituting in its place the following: Should any payment of Principal and/or Interest required under this Note not be paid in full on the due date as specified hereinabove, Maker acknowledges that the Payee will incur extra expenses for the handling of the delinquent payment and servicing the indebtedness evidenced hereby, and that the exact amount of these extra expenses is extremely difficult and impractical to ascertain. Therefore, Maker shall, in such event, without further notice, and without prejudice to the right of the Payee to collect any other amounts provided to be paid hereunder or under the Security Agreement, or to declare an Event of Default, pay to the Commission the "Late Fee" (as hereinafter defined) to compensate Payee for expenses incurred in handling delinquent payments and the Maker confirms and agrees that the Late Fee is a fair approximation of the expense so incurred by the Payee. The "Late Fee" is defined as the total, if any, of the "Non-Delinquency Late Fee" and the "Grace Period Late Fee" (as hereinafter defined). The "Non-Delinquency Late Fee" shall be an amount equal to five percent (5.0%) of any Principal and/or Interest payment required to be made hereunder and shall be automatically assessed if such payment is not made on the original date that such Principal and/or Interest Payment is due (without the benefit of any notice or grace period). If such Principal and/or Interest payment, together with the Non-Delinquency Late Fee, is not made on or before the ninetieth (90th) -day after the original date that such Principal and/or Interest payment was due, such payment shall automatically be subject to a second late fee (the "Grace Period Late Fee") equal to ten percent (10.0%) of the amount of such past due Principal and/or Interest Payment (without the benefit of any notice or grace period) in addition to the Non-Delinquency Late Fee. In addition to the foregoing, there shall also automatically be imposed on Maker, and Maker shall pay to the Commission without further notice, and without prejudice to the right of the Payee to collect any other amounts provided to be paid hereunder or under the Security Agreement, or to declare an Event of Default, the "Resumption Date Late Fee" (as hereinafter defined) to compensate Payee for expenses incurred in handling delinquent payment of the Suspension Interest Payment due on the Effective Date and/or the Deferred Interest Payment. The Maker confirms and agrees that the Resumption Date Late Fee is a fair 5 approximation of the expense so incurred by the Payee. The "Resumption Date Late Fee" shall be an amount equal to (i) five percent (5.0%) of the Suspension Interest Payment due on the Effective Date if such payment is not received by the Payee on the Effective Date (without the benefit of any notice or grace period), and (ii) five percent (5.0%) of the Deferred Interest Payment due on the Effective Date if such payment is not received by the Payee on the Effective Date (without the benefit of any notice or grace period). Maker and Payee agree that all references in the Original Note to a late fee shall be deemed to be a reference to the Late Fee and/or the Resumption Date Late Fee, as applicable. 10. All defined terms contained in the Loan Documents shall have the same meaning as set forth therein except as may otherwise be expressly set forth in this First Modification. Maker and the Commission covenant and agree that the reference in the Security Agreement to the "Note" shall be deemed a reference to the Original Note, as modified by this First Modification. 11. This First Modification constitutes the entire agreement regarding the amendment and modification of the Original Note between Maker and the Commission and is intended by Maker and the Commission to be a complete, exclusive and final integration of all prior and contemporaneous agreements and negotiations of Maker and the Commission concerning the amendment and modification of the Original Note. There have been no other agreements, covenants, representations or warranties between Maker and the Commission regarding the amendment and modification of the Original Note other than those expressly stated or referred to in this First Modification or in any document delivered pursuant hereto. 12. This First Modification may be amended or modified only by written instruments signed by Maker and the Commission. If any covenant, condition or provision of this First Modification is declared by a court of competent jurisdiction to be invalid and not binding on the Maker and/or the Commission, such declaration shall in no way affect the validity of the other remaining covenants, conditions and provisions of this First Modification. 13. This First Modification shall bind, inure to the benefit of and be enforceable by Maker and the Commission, their respective heirs, beneficiaries, legal representatives, successors and assigns. 14. Except as modified by this First Modification, Maker agrees that the Original Note shall continue in full force and effect without modification, and the Original Note and all of the other Loan Documents are hereby expressly approved, ratified, confirmed and reaffirmed by all parties to this First Modification. Maker hereby acknowledges and agrees that it has no claims, counterclaims, set-offs, defenses or other causes of action against the Commission and/or under the Note, Security Agreement or any of the other Loan Documents and to the extent that any such set-offs, counterclaims, defenses or other causes of action may exist, whether known or unknown, they are hereby waived and forever relinquished by the Maker. 6 15. This First Modification shall be governed and construed in accordance with the Communications Act of 1934, as amended from time to time, the then applicable orders and regulations of the Commission and federal law. 16. This First Modification may be executed in counterparts, each of which shall be deemed to be an original and all of which shall collectively be deemed to constitute a single document. IN WITNESS WHEREOF, intending to be legally bound, the undersigned Maker and the Commission have each executed this First Modification, under seal, as of the day and year first hereinabove written. [SIGNATURE PAGES FOLLOW] 7 SIGNATURE PAGE FIRST MODIFICATION OF INSTALLMENT PAYMENT PLAN NOTE Witness/Attest: MAKER: - ----------------------------------- MERCURY PCS II, L.L.C. A __________________________________ By:___________________________ (SEAL) Name:_________________________ Title:________________________ Date:___________________, 1998 8 SIGNATURE PAGE FIRST MODIFICATION OF INSTALLMENT PAYMENT PLAN NOTE COMMISSION: ----------- FEDERAL COMMUNICATIONS COMMISSION WITNESS: - ------------------------------- By:______________________________ Name: ___________________________ Its: Authorized Signatory for the Wireless Telecommunications Bureau, Federal Communications Commission 9 EX-10.20 21 LETTER AGREEMENT TRITEL COMMUNICATIONS, INC. 1410 Livingston Lane Jackson, MS 39213-8003 July 2, 1998 Phone: (601) 362-2200 Facsimile: (601) 362-2664 Mr. G.F. Amann Director of Contracts General Counsel GeoTrans Wireless 46050 Manekin Plaza Suite 100 Sterling, VA 20166 Gentlemen: THIS AGREEMENT is entered into by and between Tritel Communications, Inc., hereinafter referred to as "Tritel" and H.S.I. GeoTrans Wireless, hereinafter referred to as "GeoTrans Wireless". WHEREAS, the parties recited hereinabove have agreed to negotiate and enter into mutually acceptable service agreement covering certain Site Acquisition Services applicable to certain Federal Communications Commission (FCC) licenses currently owned or to be acquired by Tritel. AND WHEREAS, the parties hereto wish to enter into an interim agreement prior to the completion of the formal service agreement recited hereinabove so as to commence Site Acquisition Services required by Tritel and alleviate any further delays. NOW THEREFORE, Tritel and GeoTrans Wireless hereby agree as follows: 1) GeoTrans Wireless agrees to commence preliminary site acquisition services on Thursday, July 2, 1998 and continue to provide such services for the earlier of July 31, 1998 or such date as the formal service agreement has been executed by Tritel and GeoTrans Wireless. 2) GeoTrans Wireless agrees to invoice for the services rendered during this interim period on a time and materials basis and said invoices shall not exceed [CONFIDENTIAL TREATMENT REQUESTED]. 3) GeoTrans Wireless agrees that all time and material charges invoiced to Tritel prior to the execution of the formal agreement shall be submitted promptly to Tritel. All invoices submitted by GeoTrans Wireless must be accompanied by a representation and warranty of GeoTrans Wireless that all laborers, subcontractors, suppliers and others who might claim lien rights on the product or services, have been or will be timely paid in full. Tritel shall Mr. G. F. Amann July 2, 1998 Page Two remit payment on all uncontested amounts invoiced within thirty (30) days from receipt of such invoice. If the foregoing represents the spirit and expressed intent of our agreement, please so indicate by executing same in the space provided below and return one (1) copy to this office for our files. Should you have any questions or if I may be of further assistance in the meantime, please feel free to call. Yours very truly, TRITEL COMMUNICATIONS, INC. Jerry M. Sullivan, Jr. Executive Vice President/COO JMS/lsb AGREED TO AND ACCEPTED THIS ___th DAY OF JULY, 1998. H.S.I. GEOTRANS WIRELESS - ------------------------------------- By: G.F. Amann Director of Contracts, General Counsel EX-10.21 22 SERVICES AGREEMENT SERVICES AGREEMENT THIS SERVICES AGREEMENT (this "Agreement"),dated as of the lst day of June, 1998, is made by and between TRITEL COMMUNICATIONS, INC., a Delaware corporation ("Tritel"), and GALAXY PERSONAL COMMUNICATIONS SERVICES, INC., a Delaware corporation ("Galaxy"), which is a wholly-owned subsidiary of WORLD ACCESS, INC., a Delaware corporation. In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1. THE SERVICES 1.1 SERVICES. Galaxy will perform the services described on Exhibit A (the "Services") for Tritel (or subsidiaries or entities under common control with Tritel, as directed by Tritel) regarding the project described therein (the "Project") in accordance with the terms and conditions of this Agreement. Galaxy will perform the Services in a professional, workmanlike manner, will exercise reasonable skill, care and diligence in the performance of the Services and will carry out its responsibilities in accordance with industry accepted good professional engineering practices and in compliance with all standards and rules reasonably established by Tritel from time to time; provided, however, that any timetables agreed to by Galaxy shall be subject to appropriate adjustment in the event Tritel materially changes its established standards and rules. Unless otherwise agreed by Tritel in writing, Galaxy will provide all personnel, equipment and supplies necessary or appropriate to perform the Services. 1.2 EXAMINATION OF THE SERVICES. Galaxy has examined the applicable ordinances, rules and regulations, and has examined the markets where the Services will be provided and satisfied itself as to all conditions to be encountered in the performance of the Services. 1.3 TIME IS OF THE ESSENCE. Upon execution of this Agreement the parties shall promptly negotiate and establish a general overall progress schedule for the performance of the Services in all markets subject to this Agreement and completion of the Project, which schedule shall be supplemented (prior to commencing Services in any market) with more detailed and mutually established market by market progress schedules (the general and more detailed progress schedules may be hereafter referred to collectively as the "Progress Schedule") which shall include a description of milestones marking the completion of certain successive phases of the Services (the "Milestones"). The Progress Schedule, when executed by Tritel and Galaxy, shall be deemed an addendum to this Agreement and become an integral part of this Agreement. The Progress Schedule may be amended by mutual agreement of Tritel and Galaxy in writing. In the performance of Galaxy's obligations under this Agreement, time is of the essence. Galaxy agrees to see to the timely performance of the Services in accordance with the Progress Schedule and will not delay (beyond deadlines established in the Progress Schedule) or interfere with other portions of work on the Project. Galaxy recognizes that Tritel will incur severe economic loss if the Project is not timely completed, and that Galaxy will be responsible to compensate Tritel for such loss in accordance with Section 1.9 if Galaxy does not comply with the Progress Schedule. 1.4 COMMENCEMENT AND PROGRESS. Upon Tritel and Galaxy's mutual execution of the Progress Schedule, Galaxy will commence providing Services within a market specified by Tritel within three (3) weeks after written notice from Tritel to Galaxy, and shall provide the Services diligently and in accordance with the Progress Schedule. 1.5 PRIORITY OF SERVICES. Within the parameters of the Progress Schedule, Tritel shall have the right to decide the time, order and priority in which the various portions of the Services shall be performed and all other matters relevant to the timely and orderly conduct of Galaxy's Services. 1.6 COORDINATION. Galaxy shall cooperate with Tritel and all other contractors involved in the Project in the provision of the Services. Tritel shall cooperate with Galaxy in connection with its provision of the Services, and shall instruct its contractors and agents involved in the Project to do likewise. 1.7 AUTHORIZED REPRESENTATIVE; PERSONNEL. Galaxy shall designate one or more persons who shall be Galaxy's authorized representative(s) on-site and off-site. Tritel shall have the right to approve any personnel assigned by Galaxy to perform any Services, which approval shall not be unreasonably withheld or delayed. 1.8 ASSIGNMENT AND SUBCONTRACTING. Galaxy will not assign the work under this Agreement, or subcontract any portion of it, without the written consent of Tritel. Galaxy will not make any assignment of payments to be earned by Galaxy under this Agreement without the prior written approval of Tritel. 1.9 CONSEQUENCES FOR DELAY. Except as noted below, in the event of a delay of Galaxy referred to in Section 1.3, there shall be deducted from the Compensation payable to Galaxy the following amounts: (a) a charge equal to [CONFIDENTIAL TREATMENT REQUESTED] per day per cell site for each day of delay in the Progress Schedule (or, if Tritel incurs extraordinary expense to maintain its schedule in spite of Galaxy's delay, an amount equal to such expense) materially attributable to Galaxy, subject to a maximum delay charge of [CONFIDENTIAL TREATMENT REQUESTED] per cell site; or (b) a charge 2 equal to [CONFIDENTIAL TREATMENT REQUESTED] per day per each cell site within a system or cluster of cell sites each as will be mutually defined in the Progress Schedule (which system or cluster cannot be placed in commercial service due to one or more cell sites within such system or cluster not being placed in commercial service) for each day of delay in the Progress Schedule (or if Tritel incurs extraordinary expense to maintain its schedule in spite of Galaxy's delay, an amount equal to such expense), subject to a maximum delay charge of [CONFIDENTIAL TREATMENT REQUESTED] per cell site for each cell site within such system or cluster. Galaxy will be excused for any delay caused by acts of God, war (including civil war), civil unrest, acts of government, fire, floods, explosions, inclement weather, epidemics, quarantine restrictions, interplanetary catastrophes, delays solely caused by Tritel or its vendors or other contractors, or other events beyond the control of Galaxy. Galaxy will be entitled to extensions of time for such delay only upon written notice to Tritel within ten (10) days after commencement of the delay. The foregoing sums represent the amount of liquidated damages which the parties have agreed upon as compensation to Tritel for any delay in placing Tritel's systems in commercial service in accordance with the Progress Schedule as a result of Galaxy's delay or interference. The parties acknowledge that such sums represent a fair and equitable amount of compensation for delay in view of the impossibility of ascertaining actual damages. The foregoing liquidated damages clause shall, however, be in addition to and not in substitution for any other rights or remedies which Tritel may have under this Agreement or otherwise against Galaxy by reason of its failure to complete the Services with the time limits referred to above. If due to any act or omission of Galaxy mutually agreed Acceptance Criteria (defined below) are not met and the commercial launch of a system is delayed, in addition to the delay liquidated damages set forth above, Galaxy shall correct to Tritel's reasonable satisfaction, at Galaxy's sole cost, any deficiency in the applicable design criteria, including, reasonable costs associated with additional planning and testing, acquiring and constructing additional cell sites erroneously omitted from (or required as a result of any flaw in) Galaxy's original RF design and the cost of additional base stations and other equipment and supplies not contemplated in Galaxy's original RF design. The provisions of this paragraph shall not apply to deficiencies caused by Tritel's deviation from the original design criteria. SECTION 2. COMPENSATION 2.1 COMPENSATION. Tritel will pay Galaxy for Services rendered in accordance with Exhibit B (the "Compensation"). Unless expressly excluded pursuant to the terms of this Agreement, all costs and expenses related to the provision of the Services are included in the Compensation. However, any state and local sales or use taxes arising from Tritel's payment of the Compensation are not included and, if applicable, shall be payable by Tritel. 2.2 PAYMENT TERMS. Galaxy will submit invoices to Tritel in accordance with the Milestone schedule set forth in Exhibit A. Tritel will remit all properly payable amounts within thirty (30) days of Tritel 3 receipt of any such invoice unless Tritel elects the financing option set forth below. Tritel may elect to finance the payment of any invoice for a period of up to nine months. If Tritel so elects, interest will begin to accrue on all charges set forth in any deferred invoice at a floating per annum rate equal to the prime rate of interest published in The Wall Street Journal plus one percent beginning on the thirty-first day following Tritel's receipt of any such invoice. Each invoice will describe, in reasonable detail and with respect to the relevant invoice period (a) a description of the Services provided, and (b) any work product created. The Compensation shall not be altered except as specifically provided for in this Agreement. 2.3 INVOICE REPRESENTATION. All invoices must be accompanied by a representation and warranty of Galaxy that all laborers, subcontractors, suppliers and others who might claim lien rights on the Project have been or will be timely paid in full. 2.4 PAYMENT NOT ACCEPTANCE. Payment to Galaxy alone does not constitute or imply acceptance by Tritel of any portion of Galaxy's Services. 2.5 GALAXY PAYMENT FAILURE. If it appears to Tritel that the labor, material and other bills incurred in the performance of Galaxy's Services (which if unpaid may give rise to lien rights or claims on the Project) are not being currently paid, Tritel may take such steps as it deems necessary to insure that the money paid to Galaxy will be utilized to pay such bills. 2.6 BACK CHARGES AND WITHHOLDS. Tritel may withhold payments from Galaxy in amounts that are sufficient to protect Tritel in the event of any of the following: (a) Galaxy's improper or delayed works, defective work or damage to the work, which is not corrected by it; (b) Any claims Tritel may have against Galaxy arising out of other projects; (c) Filing of any claims, demands, suits, attachments and/or liens against Galaxy; (d) Reasonable evidence brought to Tritel's attention that any claims, demands, suits, attachments and/or liens are to be filed against Galaxy which could potentially affect the Project; (e) Reasonable evidence brought to Tritel's attention of prospective insolvency of Galaxy; or (f) Any bona fide claim or lien against Tritel or the premises upon which the Services were performed which arises out of Galaxy's default in its performance of this Agreement. 4 2.7 FINAL PAYMENT. The final payment will be due when Galaxy's Services have been completed and accepted by Tritel, which acceptance shall not be unreasonably withheld. For purposes of this Section 2.7, final payment shall be deemed to have been made upon Tritel's election to finance the charges subject to the final payment, effective upon Tritel's provision of notice of such election to Galaxy. The making and acceptance of final payment constitutes a waiver of any claims by Galaxy against Tritel for compensation for extra work or for compensation of any kind claimed by Galaxy because of the activities of Tritel in connection with the Project. Prior to final payment Galaxy shall submit to Tritel: (a) Galaxy's affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with Galaxy's Services for which Tritel or its property might in any way be liable, have been paid, or otherwise satisfied; (b) Satisfaction of all required acceptance criteria which shall be mutually established by Tritel and Galaxy within 90 days of execution of this Agreement in accordance with the parameters and procedures set forth in the General Milestone and Acceptance Criteria Schedule attached as Exhibit C (such acceptance criteria as shall be established may be referred to as the "Acceptance Criteria"); and (c) Other data as reasonably required by Tritel, such as receipts, releases, and waivers of liens. Final payment shall constitute a waiver of all claims by Galaxy for additional compensation relating to Galaxy's Services, but shall in no way relieve Galaxy of liability for obligations assumed under this Agreement or for faulty or defective work appearing within sixty (60) days from the later of (i) final payment; or (ii) commercial in-service use of the applicable system. 2.8 SUSPENSION OF SERVICES. During the term of this Agreement, Tritel may elect to suspend Services in progress in a specific market due to any of the following conditions: (i) FCC or state regulatory actions which affect a specific Tritel service area; (ii) Moratoriums or similar actions imposed by state or local authorities which would materially affect Tritel's ability to complete network deployment within such area; or (iii) Mutual agreement by Galaxy and Tritel. If Services were suspended as a result of any of the above conditions, Galaxy would receive demobilization compensation during the suspension and remobilization compensation if Galaxy's personnel are remobilized. Demobilization compensation will equal [CONFIDENTIAL TREATMENT REQUESTED] of the hourly rates of personnel demobilized (assuming a 9-hour workday and 5-day workweek during any period of demobilization) plus a demobilization fee of [CONFIDENTIAL TREATMENT REQUESTED] per person demobilized. Upon remobilization, Galaxy will be paid a fee 5 of [CONFIDENTIAL TREATMENT REQUESTED] per Galaxy employee remobilized. Tritel would not assign work in progress, suspended under this provision, to other contractors or internal personnel for resumption of work without the mutual consent of Tritel and Galaxy. The Progress Schedule for any market suspended shall be tolled during any period of suspension. No suspension of services under this provision will occur prior to completion of the design phase and issuance of search rings. SECTION 3. TERM. The term of this Agreement will commence on the date hereof and, unless otherwise earlier terminated pursuant to Section 11 or extended upon mutual agreement of the parties, will end upon the earlier of: (i) Galaxy's completion and Tritel's acceptance of the Services (as determined by the Acceptance Criteria); or (ii) fifteen (15) months from the date of Galaxy's commencement of Services in the last market of Tritel in the Project covered by this Agreement. SECTION 4. INDEPENDENT CONTRACTOR. Galaxy will perform the Services as an independent contractor of Tritel, and this Agreement will not be construed to create a partnership, joint venture or employment relationship between Galaxy and Tritel. Galaxy will not represent itself to be an employee or agent of Tritel or enter into any agreement on Tritel's behalf or in Tritel's name, unless Galaxy is specifically authorized in writing by Tritel to do so. SECTION 5. COMPLIANCE WITH LAWS. Galaxy will at its own cost (a) comply with all federal, state and local laws, ordinances, regulations and orders with respect to its performance of the Services (collectively, the "laws"), (b) file all reports relating to the Services (including, without limitation, tax returns), (c) pay all filing fees and federal, state and local taxes applicable to Galaxy's business as the same shall become due, and (d) pay all amounts required under local, state and federal workers' compensation acts, disability benefit acts, unemployment insurance acts and other employee benefit acts when due. Galaxy will provide Tritel with such documents and other supporting materials as Tritel may reasonably request to evidence Galaxy's continuing compliance with this Section 5. Galaxy is liable to Tritel for all fines and penalties attributable to any acts of commission or omission by Galaxy, its employees and agents resulting from the failure to comply with laws. SECTION 6. INSURANCE. 6.1 COVERAGE REQUIREMENTS. Prior to providing any Services, Galaxy will procure and maintain throughout the term of this Agreement insurance policies (including, without limitation, automobile insurance, commercial liability insurance, professional liability insurance and statutory workers' compensation insurance) that are sufficient to protect Galaxy's business against all applicable risks and, upon Tritel's request, furnish Tritel with an endorsement from the insurance carriers showing Tritel as an additional insured under Galaxy's insurance. Galaxy will provide Tritel 6 with certificates of insurance and other supporting materials as Tritel may reasonably request to evidence Galaxy's continuing compliance with the preceding sentence. 6.2 CANCELLATION. Galaxy's insurance policies shall contain a provision that coverage afforded under the policies will not be canceled, changed in a manner to reduce coverage from the levels currently in effect or not renewed (unless replaced with equivalent coverage with an alternate carrier) until at least thirty days' prior written notice has been given to Tritel. A statement to this effect will be included with Galaxy's insurance certificates. Certificates of insurance acceptable to Tritel shall be filed with Tritel prior to the commencement of Galaxy's Services. 6.3 WAIVER OF SUBROGATION. Tritel and Galaxy waive all rights against each other and against separate contractors, and all other subcontractors for damages caused by fire or other perils to the extent covered by Builder's Risk or any other property insurance purchased for the Project, except such rights as they may have to the proceeds of such insurance. 6.4 RISK OF LOSS. Galaxy will be liable for all loss or damage, other than ordinary wear and tear, to Tritel's property in Galaxy's possession or control. In the event of any such loss or damage, Galaxy will pay Tritel the full current replacement cost of such equipment or property within thirty (30) days after its loss or damage. 6.5 NO WORKERS' COMPENSATION LIMITATION ON INDEMNITY. In any and all claims against Tritel by any employee of Galaxy or anyone directly or indirectly employed by Galaxy or anyone for whose acts Galaxy may be liable, the indemnification obligations under Section 9 shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for Galaxy under Workers' Compensation laws, disability benefit laws or other employee benefit laws. SECTION 7. OWNERSHIP AND USE OF PROPRIETARY MATERIALS 7.1 PROPRIETARY MATERIALS. As used in this Agreement, "Proprietary Materials" means all products, devices, computer programs, techniques, know-how, algorithms, procedures, discoveries or inventions, whether patentable or copyrightable and whether reduced to practice, and all materials, texts, drawings, specifications, source code, data and other recorded information, in preliminary or final form and on any media whatsoever, that (a) is within the scope of the Project or (b) reduced to practice, developed, discovered, invented or made by Galaxy during the term of this Agreement, whether solely or jointly with others, and for the purposes of performing the Services. 7 7.2 OWNERSHIP. Tritel will be the exclusive owner of all Proprietary Materials arising from Galaxy's performance of this Agreement. To the extent permitted under the U.S. Copyright Act (17 USC (Section) 101 et seq., and any successor statute thereto), the Proprietary Materials will constitute "works made for hire," and the ownership of such Proprietary Materials will vest in Tritel at the time they are created. To the extent the Proprietary Materials are not "works made for hire" under applicable copyright laws, Galaxy hereby assigns and transfers to Tritel all right, title and interest that Galaxy may now or hereafter have in the Proprietary Materials, subject to the limitations set forth in Section 7.4. Galaxy will promptly disclose to Tritel all Proprietary Materials. 7.3 FURTHER ACTS. Galaxy will take such action (including, but not limited to, the execution, acknowledgement, delivery and assistance in preparation of documents or the giving of testimony) as may be requested by Tritel to evidence, transfer, vest or confirm Tritel's right, title and interest in the Proprietary Materials. 7.4 LIMITATION. Notwithstanding any other provision of this Agreement to the contrary, this Section 7 will not obligate Galaxy to assign or offer to assign to Tritel any of Galaxy's rights in an invention for which no equipment, supplies, facilities or trade secret information of Tritel was used and which was developed entirely on Galaxy's own time, unless the invention relates directly to the Project. 7.5 USE. Except as required for Galaxy's performance of the Services or as authorized in writing by Tritel, Galaxy will not use, disclose, publish or distribute any Proprietary Materials or remove any Proprietary Materials from Tritel's premises. Galaxy will hold all Proprietary Materials in trust for Tritel and will deliver them to Tritel upon request and in any event upon the expiration or termination of this Agreement. 7.6 NON-INFRINGEMENT WARRANTY. Galaxy represents and warrants that any Proprietary Materials originating from Galaxy, and the exercise by Tritel of its rights hereunder with respect to the Proprietary Materials, will not infringe upon, violate or misappropriate any patent, copyright, trade secret, trademark, contract or other right or interest of any third party. 8 7.7 OTHER COMPANIES. During the course of executing the amended services, Galaxy employees may use software and documentation created by other RF services companies. Each Galaxy employee who uses these software products must agree in writing to protect any confidential information they acquire through training on or use of these software products. 7.8 REMEDIES. Galaxy agrees that damages may be inadequate to compensate for the unique losses to be suffered in the event of a breach of the provisions set forth in Sections 7.1 through 7.7, and that Tritel will be entitled, in addition to any other remedy it may have under this Agreement or at law, to seek and obtain injunctive and other equitable relief, including specific performance of the terms of this Agreement without the necessity of posting bond. SECTION 8. NO CONFLICTING OBLIGATIONS. 8.1 OTHER AGREEMENTS. Galaxy's execution, delivery and performance of this Agreement will not violate any other employment, nondisclosure, confidentiality, consulting or other agreement to which Galaxy is a party or by which it may be bound. 8.2 THIRD-PARTY CONFIDENTIAL INFORMATION. Galaxy will not use, in the performance of the Services or the creation of any Proprietary Materials, or disclose to Tritel any confidential or proprietary information of any other person if such use or disclosure would violate any obligation or duty that Galaxy owes to such other person. Galaxy's compliance with this Section 8.2 will not prohibit, restrict or impair Galaxy's performance of the Services and it's other obligations and duties to Tritel. SECTION 9. INDEMNIFICATION. Galaxy shall indemnify, defend and hold Tritel (and Tritel's agents, legal representatives, officers, directors, shareholders and employees) harmless from all claims, damages, losses, costs, expenses (including attorneys' fees) and liabilities, including any amounts paid in satisfaction of judgments, in compromise or as fines and penalties, arising out of or resulting from any claim, action, investigation or other proceeding (including any proceeding by any of Galaxy's employees, agents or subcontractors), actual or threatened, that is based upon (a) a default by Galaxy in the performance of its obligations under this Agreement, (b) any representation or warranty of Galaxy being untrue in any material respect, (c) the conduct of Galaxy's business, (d) any negligent act or omission of Galaxy, or (e) the infringement or misappropriation of any foreign or United States patent, copyright, trade secret or other proprietary right by the Proprietary Materials originating from Galaxy. 9 SECTION 10. NONDISCLOSURE AGREEMENT As a condition to Tritel's obligations under this Agreement, Galaxy agrees to abide by all the terms and conditions of that certain Non-disclosure Agreement dated as of May 28, 1998, executed by and between Tritel and Galaxy (the "Non-disclosure Agreement"). SECTION 11. TERMINATION. 11.1 TERMINATION FOR CAUSE. Tritel may terminate this Agreement upon an Event of Default (defined below), provided, however, that as to any of the matters set forth in subparagraphs (iii) through (vii) of Section 13: (a) Tritel sends written notice to Galaxy describing the breach in reasonable detail, (b) Galaxy does not cure the breach within thirty (30) days following its receipt of such notice, and (c) following the expiration of the thirty-day cure period, Tritel sends a second written notice to Galaxy indicating Tritel's desire to terminate this Agreement. If an Event of Default results from any of the matters set forth in subparagraphs (i) and (ii) of Section 13, Tritel's termination of this Agreement shall be effective upon giving notice of termination to Galaxy. Galaxy may terminate this Agreement upon Tritel's material breach of this Agreement, provided that (a) Galaxy sends written notice to Tritel describing the breach in reasonable detail, (b) Tritel does not- cure the breach within thirty (30) days following its receipt of such notice, and (c) following the expiration of the thirty-day cure period, Galaxy sends a second written notice to Tritel indicating Galaxy's desire to terminate this Agreement. If Tritel terminates this Agreement for cause as described above, Tritel, without prejudice to any other remedy it might have, may terminate this Agreement and complete the Services by such means as Tritel deems fit. In such case, Galaxy shall not be entitled to receive any further payment until Galaxy's Services are completed. If the unpaid balance of the Compensation shall exceed the aggregate of (1) the expense of Tritel of completing the Services, including compensation for additional managerial and administrative services, and (2) the losses and damages of Tritel, including its attorneys' fees and litigation expense, such excess shall be paid to Galaxy. If the expense of completing Galaxy's Services and the losses and damages of Tritel shall exceed the unpaid balance of the Compensation, Galaxy shall pay the difference to Tritel promptly on demand. 11.2 TERMINATION FOR CONVENIENCE. Either Tritel or Galaxy may terminate this Agreement at any time upon ninety (90) days' written notice to the other (a "Termination for Convenience"). Upon a Termination for Convenience by Tritel, Galaxy shall be compensated for any Services rendered but which have not been paid ("Unpaid Services") on a time and materials basis as set forth in Exhibit B, unless the Unpaid Services constitute a Milestone in which case payment shall be made in accordance with the Milestone schedule set forth in Exhibit B. Upon a Termination for Convenience by Galaxy, Galaxy shall not be compensated for any Unpaid Services unless the Unpaid Services constitute a Milestone in which case payment shall be made in accordance with the Milestone schedule set forth in Exhibit B. 10 11.3 SURVIVAL. Sections 5 and 7 and Sections 9 through 24 (together with all other provisions of this Agreement that may reasonably be interpreted or construed as surviving termination of the Term) will survive the termination of the Term. SECTION 12. NOTICES. All notices given hereunder will be given (and shall be deemed to have been given upon receipt) in writing, will refer to this Agreement and will be personally delivered, sent by telecopy, by other electronic facsimile transmission or by registered or certified mail (return receipt requested) to the address set forth below the parties' signatures at the end of this Agreement. Any party may from time to time change such address by giving the other party notice of such change in accordance with this Section 12. SECTION 13. EVENT OF DEFAULT. For the purposes of this Agreement, an "Event of Default" shall be if: (i) At any time there shall be filed by or against Galaxy in any court a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of the property of Galaxy, and within twenty (20) days from the filing date Galaxy fails to secure a discharge; or (ii) Galaxy makes an assignment for the benefit of creditors or petitions for or enters into an agreement or arrangement with its creditors; or (iii) Galaxy materially fails to prosecute the Services in accordance with the Acceptance Criteria, and therefore, fails to complete the Services entirely on or before any date established in the Progress Schedule for partial, substantial or final completion (except for delays for which Galaxy is entitled to additional time); or (iv) There is a breach of any of Galaxy's representation or warranties contained in this Agreement or required to accompany any invoice rendered under this Agreement; or (v) Galaxy fails to supply sufficient labor, material and/or equipment so as to complete the Services in accordance with the Progress Schedule, unless such delay is excused in accordance with Section 1.9; or (vi) Galaxy performs defective work and fails to correct promptly and properly such defective work; or (vii) Without limitation, Galaxy fails to perform any material provision of this Agreement. 11 SECTION 14. ASSIGNMENT Galaxy may not assign this Agreement, in whole nor in part, without Tritel's prior written consent. Tritel may assign its rights hereunder to (a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Tritel is a party, (b) any corporation, partnership, association or other entity or person to which Tritel may transfer all or substantially all of the assets and business of Tritel existing at such time, or (c) any subsidiary of or entity under common control with Tritel. Upon any such assignment by Tritel and the full and unconditional assumption by such assignee of all of Tritel's obligations hereunder arising after such assignment, Tritel shall be released and free from any obligation or liability under this Agreement arising after such assignment. All the terms and provisions of this Agreement will be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. SECTION 15. PERSONNEL The terms and conditions of this Agreement will be binding upon Galaxy's employees, agents, subcontractors and affiliates. SECTION 16. WAIVERS No delay or failure by any party hereto in exercising or enforcing any of its rights or remedies hereunder, and no course of dealing or performance with respect thereto, will constitute a waiver thereof. The express waiver by a party hereto of any right or remedy in a particular instance or will not constitute a waiver thereof in any other instance. All rights and remedies will be cumulative and not exclusive of any other rights or remedies. SECTION 17. AMENDMENTS No amendment, waiver or discharge of any provision of this Agreement will be effective unless made in writing that specifically identifies this Agreement and the provision intended to be amended, waived or discharged and signed by Tritel and Galaxy. Each such amendment, waiver or discharge will be effective only in the specific instance and for the specific purpose for which given. SECTION 18. APPLICABLE LAW This Agreement and each of the documents referred to herein shall be interpreted, construed, applied and enforced in accordance with the laws of the State of Mississippi, without regard to any rules governing conflicts of laws. Any action to enforce arising out of, or relating in any way to, any of the provisions of this Agreement may be brought and prosecuted only within such court or courts located in the State of Mississippi as is provided by law; and the parties consent to the jurisdiction of said court or courts located in the State of Mississippi and the service of process by registered mail, return receipt requested, or by any other manner provided by law. 12 SECTION 19. SEVERABILITY If any provision of this Agreement is held invalid, illegal or unenforceable in any jurisdiction, for any reason, then, to the full extent permitted by law (a) all other provisions hereof will remain in full force and effect in such jurisdiction and will be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability will not affect the jurisdiction thereover will have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law. SECTION 20. ENTIRE AGREEMENT This Agreement and the Non-disclosure Agreement, including the exhibits and schedules hereto and thereto, constitute the entire agreement between the parties with respect to their subject matters, and all prior or contemporaneous oral or written communications, understandings or agreements between the parties with respect to such subject matters are hereby superseded in their entireties. SECTION 21. DISPUTES 21.1 AGREEMENT TO ARBITRATE. All claims, disputes and matters in question arising out of, or relating to, this Agreement or any claimed breach of this Agreement, except for claims of Galaxy which have been waived by its acceptance of final payment, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then in effect unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable. 21.2 DEMAND FOR ARBITRATION. Notice of demand for arbitration shall be filed in writing with the other party to this Agreement and with American Arbitration Association. The demand for arbitration shall be made within thirty (30) days after written notice of the claim, dispute or other matter in question has been given, and in no event shall it be made after the when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations, whichever occurs first. The location of the arbitration proceeding shall be Jackson, Mississippi. 21.3 AWARD. The award rendered by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction. 21.4 SAME ARBITRATORS. At the election of Tritel, any arbitration proceeding instituted by either party under this Agreement may be consolidated with any other arbitration proceeding then or thereafter pending 13 between either party and any other person or entity if the respective arbitrations involve similar questions of fact or law or arise out of any work done or services supplied for the design or construction of the Project. 21.5 EXCEPTIONS. This agreement to arbitrate shall not apply to any claim of contribution or indemnity asserted by one party of this Agreement against the other party and arising out of an action brought in a state or federal court or in arbitration by a person who is under no obligation to arbitrate the subject matter of such action with either of the parties to this Agreement, or who does not consent to such arbitration. SECTION 22. COUNTERPARTS. This Agreement may be executed in two or more counterparts that together shall constitute a single agreement. SECTION 23. HEADINGS. The headings contained in this Agreement are for ease of reference and shall not affect the interpretation or meaning of this Agreement. SECTION 24. PUBLICITY. So long as this Agreement is in effect, neither Galaxy, World Access, Inc. nor any of their affiliates, officers, directors, employees or agents shall issue any press release or otherwise make any public statement with respect to the existence of this Agreement or the subject matter of this Agreement without the prior written consent of Tritel. SECTION 25. LIMITATION OF LIABILITY. Except for the liquidated damages and other payment undertakings of Galaxy as set forth in Section 1.9, expenses of arbitration and awards of attorneys fees and expenses, in no event shall Galaxy be liable under this Agreement for: (i) special, incidental or consequential damages (including loss of profits) regardless of legal theory advanced, whether foreseen or unforeseen; or (ii) an amount exceeding the price of Services rendered through the date of any termination or expiration of this Agreement. SECTION 26. FORCE MAJEURE. In the event a party's performance of an obligation hereunder is rendered impossible or commercially impractical (rather than simply delayed) due to causes beyond its control and without its fault or negligence, including, but not limited to, acts of God, war (including civil war), civil unrest, acts of government, fire, floods, explosions, inclement weather, epidemics, quarantine restrictions, interplanetary catastrophes, strikes or labor unrest (of third parties but not of such party), material shortage, or delays in transportation, such party's performance of such obligation shall be excused. * * * 14 The parties have executed this Agreement as of the date first set forth above. TRITEL COMMUNICATIONS, INC. By: ____________________________________ Name: Jerry M. Sullivan, Jr. Its: Executive Vice President ADDRESS: 1410 Livingston Lane Jackson, Mississippi 39213-8003 Attn: Jerry M. Sullivan, Jr. GALAXY PERSONAL COMMUNICATIONS SERVICES, INC. By: _____________________________________ Name: Joseph W. Forbes, Jr. Its: President ADDRESS: 1075 Windward Ridge, Suite 100 Alpharetta, Georgia 30005 Attn: Joseph W. Forbes 15 EXHIBIT A GENERAL DESCRIPTION OF SERVICES A.1 RF ENGINEERING SERVICES Galaxy specializes in the design, development and implementation of advanced wireless communications systems. The firm offers full-service engineering consulting for system design, implementation and optimization. Listed below are the major engineering activities and key deliverables (broken down into three major phases) to be provided by Galaxy to Tritel regarding Tritel's proposed TDMA IS-136 PCS system. This Agreement is contingent upon Tritel and Galaxy reaching a consensus on design methodology and acceptance criteria within days from the execution of this Agreement. A.1.1 Phase I - RF Engineering Services - Initial RF Design RF design using a basic cell planning grid which attempts to meet the technical design objectives. This design stage includes cell counts, basic propagation analysis, and a detailed design document. A consensus allows the RF designer to proceed to the next design step. Major Engineering Activities: o Establish and Finalize Design Criteria o Perform Detailed Demographic/Traffic Data Analysis o Complete Propagation Model Validation o Complete System Design and Demand Analysis o Complete Site Verification/Survey o Analyze Drive Test Measurements o Complete Nominal System Design Key Deliverable: Search Area Maps: that detail for each site: latitude/ longitude, AMSL ground elevation, address, coverage objectives and preliminary site design recommendations (tower height, ERP, etc.). Handoff: Site Acquisition 16 Phase I Interim Deliverables: o Market Visit Report that further describes market's demographic profile but also includes data on business expansion and development, and recent population shifts. Potential sites for propagation model validation drive testing are identified. o Drive Test and Propagation Model Validation Data that provides a detailed coverage and propagation analysis (i.e. path loss per decade, 1 mile intercept, slope, scattergrams, etc.). This data can be used to generalize the propagation environment for similar morphological and terrestrial areas within the market, thereby providing Tritel with a more refined and accurate RF prediction modeling tool. o Detailed Terrain Analysis Report for the markets under design. This analysis will include estimates of mean and standard deviation of the AMSL ground elevation. identification of locations that may drastically affect RF propagation and coverage are also identified. o Preliminary Phase I Initial RF Design Document that includes the estimated number of cell sites, best server plots and coverage maps for each market, final demographic data, terrain analysis and preliminary traffic analysis, if applicable. 17 A.1.2 Phase H - RF Engineering Services - Final RF Design and Implementation Major Engineering Activities: o Evaluate real world sites and collocation possibilities o Rank Candidate Sites o Analyze Drive Test Measurements o Engineering Analysis of Engineered Sites o Provide RF engineering information required for FCC/FAA filings o True-up design -Validate Sites o Evaluate microwave incumbent cases o Develop Preliminary Frequency Coordination o Ensure special design considerations and growth strategies are being addressed Key Deliverable: Approved Sites Handoff: Site Acquisition, Site Construction Phase II Interim Deliverables: o Candidate Evaluation Report that describes candidate sites submitted by site acquisition which were evaluated on a per design site basis. The report will also provide a detailed description of why each site was approved or disapproved for final consideration. o Candidate Evaluation Drive Data that provides detailed coverage information and test configuration setup. o Modified RF Network Design pursuant to approved leased candidates and collocation candidates to be included in the final RF Network Design. This design will include sites that have passed zoning and are inline for permanent placement within the system design. o Final RF Network Design that includes coverage, complete frequency coordination and future issues associated with the design. 18 A.1.3 Phase III - RF Engineering Services - Network Optimization Major Engineering Activities: o Create System Optimization Procedures o Perform System Wide Testing and Integration o Perform system wide interference analysis testing o Perform Network Optimization o Complete Frequency Coordination o Complete Interference Testing from Non-Relocated Market Incumbents Key Deliverable: System Available for Commercial Service Handoff: Operations Phase III Interim Deliverables: o RF Network System Optimization Guidelines and Procedures Manual that includes descriptions of key system parameters, procedures for adjusting parameters and processes for solving various system problems. o RF Network System Optimization Report detailing the current system parameter settings and the solutions which were provided to resolve system problems. 19 A.2 RF PROJECT MANAGEMENT SERVICES Major Project Management Activities: o Manage RF Project Schedule for all markets assigned to Galaxy by Tritel o Provide overall RF Project Management for all RF consulting firms o Ensure Uniform RF Design Standards for all markets o Ensure Uniform RF Design Processes for all markets o Perform review of nominal RF Design in all markets o Coordinate information flow between all RF Design teams and Tritel Project Manager Key Deliverable: RF Project Schedule, Project Status Reporting Handoff: Tritel Project Manager 20 EXHIBIT B COMPENSATION B.1 PRICING SUMMARY: B.1.1 Fixed Rate Pricing Galaxy shall perform the Services for Tritel as described in Exhibit A. Section A.1.1 The Fixed Rate Pricing set forth below (which shall apply under this Agreement unless Tritel elects to procure Services on an time and materials basis as outlined in Section B. 1.3) is on a "per site" basis. The price per site for each phase is based on a minimum of 875 "effective base stations" for which Tritel hereby engages Galaxy. These pr ices are based on Galaxy performing all three phases of RF Engineering Services outlined herein. An "effective base station" shall mean either (a) Galaxy's provision of Services equaling approximately one hundred percent (100%) of the RF engineering services required to provide RF Design, Implementation and Optimization to construct and place in commercial service one (1) cell site within Tritel's system, or (b) Galaxy's provision of Services equaling less than one hundred percent (100%) of the RF engineering services required to provide RF Design, Implementation and Optimization to construct and place in service more than one (1) cell site but which in the aggregate total approximately one hundred percent (100%) of Services required to construct and place in commercial service an average cell site within Tritel's total system. FIXED RATE PRICING PER SITE - -------------------------------------------------------------------------------- DESCRIPTION OF SERVICE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PHASE I - INITIAL RF DESIGN [CONFIDENTIAL TREATMENT REQUESTED] - -------------------------------------------------------------------------------- PHASE II - IMPLEMENTATION [CONFIDENTIAL TREATMENT REQUESTED] - -------------------------------------------------------------------------------- PHASE III - OPTIMIZATION [CONFIDENTIAL TREATMENT REQUESTED] - -------------------------------------------------------------------------------- TOTAL RF ENGINEERING COST PER SITE [CONFIDENTIAL TREATMENT REQUESTED] - -------------------------------------------------------------------------------- PROJECT MANAGEMENT SERVICES [CONFIDENTIAL TREATMENT REQUESTED] - -------------------------------------------------------------------------------- 21 B.1.2 Volume Purchase Commitment Tritel engages Galaxy to provide the complete RF Design services, outlined in Exhibit A. Section A.1, for a minimum of 875 effective base stations. At Tritel's election, Galaxy may also be engaged under this Agreement to complete additional effective base stations as assigned by Tritel at the same per site price. Tritel has also engaged Galaxy to provide the overall RF Project Management services outlined in Exhibit A, Section A.2 for a minimum of 1275 base stations. B.1.3 Hourly Engineering Services Rates The following rates will apply for services performed on a time and material basis, if applicable, and are good through December of 1999. DESCRIPTION OF RESOURCE HOURLY RATE PRINCIPAL / VP OF ENGINEERING [CONFIDENTIAL TREATMENT REQUESTED] DIRECTOR OF ENGINEERING [CONFIDENTIAL TREATMENT REQUESTED] RADIO PROJECT MANAGER [CONFIDENTIAL TREATMENT REQUESTED] SENIOR RADIO ENGINEER [CONFIDENTIAL TREATMENT REQUESTED] RADIO ENGINEER [CONFIDENTIAL TREATMENT REQUESTED] DESIGN ENGINEER [CONFIDENTIAL TREATMENT REQUESTED] ASSOCIATE RADIO ENGINEER [CONFIDENTIAL TREATMENT REQUESTED] FIELD ENGINEER [CONFIDENTIAL TREATMENT REQUESTED] ENGINEERING AIDE [CONFIDENTIAL TREATMENT REQUESTED] 22 B.2 TEST EQUIPMENT CHARGES: Listed below are the components whose costs are included in the Fixed Rate Pricing of Section B. 1. 1. This equipment is necessary to perform testing for propagation model validation, clear channel verification and candidate evaluation. o Grayson Transmitters (20 Watt) o Grayson PCS 1900 Scan Receivers o Cables and Antennas o Drive Test Vehicles (including maintenance and insurance) o Laptop Computer o In addition, Galaxy can provide the equipment necessary to complete IS-136 optimization within the Tritel BTA markets. B.3 BOOM TRUCK RENTAL FEES: At Tritel's request, Galaxy shall provide a boom truck platform to be utilized in conjunction with propagation model and candidate evaluation testing. Pricing includes operator, fuel and insurance and a 15 test sites per month minimum would apply. - -------------------------------------------------------------------------------- 40 METER BOOM TRUCK WITH NECESSARY IMPLEMENTS: [CONFIDENTIAL TREATMENT REQUESTED] PER SITE(1) 50 METER BOOM TRUCK WITH NECESSARY IMPLEMENTS: [CONFIDENTIAL TREATMENT REQUESTED] PER SITE(2) - -------------------------------------------------------------------------------- B.4 TRAVEL EXPENSES: Listed below are costs included in the Fixed Rate Pricing of section B.1.1.: o Travel Expenses and accommodations away from Atlanta, GA including airfare. o One rental vehicle for each Galaxy personnel deployed in the market. o Galaxy personnel will be allotted one trip home per month. o Galaxy per diem rates are per standard 1997 U.S. Government CONUS rates for the market that work is being performed in. Extraordinary travel required by Tritel outside of travel between the designated markets and Atlanta will be billed at actual costs plus an [CONFIDENTIAL TREATMENT REQUESTED]processing fee. - ---------------- (1) Mobilization charges of $2000 per market will apply (2) Mobilization charges of $2000 per market will apply 23 B.5 OFFICE EXPENSES: Office space and all utility costs are not part of this proposal for all markets outside of Atlanta, GA. Galaxy will require access to a data network, a HP755 plotter, color printer, fax machine, and laser printer. Shipping, supplies, and copying capabilities to be provided by Tritel. Galaxy will provide the following equipment and software required to complete the Project: o WIZARDO(R) RF Prediction and Modeling Tool o MAPINFO Software o MAPINFO Databases (Census, Demographic, Traffic) o Computers - (minimum requirements: 133 MHz, Pentium, 32MB RAM) o Laptop computers - (minimum requirements: 100 MHz, Pentium, 16 MB RAM) B. 7 REIMBURSABLE EXPENSES: The following charges are not included in the fixed rate pricing and are payable by Tritel: 1. Photocopying, printing, and other reproduction costs. 2. Topographic and city Maps, models, drawings, and any other presentation materials. 3. FAA analysis. 4. Reasonable telephone, fax and wireless phone charges. 24 B.8 TERMS OF PAYMENT The tern s of Galaxy's payment structure is Net 30 days upon receipt of invoice unless Tritel elects the financing option set forth in the Agreement. Fixed Rate Billing is based on a 15-month duration of work as to each market assigned to Galaxy by Tritel during the term of this Agreement. Pricing beyond that time frame will be based on Galaxy's Hourly rates set forth in Section B. 1.3. Invoices shall be rendered according to the following milestones: RF Engineering and Project Management Services Payment Milestones
Milestone: Fee: - ---------- ---- o Project Initiation, invoiced 45 days after contract signing [CONFIDENTIAL TREATMENT REQUESTED] o Acceptance of Nominal RF Design [CONFIDENTIAL TREATMENT REQUESTED] o Search Area Maps Issued [CONFIDENTIAL TREATMENT REQUESTED] o RF Acceptance of Site Candidate [CONFIDENTIAL TREATMENT REQUESTED] o Commercial In-Service [CONFIDENTIAL TREATMENT REQUESTED]
Invoices shall initially be based on the parties' mutual good faith estimate of the total cell sites required in the market(s) in which Services have been commenced and which are the subject of the invoices ("Initial Invoice"). If actual cell site counts differ from the estimated count used to calculate Initial Invoice amounts: I) The excess amount invoiced, if any, shall be payable by Galaxy to Tritel as follows: i) if the Initial Invoice terms were net 30, like terms apply; ii) if the Initial Invoice terms were under the Financing Plan, the excess shall be subtracted from the Initial Invoice amount financed and payment structure will be adjusted accordingly, with credit given for any excess interest charges accrued; iii) at Tritel's option, the excess shall be rendered in equivalent Services value on a time and materials basis. II) The amount of deficiency in the invoice total, it any, shall be payable by Tritel as follows: i) if the Initial Invoice terms were net 30, like terms apply; 25 ii) if the Initial Invoice terms were under the Financing Plan, net 30 terms apply. As soon as the actual number of cell sites to be constructed in such markets is determined by Tritel invoices shall thereafter be based on the actual cell site count rather than the estimate. 26 B.9 CONDITIONS AND CONSIDERATIONS The following conditions and specific assumptions apply to the fixed rate pricing under this Agreement: o Galaxy requires 3-week mobilization from issuance of Purchase Order. o Galaxy assumes a fifteen- (15) month deployment schedule per market based on FAA tower height approval process. o Fixed rate pricing assumes the following: 1. Completion of all associated tasks in a fifteen (15) month period. Delays beyond such period directly attributable to equipment vendors, zoning entities, FAA, FCC or regulatory bodies or to Tritel's internal delays will result in charges on a time and materials basis. 2. Propagation Model Validation testing at a maximum of 15% of the total Project sites. 3. Evaluation of up to three (3) viable candidates submitted by site acquisition personnel per Search Area. 4. Drive testing of up to 80% of the total sites will be performed for candidate evaluation. 5. Drive testing for one (1) candidate per site for data analysis. 6. Use of Wizard(R) propagation software for the specified duration of this Project is included. Use of another tool and any Unix workstations required for the tool would be at a straight pass-through charge to Tritel. 7. Data collection and computer workstations/laptops necessary to complete this scope of work is included in the fixed rate pricing. 8. A nine-(9) hour workday, and twenty-two (22) work days per month. 9. Meals and lodging Per Diem costs at standard 1997 government CONUS rates are included in the fixed rate pricing. 10. Travel and per diem expenses are included in the fixed rate pricing. o Tritel will provide Galaxy personnel access to full office workspace outside of Atlanta, GA. o Tritel will provide Letters of Intent for sites to be used in Propagation Model Validation testing. o Microwave relocation services are not included in the fixed rate pricing but are available upon Tritel's request. o Frequency coordination for all testing is excluded from this scope of work. o Crane rental charges are optional services available to Tritel. o Technology-specific phones and test equipment required for network optimization is not included. o FAA filing and authorization is excluded. o If Galaxy is required to redesign the RF Plan, following acceptance of the nominal design by Tritel and issue of the initial search rings, additional payments will be billed under the following conditions: 1. No property available or failure to perform by Site Acquisition Tritel (10% of Phase 1&2 Per Site Costs for each search ring reissued for the same design location). 2. Marketing Objectives change requiring new design (10% of Phase 1&2 Per Site Costs for each search ring reissued). 27 3. New site or new design location required to fulfill or enhance design objectives as defined by Tritel Project manager (100% of Phase 1 & 2 Per Site Costs for each search ring issued). 4. Approved Site Candidate rejected for any non-RF Issue (50% of Phase 1&2 Per Site Costs for each search ring reissued). 28 EXHIBIT C GENERAL MILESTONE AND ACCEPTANCE CRITERIA SCHEDULE Milestone Completion and Acceptance Criteria of RF Engineering Deliverables for Tritel Wireless Markets The following conditions, when fulfilled, define Milestone completion and acceptance criteria for the Services ("Acceptance"). Tritel acknowledges and accepts that failure to adhere to the Acceptance Criteria unless otherwise authorized in writing by Galaxy shall constitutes waiver of all Tritel's claims against Galaxy for subsequent delays or failures in network performance. Acceptance Criteria: MILESTONE NO. 1 NOMINAL RF DESIGN i. Tritel will designate a single contact to provide authorized acceptance and final approvals of all Galaxy deliverables. ii. Tritel and Galaxy must create and mutually agree upon a market by market design criteria prior to the initiation of design activities, including service levels, reliability margins, coverage objectives, subscriber counts and planned system growth. iii. Tritel, Galaxy and Tritel's designated equipment vendor must agree on equipment performance specifications to be utilized in the design of Tritel's network prior to the initiation of design activities. Final responsibility for all equipment performance issues remains with Tritel's designated equipment vendor. iv. Tritel and Galaxy will mutually agree on Computer-aided design tools to be utilized during the design of Tritel's markets. v. Galaxy will recommend at its discretion the appropriate quantity of sites required for Propagation Model Validation (PMV) Tests in individual markets in order to calibrate industry accepted computer-aided simulation models utilized in the design of Tritel's markets. Tritel is responsible for providing timely permission to access to selected PMV sites via its designated Site Acquisition Contractor. Tritel is responsible for providing clear frequencies for use by Galaxy in PMV testing, errors resulting from non-clear frequencies provided to Galaxy resulting in erroneous PMV data will be Tritel's responsibility. vi. Galaxy will make available to Tritel for its approval the nominal RF design of individual markets, including link budgets, model parameters, antenna specifications and expected coverage criteria during a formal design review prior to issuance of Search Area Maps to Tritel's designated Site Acquisition Contractor. NO. 2 MILESTONE SEARCH AREA MAPS i. Issuance of Search Area Maps 29 NO. 3 MILESTONE SITE ACCEPTANCE i. Information for site candidates will be provided in a format mutually agreed to by Galaxy, Tritel and its designated Site Acquisition Contractor. Galaxy will be responsible for approval or disapproval of proposed candidates within a mutually agreed to review interval. ii. Tritel or its designate will provide timely access to all candidate sites required by Galaxy for candidate testing during the site approval process. iii. Any design criteria exceptions will be mutually agreed upon between Galaxy and Tritel and Tritel's equipment vendor if appropriate. Design criteria exceptions include, but are not limited to: Antenna Radiation Centerline Heights, Antenna Orientations, Site locations outside of specified search area, Antenna Placement and deviation from recommended site validation activities. iv. Galaxy and Tritel will mutually agree upon a format for delivering required information for FCC and FAA filings. NO. 4 MILESTONE OPTIMIZATION i. Tritel will provide Galaxy with available cleared spectrum on a market by market basis for use in frequency planning activities in a mutually agreed to time interval prior to the initiation of any optimization activities. Available spectrum must be sufficient to support a mutually agreed upon frequency reuse plan to meet approved channel counts. ii. Galaxy will make available to Tritel for its approval the final RF design of individual markets, including link budgets, model parameters, antenna specifications, expected coverage criteria, final frequency plan and a traffic/channel plan during a formal design review prior to initiation of frequency planning activities. iii. Performance of antennas within specified operational parameters are the sole responsibility of the antenna vendor. iv. Galaxy, Tritel and Tritel's equipment vendor will mutually agree on a format for required equipment database information. v. Galaxy, Tritel and Tritel's equipment vendor will mutually agree to an Optimization Test Plan developed by Galaxy. vi. Galaxy will not initiate cluster testing activities until all sites have completed Tritel's vendor commissioning process. vii. Delays in optimization due to equipment failure, installation problems or construction defects will be the responsibility of Tritel's designated vendors. viii. Delays in optimization due to failure to implement require engineering parameter changes will be the responsibility of Tritel or their designated operations agent. ix. Galaxy requires remote access to switch databases in order to verify engineering parameter changes. x. Optimization Tests will be performed on baseline drives of primary routes within the established service area, operating to the established design criteria. 30 EX-10.22 23 SERVICES AGREEMENT SERVICES AGREEMENT THIS SERVICES AGREEMENT (this "Agreement" dated as of the 27th day of August, 1998, is made by and between TRITEL COMMUNICATIONS, INC., a Delaware corporations ("Tritel") and GALAXY PERSONAL COMMUNICATIONS SERVICES, INC., a Delaware corporation ("Galaxy"), which is a wholly owned subsidiary of WORLD ACCESS, INC., a Delaware corporation. In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1. THE SERVICES 1.1 SERVICES. Galaxy will perform the services described on Exhibit A (the "Services") for Tritel (or subsidiaries or entities under common control with Tritel, as directed by Tritel regarding the project described therein (the "Project") in accordance with the terms and conditions of the Agreement. Galaxy will perform the Services in a professional, workmanlike manner, will exercise reasonable skill, care and diligence in the performance of the Services and will carry out its responsibilities in accordance with industry accepted good professional engineering practices and in compliance with all standards and rules reasonably established by Tritel from time to time; provided, however, that any timetables agreed to by Galaxy shall be subject to appropriate adjustment in the event Tritel materially changes its established standards and rules. Unless otherwise agreed to by Tritel in writing, Galaxy will provide all personnel, equipment and supplies necessary or appropriate to perform the Services. 1.2 EXAMINATION OF THE SERVICES. Galaxy has examined the applicable ordinances, rules and regulations, and has examined the markets where the Services will be provided and satisfied itself as to all conditions to be encountered in the performance of the Services. 1.3 TIME IS OF THE ESSENCE. Upon execution of this Agreement, the parties shall promptly negotiate and establish a general overall progress schedule for the performance of the Services in all markets subject to this Agreement and completion of the Project, which schedule shall be supplemented (prior to commencing Services in any market) with more detailed and mutually established market by market progress schedules (the general and more detailed progress schedules may be hereafter referred to collectively as the "Progress Schedule") which shall include a description of milestones marking the completion of certain successive phases of the Services (the "Milestones"). The Progress Schedule, when executed by Tritel and Galaxy, shall be deemed an addendum to this Agreement and become an integral part of this Agreement. The Progress Schedule may be amended by mutual agreement of Tritel and Galaxy in writing. In the performance of Galaxy's obligations under this Agreement, time is of the essence. Galaxy agrees to see to the timely performance of the Services in accordance with the Progress Schedule and will not delay (beyond deadlines established in the Progress Schedule) or interfere with other portions of work on the Project. Galaxy recognizes that Tritel will incur severe economic loss if the Project is not timely completed, and that Galaxy will be responsible to compensate Tritel for such loss in accordance with Section 1.9 if Galaxy does not comply with the Progress Schedule. Because the activities of Galaxy are dependent upon other organizations' delivery of services and goods, Galaxy shall not be held liable for delays caused by third parties beyond its control. 1.4 COMMENCEMENT AND PROGRESS. Upon Tritel and Galaxy's mutual execution of the Progress Schedule, Galaxy will commence providing Services within a market specified by Tritel within three (3) weeks after written notice from Tritel to Galaxy, and shall provide the Services diligently and in accordance with the Progress Schedule. 1.5 PRIORITY OF SERVICES. Within the parameters of the Progress Schedule, Tritel shall have the right to decide the time, order and priority in which the various portions of the Services shall be performed and all other matters relevant to the timely and orderly conduct of Galaxy's Services. 1.6 COORDINATION. Galaxy shall cooperate with Tritel and all other contractors involved in the Project in the provision of the Services. Tritel shall cooperate with Galaxy in connection with its provision of the Services, and shall instruct its contractors and agents involved in the Project to do likewise. 1.7 AUTHORIZED REPRESENTATIVE; PERSONNEL. Galaxy shall designate one or more persons who shall be Galaxy's authorized representative(s) on-site and off-site. Tritel shall have the right to approve any personnel assigned by Galaxy to perform any Services, which approval shall not be unreasonably withheld or delayed. 1.8 ASSIGNMENT AND SUBCONTRACTING. Galaxy will not assign the work under this Agreement, or subcontract any portion of it, without the written consent of Tritel. Galaxy will not make any assignment of payments to be earned by Galaxy under this agreement without the prior written approval of Tritel. 2 1.9 CONSEQUENCES FOR DELAY. Except as noted below, in the event of a delay of Galaxy referred to in Section 1.3, there shall be deducted from the Compensation payable to Galaxy the following amounts: (a) a charge equal to [CONFIDENTIAL TREATMENT REQUESTED] per day per cell site for each day of delay in the Progress Schedule (or, if Tritel incurs extraordinary expense to maintain its schedule in spite of Galaxy's delay, an amount equal to such expense) materially attributable to Galaxy, subject to a maximum delay charge of [CONFIDENTIAL TREATMENT REQUESTED] per cell site; or (b) a charge equal to [CONFIDENTIAL TREATMENT REQUESTED] per day per each cell site within a system or cluster of cell sites each as will be mutually defined in the Progress Schedule (which system or cluster cannot be placed in commercial service due to one or more cell sites within such system or cluster not being placed in commercial service) for each day of delay in the Progress Schedule (or if Tritel incurs extraordinary expense to maintain its schedule in spite of Galaxy's delay, an amount equal to such expense), subject to a maximum delay charge of [CONFIDENTIAL TREATMENT REQUESTED] per cell site for each cell site within such system or cluster. Galaxy will be excused for any delay caused by acts of God, war (including civil war), civil unrest, acts of government, fire, floods, explosions, inclement weather, epidemics, quarantine restrictions, interplanetary catastrophes, delays solely caused by Tritel or its vendors or other contractors, or other events beyond the control of Galaxy. Galaxy will be entitled to extensions of time for such delay only upon written notice to Tritel within ten (10) days after commencement of the delay. The foregoing sums represent the amount of liquidated damages which the parties have agreed upon as a compensation to Tritel for any delay in placing Tritel's systems in commercial service in accordance with the Progress Schedule as a result of Galaxy's delay or interference. The parties acknowledge that such sums represent a fair and equitable amount of compensation for delay in view of the impossibility of ascertaining actual damages. The foregoing liquidated damages clause shall, however, be in addition to and not in substitution for any other rights or remedies which Tritel may have under this Agreement or otherwise against Galaxy by reason of its failure to complete the Services with the time limits referred to above. If due to any act or omission of Galaxy mutually agreed Acceptance Criteria (defined below) are not met and the commercial launch of a system is delayed, in addition to the delay liquidated damages set forth above, Galaxy shall corrected to Tritel's reasonable satisfaction, at Galaxy's sole cost, any deficiency in the implementation of fixed network services that is within Galaxy's sole control. The provisions of this paragraph shall not apply to deficiencies caused by Tritel's deviation from the original project criteria or by Tritel's direction to conduct implementation or interconnect activities in a manner inconsistent with Galaxy's recommendations. 3 SECTION 2. COMPENSATION 2.1 COMPENSATION. Tritel will pay Galaxy for Services rendered in accordance with Exhibit B (the "Compensation"). Unless expressly excluded pursuant to the terms of this Agreement, all costs and expenses related to the provision of the Services are included in the Compensation. However, any state and local sales or use taxes arising from Tritel's payment of the Compensation are not included and, if applicable, shall be payable by Tritel. 2.2 PAYMENT TERMS. Galaxy will submit invoices to Tritel in accordance with the Milestone schedule set forth in Exhibit A. Tritel will remit all properly payable amounts within thirty (30) days of Tritel receipt of any such invoice unless Tritel elects the financing option set forth below. Tritel may elect to finance the payment of any invoice for a period of up to nine months. If Tritel so elects, interest will begin to accrue on all charges set forth in any deferred invoice at a floating per annum rate equal to the prime rate of interest published in The Wall Street Journal plus one percent beginning on the thirty-first day following Tritel's receipt of any such invoice. Each invoice will describe, in reasonable detail and with respect to the relevant invoice period (a) a description of the Services provided, and (b) any work product created. The Compensation shall not be altered except as specifically provided for in this Agreement. 2.3 INVOICE REPRESENTATION. All invoices must be accompanied by a representation and warranty of Galaxy that all laborers, subcontractors, suppliers and others who might claim lien rights on the Project have been or will be timely paid in full. 2.4 PAYMENT NOT ACCEPTANCE. Payment to Galaxy alone does not constitute or imply acceptance by Tritel of any portion of Galaxy's Services. 2.5 GALAXY PAYMENT FAILURE. If it appears to Tritel that the labor, material and other bills incurred in the performance of Galaxy's Services (which if unpaid may give rise to lien rights or claims on the Project) are not being currently paid, Tritel may take such steps as it deems necessary to insure that the money paid to Galaxy will be utilized to pay such bills. 2.6 BACK CHARGES AND WITHHOLDS. Tritel may withhold payments from Galaxy in amounts that are sufficient to protect Tritel in the event of any of the following: 4 (a) Galaxy's improper or delayed works, defective work or damage to the work, which is not corrected by it; (b) Any claims Tritel may have against Galaxy arising out of other projects; (c) Filing of any claims, demands, suits, attachments and/or liens against Galaxy; (d) Reasonable evidence brought to Tritel's attention that any claims, demands, suits, attachments and/or liens are to be filed against Galaxy which could potentially affect the Project; (e) Reasonable evidence brought to Tritel's attention of prospective insolvency of Galaxy; or (f) Any bona fide claim or lien against Tritel or the premises upon which the Services were performed which arises out of Galaxy's default in its performance of this Agreement. 2.7 FINAL PAYMENT. 2.7 FINAL PAYMENT. The final payment will be due when Galaxy's Services have been completed and accepted by Tritel, which acceptance shall not be unreasonably withheld. For purposes of this Section 2.7, final payment shall be deemed to have been made upon Tritel's election to finance the charges subject to the final payment, effective upon Tritel's provision of notice of such election to Galaxy. The making and acceptance of final payment constitutes a waiver of any claims by Galaxy against Tritel for compensation for extra work or for compensation of any kind claimed by Galaxy because of the activities of Tritel in connection with the Project. Prior to final payment Galaxy shall submit to Tritel: (a) Galaxy's affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with Galaxy's Services for which Tritel or its property might in any way be liable, have been paid, or otherwise satisfied; (b) Satisfaction of all required acceptance criteria which shall be mutually established by Tritel and Galaxy within 90 days of execution of this Agreement in accordance with the parameters and procedures set forth in the General Milestone and Acceptance Criteria Schedule attached as Exhibit C (such acceptance criteria as shall be established may be referred to as the "Acceptance Criteria"); and (c) Other data as reasonably required by Tritel, such as receipts, releases, and waivers of liens. Final payment shall constitute a waiver of all claims by Galaxy for additional compensation relating to Galaxy's Services, but shall in no way relieve Galaxy of liability for obligations 5 assumed under this Agreement or for faulty or defective work appearing within sixty (60) days from the later of (i) final payment; or (ii) commercial in-service use of the applicable system. 2.8 SUSPENSION OF SERVICES. During the term of this Agreement, Tritel may elect to suspend Services in progress in a specific market due to any of the following conditions: (i) FCC or state regulatory actions which affect a specific Tritel service area; (ii) Moratoriums or similar actions imposed by state or local authorities which would materially affect Tritel's ability to complete network deployment within such area; or (iii) Mutual agreement by Galaxy and Tritel. If Services were suspended as a result of any of the above conditions, Galaxy would receive demobilization compensation during the suspension and remobilization compensation if Galaxy's personnel are remobilized. Demobilization compensation will equal 30% of the hourly rates of personnel demobilized (assuming a 9-hour workday and 5-day workweek during any period of demobilization) plus a demobilization fee of $2,000 per person demobilized. Upon remobilization, Galaxy will be paid a fee of $2,000 per Galaxy employee remobilized. Tritel would not assign work in progress, suspended under this provision, to other contractors or internal personnel for resumption of work without the mutual consent of Tritel and Galaxy. The Progress Schedule for any market suspended shall be tolled during any period of suspension. No suspension of services under this provision will occur prior to completion of the design phase and issuance of search rings. SECTION 3. TERM. The term of this Agreement will commence on the date hereof and, unless otherwise earlier terminated pursuant to Section II or extended upon mutual agreement of the parties, will end upon the earlier of: (i) Galaxy's completion and Tritel's acceptance of the Services (as determined by the Acceptance Criteria); or (ii) fifteen (15) months from the date of Galaxy's commencement of Services in the last market of Tritel in the Project covered by this Agreement. SECTION 4. INDEPENDENT CONTRACTOR. Galaxy will perform the Services as an independent contractor of Tritel, and this Agreement will not be construed to create a partnership, joint venture or employment relationship between Galaxy and Tritel. Galaxy will not represent itself to be an . employee or agent of Tritel or enter into any agreement on Tritel's behalf or in Tritel's name, unless Galaxy is specifically authorized in writing by Tritel to do so. 6 SECTION 5. COMPLIANCE WITH LAWS. Galaxy will at its own cost (a) comply with all federal, state and local laws, ordinances, regulations and orders with respect to its performance of the Services (collectively, the "laws"), (b) file all reports relating to the Services (including, without limitation, tax returns), (c) pay all filing fees and federal, state and local taxes applicable to Galaxy's business as the same shall become due, and (d) pay all amounts required under local, state and federal workers' compensation acts, disability benefit acts, unemployment insurance acts and other employee benefit acts when due. Galaxy will provide Tritel with such documents and other supporting materials as Tritel may reasonably request to evidence Galaxy's continuing compliance with this Section 5. Galaxy is liable to Tritel for all fines and penalties attributable to any acts of commission or omission by Galaxy, its employees and agents resulting from the failure to comply with laws. SECTION 6. INSURANCE. 6.1 COVERAGE REQUIREMENTS. Prior to providing any Services, Galaxy will procure and maintain throughout the term of this Agreement insurance policies (including, without limitation, automobile insurance, commercial liability insurance, professional liability insurance and statutory workers' compensation insurance) that are sufficient to protect Galaxy's business against all applicable risks and, upon Tritel's request, furnish Tritel with an endorsement from the insurance carriers showing Tritel as an additional insured under Galaxy's insurance. Galaxy will provide Tritel with certificates of insurance and other supporting materials as Tritel may reasonably request to evidence Galaxy's continuing compliance with the preceding sentence. 6.2 CANCELLATION. Galaxy's insurance policies shall contain a provision that coverage afforded under the policies will not be canceled, changed in a manner to reduce coverage from the levels currently in effect or not renewed (unless replaced with equivalent coverage with an alternate carrier) until at least thirty days' prior written notice has been given to Tritel. A statement to this effect will be included with Galaxy's insurance certificates. Certificates of insurance acceptable to Tritel shall be filed with Tritel prior to the commencement of Galaxy's Services. 6.3 WAIVER OF SUBROGATION. Tritel and Galaxy waive all rights against each other and against separate contractors, and all other subcontractors for damages caused by fire or other perils to the extent covered by Builder's Risk or any other property insurance purchased for the Project, except such rights as they may have to the proceeds of such insurance. 7 6.4 RISK OF LOSS. Galaxy will be liable for all loss or damage, other than ordinary wear and tear, to Tritel's property in Galaxy's possession or control. In the event of any such loss or damage, Galaxy will pay Tritel the full current replacement cost of such equipment or property within thirty (30) days after its loss or damage. 6.5 NO WORKERS' COMPENSATION LIMITATION ON INDEMNITY. In any and all claims against Tritel by any employee of Galaxy or anyone directly or indirectly employed by Galaxy or anyone for whose acts Galaxy may be liable, the indemnification obligations under Section 9 shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for Galaxy under Workers' Compensation laws, disability benefit laws or other employee benefit laws. SECTION 7. OWNERSHIP AND USE OF PROPRIETARY MATERIALS 7.1 PROPRIETARY MATERIALS. As used in this Agreement, "Proprietary Materials" means all products, devices, computer programs, techniques, know-how, algorithms, procedures, discoveries or inventions, whether patentable or copyrightable and whether reduced to practice, and all materials, texts, drawings, specifications, source code, data and other recorded information, in preliminary or final form and on any media whatsoever, that (a) is within the scope of the Project or (b) reduced to practice, developed, discovered, invented or made by Galaxy during the term of this Agreement, whether solely or jointly with others, and for the purposes of performing the Services. 7.2 OWNERSHIP. Tritel will be the exclusive owner of all Proprietary Materials arising from Galaxy's performance of this Agreement. To the extent permitted under the U.S. Copyright Act (17 USC ss. 101 et seq., and any successor statute thereto), the Proprietary Materials will constitute "works made for hire," and the ownership of such Proprietary Materials will vest in Tritel at the time they are created. To the extent the Proprietary Materials are not "works made for hire" under applicable copyright laws, Galaxy hereby assigns and transfers to Tritel all right, title and interest that Galaxy may now or hereafter have in the Proprietary Materials, subject to the limitations set forth in Section 7.4. Galaxy will promptly disclose to Tritel all Proprietary Materials. 7.3 FURTHER ACTS. Galaxy will take such action (including, but not limited to, the execution, acknowledgement, delivery and assistance in preparation of documents or the giving of testimony) as may be requested by Tritel to evidence, transfer, vest or confirm Tritel's right, title and interest in the Proprietary Materials. 8 7.4 LIMITATION. Notwithstanding any other provision of this Agreement to the contrary, this Section 7 will not obligate Galaxy to assign or offer to assign to Tritel any of Galaxy's rights in an invention for which no equipment, supplies, facilities or trade secret information of Tritel was used and which was developed entirely on Galaxy's own time, unless the invention relates directly to the Project. 7.5 USE. Except as required for Galaxy's performance of the Services or as authorized in writing by Tritel, Galaxy will not use, disclose, publish or distribute any Proprietary Materials or remove any Proprietary Materials from Tritel's premises. Galaxy will hold all Proprietary Materials in trust for Tritel and will deliver them to Tritel upon request and in any event upon the expiration or termination of this Agreement. 7.6 NON-INFRINGEMENT WARRANTY. Galaxy represents and warrants that any Proprietary Materials originating from Galaxy, and the exercise by Tritel of its rights hereunder with respect to the Proprietary Materials, will not infringe upon, violate or misappropriate any patent, copyright, trade secret, trademark, contract or other right or interest of any third party. 7.7 OTHER COMPANIES. During the course of executing the amended services, Galaxy employees may use software and documentation created by other service companies. Each Galaxy employee who uses these software products must agree in writing to protect any confidential information they acquire through training on or use of these software products. 7.8 REMEDIES. Galaxy agrees that damages may be inadequate to compensate for the unique losses to be suffered in the event of a breach of the provisions set forth in Sections 7.1 through 7.7, and that Tritel will be entitled, in addition to any other remedy it may have under this Agreement or at law, to seek and obtain injunctive and other equitable relief, including specific performance of the terms of this Agreement without the necessity of posting bond. SECTION 8. NO CONFLICTING OBLIGATIONS. 8.1 OTHER AGREEMENTS. Galaxy's execution, delivery and performance of this Agreement will not violate any other employment, nondisclosure, confidentiality, consulting or other agreement to which Galaxy is a party or by which it may be bound. 9 8.2 THIRD-PARTY CONFIDENTIAL INFORMATION. Galaxy will not use, in the performance of the Services or the creation of any Proprietary Materials, or disclose to Tritel any confidential or proprietary information of any other person if such use or disclosure would violate any obligation or duty that Galaxy owes to such other person. Galaxy's compliance with this Section 8.2 will not prohibit, restrict or impair Galaxy's performance of the Services and it's other obligations and duties to Tritel. SECTION 9. INDEMNIFICATION. Galaxy shall indemnify, defend and hold Tritel (and Tritel's agents, legal representatives, officers, directors, shareholders and employees) harmless from all claims, damages, losses, costs, expenses (including attorneys' fees) and liabilities, including any amounts paid in satisfaction of judgments, in compromise or as fines and penalties, arising out of or resulting from any claim, action, investigation or other proceeding (including any proceeding by any of Galaxy's employees, agents or subcontractors), actual or threatened, that is based upon (a) a default by Galaxy in the performance of its obligations under this Agreement, (b) any representation or warranty of Galaxy being untrue in any material respect, (c) the conduct of Galaxy's business, (d) any negligent act or omission of Galaxy, or (e) the infringement or misappropriation of any foreign or United States patent, copyright, trade secret or other proprietary right by the Proprietary Materials originating from Galaxy. SECTION 10. NONDISCLOSURE AGREEMENT As a condition to Tritel's obligations under this Agreement, Galaxy agrees to abide by all the terms and conditions of that certain Non-disclosure Agreement dated as of May 28, 1998, executed by and between Tritel and Galaxy (the "Non-disclosure Agreement"). SECTION 11. TERMINATION. 11.1 TERMINATION FOR CAUSE. Tritel may terminate this Agreement upon an Event of Default (defined below), provided, however, that as to any of the matters set forth in subparagraphs (iii) through (vii) of Section 13: (a) Tritel sends written notice to Galaxy describing the breach in reasonable detail, (b) Galaxy does not cure the breach within thirty (30) days following its receipt of such notice, and (c) following the expiration of the thirty-day cure period, Tritel sends a second written notice to Galaxy indicating Tritel's desire to terminate this Agreement. If an Event of Default results from any of the matters set forth in subparagraphs (i) and (ii) of Section 13, Tritel's termination of this Agreement shall be effective upon giving notice of termination to Galaxy. Galaxy may terminate this Agreement upon Tritel's material breach of this Agreement, provided that (a) Galaxy sends written notice to Tritel describing the breach in reasonable detail, (b) Tritel does not cure the breach within thirty (30) days following its receipt of such notice, and (c) following the expiration of the thirty-day cure period, Galaxy sends a second written notice to Tritel indicating Galaxy's desire to terminate this Agreement. 10 If Tritel terminates this Agreement for cause as described above, Tritel, without prejudice to any other remedy it might have, may terminate this Agreement and complete the Services by such means as Tritel deems fit. In such case, Galaxy shall not be entitled to receive any further payment until Galaxy's Services are completed. If the unpaid balance of the Compensation shall exceed the aggregate of (1) the expense of Tritel of completing the Services, including compensation for additional managerial and administrative services, and (2) the losses and damages of Tritel, including its attorneys' fees and litigation expense, such excess shall be paid to Galaxy. If the expense of completing Galaxy's Services and the losses and damages of Tritel shall exceed the unpaid balance of the Compensation, Galaxy shall pay the difference to Tritel promptly on demand. 11.2 TERMINATION FOR CONVENIENCE. Either Tritel or Galaxy may terminate this Agreement at any time upon ninety (90) days' written notice to the other (a "Termination for Convenience"). Upon a Termination for Convenience by Tritel, Galaxy shall be compensated for any Services rendered but which have not been paid ("Unpaid Services") on a time and materials basis as set forth in Exhibit B, unless the Unpaid Services constitute a Milestone in which case payment shall be made in accordance with the Milestone schedule set forth in Exhibit B. Upon a Termination for Convenience by Galaxy, Galaxy shall not be compensated for any Unpaid Services unless the Unpaid Services constitute a Milestone in which case payment shall be made in accordance with the Milestone schedule set forth in Exhibit B. 11.3 SURVIVAL. Sections 5 and 7 and Sections 9 through 24 (together with all other provisions of this Agreement that may reasonably be interpreted or construed as surviving termination of the Term) will survive the termination of the Term. SECTION 12. NOTICES. All notices given hereunder will be given (and shall be deemed to have been given upon receipt) in writing, will refer to this Agreement and will be personally delivered, sent by telecopy, by other electronic facsimile transmission or by registered or certified mail (return receipt requested) to the address set forth below the parties' signatures at the end of this Agreement. Any party may from time to time change such address by giving the other party notice of such change in accordance with this Section 12. SECTION 13. EVENT OF DEFAULT. For the purposes of this Agreement an "Event of Default shall be if: (i) At any time there shall be filed by or against Galaxy in any court a petition in bankruptcy or insolvency or for reorganization or for the appointment of a 11 receiver or trustee of all or a portion of the property of Galaxy, and within twenty (20) days from the filing date Galaxy fails to secure a discharge; or (ii) Galaxy makes an assignment for the benefit of creditors or petitions for or enters into an agreement or arrangement with its creditors; or (iii) Galaxy materially fails to prosecute the Services in accordance with the Acceptance Criteria, and therefore, fails to complete the Services entirely on or before any date established in the Progress Schedule for partial, substantial or final completion (except for delays for which Galaxy is entitled to additional time); or (iv) There is a breach of any of Galaxy's representation or warranties contained in this Agreement or required to accompany any invoice rendered under this Agreement; or (v) Galaxy fails to supply sufficient labor, material and/or equipment so as to complete the Services in accordance with the Progress Schedule, unless such delay is excused in accordance with Section 1.9; or (vi) Galaxy performs defective work and fails to correct promptly and properly such defective work; or (vii) Without limitation, Galaxy fails to perform any material provision of this Agreement. SECTION 14. ASSIGNMENT Galaxy may not assign this Agreement, in whole nor in part, without Tritel's prior written consent. Tritel may assign its rights hereunder to (a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Tritel is a party, (b) any corporation, partnership, association or other entity or person to which Tritel may transfer all or substantially all of the assets and business of Tritel existing at such time, or (c) any subsidiary of or entity under common control with Tritel. Upon any such assignment by Tritel and the full and unconditional assumption by such assignee of all of Tritel's obligations hereunder arising after such assignment, Tritel shall be released and free from any obligation or liability under this Agreement arising after such assignment. All the terms and provisions of this Agreement will be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. SECTION 15. PERSONNEL The terms and conditions of this Agreement will be binding upon Galaxy's employees, agents, subcontractors and affiliates. 12 SECTION 16. WAIVERS No delay or failure by any party hereto in exercising or enforcing any of its rights or remedies hereunder, and no course of dealing or performance with respect thereto, will constitute a waiver thereof. The express waiver by a party hereto of any right or remedy in a particular instance or will not constitute a waiver thereof in any other instance. All rights and remedies will be cumulative and not exclusive of any other rights or remedies. SECTION 17. AMENDMENTS No amendment, waiver or discharge of any provision of this Agreement will be effective unless made in writing that specifically identifies this Agreement and the provision intended to be amended, waived or discharged and signed by Tritel and Galaxy. Each such amendment, waiver or discharge will be effective only in the specific instance and for the specific purpose for which given. SECTION 18. APPLICABLE LAW This Agreement and each of the documents referred to herein shall be interpreted, construed, applied and enforced in accordance with the laws of the State of Mississippi, without regard to any rules governing conflicts of laws. Any action to enforce arising out of, or relating in any way to, any of the provisions of this Agreement may be brought and prosecuted only within such court or courts located in the State of Mississippi as is provided by law; and the parties consent to the jurisdiction of said court or courts located in the State of Mississippi and the service of process by registered mail, return receipt requested, or by any other manner provided by law. SECTION 19. SEVERABILITY If any provision of this Agreement is held invalid, illegal or unenforceable in any jurisdiction, for any reason, then, to the full extent permitted by law (a) all other provisions hereof will remain in full force and effect in such jurisdiction and will be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability will not affect the jurisdiction thereover will have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law. SECTION 20. ENTIRE AGREEMENT This Agreement and the Non-disclosure Agreement, including the exhibits and schedules hereto and thereto, constitute the entire agreement between the parties with respect to their subject matters, and all prior or contemporaneous oral or written communications, understandings or agreements between the parties with respect to such subject matters are hereby superseded in their entireties. 13 SECTION 21. DISPUTES 21.1 AGREEMENT TO ARBITRATE. All claims, disputes and matters in question arising out of, or relating to, this Agreement or any claimed breach of this Agreement, except for claims of Galaxy which, have been waived by its acceptance of final payment, shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then in effect unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable. 21.2 DEMAND FOR ARBITRATION. Notice of demand for arbitration shall be filed in writing with the other party to this Agreement and with American Arbitration Association. The demand for arbitration shall be made within thirty (30) days after written notice of the claim, dispute or other matter in question has been given, and in no event shall it be made after the when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations, whichever occurs first. The location of the arbitration proceeding shall be Jackson, Mississippi. 21.3 AWARD. The award rendered by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction. 21.4 SAME ARBITRATORS. At the election of Tritel, any arbitration proceeding instituted by either party under this Agreement may be consolidated with any other arbitration proceeding then or thereafter pending between either party and any other person or entity if the respective arbitrations involve similar questions of fact or law or arise out of any work done or services supplied for the design or construction of the Project. 21.5 EXCEPTIONS. This agreement to arbitrate shall not apply to any claim of contribution or indemnity asserted by one party of this Agreement against the other party and arising out of an action brought in a state or federal court or in arbitration by a person who is under no obligation to arbitrate the subject matter of such action with either of the parties to this Agreement, or who does not consent to such arbitration. 14 SECTION 22. COUNTERPARTS. This Agreement may be executed in two or more counter parts that together shall constitute a single agreement. SECTION 23. HEADINGS. The headings contained in this Agreement are for ease of reference and shall not affect the interpretation or meaning of this Agreement. SECTION 24. PUBLICITY. So long as this Agreement is in effect, neither Galaxy, World Access, Inc. nor any of their affiliates, officers, directors, employees or agents shall issue any press release or otherwise make any public statement with respect to the existence of this Agreement or the subject matter of this Agreement without the prior written consent of Tritel. SECTION 25. LIMITATION OF LIABILITY. Except for the liquidated damages and other payment undertakings of Galaxy as set forth in Section 1.9, expenses of arbitration and awards of attorneys fees and expenses, in no event shall Galaxy be liable under this Agreement for: (i) special, incidental or consequential damages (including loss of profits) regardless of legal theory advanced, whether foreseen or unforeseen; or (ii) an amount exceeding the price of Services rendered through the date of any termination or expiration of this Agreement. SECTION 26. FORCE MAJEURE. In the event a party's performance of an obligation hereunder is rendered impossible or commercially impractical (rather than simply delayed) due to causes beyond its control and without its fault or negligence, including, but not limited to, acts of God, war (including civil war), civil unrest, acts of government, fire, floods, explosions, inclement weather, epidemics, quarantine restrictions, interplanetary catastrophes, strikes or labor unrest (of third parties but not of such party), material shortage, or delays in transportation, such party's performance of such obligation shall be excused. 15 The parties have executed this Agreement as of the date first set forth above. TRITEL COMMUNICATIONS, INC. By:______________________________ Name: Jerry M. Sullivan, Jr. Its: Executive Vice President Chief Operating Officer Address: 1410 Livingston Lane Jackson, Mississippi 39213-8003 Attn: Jerry M. Sullivan, Jr. GALAXY PERSONAL COMMUNICATIONS SERVICES, INC. By:______________________________ Name: Linda S. Rothermel Its: Director Sales and Marketing Address: 1075 Windward Ridge Parkway, Suite 100 Alpharetta, GA 30005 Attn: Linda S. Rothermel 16 EXHIBIT A GENERAL DESCRIPTION OF SERVICES 1.0 WIRELINE COORDINATION The scope of the coordination will be dependent on the type of link selected on a site by site basis. Galaxy will recommend which is most appropriate for each site. Galaxy will use MapInfo to generate maps to show the planned sites and the following information: location, site number, tower height, and logical connectivity. 1.1 LEASED LINE DESIGN Galaxy will determine the type of service required for a particular site and request the service provider to provision for the link. A basic site sketch will be drawn and furnished to the Leased Line provider with recommendations and service requirements. This process encompasses a Service Inquiry, Service Order, coordination of Civil Ready Dates, the Customer Desired Due Date (CDDD), and delivery of the Leased Line to the site. Galaxy will be responsible for and act as the Operator's Representative in all aspects of provisioning Leased Line facilities to the sites excluding execution of lease agreements with service providers. Follow-up with provider will be documented and any deviation from Request for Service date will be forwarded to Operations personnel. Based on the information supplied by the Leased Line Provider, integrated with the construction schedule, Galaxy will prepare and maintain a Facilities Deployment Schedule that will be utilized in network deployment with regards to the Fixed Network Department. While testing and reliability of the leased line will be the responsibility of the service provider, Galaxy will evaluate the results of any tests as available and will accept or reject any such service as appropriate. 2.0 IN-MARKET ENGINEERING Galaxy will communicate transport requirements to Tritel's construction manager via sketches showing distances and requirements unique to that location. Serving Telephone Companies will also be noted. At that time an initial plan and route is selected for site service and delivery of Leased Line facilities. Galaxy engineers will survey every site to determine optimal routing and least cost. The engineer will make determinations in the field, which will then be integrated into the overall network plan. All field data will be evaluated for accuracy and efficiency. 2.1 FIELD COORDINATION OF FACILITY ROUTING Galaxy will attend an on-site review of the preferred site and conduct initial field survey and assessment of the leased line routing. Documentation in the form of CellSite Survey will be recorded. In order to meet the requirements for expedient site activation, Galaxy will recommend construction methods that will minimize local telephone company construction requirements, local permitting requirements, and maximize the use of Company's site development contractors in such a way that site connectivity of any type of installation will be handled in an expeditious manner. 2.2 PUNCH LISTS AND PROBLEM RESOLUTION Individual site hand over visits may be required to verify substantial completion of network facilities and/or resolution of network roadblocks. In this event, Galaxy will dispatch a Network Engineer for this purpose. This individual will be responsible to facilitate resolution of the problems by interfacing with the Telco, Program Management and the Site Contractor as necessary. 3.0 SITE DOCUMENTATION Galaxy will prepare a basic schematic of connectivity from the BTS site to the outside plant and forward this to the client and the service provider. Client personnel can then use this schematic for maintenance and ordering purposes at the site. This sketch is not intended to replace the A&E civil drawings. 4.0 DEPLOYMENT COORDINATION Galaxy will attend deployment meetings in each market as required to ensure the seamless integration of transport facilities into the wireless network. Input from these meetings will be used to direct the work and appropriately schedule the delivery of facilities to the sites. 5.0 PROJECT DOCUMENTATION Galaxy will compile a detailed CELLSITE FACILITIES RECORD, which will be available in both hard and soft copy: o CellSite Survey (site sketch) o Digital site photo o Site data (location, building management contact, lock combination, etc.) o T-1 Routing Design (as needed for Rooftop sites) o LEC and Power Company contact names & numbers Leased Line Site (as required, if microwave is not selected) o Service Inquiry o T-1 Service Order o Service provider quotes o MapInfo Plot of Topology o CFA assignment(s) o Client and Service Provider Circuit IDs Microwave Site Documentation (as required) o Path survey o Path design o Equipment and waveguide specifications o Transmission power o Frequency report o FCC application and certificate o Testing and installation documentation o Digital photos 6.0 DATABASE MANAGEMENT Galaxy will use its proprietary database to document data on a per site basis. The database will also facilitate ordering and mapping associated with provisioning. Standard reports are available; however, customized reports can be developed for the client. Tritel would be charged an hourly rate to develop customized reports upon Tritel's request. To ensure swift deployment, the database includes RBOC tariffs in all 50 states, updated monthly. 7.0 SERVICES 7.1 TURNKEY MICROWAVE SERVICES 7.1.1 PRELIMINARY FEASIBILITY STUDY A course grade microwave feasibility study shall be done to verify path viability utilizing USGS Quad maps to assess all potential obstructions along the path and determine preliminary antenna heights. Upon successfully passing the feasibility study, Galaxy will conduct a complete microwave path survey to insure path integrity. 7.1.2 MICROWAVE PATH AND SITE SURVEYS When the transport medium chosen is microwave and the feasibility has been determined, Galaxy will establish the estimated necessary microwave antenna centerlines. The availability of transmission capacity from the site to a hub facility will then be confirmed. As an incremental pass-through charge, arrangements for a structural capacity review of the tower to support the microwave antenna at the necessary height will be performed. 7.1.3 MICROWAVE PATH DESIGN Galaxy will run a computer-based model to assess microwave transmission attenuation. This same model will also calculate the required antenna design, transmitter power, and wave guide type. This process will serve as a verification of equipment recommendation from Galaxy. Based on this comparison, Galaxy will prepare equipment specifications with the path design attached and will forward to the owner's Equipment Management for procurement. Galaxy will provide a Technical Survey Report. 7.1.4 FREQUENCY COORDINATION AND LICENSING PREPARATION Galaxy will arrange for the frequency coordination necessary for transmitting. Galaxy will complete and submit the FCC License application and follow up with the FCC to obtain the acceptance certificate. 7.1.5 INSTALLATION ENGINEERING AND SPECIFICATION Once the path design, equipment selection, and tower coordination has been completed and authorized by Company, Galaxy will deploy an installation team into the field to install all necessary hardware and radios. This team will perform all required tests in order to ensure reliability and complete satisfaction by Company. 7.1.6 SITE COMMISSIONING AND DOCUMENTATION All installation and engineering procedures will be documented. This information along with Digital site photos will be provided in a concise professional format (hard and soft copy) to Company after commissioning. 8.0 INTERCONNECTION WITH PSTN The determination of LEC Access Tandems and the Interexchange Carriers (IXCs) Point-of-Presence (POPs) locations in each Local Access Transport Area (LATA) is the first phase in the PSTN design. The location of these points will drive the location of the Mobile Switching Center (MSC), given that the closer the MSC is to these points, the lower the cost of wireline transmission. Galaxy will compare real estate cost with transmission costs in the placement of the MSC. Most metropolitan LATAs have two Access Tandem locations that might be used for connection. Tritel should plan to connect to each for diversity purposes and to obtain better Virtual Rate Center (VRC) coverage. Each NXX obtained by Tritel must be tied to an exchange within the LATA for rating purposes. In some LECs, a different VRC may be used for each NXX obtained by Tritel while in others, Tritel will be allowed only one VRC per Access Tandem. A unique VRC for each NXX obtained would help Tritel establish different rating zones within a LATA to: o minimize costs for wireline customers calling Tritel wireless customers o minimize Tritel's mobile-to-land costs. Galaxy assumes that a minimum of one NXX per LATA will be necessary for launch, depending on the requirements of each situation. In order to obtain NXX codes for Tritel through the LEC, Galaxy will assist with and require: o Tritel Access Customer Name Abbreviation (ACNA) o Operating Company Number (OCN) o Exact address of the switch o V & H coordinates of the switch o CLLI code for the MSC site o Tritel POP site in other LATAs Galaxy will develop procedures to obtain NXX codes in LATAs in and outside the MSC location. In some cases, the LEC will require Tritel to obtain a Point-of-Presence (POP) before Galaxy can secure these NXXs. Alternatively, using an IXC puts Tritel at risk should Tritel want to change carriers in the future. Thus, the ideal location would be the LEC wire center near all IXC POPs. During the interim, Tritel should attempt to use the BTS site on a building closest to the Access Tandem or the End Office to connect to in that LATA. Galaxy does not anticipate a need for equipment at this location, but Tritel should obtain enough space to allow cross-connects and additional equipment that can be installed to support future growth. Lead times to order an NXX block of 10,000 numbers through LECs is about 66 days. To determine the PSTN connections needed, we recommend reviewing Bellcore Technical Reference TR-NPL-000145, Issue 2, dated December 1993. In the early stages of Tritel's network development. it is assumed most traffic will be sent and received from the LEC Access Tandem using Type 2A circuits. Some LECs require that these circuits be directionalized, meaning that separate trunk groups are established to and from the tandem. Some LECs also require a separate equal access trunk group labeled Type 2T or 2AT. Type 2B circuits directly to end offices may be used at a later date as traffic loads dictate. Costs would be the driving factor that would determine whether these circuits would be installed. Economic analysis will be used at the appropriate time to determine when to install such circuits. Galaxy assumes that Tritel will use a selected carrier or carriers for branded long distance service. Whether direct trunks will be installed to other long distance carriers would again be a function of traffic loads. The LATA Access Tandem will have connections to all long distance carriers serving the area and until loads build to a point of dictating direct connections, traffic for these carriers should be handled using the tandem. Most LECs require a Type 1 trunk group to handle 800, N11, 1+, 0+, and 0- traffic. Galaxy will make application for and secure this trunk group. After Tritel has developed trunking requirements for E911, Directory Assistance (DA), Directory Assistance Call Completion (DACC), Operator Services, and call volume, Galaxy will make application for and process all required paperwork. Galaxy will then track status and ensure that Operations personnel are notified of installation and test dates. These requirements will drive the MSC trunking for each LATA within a market. Tritel will need to determine the LATAs to be served at launch and LATAs for later implementation. Access Tandem connections in each LATA served will generally be required. If only a small portion of the LATA is to be covered, a Type 1 connection to an end office will be recommended. E911 needs in each LATA must be carefully investigated. Galaxy recommends and will implement connection for E911 through a dedicated NXX for E911 use where Tritel would outpulse NXX-XXXX as the called number. The NXX indicates Tritel and the XXXX indicates the sector of call origination. ANI would not be sent. E911 requirements may change as the FCC refines a method of pinpointing the location of wireless stations. Implementing these methodologies would be outside this scope of work. 9.0 SUBCONTRACTING Galaxy may elect to subcontract some components of the scope of work for fixed network services. In such a circumstance, Tritel shall have the right to approve the contracting firm or personnel and shall not unreasonably withhold approval. Any subcontractors will be managed directly by Galaxy personnel to ensure consistent quality in service delivery to Tritel. 10.0 RESPONSIBILITY OF PARTIES With respect to Fixed Network services, Galaxy's efforts will be subject to changes, requests, or acts of Tritel, the Program Manager, or other Parties given responsibility for aspects of the Fixed Network Services. Galaxy is not liable for liquidated damages or delay penalties due to changes to the progress schedule or acts and omissions made by other parties outside Galaxy's control that impede or delay Galaxy's ability to complete work activities. EXHIBIT B COMPENSATION B.1 FEE SCHEDULE Galaxy Engineering offers a per site list price that includes: o Implementation as defined in Sections 1 through 6 o Interconnection as defined in Section 8 The list price per site for implementation is[CONFIDENTIAL TREATMENT REQUESTED]. However, because the volume of sites requested by the client exceeds 1200, and because of the significant RF work also being completed for the client, we are pleased to offer a reduction, itemized per site as follows: o Per Site Implementation Fee: [CONFIDENTIAL TREATMENT REQUESTED] o Per Site Interconnect Fee [CONFIDENTIAL TREATMENT REQUESTED] As site redesign becomes necessary, the fee per each site redesign will be [CONFIDENTIAL TREATMENT REQUESTED]. Microwave design and installation: Number of Paths Price Per Path for Design & Installation --------------- ---------------------------------------- 1--25 [CONFIDENTIAL TREATMENT REQUESTED] 26+ [CONFIDENTIAL TREATMENT REQUESTED] If microwave is selected as the transport medium, Tritel will be charged for the first site implementation milestone for the applicable percent of the per-site fee for achieving the first milestone. In addition, Tritel will be charged for the price per path listed above. This fee schedule and the following hourly rates are valid for fixed network projects of greater than 1200 sites. B.1.2 TRAVEL AND OFFICE EXPENSES Travel Expenses and accommodations away from Atlanta, GA including coach airfare will be passed through to the client. One rental vehicle for each Galaxy employee deployed in the market. Galaxy personnel will be allotted one trip home per month. Galaxy per diem rates are per standard 1998 U.S. Government CONUS rates for the market that work is being performed in. Extraordinary travel required by Tritel outside of travel between the markets and Atlanta will be billed at actual costs plus an [CONFIDENTIAL TREATMENT REQUESTED] processing fee. Office Expenses will be passed through at cost, where applicable. Office space outside of Atlanta (set up upon Tritel's request) will be billed to or arranged by Tritel at Tritel's discretion. B.1.3 HOURLY RATES FOR OUT OF SCOPE SERVICES The following Hourly Rates apply to work performed upon client request that is outside the scope of this proposal. Listed below are the personnel expected to work full-time on this project upon acceptance by the client. DESCRIPTION HOURLY RATE ----------- ----------- FIXED NETWORK MANAGER [CONFIDENTIAL TREATMENT REQUESTED] SYSTEM INTEGRATOR [CONFIDENTIAL TREATMENT REQUESTED] FIXED NETWORK ADMINISTRATOR [CONFIDENTIAL TREATMENT REQUESTED] OSP SUPERVISOR [CONFIDENTIAL TREATMENT REQUESTED] FIELD TECHNICIANS--IN MARKET [CONFIDENTIAl TREATMENT REQUESTED] CAD/MAPINFO COORDINATOR [CONFIDENTIAL TREATMENT REQUESTED] B.2 ASSUMPTIONS o Site Acquisition Request forms will be released in clusters. o Site Acquisition Service Providers will release sites in clusters. o Galaxy will release sites to construction in clusters. o Galaxy will coordinate weekly status meetings. o Galaxy will request competitive bids for site construction. o Consultants will be retained directly by the owner for the following services: FAA Evaluations, FCC requirements, Microwave Relocation, and Tower De-tuning Analyses. o The Client will provide Equipment Vendor information as requested to complete these scopes of services. o Galaxy is to be named as an additional insured on all required certificates of insurance from contractors, consultants, and vendors involved in the project. B.3 PAYMENT TERMS The terms of Galaxy's payment structure is Net 30 days upon receipt of invoice unless Tritel elects the financing option set forth in the Agreement. Invoices shall be rendered according to the following milestones: Fixed Network Engineering Payment Milestones
Milestone: Fee: - ---------------------------------------------------------------------------------------------- o Project Initiation [CONFIDENTIAL TREATMENT REQUESTED] o Service Inquiry Form Issued [CONFIDENTIAL TREATMENT REQUESTED] o Order Placed [CONFIDENTIAL TREATMENT REQUESTED] o Delivery of T-1 or 90 days after Order Placement [CONFIDENTIAL TREATMENT REQUESTED] o Site Documentation Submitted to Tritel or 90 days after T-1 [CONFIDENTIAL Delivery TREATMENT REQUESTED]
Invoices shall initially be based on the parties' mutual good faith estimate of the total cell sites required in the market(s) in which Services have been commenced and which are the subject of the invoices ("Initial Invoice"). If actual cell site counts differ from the estimated count used to calculate Initial Invoice amounts: I) The excess amount invoiced, if any, shall be payable by Galaxy to Tritel as follows: i) if the Initial Invoice terms were net 30, like terms apply; ii) if the Initial Invoice terms were under the Financing Plan, the excess shall be subtracted from the Initial Invoice amount financed and payment structure will be adjusted accordingly, with credit given for any excess interest charges accrued; iii) at Tritel's option, the excess shall be rendered in equivalent Services value on a time and materials basis. II) The amount of deficiency in the invoice total, if any, shall be payable by Tritel as follows: i) if the Initial Invoice terms were net 30, like terms apply; ii) if the Initial Invoice terms were under the Financing Plan, net 30 terms apply. As soon as the actual number of cell sites to be constructed in such markets is determined by Tritel invoices shall thereafter be based on the actual cell site count rather than the estimate. EXHIBIT C MILESTONE COMPLETION AND GENERAL ACCEPTANCE CRITERIA OF FIXED NETWORK ENGINEERING DELIVERABLES FOR TRITEL WIRELESS MARKETS The following conditions, when fulfilled, define Milestone completion and Acceptance Criteria for the Services ("Acceptance"). Tritel acknowledges and accepts that failure to adhere to the Acceptance Criteria unless otherwise authorized in writing by Galaxy shall constitute waiver of all Tritel' s claims against Galaxy for subsequent delays or failures in network performance. Acceptance Criteria: In-Market Engineering/Implementation Phase i. Galaxy's Fixed Network Implementation phase will begin when Tritel gives authorization to Galaxy to issue Service Inquires. ii. The issuance of a Service Inquiry Form will signify the first milestone for Fixed Network Site Implementation. iii. The second milestone for Fixed Network Site Implementation is achieved when the T-1 is ordered (leased line or microwave). iv. The third milestone for Fixed Network Site Implementation is the delivery of the T-1, including testing and acceptance. v. The fourth milestone for Fixed Network Site Implementation is the delivery of the Fixed Network Site Implementation documentation, "Site Book." vi. Galaxy's Fixed Network Implementation phase will conclude in each BTA when for 3 consecutive months the number of sites ordered in that market is less than 5% per month of the total initial Search Areas deployed. Terms o Any contractual obligations made with carriers will be the sole responsibility of Tritel. All carrier equipment purchases and/or lease agreements will be the sole responsibility of Tritel. Galaxy will, at Tritel's discretion, issue all purchase orders to carriers/vendors. o In order to process T-1 orders some carriers will require valid E911 addresses. It will be Tritel's responsibility (via a Site Acquisition Contractor) to obtain and provide valid addresses to Galaxy. o Charges required by a Carrier due to: Special Construction, cancellations, delays (outside the control of Galaxy Engineering) or repeated installation trips will be the responsibility of Tritel. Interconnection Phase i. The Interconnection phase will begin simultaneously with the Fixed Network Design phase. ii. Galaxy applies for NXX(s) in each LATA. A requirement for Galaxy to begin application is that Tritel or its design agent establish the location of the MSC for Type 1 Circuit Application. iii. Trunks Ordered (following marketing input): Terms o Tritel Interconnection objectives (Operator Services, 0+, 0-, 555-1212, Area Wide Calling Plans, IT circuits, etc.) will need to be established before the interconnect phase can begin. o The minimum processing time for NXX's is 66 days. Galaxy Fixed Network Engineering will require specific information from Tritel as outlined in Section 8 of the Scope of Services in order to obtain NXX's for each LATA. o The Interconnection phase will conclude simultaneously with the Fixed Network Implementation phase. At such time when the Fixed Network Implementation phase has concluded, Galaxy Engineering will support the hand-off of all interconnect data to permanent Tritel Operations personnel. EX-10.23 24 AGREEMENT AGREEMENT THIS AGREEMENT is made by and between BellSouth Telecommunications, Inc., ("BellSouth"), a Georgia corporation, and Tritel Communications, Inc., ("Carrier") a Delaware corporation and shall be deemed effective as of March 16, 1999 (the "Effective Date"). This agreement may refer to either BellSouth or Carrier or both as a "party" or "parties." WITNESSETH WHEREAS, BellSouth is an incumbent local exchange carrier ("ILEC") authorized to provide telecommunications services in the states of Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee; and WHEREAS, Carrier is a Commercial Mobile Radio Service ("CMRS") provider licensed by the Federal Communications Commission ("FCC") to provide CMRS in the states of Alabama, Florida, Georgia, Kentucky, Mississippi, and Tennessee; and WHEREAS, the parties wish to interconnect their facilities and exchange traffic for the purposes of fulfilling their obligations pursuant to Sections 251, 252 and 271 of the Telecommunications Act of 1996 and to replace any and all other prior agreements, both written and oral; NOW THEREFORE, in consideration of the mutual agreements contained herein, BellSouth and Carrier agree as follows: I. DEFINITIONS For purposes of this Agreement, the following capitalized terms have the meanings set forth below unless the context requires otherwise. Terms that appear herein (whether or not capitalized) that are not defined herein have the meanings ascribed to them in the Act, or (if not defined therein) have the meanings customarily associated with them based on ordinary usage in the telecommunications industry as of the Effective Date. A. COMMISSION is defined as the appropriate regulatory agency in each of BellSouth's nine state region: Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee. B. EFFECTIVE DATE is defined in the first sentence of this Agreement. C. INTERMEDIARY FUNCTION is defined as the delivery, pursuant to this agreement or to Commission directive, of local or toll (using traditional landline definitions) telecommunications traffic to or from (i) a local exchange carrier (LEC) other than BellSouth; or (ii) an alternative (or competitive) local exchange carrier ("ALEC"); or (iii) another telecommunications carrier (such as a CMRS provider) other than Carrier through the network of one party from or to an end user of the other party. D. LOCAL TRAFFIC is defined for purposes of reciprocal compensation under this Agreement as: (1) any telephone call that originates on the network of Carrier within a Major 1 Trading Area ("MTA") and terminates on the network of BellSouth in the same MTA and within the Local Access and Transport Area ("LATA") in which the call is handed off from Carrier to BellSouth, and (2) any telephone call that originates on the network of BellSouth that is handed off to Carrier in the same LATA in which the call originates and terminates on the network of Carrier in the MTA in which the call is . handed off from BellSouth to Carrier. For purposes of this Agreement, LATA shall have the same definition as that contained in the Telecommunications Act of 1996, and MTA shall have the same definition as that contained in the FCC's rules. E. LOCAL INTERCONNECTION is defined for purposes of this Agreement as (1) the connection of the parties' respective networks for the exchange and delivery of Local Traffic between the parties to be terminated on each party's network so that end users of either party have the ability to reach end users of the other party without the use of any access code or substantial delay in the processing of the call; and (2) a LEC's provision of unbundled network features, functions, and capabilities to carrier. F. NON-LOCAL TRAFFIC is defined as all traffic that is neither Local Traffic nor access services (the latter described in Section V.F of this Agreement). G. PERCENT OF INTERSTATE USAGE (PIU) is defined as a factor to be applied to that portion of Non-Local Traffic comprised of interstate interMTA minutes of use in order to -designate those minutes that should be rated as interstate access services minutes of use. The numerator is all interstate interMTA minutes of use, less any interstate minutes of use for "Terminating Party Pays" services, such as 800 Services. The denominator is all interMTA minutes of use less all minutes attributable to "Terminating Party Pays" services. H. PERCENT LOCAL USAGE (PLU) is defined as a factor to be applied to terminating minutes of use. The numerator is all "nonintermediary" Local Traffic minutes of use. The denominator is the total minutes of use including Local Traffic and Non-Local Traffic. I. TELECOMMUNICATIONS ACT OF 1996 ("ACT") means Public Law 104-104 of the United States Congress effective February 8, 1996. The Act amended the Communications Act of 1934 (47, U.S.C. Section 1 et. seq.). II. PURPOSE The parties desire to enter into this Agreement consistent with all applicable federal, state and local statutes, rules and regulations in effect as of the date of its execution including, without limitation, the Act at Sections 251, 252 and 271. The access and interconnection obligations contained herein enable Carrier to provide CMRS in those areas-where it is authorized to provide such services within the nine state region of BellSouth. The parties have entered into this Agreement to memorialize their agreement with respect to certain matters concerning Local Interconnection as a result of their negotiations pursuant to Sections 251 and 252 of the Act. With respect to any facility, feature, function, service, or other arrangement concerning Local Interconnection -or any other matter subject to negotiation pursuant to Sections 251 and 252 of the Act between the parties that has not been agreed upon by the parties and memorialized herein, (a) the parties may conduct further negotiations pursuant to 2 Sections 251 and 252 of the Act upon a written request therefor by Carrier, and (b) Carrier reserves any rights it might have under Section 332 of the Communications Act of 1934, 47 U.S.C. 332, as amended. III. TERM OF THE AGREEMENT A. The term of this Agreement shall be two years, beginning on the Effective Date and shall automatically renew for additional six (6) month terms unless either party provides written notice of termination to the other party at least sixty (60) days prior to the last day of the initial two-year term or any subsequent six-month renewal term, as the case may be. B. In the event BellSouth or Carrier receives from the other a notice of termination pursuant to paragraph A of this section, Carrier may within 30 calendar days from the receipt thereof send to BellSouth a written request to renegotiate this Agreement pursuant to Sections 251 and 252 of the Act, in which case this Agreement shall not be terminated, but shall continue in full force and effect, unless and until a substitute agreement between the parties with respect to the matters governed herein takes effect. C. Notwithstanding the foregoing, the parties may terminate this Agreement at any time upon their written mutual consent. IV. LOCAL INTERCONNECTION A. The delivery of Local Traffic between the parties shall be reciprocal and compensation will be mutual according to the provisions of this Agreement. The parties agree that the exchange of traffic on BellSouth's interMTA EAS routes shall be considered as Local Traffic and compensation for the termination of such traffic shall be pursuant to the terms of this section. EAS routes are those exchanges within an exchange's Basic Local Calling Area, as defined in Section A3 of BellSouth's General Subscriber Services Tariff. B. Each party will pay the other for terminating its Local Traffic on the others network the local interconnection rates as set forth in Attachment B-1, by this reference incorporated herein. The amount that each party shall pay to the other for the delivery of Local Traffic shall be calculated by multiplying the applicable rate in Attachment B-1 for each type of call by the total minutes of use each month for each such type of call. The minutes of use or portion thereof for each call, as the case may be, will be accumulated for the monthly billing period and the total of such minutes of use for the entire month rounded to the nearest minute. The usage charges will be based on. the rounded total monthly minutes. The charges for Local Interconnection shall be billed monthly and payable monthly. Late payment fees, not to exceed 1 1/2% per month after the due date may be assessed, if undisputed interconnection charges are not paid, within thirty (30) days of the due date of the monthly bill. V. METHODS OF INTERCONNECTION A. 1. The parties agree that there are three appropriate methods of interconnecting facilities: (a) virtual collocation where physical collocation is not practical for technical reasons or because of space limitations; (b) physical collocation; and (c) interconnection at any technically feasible point via purchase of facilities from either party by the 3 other party. Rates and charges for collocation are set forth in Attachment C-1 3, incorporated herein by this reference, or as otherwise agreed upon by the parties. Type 1, Type 2A and Type 2B interconnection arrangements described in BellSouth's General Subscriber Services Tariff, Section A35, or, in the case of North Carolina, in the North Carolina Connection and Traffic Interchange Agreement effective June 30, 1994, as amended, may be purchased pursuant to this Agreement provided, however, that such interconnection arrangements shall be provided at the rates, terms and conditions set forth in this Agreement. Facilities for interconnection or for other BellSouth-supplied facilities, features, functions, or services may be purchased by Carrier (i) pursuant to a separate agreement between the parties, or (ii) pursuant to the rates, terms and conditions set forth in applicable tariffs, including without limitation BellSouth's intrastate Switched Access (Section E6) or Special Access (Section E7) services tariff. 2. Local Interconnection shall be provided at a level of quality at least equal to that which each party provides to itself, to any of its Affiliates, or, in the case of BellSouth-supplied interconnection, at least equal to that provided by BellSouth to any similarly-situated CMRS provider having interconnection arrangement(s) with BellSouth comparable to the interconnection arrangement(s) provided to Carrier under this Agreement; except that, upon request, a different level of quality may be provided to the extent technically feasible and subject to the negotiation of acceptable provisions and compensation arrangements. All interconnection facilities shall meet the applicable telecommunications industry standards of engineering, design, and operation, as the case may be, for LEC-CMRS interconnection in effect from time to time. B. The parties agree to accept and provide any of the preceding methods of interconnection. Reciprocal connectivity shall be established to at least one BellSouth access tandem within every LATA Carrier desires to serve, or Carrier may elect to interconnect directly at an end office for delivery of traffic to end users served by that end office. Such interconnecting facilities shall conform, at a minimum, to the telecommunications industry standard of DS-1 pursuant to Bellcore Standard No. TRNWT-00499. Signal transfer point, Signaling System 7 ("SS7") connectivity is required at each interconnection point after Carrier implements SS7 capability within its own network. BellSouth will provide out-of-band signaling using Common Channel Signaling Access Capability where technically and economically feasible, in accordance with the technical specifications set forth in the BellSouth Guidelines to Technical Publication, TR-TSV-000905. The parties agree to engineer their respective facilities (i) to provide the necessary on-hook, off-hook answer and disconnect supervision, (ii)to hand off calling party number ID when technically feasible, and (iii) to honor privacy codes and line blocking requests C. Nothing herein shall prevent Carrier from utilizing existing collocation facilities, purchased from the appropriate tariffs, for local interconnection; provided, however, that, unless otherwise agreed to by the parties, if Carrier orders new facilities for interconnection or rearranges any of its existing facilities in order to use such facilities for local interconnection hereunder and a BellSouth charge is applicable thereto, BellSouth shall only charge Carrier the lower of the interstate or intrastate tariffed rate or promotional rate. D. The parties agree to establish trunk groups from the interconnecting facilities of subsection (A) of this section such that each party provides a reciprocal of each trunk-group 4 established by the other party. Notwithstanding the foregoing, each party may construct its network, including the interconnecting facilities, to achieve optimum cost effectiveness and network efficiency. The parties agree to provide at least a P.01 level of service and to work cooperatively in the placement and/or removal of interconnection facilities. Unless otherwise agreed: (i) BellSouth will provide or bear the cost of all trunk groups for the delivery of Local Traffic from BellSouth's network to Carrier's MSCs within BellSouth's service territory; and (ii) Carrier will provide or bear the cost of all trunk groups for the delivery of Local Traffic from Carrier to each BellSouth access tandem and end office at which the parties' networks are interconnected; Carrier may supply its own interconnection facilities or may purchase such facilities (a) from BellSouth pursuant to a separate agreement or tariff for this purpose, or (b) from any other third-party supplier; and (iii) in the event the parties agree to use two-way interconnection facilities in lieu of separate one-way facilities, the appropriate charges for such facilities shall be divided on a pro rata basis reflecting the estimated or actual percentage of traffic that terminates on the network of each party; provided however that, in such circumstance, BellSouth's treatment of Carrier as to said charges shall be consistent with BellSouth treatment of other local exchange carriers for the same charges. E. The parties agree to use an auditable PLU factor as a method for determining the amount of traffic exchanged by the parties that is Local Traffic and the amount of traffic that is Non-Local Traffic. The PLU factor will be used for traffic delivered by either party for termination on the other party's network. F. When the parties provide an access service connection between an interexchange carrier ("IXC") and each other, each party will provide its own access services to the IXC. If access charges are billed, each party will bill its own access services rates to the IXC. G. The ordering and provision of all services purchased from BellSouth by Carrier shall be as set forth in the BellSouth Telecommunications Wireless Customer Guide as amended from time to time. The ordering and provisioning of facilities or services by a party, including, but limited to, installation, testing, maintenance, repair, and disaster recovery, shall be provided at a level of quality and care at least equal to that which it provides to itself, an affiliate, or, in the case of BellSouth supplied interconnection, at least equal to that provided by BellSouth to any other similarly situated CMRS provider having interconnection arrangement(s) with BellSouth comparable to the interconnection arrangement(s) provided to Carrier under this Agreement, unless Carrier and BellSouth specifically negotiate a different level of quality or care. H. BellSouth will make available to Carrier an electronic mail capability, via the Internet, through which Carrier may deliver ordering information to BellSouth and through which Carrier may receive confirmation of such ordering information. I. Upon request, the parties shall conduct further negotiations pursuant to Sections 251 and 252 of the Act regarding interconnection, services or network elements and nothing in 5 this agreement shall prohibit, or shall be construed to prohibit, such negotiations or any arbitration arising therefrom, if necessary; provided that Carrier may not make more than one such request for negotiations in any calendar year during which the Agreement is in effect. VI. INTRALATA AND INTERLATA NON-LOCAL TRAFFIC INTERCONNECTION A. The delivery of Non-Local Traffic by a party to the other party shall be reciprocal and compensation will be mutual. For terminating its Non-Local Traffic on the other party's network, each party will pay either the access charges described in p9ragraph (B) hereunder or the Non-Local Intermediary Charges described in paragraph (D) hereunder, as appropriate. B. For originating and terminating intrastate or interstate interMTA Non-Local Traffic, each party shall pay the other BellSouth's intrastate or interstate, as appropriate, switched network access service rate elements on a per minute of use basis. Said rate elements shall be as set out in BellSouth's Intrastate Access Services Tariff or BellSouth's Interstate Access Services Tariff as those tariffs may be amended from time to time during the term of this Agreement. The appropriate charges will be determined by the routing of the call. C. The parties agree that actual traffic measurements in each of the appropriate categories is the preferred method of classifying and billing traffic. If, however, either party cannot measure traffic in each category, then the parties shall agree on a surrogate method of classifying and billing traffic, taking into consideration territory served (e.g. MTA boundaries, LATA boundaries and state boundaries) and traffic routing of the parties. D. If Non-Local Traffic originated by a party to this Agreement is delivered by the other party for termination to the network of a nonparty telecommunications carrier ("Nonparty Carrier"), then the party performing the intermediary function will bill the other party and the other party shall pay a $.002 per minute intermediary charge in addition to any charges that the party performing the intermediary function may be obligated to pay to the Nonparty Carrier (collectively called "Non-Local Intermediary Charges"). The parties agree that the charges that the party performing the intermediary function may be obligated to pay to the Nonparty Carrier may change during the term of this Agreement and that the appropriate rate shall be the rate in effect when the traffic is terminated. The parties shall agree for purposes of this section, and subject to verification by audit what percentage of the Non-Local Traffic delivered to BellSouth by Carrier shall be subject to Non-Local Intermediary Charges. The parties agree that none of the Non-Local Traffic delivered to Carrier by BellSouth shall be subject to the Non-Local Intermediary Charges. VII. PROVISION OF UNBUNDLED ELEMENTS A. BellSouth shall, upon request of Carrier, and to the extent technically feasible, provide to Carrier access to its Network Elements for the provision of a Carrier telecommunications service. Any request by Carrier for access to a BellSouth Network Element that is not already available shall be treated as a Network Element bona fide request. Carrier agrees to pay the cost associated with the bona fide request if Carrier cancels the request or fails to purchase the service once completed. Carrier shall provide BellSouth access to its Network Elements as mutually agreed by the parties or as required by the Commission or the FCC. 6 B. A Network Element obtained by one party from the other party under this section may be used in combination with the facilities of the requesting party only to provide a telecommunications service, including obtaining billing and collection, transmission, and routing of the telecommunications service. VIII. ACCESS TO POLES, DUCTS, CONDUITS, AND RIGHTS OF WAY BellSouth agrees to provide to Carrier, pursuant to 47 U.S.C. (Section) 224, as amended by the Act, nondiscriminatory access to any pole, duct, conduit, or right-of-way owned or controlled by BellSouth. IX. ACCESS TO 91 1/E911 EMERGENCY NETWORK A. BellSouth and Carrier recognize that 911 and E911 services were designed and implemented primarily as methods of providing emergency services to fixed location subscribers. While BellSouth and Carrier recognize the need to provide "911-like" service to mobile subscribers, both parties recognize that current technological restrictions prevent an exact duplication of the services provided to fixed location customers. BellSouth agrees to route "911 -like" calls received from Carrier to the emergency agency designated by Carrier for such calls. Carrier agrees to provide the information necessary to BellSouth so that each call may be properly routed and contain as much pertinent information as is technically feasible. B. BellSouth and Carrier recognize that the technology and regulatory requirements for the provision of "911-like" service by CM RS carriers are evolving and agree to modify or supplement the foregoing in order to incorporate industry accepted technical improvements that Carrier desires to implement and to permit Carrier to comply with applicable regulatory requirements. X. ACCESS TO TELEPHONE NUMBERS Carrier is responsible for interfacing with the North American Numbering Plan administrator for all matters dealing with dedicated NXXs. BellSouth will cooperate with Carrier in the provision of shared NXXs where BellSouth is the service provider. XI. ACCESS TO SIGNALING AND SIGNALING DATABASES A. BellSouth will offer to Carrier use of BellSouth's signaling network and signaling databases on an unbundled basis at BellSouth's published tariffed rates set forth in Section XLB below or at unbundled rates that may be available through non-tariffed arrangements. Signaling functionality will be available with both A-link and B-link connectivity. B. Where interconnection is via B-link connections, charges for the SS7 interconnection elements are as follows: 1) Port Charge - BellSouth shall not bill an STP port charge nor shall BellSouth pay a port charge; 2) SS7 Network Usage -BellSouth shall bill its tariffed usage charge and shall pay usage billed by the Carrier at rates not to exceed those charged by BellSouth; 3) SS7 Link - BellSouth will bill its tariffed charges for only two links of each quad ordered. Application of these charges in this manner is designed to reflect the reciprocal use of the parties' signaling networks. Where interconnection is via A-link 7 connections, charges for the SS7 interconnection elements are as follows: 1) Port Charge - BellSouth shall bill its tariffed STP port charge but shall not pay a termination charge at the Carrier's end office; 2) SS7 Network Usage - BellSouth shall bill its tariffed usage charge but shall not pay for any usage; 3) SS7 Link - BellSouth shall bill its tariffed charges for each link in the A-link pair but shall not pay the Carrier for any portion of those links. XII. NETWORK DESIGN AND MANAGEMENT A. The parties agree to work cooperatively to install and maintain reliable interconnected telecommunications networks, including but not limited to, maintenance contact numbers and escalation procedures. BellSouth agrees to provide public notice of changes in the information necessary for the transmission and routing of Carriers services using its local exchange facilities or networks, as well as of any other changes that would affect the interoperability of those facilities and networks. B. The interconnection of all networks will be based upon accepted industry/national guidelines for transmission standards and traffic blocking criteria. C. The parties will work cooperatively to apply sound network management principles by invoking appropriate network management controls, e.g.. call gapping, to alleviate or prevent network congestion. D. Neither party will charge rearrangement, reconfiguration, disconnection, termination or other such non-recurring fees that may be associated with the initial reconfiguration of either party's existing network interconnection arrangements. Except as otherwise agreed by the parties, the parties may charge non-recurring fees for any additions to, or added capacity to, any facility or trunk. E. The parties agree to provide Common Channel Signaling (CCS) information to one another, where available, in conjunction with all traffic in order to enable full interoperability of CLASS features and functions except for features or functions that have not been deployed in the parties' respective networks. All CCS signaling parameters will be provided, including automatic number identification (ANI), originating line information (OLI) calling party category, charge number, etc. All privacy indicators will be honored, and the parties agree to cooperate on the exchange of Transactional Capabilities Application Part (TCAP) messages to facilitate full interoperability of CCS-based features between the respective networks. F. For network expansion, the parties agree to review engineering requirements on a quarterly basis and establish forecasts for trunk utilization as required by Section VI of this Agreement. New trunk groups will be implemented as stated by engineering requirements for both parties. G. The parties agree to provide each other with the proper call information for Local Traffic, including without limitation, originating call party number, destination call party number, Carrier Identification Code, all proper translations for routing between networks and any information necessary for billing where either party provides recording capabilities. The exchange of information is required to enable each party to bill properly. 8 XIII. AUDITING PROCEDURES A. Upon thirty (30) days written notice, each party must provide the other the ability and opportunity to conduct an annual audit to ensure the proper billing of traffic between the parties. The parties agree to retain records of call detail for a minimum of nine months from which the PLU, the percent intermediary traffic, the percent interMTA traffic, and the PIU can be ascertained. The audit shall be accomplished during normal business hours at an office designated by the party being audited. Audit request shall not be submitted more frequently than one (1) time per calendar year. Audits shall be performed by a mutually acceptable independent auditor paid for by the party requesting the audit. The PLU shall be adjusted based upon the audit results and shall apply to the usage for the quarter the audit was completed, the usage for the quarter prior to the completion of the audit, and to the usage for the two quarters following the completion of the audit. B. For combined interstate and intrastate Carrier traffic terminated by BellSouth over the same facilities, Carrier shall provide, to the extent technically feasible, a PIU factor to BellSouth. Should Carrier in the future provide toll services through the use of network switched access services, then all jurisdictional report requirements, rules and regulations specified in E2.3.14 of BellSouth's Intrastate Access Services Tariff will apply to Carrier. After the Local Traffic percentage has been determined by use of the PLU factor for application and billing of Local Interconnection, the PIU factor will be used for application and billing of interstate and intrastate access charges, as appropriate. XIV. LIABILITY AND INDEMNIFICATION A. Liability Cap. (1) With respect to any claim or suit, whether based in contract, tort or any other theory of legal liability, by Carrier, any Carrier customer or by any other person or entity, for damages associated with any of the services provided by BellSouth pursuant to or in connection with this Agreement, including but not limited the installation, provision, preemption, termination, maintenance, repair or restoration of service, and subject to -the provisions of the remainder of this Article XIV, BellSouth's liability shall be limited to an amount equal to the proportionate charge for the service provided pursuant to this Agreement, for the period during which the service was affected. Notwithstanding the foregoing, claims for damages by Carrier, any Carrier customer or any other person or entity resulting from the gross negligence or willful misconduct of BellSouth and claims for damages by Carrier resulting from the failure of BellSouth to honor in one or more material respects any one or more of the material provisions of this Agreement shall not be subject to such limitation of liability. (2) With respect to any claim or suit, whether based in contract, tort or any other theory of legal liability, by BellSouth, any BellSouth customer or by any other person or entity, for damages associated with any of the services provided by Carrier pursuant to or in connection with this Agreement, including but not limited to the installation, provision, preemption, termination, maintenance, repair or restoration of service, and subject to the provisions of the remainder of this Article XIV, Carriers liability shall be limited to an amount equal to the proportionate charge for the service provided pursuant to this Agreement for the period during 9 which the service was affected. Notwithstanding the foregoing, claims for damages by BellSouth, any BellSouth customer or any other person or entity resulting from the gross negligence or willful misconduct of Carrier and claims for damages by BellSouth resulting from the failure of Carrier to honor in one or more material respects any one or more of the material provisions of this Agreement shall not be subject to such limitation of liability. B. Neither party shall be liable for any act or omission of any other telecommunications company to the extent such other telecommunications company provides a portion of a service. C. Neither party shall be liable for damages to the other party's terminal location, point of interconnection, or the other party's customers' premises resulting from the furnishing of a service, including but not limited to the installation and removal of equipment and associated wiring, except to the extent the damage is caused by such Party's gross negligence or willful misconduct. D. Each party shall, to the greatest extent permitted by the law governing this Agreement ("Applicable Law"), include in its tariff (if it files one) or, where it does not file a tariff, in an appropriate contract with its customers that relates to the subject matter of this Agreement, a limitation of liability (i) that covers the other party to the same extent the first party covers itself and (ii) that limits the amount of damages a customer may recover to the amount charged the applicable customer for the service that gave rise to such loss. E. No Consequential Damages - EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION XIV, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, RELIANCE, OR SPECIAL DAMAGES SUFFERED BY SUCH OTHER PARTY (INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO BUSINESS, LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED BY SUCH OTHER PARTY), REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY, OR TORT, INCLUDING WITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER ACTIVE OR PASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THE POSSIBILITY THAT SUCH DAMAGES COULD RESULT. EACH PARTY HEREBY AGREES TO HOLD HARMLESS THE OTHER PARTY AND SUCH OTHER PARTYS AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS FROM ALL SUCH DAMAGES. PROVIDED, HOWEVER, NOTHING CONTAINED IN THIS SECTION XVIII SHALL LIMIT A PARTY'S LIABILITY TO THE OTHER FOR (1) WILLFUL OR INTENTIONAL MISCONDUCT, GROSS NEGLIGENCE, OR FAILURE TO HONOR ONE OR MORE OF THE MATERIAL PROVISIONS OF THIS AGREEMENT IN ONE OR MORE MATERIAL RESPECTS; (11) BODILY INJURY, DEATH OR DAMAGE TO TANGIBLE REAL OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY A PARTY'S NEGLIGENT ACT OR OMISSION OR THAT OF ITS AGENTS, SUBCONTRACTORS OR EMPLOYEES, NOR SHALL ANYTHING CONTA1NED IN THIS SECTION XIV LIMIT THE PARTIES' INDEMNIFICATION OBLIGATIONS AS SPECIFIED HEREIN. 10 F. Obligation to Indemnify - Each party shall, and hereby agrees to, defend at the other party's request, indemnify and hold harmless the other party and each of its officers, directors, employees and agents (each, an "Indemnitee") against and in respect of any loss, debt, liability, damage, obligation, claim, demand, judgment or settlement of any nature or kind, known or unknown, liquidated or unliquidated, including without limitation all reasonable costs and expenses incurred (legal, accounting or otherwise) (collectively, "Damages") arising out of, resulting from or based upon any pending or threatened claim, action, proceeding or suit by any third party (a "Claim") (i) arising from any breach of any representation, warranty or covenant made by such indemnifying party (the "Indemnifying Party") in this Agreement, (ii) based upon injuries or damage to any person or property or the environment arising out of or in connection with this Agreement that are the result of the Indemnifying Party's actions, breach of Applicable Law, or status of its employees, agents and subcontractors, or (iii) for actual or alleged infringement of any patent, copyright, trademark, service mark, trade name, trade dress, trade secret or any, other intellectual property right, now known or later developed (referred to as "Intellectual Property Rights") to the extent that such Claim for infringement arises from Indemnitee's use of the services provided to it under this Agreement. G. Each party's failure to perform under this Agreement shall be excused by labor strikes, civil commotion, criminal actions taken against them, acts of God, and other circumstances beyond their reasonable control. H. The obligations of the parties contained within this section shall survive the expiration of this Agreement. XV. MORE FAVORABLE PROVISIONS A. The parties agree that if - 1. the FCC or the Commission finds that the terms of this Agreement are inconsistent in one or more material respects with any of its or their respective decisions, rules, or regulations, or 2. the FCC or the Commission preempts the effect of this Agreement, then, in either case, upon such occurrence becoming final and no longer subject to administrative or judicial review, the parties shall immediately commence good faith negotiations to conform this Agreement to the requirements of any such decision, rule, regulation, or preemption. The revised agreement shall have the same effective date as the initial FCC or Commission action giving rise to such negotiations. The rates, terms, and conditions of any new agreement shall not be applied retroactively to any period prior to such effective date except to the extent that such retroactive effect is expressly required by such FCC or Commission decision, rule, regulation, or preemption. B. In the event that BellSouth, either before or after the Effective Date, enters into an agreement with any other telecommunications carrier (an "Other Interconnection Agreement") which provides for the provision within a state of any of the arrangements covered by this Agreement upon rates, terms or conditions that differ from the rates, terms and conditions for such arrangements set forth in this Agreement ("Other- Terms"), then BellSouth shall be deemed thereby to have offered such arrangements to Carrier upon such Other Terms in that state only, 11 which Carrier may accept as provided in Part E of this Section. In the event that Carrier accepts such offer within sixty (60) days after the Commission, or the FCC, as the case may be, approves such Other Interconnection Agreement pursuant to Section 252 of the Act, or within thirty (30) days after Carrier acquires actual knowledge of an Other Interconnection Agreement not requiring the approval of the Commission pursuant to Section 252 of the Act, as the case may be, such Other Terms shall be effective between BellSouth and Carrier as of the effective date of such Other Interconnection Agreement or the .Effective Date of this Agreement, whichever is later. In the event that Carrier accepts such offer more than sixty (60) days after the Commission, or the FCC, as the case may be, approves such Other Interconnection Agreement pursuant to Section 252 of the Act, or more than thirty (30) days after acquiring actual knowledge of an Other Interconnection Agreement not requiring the approval of the Commission pursuant to Section 252 of the Act, as the case may be, such Other Terms shall be effective between BellSouth and Carrier as of the date on which Carrier accepts such offer. C. In the event that after the Effective Date the FCC or the Commission having jurisdiction enters an order (an "Interconnection Order") requiring BellSouth to provide within a particular state any of the arrangements covered by this Agreement upon Other Terms, then upon such Interconnection Order becoming final, no petitions for reconsideration pending, and the time for seeking reconsideration has expired, BellSouth shall be deemed to have offered such arrangements to Carrier upon such Other Terms, which Carrier may accept as provided in Part E of this Section. In the event that Carrier accepts such offer within sixty (60) days after the date on which such Interconnection Order becomes final, no petitions for reconsideration pending, and the time for seeking reconsideration has expired, such Other Terms shall be effective between BellSouth and Carrier as of the effective date of such Interconnection Order or the Effective Date of this Agreement, whichever is later. In the event that Carrier accepts such offer more than sixty (60) days after the date on which such Interconnection Order becomes final, no petitions for reconsideration pending, and the time for seeking reconsideration has expired, such Other Terms shall be effective between BellSouth and Carrier as of the date on which Carrier accepts such offer. Provided, however, that if after judicial review, the rates set forth in such Other Terms and accepted by Carrier are revised, stayed or modified by an order of a judicial authority of competent jurisdiction (a "Judicial Modification"), then BellSouth or Carrier, as applicable, shall make a corrective payment to the other party equal to the difference between (a) the lesser of (1) the rates set forth herein, or (2) modified rates (if any) set forth in such Judicial Modification, and (b) the rates in such Other Terms for the period from (x) the date on which Carrier accepted such Other Terms until (y) the effective date of the Judicial Modification, plus simple interest determined in accordance with Section F below. The Parties' obligation to make such corrective payments as set forth in this Section shall survive for a period of three (3) years after the termination or expiration of this Agreement for any reason. D. In the event that after the Effective Date BellSouth files and subsequently receives approval for one or more intrastate or interstate tariffs (each, an "Interconnection Tariff") offering to provide within a particular state any of the arrangements covered by this Agreement upon Other Terms, then upon such Interconnection Tariff becoming effective, BellSouth shall be deemed thereby to have offered such arrangements to Carrier upon such Other Terms in that state only, which Carrier may accept as provided in Part E of this Section. In the event that Carrier accepts such offer within sixty (60) days after the date on which such Interconnection Tariff becomes effective, such Other Terms shall be effective between BellSouth and Carrier as 12 of the effective date of such Interconnection Tariff or the Effective Date of this Agreement, whichever is later. In the event that Carrier accepts such offer more than sixty (60) days after the date on which such Interconnection Tariff becomes ' effective, such Other Terms shall be effective between BellSouth and Carrier as of the date on which Carrier accepts such offer. E. In the event that BellSouth is deemed to have offered Carrier the arrangements covered by this Agreement upon Other Terms, Carrier in its sole discretion may accept such offer either -- 1. by accepting such Other Terms in their entirety; or 2. by accepting the Other Terms that directly relate to any one or more of the following arrangements as described by lettered category: A. local interconnection (including transport and termination), B. interLATA and lntraLATA toll traffic interconnection, C. unbundled access to network elements, which include: local loops, network interface devices, switching capability, interoffice transmission facilities, signaling networks and call-related databases, operations support systems functions, operator services and directory assistance, and any elements that result from subsequent bona fide requests, D. access to poles, ducts, conduits and rights-of-way, E. access to 911 /E91 1 emergency network, F. collocation, or G. access to telephone numbers. The terms of this Agreement, other than those affected by the Other Terms accepted by Carrier, shall remain in full force and effect. F. Corrective Payment. In the event that -- 1. BellSouth and Carrier revise this Agreement pursuant to Part A of this Section, or 2. Carrier accepts a deemed offer of Other Terms pursuant to Part Eof this Section, then BellSouth or Carrier, as applicable, shall make a corrective payment to the other party to correct for the difference between (a) the rates set forth herein and (b) the rates in such revised agreement or Other Terms for the period from (x) the effective date of such revised agreement or Other Terms until (y) the later of the date that the parties execute such revised agreement or the parties implement such Other Terms, plus simple interest at a rate equal to the thirty (30) day commercial paper rate in effect from time to time for high-grade, unsecured notes sold through dealers by major corporations in multiples of $1,000.00 as regularly published in The Wall Street Journal XVI. TAXES AND FEES A. Definition. For purposes of this section, the terms "taxes" and "fees" shall include but not be limited to federal, state or local sales, use, excise, gross receipts or other taxes or tax-like fees of whatever nature and however designated (including tariff surcharges and any fees, charges or other payments, contractual or otherwise, for the use of public streets or rights of way, whether designated as franchise fees or otherwise) which are imposed, or sought to be imposed, on or with respect to the services furnished hereunder or measured by the charges or payments therefor. 13 B. Taxes And Fees Imposed Directly On Either Providing Party Or Purchasing Party. 1. Taxes and fees imposed on the providing party, which are neither permitted nor required to be passed on by the providing party to its customer, shall be borne and paid by the providing party. 2. Taxes and fees imposed on the purchasing party, which are not required to be collected and/or remitted by the providing party, shall be borne and paid by the purchasing party. C. Taxes And Fees Imposed On Purchasing Party But Collected And Remitted By Providing Party. 1. Taxes and fees imposed on the purchasing party shall be borne by the purchasing party, even if the obligation to collect and/or remit such taxes or fees is placed on the providing party. 2. To the extent permitted by applicable law, any such taxes and fees shall be shown as separate items on applicable billing documents between the Parties. Notwithstanding the foregoing, the purchasing party shall remain liable for any such taxes and fees regardless of whether they are actually billed by the providing party at the time that the respective service is billed. 3. If the purchasing party determines that in its opinion any such taxes or fees are not payable, the providing party shall not bill such taxes or fees to the purchasing party if the purchasing party provides written certification, reasonably satisfactory to the providing party, stating that it is exempt or otherwise not subject to the tax or fee, setting forth the basis therefor, and satisfying any other requirements under applicable law. If any authority seeks to collect any such tax or fee that the purchasing party has determined and certified not to be payable, or any such tax or fee that was not billed by the providing party, the purchasing party shall have the right, at its own expense, to contest the same in good faith, in its own name or on the providing party's behalf. In any such contest, the purchasing party shall promptly furnish the providing party with copies of all filings in any proceeding, protest, or legal challenge, all rulings issued in connection therewith, and all correspondence between the purchasing party and the governmental authority. 4. In the event that all or any portion of an amount sought to be collected must be paid in order to contest the imposition of any such tax or fee, or to avoid the existence of a lien on the assets of the providing party during the pendency of such contest, the purchasing party shall be responsible for such payment and shall be entitled to the benefit of any refund or recovery. 5. If it is ultimately determined that any additional amount of such a tax or fee is due to the imposing authority, the purchasing party shall pay such additional amount, including any interest and penalties thereon. 6. Notwithstanding any provision to the contrary, the purchasing party shall protect, indemnify and hold harmless (and defend at the purchasing party's expense) the providing party from and against any such tax or fee, interest or penalties thereon, or other charges or payable 14 expenses (including reasonable attorney fees) with respect thereto, which are incurred by the providing party in connection with any claim for or contest of any such tax or fee. 7. Each party shall notify the other party in writing of any assessment, proposed assessment or other claim for any additional amount of such a tax or fee by a governmental authority; such notice to be provided, if possible, at least ten (10) days prior to the date by which a response, protest or other appeal must be filed, but in no event later than thirty (30) days after receipt of such assessment, proposed assessment or claim. 8. The Purchasing Party shall have the right, at its own expense, to claim a refund or credit, in its own name or on the Providing Party's behalf, of any such tax or fee that it determines to have paid in error, and the Purchasing Party shall be entitled to any recovery thereof. D. Taxes And Fees Imposed On Providing Party But Passed On To Purchasing Party. 1. Taxes and fees imposed on the providing party, which are permitted or required to be passed on by the providing party to its customer, shall be borne by the purchasing party. 2. To the extent permitted by applicable law, any such taxes and fees shall be shown as separate items on applicable billing documents between the Parties. Notwithstanding the foregoing, the purchasing party shall remain liable for any such taxes and fees regardless of whether they are actually billed by the providing party at the time that the respective service is billed. 3. If the purchasing party disagrees with the providing party's determination as to the application or basis of any such tax or fee, the Parties shall consult with respect to the imposition and billing of such tax or fee and with respect to whether to contest the imposition of such tax or fee. Notwithstanding, the foregoing, the providing party shall retain responsibility for determining whether and to what extent any such taxes or fees are applicable. The providing party shall further retain responsibility for determining whether and how to contest the imposition of such taxes or fees; provided, however, that any such contest undertaken at the request of the purchasing party shall be at the purchasing party's expense. In the event that such contest must be pursued in the name of the providing party, the providing party shall permit the purchasing party to pursue the contest in the name of the providing party and the providing party shall have the opportunity to participate fully in the preparation of such contest. 4. If after consultation in accordance with the preceding Section, the - -purchasing party does not agree with the providing party's final determination as to the application or basis of a particular tax or fee, and if the providing party, after receipt of a written request by the purchasing party to contest the imposition of such tax or fee with the imposing authority, fails or refuses to pursue such contest or to allow such contest by the purchasing party, the purchasing party may utilize the dispute resolution process outlined in Section XVIII of this Agreement. Utilization of the dispute resolution process shall not relieve the purchasing party from liability for any tax or fee billed by the providing party pursuant to this subsection during the pendency of such dispute resolution proceeding. In the event that the purchasing party prevails in such dispute resolution proceeding, it shall be entitled to a refund in accordance with the final decision 15 therein. Notwithstanding the foregoing, if at any time prior to a final decision in such dispute resolution proceeding the providing party initiates a contest with the imposing authority with respect to any of the issues involved in such dispute resolution proceeding, the dispute resolution proceeding shall be dismissed as to such common issues and the final decision rendered in the contest with the imposing authority shall control as to such issues. 5. In the event that all or any portion of an amount sought to be collected must be paid in order to contest the imposition of any such tax or fee, or to avoid the existence of a lien on the assets of the providing party during the pendency of such contest, the purchasing party shall be responsible for such payment and shall be entitled to the benefit of any refund or recovery. 6. If it is ultimately determined that any additional amount of such a tax or fee is due to the imposing authority, the purchasing party shall pay such additional amount, including any interest and penalties thereon. 7. Notwithstanding any provision to the contrary, the purchasing party shall protect, indemnify and hold harmless (and defend at the purchasing party's expense) the providing party from and against any such tax or fee, interest or penalties thereon, or other charges or payable expenses (including reasonable attorney fees) with respect thereto, which are incurred by the providing party in connection with any claim for or contest of any such tax or fee. 8. Each party shall notify the other party in writing of any assessment, proposed assessment or other claim for any additional amount of such a tax or fee by a governmental authority; such notice to be provided, if possible, at least ten (10) days prior to the date by which a ' response, protest or other appeal must be filed, but in no event later than thirty (30) days after receipt of such assessment, proposed assessment or claim. E. Mutual Cooperation. In any contest of a tax or fee by one Party, the other Party shall cooperate fully by providing records, testimony and such additional information or assistance as may reasonably be necessary to pursue the contest. Further, the other Party shall be reimbursed for any reasonable and necessary out-of pocket copying and travel expenses incurred in assisting in such contest. XVII. TREATMENT OF PROPRIETARY AND CONFIDENTIAL INFORMATION A. The parties agree that it may be necessary to provide each other with certain confidential information, including trade secret information, including but not limited to, technical and business plans, technical information, proposals, specifications, drawings, procedures, customer account data, call detail records and like information (hereinafter collectively referred to as "Information"). The parties agree that if Information is provided in written, graphic or other usable form and clearly marked with a confidential, private or proprietary legend, then that Information will be returned to the owner within a reasonable time. Both parties agree that such marked Information shall not be copied or reproduced in any form except to the extent required to perform this Agreement. The parties shall protect any Information received from distribution, disclosure or dissemination to anyone except employees of the parties with an identifiable need to know such Information who agree in writing to be 16 bound by the terms of this Section; however, in no event shall any of Carrier's Information be disclosed to any person employed by an Affiliate of BellSouth engaged in the provision of CMRS. In the event any person having had access to Carrier's Information is subsequently employed by an Affiliate of BellSouth engaged in the provision of CMRS, such person shall be required to agree in writing not to reveal or use such Information. The parties will use the same standard of care to protect Information received as they would use to protect their own confidential and proprietary Information. B. Notwithstanding the foregoing, all Information in any party's possession that would constitute Customer Proprietary Network Information of the party or the parties' customers pursuant td any federal or state law or the rules and regulations of the FCC or any state commission, and any Information developed or received by a party regarding the other party's facilities, services, volumes, or usage shall automatically be deemed confidential Information for all purposes, even if not marked as such, and shall be held confidential as is required for Information. C. Notwithstanding the foregoing, there will be no obligation to protect any portion of any Information that is either: 1) made publicly available by the owner of the Information or lawfully disclosed by a nonparty to this Agreement; 2) lawfully obtained from any source other than the owner of the Information; 3) independently developed by personnel of the receiving party to whom Information had not been previously disclosed and not based on or derived from such Information; or 4) previously known to the receiving party without an obligation to keep it confidential. A party may also disclose all Information it is required or ordered to disclose by law, a court, or governmental agency, as long as the party that owns such Information has been notified of the required disclosure promptly after the disclosing party becomes aware of its requirement to disclose. The party required to disclose the Information shall take all lawful measures to avoid disclosing the Information called for until the party that owns the Information has had a reasonable time to seek and comply with a protective order issued by a court or governmental agency of competent jurisdiction that with respect to the Information otherwise required to be disclosed. D. The party's obligations to safeguard information shall survive for one (1) year after the expiration or termination of this Agreement for any reason whatsoever. XVIII. RESOLUTION OF DISPUTES Except as otherwise stated in this Agreement, if any dispute arises as to the interpretation of any provision of this Agreement or as to the proper implementation of this Agreement, the parties shall initially refer the disputed issue to the individuals designated by the parties . If the issue is not resolved within 30 days, either party may petition the Commission for a resolution of the dispute, and/or pursue any other remedy available to it at law or in equity.. XIX. LIMITATION OF USE The parties agree that this Agreement shall not be proffered by either party in another jurisdiction as evidence of any concession or as a waiver of any position taken by the other party in that jurisdiction or for any other purpose. 17 XX. WAIVERS This Agreement may not be amended in any way except upon the written consent of the parties. No party shall be deemed to have waived any rights it has under the Agreement based on its prior decision not to enforce, or its failure to strictly enforce, any such rights, including, without limitation, the right to seek specific performance or other injunctive relief. No amendment or waiver of any provision of this Agreement, and no consent to any default under this Agreement shall be effective unless the same is in writing and signed by an officer of the party against whom such amendment, waiver or consent is claimed. XXI. MISCELLANEOUS TERMS A. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Georgia, without regard to Georgia's conflict of law principles, and, where applicable, federal law, including the Communications Act of 1934, as amended by the Act. B. In the event any provision of this Agreement shall be held to be invalid, illegal or unenforceable, it shall be severed from the Agreement and the remainder of this Agreement shall remain valid and enforceable and shall continue in full force and effect; provided, however, that if any severed provisions of this Agreement are essential to any party's ability to continue to perform its material obligations hereunder to the reasonable satisfaction of the party to which the obligations are owed, the parties shall immediately begin negotiations of new provisions to replace the severed provisions. C. The parties are independent contractors and nothing herein shall be construed to imply that they are partners, joint venturers or agents of one another. D. Except as otherwise expressly provided in this Agreement, each of the remedies provided under this Agreement is cumulative and is in addition to any remedies that may be available at law or in equity. E. Except as may be specifically set forth in this Agreement, this Agreement does not provide and shall not be construed to provide any person not a party or proper assignee or successor hereunder with any remedy, claim, liability, reimbursement, cause of action, or other privilege arising under or relating to this Agreement. F. Neither party shall publish or use any advertising, sales promotions or other publicity materials that use the other party's logo, trademarks or service marks without the prior written approval of the other party. G. No party may assign any of its rights or delegate any of its obligations under this Agreement without the prior written consent of the other party, which will not be unreasonably withheld; provided, that (i) the parties will permit the addition of whollyowned Affiliates as parties hereto, and (ii) a party may assign its rights or delegate its obligations hereunder without the consent of the other party to a wholly-owned Affiliate if such Affiliate is, in the case of BellSouth, an authorized local exchange telephone carrier, or in the case of Carrier, a licensed provider of radio telecommunications services, and provided further that (a) the performance of 18 any assignee shall be guaranteed by any such assignor and (b) a Carrier may also assign its rights or obligations to a controlling parent corporation without the consent of BellSouth H. Any liabilities or obligations of a party for acts or omissions prior to the cancellation or termination of this Agreement, any obligation of a party under the provisions regarding indemnification, Confidential Information, limitations on liability, and any other provisions of this Agreement which, by their terms, are contemplated to survive (or to be performed after) termination of this Agreement, shall survive cancellation or termination thereof. I. Whenever any-provision of this Agreement refers to a technical reference, technical publication, any publication of telecommunications industry administrative or technical standards, or any other document specifically incorporated into this Agreement, it will be deemed to be a reference to the most recent version or edition (including any amendments, supplements, addenda, or successors) or such documents that is in effect, and will include the most recent version or edition (including any amendments, supplements, addenda, or successors) or each document incorporated by-reference in such a technical reference, technical publication, or publication of industry standards. Should there be an inconsistency between or among publications or standards, the parties shall mutually agree upon which requirement shall apply. J. The drafting of this Agreement was a collaborative effort between the parties. Accordingly, in connection with the interpretation for any reason of any provision of this Agreement, there shall be no inference drawn against the party that drafted such provision. XXII. EXECUTION This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and which together shall constitute a single agreement. A facsimile copy of a party's execution of this Agreement shall be valid and binding upon the party and must be followed as soon as practicable thereafter by the original version of such execution. XXIII. NOTICES A. Every notice, consent, approval, or other communications required or contemplated by this Agreement shall be in writing and shall be delivered in person, via overnight mail, or given by postage prepaid mail, address to: BELLSOUTH TELE COMMUNICATIONS, INC. TRITEL COMMUNICATIONS, INC. 675 W. Peachtree St. N.E. 112 E. State Street, Suite B Suite 4300 Ridgeland, Mississippi 39157 Atlanta, Georgia 30375 Attn: Mr. Roland Patterson Attn: Legal Dept. "Wireless" Attorney Senior Director of Technical Facilities Copy to: Walt Sapronov, Esq. Gerry, Friend & Sapronov, LLP Three Ravinia Drive, Suite 1450 Atlanta, Georgia 30346-2131 19 or at such other address as the intended recipient previously shall have designated by written notice to the other party. B. Where specifically required, notices shall be by certified or registered mail. Unless otherwise provided in this Agreement, notice by mail shall be effective on the date it is officially recorded as delivered by return receipt or equivalent, and in the absence of such record of delivery, it shall be presumed to have been delivered the fifth day, or next business day after the fifth day, after it was deposited in the mails; and by overnight mail, the day after being sent. XXIV. ENTIRE AGREEMENT This Agreement and its Attachments, incorporated herein by this reference, sets forth the entire understanding and supersedes prior agreements between the parties relating to the subject matter contained herein and merges all prior discussions between them, and neither party shall be bound by any definition, condition, provision, representation, warranty, covenant or promise other than as expressly stated in this Agreement or as is contemporaneously or subsequently set forth in writing and executed by a duly authorized officer or representative of the party to be bound thereby. In the event of any conflict between the term(s) of this Agreement and those of an applicable tariff, the terms of this Agreement shall control. BELLSOUTH TELECOMMUNICATIONS, INC. TRITEL COMMUNICATIONS, INC. By:_______________________________ By:______________________________ Jerry D. Hendrix Jerry M. Sullivan, Jr. - ---------------------------------- ---------------------------------- Name Name Director Executive Vice President - ---------------------------------- ---------------------------------- Title Title ______________________________ ______________________________ Date Date 20 ATTACHMENT B-1 CMRS Local Interconnection Rates -------------------------------- (All rates are Per Minute of Use) Alabama - ------- Type 1 (End Office Switched): $.004709 Type 2A (Tandem Switched): $.004709 Type 2B (Dedicated End Office): $.0017 Florida - ------- Type 1 (End Office Switched): $.003776 Type 2A (Tandem Switched): $.003776 Type 2B (Dedicated End Office): $.002 Georgia - ------- Type 1 (End Office Switched): $.004513 Type 2A (Tandem Switched): $.004513 Type 2B (Dedicated End Office): $.00160 Kentucky - -------- Type 1 (End Office Switched): $.005273 Type 2A (Tandem Switched): $.005273 Type 2B (Dedicated End Office): $.002562 Mississippi - ----------- Type 1 (End Office Switched): $.009104 Type 2A (Tandem Switched): $.009104 Type 2B (Dedicated End Office'): $.0026 Tennessee - --------- Type 1 (End Office Switched): $.003767 Type 2A (Tandem Switched): $.003767 Type 2B (Dedicated End Office): $.0019 21 Attachment C-1 Unbundled Products and Services and New Services Service: Subscriber Listing Information Description: Subscriber primary listing information provided at no charge and in an acceptable format will be published at no charge as standard directory listings in an alphabetical directory published by or for BellSouth at no charge to each ALEC end user customer. State(s): All Rates (1) No charge for ALEC-1 customer primary listings. (2) Additional listings and optional listings may be provided by BellSouth at rates set forth in BellSouth's intrastate General Subscriber Services Tariffs. 22 Attachment C-13 Unbundled Products and Services and New Services Service: Virtual Collocation Description: Virtual Expanded Interconnection Service (VEIS) provides for location interconnection in collocator provided/BellSouth leased fiber optic facilities to BellSouth's switched and special access services, and local interconnection facilities. Rates, Terms and Conditions: State(s): All except Florida: In all states except Florida, the rates, terms and conditions will be applied as set forth in Section 20 of BellSouth Telecommunication's, Inc. Interstate Access Service Tariff, FCC No. 1. State: Florida In the state of Florida, the rates, terms and conditions will be applied as set forth in Section E20 of BellSouth Telecommunication's, Inc. Intrastate Access Service Tariff. - ------------------------------------------------------------------------------- Service: Physical Collocation Description: Per FCC - (10/19/92 FCC Order, para 39) Physical Collocation is whereby "the interconnection party pays for LEC central office space in which to locate the equipment necessary to terminate its transmission links, and has physical access to the LEC central office to install, maintain, and repair this equipment." State(s): All Rates, Terms and Conditions: To be negotiated 23 EX-10.24 25 AGREEMENT FOR PROJECT AND CONSTRUCTION MANAGEMENT SERVICES EXECUTION COPY AGREEMENT FOR PROJECT AND CONSTRUCTION MANAGEMENT SERVICES BETWEEN TRITEL COMMUNICATIONS, INC. AND TRITEL FINANCE, INC. AND BECHTEL CORPORATION CONFIDENTIAL EXECUTION COPY TABLE OF CONTENTS ARTICLE PAGE NO. 1.0 Project............................................................1 2.0 Contractor's Services..............................................1 3.0 Information and Items to be Furnished by Owner.....................3 4.0 Notice to Proceed and Time of Performance..........................4 5.0 Compensation and Payment...........................................4 6.0 Accounting of Costs................................................5 7.0 Changes and Extra Work.............................................5 8.0 Notice and Acceptance of Completion................................5 9.0 Responsibility of Contractor.......................................6 10.0 Insurance..........................................................8 11.0 Ownership of Plans and Title to Work...............................9 12.0 Force Majeure.....................................................12 13.0 Termination.......................................................12 14.0 Suspension of Services............................................13 15.0 Notices...........................................................13 16.0 Representative of the Parties.....................................14 17.0 Transfer of Ownership.............................................14 18.0 Assignment and Subcontracts.......................................15 19.0 Fair Operation of Agreement.......................................15 20.0 Dispute Resolution................................................15 21.0 Applicable Law....................................................16 22.0 Successors and Assigns............................................16 23.0 Severability......................................................16 24.0 Entire Agreement..................................................16 25.0 Disclosure........................................................17 ATTACHMENT A Scope of Services A-1 ATTACHMENT B Compensation B-1 ATTACHMENT C Description of Contractor Positions C-1 ATTACHMENT D Staffing Plan and Estimated ODCs D-1 CONFIDENTIAL EXECUTION COPY AGREEMENT FOR PROJECT AND CONSTRUCTION MANAGEMENT SERVICES THIS AGREEMENT ("Agreement") is entered into this 24th day of November, 1998, by and between TRITEL COMMUNICATIONS, INC. and TRITEL FINANCE, INC. (jointly, "Owner"), and BECHTEL CORPORATION ("Contractor") but shall be effective as of the date final approval by Owner's board(s) of directors is obtained. Owner shall notify Contractor in writing promptly of the date that such final approval is obtained and confirming the effective date of this Agreement. Contractor agrees to furnish the skill and judgment specified in Paragraph 9.1 in furthering the interests of Owner. Contractor agrees to furnish efficient administration and management services as described in this Agreement and to perform such services in an expeditious and economical manner consistent with this Agreement and the best interests of Owner. 1.0 THE PROJECT 1.1 The project consists of the build-out of a Personal Communications System incorporating PCS-sites and mobile switching centers (individually, an "MSC") located in the States of Alabama, Georgia, Indiana, Kentucky, Louisiana, Mississippi and Tennessee, in the United States of America. As used herein, the term "Project" or PCS System" shall mean only those areas of the project described above that are assigned to Contractor by Owner. 1.2 The Project will be described more particularly in the drawings, plans and specifications to be prepared by Contractor or by other retained design professionals (whose services will be procured as provided in this Agreement) and approved by Owner under this Agreement. 2.0 CONTRACTOR'S SERVICES 2.1 Contractor will perform, or cause to be performed, the services (hereinafter referred to as the "Services") generally described below which are more fully described in Attachment A ("Scope of Services"), attached hereto and made a part hereof, and the Services shall be performed by Contractor with respect to such PCS-sites and MSC locations as are assigned by Owner to Contractor. Contractor shall perform the Services in accordance with the standard set forth in Paragraph 9.1, in compliance with all local, city, county, state and federal laws, rules, regulations, statutes and ordinances now in effect or hereafter enacted, and in compliance with Owner's instructions issued from time to time (to the extent not inconsistent with the preceding standards). Contractor shall use reasonable good faith efforts to minimize turnover of Project personnel. 2.2 Contractor will provide the overall coordination and administration for the Project as described in the Scope of Services, including, but not limited to: 2.2.1 providing a preliminary assessment of the Project budget taking into account the activities contemplated for the Project; CONFIDENTIAL 1 2.2.2 consulting with any design professionals and Owner concerning the Project and development of Project plans, drawings and specifications; 2.2.3 providing recommendations on construction feasibility, actions designed to minimize adverse effects of labor or material shortages, time requirements for procurement, installation and construction completion, and factors related to construction costs including estimates of alternate designs or materials; and providing preliminary budgets and possible economies and budgets detailing Contractor's anticipated man hours and expenses for the Project on a per PCS-site and MSC basis; 2.2.4 preparing and periodically updating Project schedules for Owner's approval, such schedules coordinated and integrated with all equipment, services and activities provided by others in connection with the Project; 2.2.5 developing and recommending milestone completion dates for the Project; 2.2.6 recommending to Owner phases and timing of issuance of drawings and specifications to facilitate phased construction of the work taking into consideration such factors as economies, time of performance, availability of labor and materials and provisions for temporary facilities; 2.2.7 providing contract administration services, including preparing Owner's construction documents (such as bid packages and contracts) for the Project for Owner's approval; 2.2.8 identifying and recommending possible contractors, including suppliers of materials and equipment for approval and signing by Owner; 2.2.9 recommending to Owner a schedule of procurement for long-lead time items which constitute part of the work as required to meet the Project schedules; 2.2.10 providing monthly (or such other interval as may be approved by Owner) written reports to Owner on the progress of the Project to include problems encountered or other similar relevant data as to all sites for the Project as Owner may reasonably require; 2.2.11 developing systems of cost control for the Project, including regular monitoring of actual costs for activities in progress and estimates for uncompleted tasks and proposed changes;and 2.2.12 administering and coordinating Owner's design professionals, contractors and suppliers and any other persons performing any work or supplying any materials for the Project. 2.3 Contractor shall perform the Services as an agent of Owner. Regarding such capacity as an agent of Owner, upon request Owner shall confirm to third parties Contractor's authorization to so act for and on behalf of Owner. 2.4 Nothing in this Agreement is intended or shall be construed to constitute Owner, or any of its employees, agents or contractors, as an employee, agent or partner of Contractor, nor shall Owner, or any of its employees, agents or contractors have, authority to bind Contractor in any respect except as may be provided by written agreement. CONFIDENTIAL 2 EXECUTION COPY 2.5 Contractor's employees, agents and subcontractors shall not be treated as employees of Owner for any purpose including, but not limited to, federal or state tax purposes. Contractor shall be solely responsible for the filing of all tax returns required by law to be filed by Contractor relating to its performance of the Services, and the payment of all contributions, payments and taxes, required by law to be filed or paid by Contractor relating to the performance of the Services by Contractor and its employees, agents and subcontractors. 3.0 INFORMATION AND ITEMS TO BE FURNISHED BY OWNER 3.1 Owner shall furnish to Contractor in a timely manner available data and other information to provide the basis upon which Contractor shall perform the Services. Contractor warrants that it has sufficient data and other information to commence performance of the Services on the effective date of this Agreement. 3.2 Upon receipt of documents, reports, plans or data from Contractor for approval, Owner will promptly (and in any event within fifteen (15) days of their receipt) either approve or disapprove, or furnish other written instructions to Contractor with respect to said documents, reports, plans or data. If Owner's written approval or disapproval or other written instruction is not furnished to Contractor within such fifteen (15) day period, such documents, reports, plans or data will be deemed to be approved. 3.3 Owner shall furnish sites for the Project and, subject to applicable advance notice requirements existing in favor of any third parties, shall furnish to Contractor and Owner's contractors unobstructed access to the sites and all other locations involved in the performance of the Services. 3.4 Solely with respect to Owner's main Project office in Jackson and regional Project offices covering areas assigned to Contractor, Owner shall furnish as reasonably necessary for Contractor's performance of Services the following items which shall be of substantially comparable kind and quality to those furnished by Owner to its employees: office space; office equipment; computers; phone systems; communications networks and connectivity to Contractor's support offices; and office supplies. Upon the termination or expiration of this Agreement, Contractor shall return such items to Owner undamaged (taking into account normal wear and tear). 3.5 Owner and Contractor will establish the general terms and conditions, including warranties, to be incorporated into all bid packages, contracts, and purchase orders entered into by Owner for the Project. With respect to any contracts with others relating to the Project and entered into after the execution of this Agreement, Owner agrees that Contractor shall be designated as Owner's agent and that all indemnity, all release and all hold harmless agreements contained in such contracts and purchase orders whereby the contractor or supplier agrees to indemnify, release or hold Owner harmless shall be extended to protect Contractor. 3.6 Owner shall make direct commitments for all services, machinery, equipment, materials and supplies required for incorporation into the Project or for use in construction thereof and for the performance of all construction and other work, and shall make payments directly for such CONFIDENTIAL 3 EXECUTION COPY commitments; provided that Contractor shall provide the accounting and controller management services set forth in Attachment A. 3.7 Owner shall furnish or secure the information, items and approvals required to be furnished or secured by it at such times and in such manner as may be reasonably required for the expeditious and orderly performance of the Services by Contractor. 4.0 NOTICE TO PROCEED AND TIME OF PERFORMANCE 4.1 Contractor shall commence the performance of its Services upon the effective date of this Agreement, which date shall be deemed the date of Notice to Proceed. 4.2 Subject to the termination provisions of Article 13.0 (Termination), the term of this Agreement is two (2) years from the effective date of this Agreement but may, subject to Article 7.0 (Changes and Extra Work), be extended by mutual agreement of the parties. 5.0 COMPENSATION AND PAYMENT 5.1 For the performance of the Services, Owner agrees to pay Contractor, in the manner and at the times specified, the Compensation consisting of Hourly Unit Rate Payments and Other Direct Costs (jointly, "Compensation"), and make available the amounts needed for Owner to pay the Owner Costs, as such terms are defined in Attachment B, attached hereto and by this reference made a part hereof 5.2 In addition, promptly after the effective date of this Agreement, Contractor shall invoice Owner for any remaining amounts due for work performed by Contractor under the Letter of Intent between Owner and Contractor dated August 10, 1998, as amended. Owner shall pay Contractor such invoiced amounts within thirty (30) days after receipt of the invoice. 5.3 Any amounts due and remaining unpaid after the due date shall accrue interest, commencing on the day after the due date and compounded for each day thereafter until the date paid, at the rate equal to [CONFIDENTIAL TREATMENT REQUESTED] above the prime lending rate quoted to substantial and responsible commercial borrowers on ninety-day loans by the Morgan Guarantee Trust Company, New York, on each day such interest accrues. 5.4 Any terms or conditions set forth on any invoice which are inconsistent with or in addition to the terms and conditions set forth in this Agreement shall be of no effect. Each invoice for Compensation shall include the following information: first, in support of the Hourly Unit Rate Payments, the name and position of Contractor's employees that have performed Services during the period covered by the invoice, the number of hours worked by each such employee during that same period, the Hourly Unit Rate applicable to each such employee and the total amount payable to Contractor for Hourly Unit Rate Payments; second, in support of the Other Direct Costs, the total amount owed for the Other Direct Costs during the period covered by the invoice, a description of the type of Other Direct Costs included in the invoice, a breakdown on a market-by-market basis of where the Other Direct Costs were incurred, and receipts to support any Other Direct Costs in excess of twenty-five dollars; and third, in support of the Owner Costs, the relevant invoices of Owner's contractors and suppliers. CONFIDENTIAL 4 EXECUTION COPY 6.0 ACCOUNTING OF COSTS 6.1 Contractor shall maintain books and accounts of the time expended by its personnel and of the Other Direct Costs in accordance with generally accepted accounting principles and practices consistently applied. Owner, during Contractor's normal business hours for the duration of this Agreement and for a period of three (3) years after the completion of the Services, shall have access to these books and accounts to the extent required to verify the hours charged for which Hourly Unit Rate Payments were received and the Other Direct Costs (excluding the development of established or standard allowances and rates) incurred hereunder. A copy of all records relating to the payments made out of the Owner's Zero Balance Operating Account shall be turned over to Owner at the conclusion of the Project. 7.0 CHANGES AND EXTRA WORK 7.1 Owner may require or approve changes within the general scope of Contractor's Services hereunder by a written Change Order, or may request extra work to be mutually agreed upon. 7.2 In the event any such change causes an increase or decrease in the time for performing Contractor's Services, the parties shall agree upon an equitable adjustment of the schedule obligations to the extent they are affected by such change. Contractor's staffing plan that is mutually agreed upon in accordance with and for the purposes described in Paragraph I a of Attachment B and the determination of the applicable Hourly Unit Rate Payments under that Paragraph shall also be subject to an equitable adjustment to the extent affected by any such scope change or by any changed circumstances outside of Contractor's control, including Force Majeure events, changes in law, and Owner's delay in performing its obligations hereunder. 7.3 Owner reserves the right to direct Contractor to reduce the number of Contractor's personnel assigned to the Project at any time upon thirty (30) days prior written notice to Contractor of such reduction. Further, Owner reserves the right to reduce the number of PCS-sites and/or MSCs assigned to Contractor at any time. Any such reductions shall be without penalty to Owner. 8.0 NOTICE AND ACCEPTANCE OF COMPLETION 8.1 Upon completion of Services in connection with a particular PCS-site or MSC, Contractor may, and upon completion of the Services for the Project, Contractor shall, notify Owner in writing of the date of said completion and request confirmation thereof by Owner. Upon receipt of such notice, Owner shall confirm to Contractor in writing that the Services referred to in such notice were completed on the date indicated in such notice, or provide Contractor with a written listing of the Services not completed. 8.2 If Owner does not respond to Contractor's initial notice of completion within thirty (30) days, Contractor shall provide Owner with a second notice of completion. Any Services included in Contractor's second notice to Owner and not listed by Owner as incomplete in a listing delivered to Contractor within fifteen (15) days of receipt of said second notice, shall be deemed complete and accepted by Owner. CONFIDENTIAL 5 EXECUTION COPY 8.3 With respect to Services listed by Owner as incomplete, Contractor shall complete such Services and the above acceptance procedure shall be repeated. 8.4 In the event Owner does not respond to Contractor's second notice within fifteen (15) days after receipt of any such second notice, the Services included in such second notice shall be deemed complete and accepted by Owner. 9.0 RESPONSIBILITY OF CONTRACTOR 9.1 Contractor will perform its Services, with that degree of skill and judgment that is normally exercised by recognized international professional engineering, construction and construction management firms with respect to services of a similar nature. Contractor shall reperform at its expense any professional services which are (a) deficient because of Contractor's failure to perform any such Services in accordance with the above standard, and (b) reported in writing to Contractor within a reasonable time, not to exceed thirty (30) days, after the discovery thereof, but in no event later than the first to occur of (i) twenty-four (24) months after the completion and acceptance of the applicable Services, and (ii) one (1) year after the assigned PCS-site or MSC location to which the Services apply has been placed in commercial service. Except as set forth above in this Paragraph 9.1, Contractor's responsibility hereunder with respect to each individual PCS-site and MSC location shall terminate upon the completion and acceptance of Services with respect to such PCS-site or MSC location. The warranty set forth in this Paragraph 9.1 is the sole and exclusive warranty of Contractor in connection with the Services and Contractor hereby disclaims and Owner waives any other express, implied or statutory warranties, including warranties of merchantability or fitness for a particular purpose. 9.2 Owner acknowledges that the work required to complete the Project shall require the involvement and assistance of other professionals and service companies ("Independent Contractors") which shall include but not be limited to architects, RF and civil engineers, site acquisition consultants, environmental consultants, geotechnical firms, surveyors, graphic artists, and construction crews. Contractor shall make reasonable efforts to locate and interview Independent Contractors as agent for Owner. Privity of contract shall exist only between Owner and the Independent Contractors with respect to the services to be performed by the Independent Contractors pursuant to express written agreements that are executed by Owner and such Independent Contractors. Owner shall grant or deny approval of any Independent Contractor recommended by Contractor and may terminate the services of an Independent Contractor for good cause or otherwise upon appropriate notice to the Independent Contractor. Contractor shall coordinate and manage the services of the Independent Contractors as agent for Owner, subject to any limitations on Contractor's authority mutually agreed by the parties . Owner shall be solely responsible for the payment of invoices submitted by the Independent Contractors; provided that Contractor shall provide the accounting and controller management services set forth in Attachment A. Owner shall indemnify Contractor from any and all claims, losses, costs or expenses associated with the services provided by the Independent Contractors, except to the extent that the same arise from the failure of Contractor to coordinate, monitor and manage the services of the Independent Contractors or otherwise perform the Services as required by this Agreement. CONFIDENTIAL 6 9.3 In conjunction with meeting Contractor's obligations as set forth in Attachment A hereto, Contractor shall be responsible for inspecting the work of Independent Contractors and/or their subcontractors on the construction sites from time to time or as directed by Owner to monitor compliance by such Independent Contractors with their contractual responsibilities to Owner. With regard to work quality and safety, Contractor's obligations are to report any deficiencies or instances of noncompliance by such Independent Contractors to Owner and to make recommendations on how to remedy such deficiencies or such noncompliance, recognizing that Contractor is providing project management services and that Owner will look to the Independent Contractors to remedy any deficiencies in their work quality and for implementation of the safety programs. With respect thereto, Contractor shall be responsible for inspecting from time to time construction means, methods, techniques, sequences, procedures, or safety precautions and programs implemented by such Independent Contractors in connection with the Project in order to monitor compliance by such Independent Contractors and/or their subcontractors with all construction specifications and their related contractual obligations to Owner, including compliance with federal, state, or local laws, regulations and codes as they pertain to the actual construction work. 9.4 Except for any liabilities arising under the third-party indemnity set forth in Paragraph 9.7, in no event shall Contractor's liability to Owner, however caused, exceed in the cumulative aggregate an amount equal to $ 10,000,000 (Ten Million Dollars), and Owner hereby releases Contractor from any liability in excess thereof. 9.5 Owner's and Contractor's remedies specified in this Agreement are the sole and exclusive remedies of either party for liabilities arising out of or in connection with this Agreement. 9.6 Except for Contractor's obligations set forth in Paragraph 3.4, Contractor's liability for loss of or damage to the Project or other property of Owner or in the custody of Owner (including any leased property) shall be limited to those payments made on Contractor's behalf by the insurers affording the insurance described in Paragraph 10.2, and Owner hereby releases and agrees to indemnify Contractor from any loss, damage or expense in excess of those payments. 9.7 Contractor agrees to indemnify, defend and hold harmless Owner and its directors, officers, partners, agents and employees from and against any third-party claims for personal injury to or death of persons and for loss of or damage to third-party property (including reasonable attorneys' fees and expenses) to the extent resulting from or arising out of the negligence or willful misconduct of Contractor. Contractor shall not be required to indemnify Owner for any act or omission of Contractor which is done at the express direction of Owner, except to the extent that Contractor acts (or fails to act) in a negligent manner in carrying out Owner's instructions. 9.8 In no event shall either party, it officers, agents or employees or its subcontractors, or contractors or suppliers of any tier providing equipment, materials or services for the Project be liable to the other party for consequential loss or damage, including, but not limited to, loss of use, loss of profit or loss of revenue, and each party hereby releases the other party, its respective CONFIDENTIAL 7 EXECUTION COPY officers, agents, employees, subcontractors, contractors and suppliers from and against such liability. 9.9 The releases from liability and limitations on liability expressed in this Agreement shall apply even in the event of the fault, negligence in whole or in part, strict liability, breach of contract or otherwise, of the party released or whose liability is limited and shall extend to the subcontractors and related entities of such party and its and their directors, officers and employees. 10.0 INSURANCE 10.1 Contractor Insurance Contractor has in force and will maintain during the performance of the Services, the following insurance: 10.1.1 Workers' Compensation covering Contractor's employees, and Employers' Liability Insurance as required by applicable law but in no event with a limit of less than $ 1,000,000 per occurrence and in the aggregate . 10.1.2 Automobile Bodily Injury and Property Damage Liability Insurance covering all owned, non-owned or hired by Contractor automobiles or automotive equipment, with limits as follows: Bodily Injury and Property Damage: $2,000,000 combined single limit each occurrence 10.1.3 Comprehensive Crime coverage with limits of $10,000,000 per occurrence. 10.1.4 Owner, Airwave Communications, LLC and Digital PCS, LLC shall be named as an additional insureds under the insurance required by Paragraph 10.1.2, and Contractor shall furnish Owner a certificate evidencing each such policy of insurance in Paragraph 10.1 which shall also include a waiver of subrogation in favor of Owner, Airwave Communications, LLC and Digital PCS, LLC. Such policies shall provide that written notice shall be given to Owner and each other additional insured thirty (30) days prior to cancellation or material change of any protection which said policies provide for Owner and each other additional insured. 10.2 Owner's Project Insurance Prior to commencement of Services at the Project sites, Owner shall take out, carry and maintain, during the performance of the Services and for such additional period as hereinafter specified, the following Project Insurance covering Owner, Contractor and all contractors and subcontractors of every tier as Named Insureds. Such insurance shall include a waiver of subrogation in favor of all Named Insureds. 10.2.1 Third-Party Losses and Damages Comprehensive Bodily and Personal Injury and Property Damage Liability Insurance, including contractual Broad Form Property Damage Cover and completed operations coverage, but CONFIDENTIAL 8 EXECUTION COPY excluding coverage for automobile liability and automobile physical damage which should be insured by each contractor and subcontractor. The policy limit will be a combined single limit for Personal Injury and Property Damage of not less than $ 10,000,000 each occurrence, with a cross-liability or severability of interest clause, and covering against liabilities arising out of or in any way connected with the Project, including personal injury claims against any insured by employees of any other insured. Such insurance shall state that it is primary and that any other insurance carried by the Named Insureds shall be specific excess and not contributing therewith. This insurance shall not contain any exclusion which denies coverage because liability for injuries to persons or damage to property arising out of the preparation of maps, plans, designs, specifications, or the performance of inspection services or out of any other Services to be performed by Contractor under this Agreement. This insurance shall not cover bodily injury or disease to Contractor's employees otherwise covered under the Workers' Compensation coverage required in Paragraph 10.1.1. This insurance shall be maintained in force until three (3) years after acceptance or termination of the Services. 10.2.2 Builder's Risk or Course of Construction Insurance Builder's Risk or Course of Construction Insurance, insuring on an "All Risks" basis with a limit of not less than the full insurable replacement cost of the Project, subject to reasonable and customary deductible amounts as selected by Owner, and covering the Project and all materials and equipment to be incorporated therein, including property in transit, in storage or elsewhere. Such insurance shall state that it is primary, shall include coverage for physical damage resulting in any way from the Services, including physical loss or damage resulting from design error, faulty workmanship or defective materials, and shall include an insurer's waiver of subrogation or right of recourse in favor of each Named Insured thereunder. Furthermore, such insurance shall remain in effect until the entire Project is completed and accepted by Owner. 10.3 Special Provisions Owner shall furnish Contractor a certificate evidencing each such policy of insurance or, upon Contractor's request, a copy of each policy of insurance required by Paragraph 10.2. Such policies shall provide that written notice shall be given to Contractor thirty (30) days prior to cancellation or material change of any protection which said policies provide for Contractor. 10.4 Insurance by Others In the event Owner elects to cause any of the insurance described in Paragraph 10.2 to be carried by a party other than Owner or Contractor, Owner hereby agrees to cause such other party to arrange the insurance as herein provided. 11.0 OWNERSHIP OF PLANS, TITLE TO WORK AND CONFIDENTIAL INFORMATION 11.1 All drawings, plans, specifications, findings and reports, developed by Contractor under this Agreement shall become the exclusive property of Owner for unrestricted use by Owner. All such drawings, plans and specifications shall at Owner's request be delivered to Owner upon completion of such Services, but Contractor may retain and use copies thereof and the CONFIDENTIAL 9 EXECUTION COPY information contained therein for internal purposes, and shall at all times retain the copyright to its copyrightable work product, provided, however, Contractor hereby grants Owner a perpetual license to use any such copyrighted/copyrightable work product. 11.2 All portions of the Project completed or in the course of construction at the job sites shall be the sole property of Owner, and the title to such materials, equipment and supplies, the costs of which are Other Direct Costs, shall pass immediately to and vest in Owner upon the happening of any event by which title passes from the vendor or supplier thereof. 11.3 As used in this Agreement, "Confidential Information" means all information of either party that is not generally known to the public, whether of a technical, business or other nature (including, without limitation, trade secrets, know-how and information relating to the technology, customers, business plans, promotional and marketing activities, finances and other business affairs of such party), that is disclosed by one party (the "Disclosing Party") to the other party (the "Receiving Party") and that is marked or otherwise designated in writing as confidential. Confidential Information may be contained in tangible materials, such as drawings, models, data, specifications, reports, compilations and computer programs, or may be in the nature of unwritten knowledge. In addition, Confidential Information includes all information that the nondisclosing party may obtain by walk-through examination of the Disclosing Party's premises, or concerning the existence, progress and contents of the discussions between the parties to the extent the disclosure of such information to unauthorized third persons could reasonably be expected to materially adversely affect the Owner's interests. For purposes of this Agreement but without limiting the scope of the definition of Confidential Information, the number, location, configuration and status of all proposed sites in the PCS System and any associated financial information, as well as the timetable and operational status of the PCS System itself, shall be deemed to be Confidential Information of Owner. 11.4 The Receiving Party, except as expressly provided in this Agreement, shall not disclose Confidential Information to anyone without the Disclosing Party's prior written consent. The Receiving Party may disclose Confidential Information to third parties providing services or goods in connection with the Project to the extent necessary for such third party to perform its work. The Receiving Party will not use, or permit others to use, Confidential Information for any purpose other than performing their obligations under this Agreement or, if to a third party performing work in connection with the Project, then under such third party's Project agreement. The Receiving Party will take all reasonable measures to avoid disclosure, dissemination or unauthorized use of Confidential Information, including at a minimum those measures it takes to protect its own Confidential Information of a similar nature. 11.5 The provisions of Paragraph 11.4 will not apply to any information that (i) is or becomes publicly available without breach of this Agreement; (ii) can be shown by documentation to have been known to the Receiving Party at the time of its receipt from the Disclosing Party, (iii) can be shown by documentation to have been independently developed by the Receiving Party without reference to any Confidential Information, or (iv) was received by the Receiving Party from a third party either not subject to a confidentiality obligation or not otherwise prohibited from transmitting the information to the Receiving Party. CONFIDENTIAL 10 EXECUTION COPY 11.6 The Receiving Party shall restrict the possession, knowledge, development and use of Confidential Information to its employees, agents, subcontractors and entities controlled by it or under common control with it (collectively, "Personnel") who have a need to know such Confidential Information in connection with the purposes set forth in this Agreement. The Receiving Party's Personnel shall have access only to the Confidential Information they need for such purposes. The Receiving Party shall ensure that its Personnel comply with this Agreement. 11.7 If the Receiving Party becomes legally obligated to disclose Confidential Information by any governmental entity with jurisdiction over it, the Receiving Party shall give the Disclosing Party prompt written notice sufficient to allow the Disclosing Party to seek a protective order or other appropriate remedy. The Receiving Party shall disclose only such information as is legally required and will use its reasonable best efforts to obtain confidential treatment for any Confidential Information that is so disclosed. 11.8 All Confidential Information shall remain the exclusive property of the Disclosing Party, and the Receiving Party shall have no rights, by license or otherwise, to use the Confidential Information except as expressly provided herein. 11.9 The Receiving Party acknowledges (1) that the use, misappropriation or disclosure of the Confidential Information in a manner inconsistent with this Article 11.0 would cause irreparable injury to the Disclosing Party, (ii) that all such Confidential Information is the property of the Disclosing Party and (iii) that it is essential to the protection of the Disclosing Party's goodwill and to the maintenance of the Disclosing Party's competitive position that the Confidential Information be kept secret and that the Confidential Information not be disclosed by the Receiving Party to others or used by the Receiving Party to the Receiving Party's own advantage or the advantage of others, except as permitted herein. The Receiving Party further acknowledges that the Receiving Party's agreement to the provisions of this. Article 11.0 and the enforceability of such provisions against the Receiving Party are an essential element of this Agreement and that, absent such provisions and the enforceability thereof, the Disclosing Party would neither (a) enter into this Agreement nor (b) permit the Receiving Party access to and use of Confidential Information. 11.10 Each party acknowledges that the provisions of this Article 11.0 of this Agreement are material to the other party, that the other party would not have entered into this Agreement if it did not include Article 11.0, and that the damages sustained by the other party as a result of a breach of this Article cannot be adequately remedied by damages at law. Each party therefore agrees that the other party, notwithstanding any other provision of this Agreement and in addition to any other remedy it may have at law, shall be entitled to injunctive and any other equitable relief to prevent or curtail any breach of this Article. 11.11 The provisions of this Article 11.0 shall survive expiration or termination of this Agreement and shall remain binding for a period of three years from the termination or expiration of this Agreement. CONFIDENTIAL 11 EXECUTION COPY 12.0 FORCE MAJEURE 12.1 Neither party hereto shall be considered in default in the performance of its obligations hereunder to the extent that the performance of any such obligation, except the obligation for payment of money, is prevented or delayed by any cause, existing or future, which is beyond the reasonable control of the affected party, or by a strike, lockout or other labor difficulty, the settlement of which shall be within the sole discretion of the party involved (individually or in the aggregate, a "Force Majeure"). 12.2 Each party hereto shall give notice promptly to the other of the nature and extent of any Force Majeure claimed to delay, hinder or prevent performance of the Services under this Agreement. In the event either party is prevented or delayed in the performance of its obligations by reason of such Force Majeure, the parties shall meet and agree upon an equitable adjustment of the schedule obligations and other affected provisions of this Agreement. 13.0 TERMINATION 13.1 Owner may for its convenience terminate Contractor's Services at any time by giving Contractor thirty (30) days prior written notice of such termination, whereupon Contractor shall: 13.1.1 Stop the performance of Services terminated hereunder except as maybe necessary to carry out such termination; 13.1.2 Terminate, to the extent possible and at Owner's request, outstanding contracts, subcontracts or purchase orders relating to the Services terminated; and 13.1.3 Take any other action toward termination of Services which Owner may reasonably direct. 13.2 This Agreement may be terminated by either party hereto by written notice to the other party at any time upon a material breach by the other party of any of the provisions of this Agreement and the breaching party's failure to cure such breach within thirty (30) days, or such longer period as the parties may mutually agree to in writing, after its receipt of written notice thereof from the non-breaching party. 13.3 Should Owner elect to terminate this Agreement for cause under Paragraph 13.2, Contractor will be required to apprise replacement personnel of all aspects of the Project for a period of thirty (30) days from the effective date of the termination and shall promptly turn over all documentation prepared in conjunction with or pertaining to the Project that is the property of Owner. Should Owner elect to terminate this Agreement for convenience under Paragraph 13.1, Contractor will be required to apprise Owner's replacement personnel (and not any personnel of a replacement contractor) of all aspects of the Project for a period of thirty (30) days from the effective date of the termination and shall promptly turnover all documentation prepared in conjunction with or pertaining to the Project that is the property of Owner. 13.4 Upon termination or expiration of this Agreement, Contractor (or its representatives) shall promptly submit to Owner an invoice covering all unbilled Compensation and Other Direct Costs, if any, earned or incurred to the date of termination or expiration together with an estimate CONFIDENTIAL 12 EXECUTION COPY of the Compensation and Other Direct Costs, if any, that would be chargeable to Owner if any particular services for work then in progress were to be completed by Contractor. Upon request by Owner (but not otherwise) Contractor shall complete such work in progress, including any work required under Paragraph 13.3, as Owner shall designate, and this Agreement shall in such case be deemed extended with respect to such work only until such work is completed and paid for. Owner shall pay Contractor for any Services performed up to and including the date of termination in accordance with Attachment B, including Hourly Unit Rate Payments and Other Direct Costs reasonably incurred in carrying out the termination and in performing the obligations set forth in Paragraph 13.1 and 13.3. Contractor shall use reasonable efforts to minimize the amounts payable hereunder. 14.0 SUSPENSION OF SERVICES 14.1 Owner may suspend the performance of Contractor's Services hereunder in whole or in part, at any time and from time to time upon thirty (30) days prior written notice of such suspension. Thereafter, Contractor shall resume the full performance of the Services when directed to do so by reasonable notice from Owner. 14.2 In the event of suspension of the performance of the Services at Owner's request, Contractor shall be entitled to Hourly Unit Rate Payments for Services performed to carry out the suspension and in reactivating the Services after the suspension and for Bechtel personnel that Owner requests Contractor to maintain on standby for the Project. In addition, Contractor shall be entitled to reimbursement for Other Direct Costs reasonably incurred by Contractor in suspending the Services and during the period of suspension , and in reactivating the Services after the end of the suspension period to the extent that such additional costs are incurred. Owner shall specify in its suspension notice the anticipated duration of such suspension and its instructions concerning Contractor's maintaining personnel on standby for the Project. If Owner does not request personnel to remain on standby, Contractor may reassign personnel as a result of any suspension of Services hereunder. Contractor will use reasonable efforts to minimize the amounts payable hereunder. In addition, Contractor shall be entitled to an equitable adjustment of the schedule obligations upon any suspension. 14.3 In the event any suspension of the Services exceeds a reasonable time (not to exceed sixty (60) days in the aggregate), Contractor may terminate its obligation to perform the Services, without thereby being in default and without prejudice to any of its rights or remedies under this Agreement, by so notifying Owner in writing, and any such termination shall be treated as if Owner terminated for convenience under Article 13.0. 14.4 Contractor may suspend or terminate for cause its obligation to perform the Services if Owner fails to honor any of the payment provisions for two (2) successive months. In the event of a suspension under this Paragraph 14.4, the provisions of Article 14.0 shall apply as if it were an Owner suspension. 15.0 NOTICES 15.1 All notices or other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile CONFIDENTIAL 13 EXECUTION COPY transmission, or by registered or certified mail (return receipt requested), postage prepaid, addressed as follows (or to such other address for a party as shall be specified by like notice; provided that notice of a change of address shall be effective only upon receipt thereof): To Owner: 1410 Livingston Lane Jackson, MS 39213-8003 Attn: Mr. David Walsh Fax: (601) 362-2664 With a copy to: 1410 Livingston Lane Jackson, MS 39213-8003 Attn: Mr. Jerry M. Sullivan, Jr. Fax: (601) 362-2664 To Contractor: 112B East State Street Ridgeland, MS 39517 Attn: Mr. Russ Glass Fax: (601) 898-6259 With a copy to: 3000 Post Oak Boulevard Houston, TX 77056-6503 Attn: Mr. Lester Hurst Fax: (713) 965-9914 16.0 REPRESENTATIVE OF THE PARTIES 16.1 Contractor and Owner each hereby appoint the representative designated below who will be authorized and empowered to act for, and on behalf of, each on matters within the terms of this Agreement: Owner's Representative: David Walsh Contractor's Representative: Russ Glass This appointment will remain in full force and effect until written notice of substitution is delivered to the other party. 17.0 TRANSFER OF OWNERSHIP 17.1 Owner represents either that it is the sole Owner of the Project or that it is authorized to bind and does bind all owners of the Project to the releases and limitations of liability set forth in this Agreement. Owner may request Contractor to perform any portion of the Services for the benefit of an affiliate or subsidiary and in such case, Contractor shall perform the Services for the benefit of such related entity and Owner shall obtain such related entity's agreement in writing to be bound by such releases and limitations of liability such that the total aggregate CONFIDENTIAL 14 EXECUTION COPY liability of Contractor to Owner and such related entities shall not exceed the limits of liability set forth in this Agreement. 17.2 Owner agrees that it shall obtain from any direct transferee of Owner's interest in the Project such transferee's agreement in writing that it will be bound by such releases and limitations of liability such that the total aggregate liability of Contractor to Owner and such transferees shall not exceed the limits of liability set forth in this Agreement. 18.0 ASSIGNMENT AND SUBCONTRACTS 18.1 This Agreement shall not be assigned by either party without the prior written approval of the other, which approval shall not be unreasonably withheld. In the event Owner sells its assets in conjunction with an assignment of Owner's Federal Communication Commission licenses for the PCS System or any subpart thereof, then Owner may assign the warranty in this Agreement to the buyer without Contractor's approval. 18.2 Except as set forth below in this Paragraph 18.2, Contractor may not subcontract its Services or any portion thereof without the prior written approval of the Owner. Contractor may subcontract portions of the Services to entities controlled by it or under common control with it without the prior written approval of Owner. Contractor hereby guarantees to Owner that such entities will comply with the responsibilities and liabilities herein assumed by Contractor, and Owner may hold Contractor responsible for any failure to so comply. Contractor agrees that Owner will incur no duplication of costs or increased taxes resulting from any such subcontract and shall indemnify and hold Owner harmless from any such costs or taxes. Owner agrees that the limitations on Contractor's liability set forth in this Agreement constitute the aggregate limit of liability of Contractor and its related entities under this Agreement. 19.0 FAIR OPERATION OF AGREEMENT 19.1 In entering into this Agreement, Owner and Contractor recognize that it is impracticable to make provision for every contingency which may arise during the life of this Agreement. Owner and Contractor concur in the principle that this Agreement shall operate between them with fairness and if, in the course of the performance of this Agreement, an infringement of this principle is anticipated or disclosed, then Owner and Contractor shall promptly consult together in good faith in an endeavor to agree upon such action as may be necessary to remove the cause or causes of such infringement. 20.0 DISPUTE RESOLUTION 20.1 Each party agrees to attempt in good faith to resolve any controversy, claims, or dispute arising out of or relating to the Agreement or breach thereof (hereinafter collectively referred to as "Dispute") promptly by negotiation between representatives of the parties who have authority to settle the Dispute. The disputing party shall give the other party a written "Notice of Dispute." The parties shall determine the procedures for the negotiation after the Notice of Dispute is received. If a Dispute CONFIDENTIAL 15 EXECUTION COPY has not been resolved within thirty (30) days after the applicable Notice of Dispute is delivered, either party may pursue its rights under Paragraphs 20.2 and 20.3 below. 20.2 With the exception of any claim under Article 11.0, any Dispute which has not been resolved in accordance with Paragraph 20.1 above shall be decided by arbitration in accordance with the Commercial Rules of Arbitration of the American Arbitration Association then in effect unless the parties mutually agree otherwise. This Agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law or the Federal Arbitration Act. The parties agree that the site of any arbitration shall be Jackson, Mississippi; provided that any and all arbitrators will come from neutral locations mutually agreeable to the parties. 20.3 Any award rendered by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof. 20.4 Unless otherwise agreed in writing, during any such Dispute Contractor shall perform the Services and maintain the schedule required by this Agreement, and Owner shall continue to make payments in accordance with this Agreement. 21.0 APPLICABLE LAW 21.1 This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Mississippi without giving effect to the conflicts of law principles thereof. 22.0 SUCCESSORS AND ASSIGNS 22.1 Except with respect to any indemnities or releases from or limitations of liability that expressly cover other parties, this Agreement is binding upon and is solely for the benefit of the parties hereto and their respective permitted successors, legal representatives and permitted assigns. 23.0 SEVERABILITY 23.1 In the event that any of the provisions, or portions or applications thereof, of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction or arbitrator, as applicable, Owner and Contractor shall negotiate in good faith an equitable adjustment in the provisions of this Agreement with a view toward effecting the original purpose of this Agreement as closely as possible, and the validity and enforceability of the remaining provisions or portions or applications thereof shall not be affected thereby. 24.0 GENERAL PROVISIONS 24.1 Any Services (other than those performed under the Amendment to the Letter of Intent between the parties dated as of September 30, 1998) provided for herein which were performed by Contractor prior to the effective date of this Agreement shall be deemed to have been performed under this Agreement. This Paragraph 24.1 is not intended to modify the compensation provisions applicable to the Services performed under the Letter of Intent between the parties dated as of August 10, 1998, as amended. CONFIDENTIAL 16 EXECUTION COPY 24.2 No delay or failure on the part of any Party hereto in exercising any right, power or privilege under this Agreement or under any other documents furnished in connection with or pursuant to this Agreement shall impair any such right, power or privilege or be construed as a waiver of any default or any acquiescence therein. No single or partial exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege, or the exercise of any other right, power or privilege under this Agreement. No waiver shall be valid against any party hereto unless made in writing and signed by the party against whom enforcement of such waiver is sought and then only to the extent expressly specified therein. 24.3 Each party to this Agreement represents and warrants to the other party to this Agreement that neither the execution and delivery of this Agreement nor the carrying out of any of the transactions contemplated herein will in any respect result in any violation of or be in conflict with any term or provision of any agreement, document or instrument to which the representing party is a party or by which it is bound. Each party to this Agreement further represents and warrants to the other party to this Agreement that this Agreement has been duly executed and delivered on behalf of the representing party and constitutes a valid and binding obligation of the representing party, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights and as may be limited by the exercise of judicial discretion and the application of principles of equity including, without limitation, requirements of good faith, fair dealing, conscionability and materiality (regardless of whether this Agreement is considered in a proceeding in equity or at law). 24.4 To the fullest extent permitted by law, neither party shall be liable to the other for exemplary or punitive damages. 24.5 This Agreement, together with all agreements, attachments, exhibits and instruments referred to herein, constitutes the entire agreement between the parties hereto relating to the subject matter hereof, and supersedes any previous agreements or understandings and may be modified only in writing signed by the parties with the same formalities as this Agreement. 24.6 The singular and plural and any gender shall include the other. 24.7 The headings and captions and any index or table of contents in this Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Agreement. 24.8 This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 25.0 DISCLOSURE 25.1 Contractor shall inform Owner of rebates or discounts, if any, offered by any services or materials suppliers to Contractor as a result of Contractor's purchasing activities as agent for Owner hereunder and shall pass on to Owner any such rebates or discounts. CONFIDENTIAL 17 EXECUTION COPY IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the day and year first herein above written.
TRITEL COMMUNICATIONS, INC. TRITEL FINANCE, INC. By: By: ----------------------------- ----------------------------- Name: Jerry M. Sullivan, Jr. Name: Jerry M. Sullivan, Jr. --------------------------- --------------------------- Title: Exec. VP/Chief Operating Officer Title: Exec. VP/Chief Operating Officer ---------------------------------- ----------------------------------
BECHTEL CORPORATION By: ------------------------------ Name: L.W. Hurst ---------------------------- Title: Vice President/General Manager ------------------------------- CONFIDENTIAL 18 EXECUTION COPY ATTACHMENT A SCOPE OF SERVICES Contractor will plan, coordinate and manage the assigned work required for the deployment of Owner's PCS System of PCS-sites and MSC locations for the BTAs listed at the end of this attachment. Contractor will provide project and construction management services, including coordination for RF engineering, site acquisition, site engineering and design, construction, equipment and material suppliers and other contractors of Owner involved in the implementation effort and including the services described in this Attachment A. PROGRAM OFFICE - -------------- Contractor will establish an "umbrella" organization to provide overall management of the Project. This organization will be located in Owner's office in Jackson and will provide project and construction management functions for the Project. There will be a single Project Manager who will serve as the single point of contact for Owner for all issues on the Project. All of the Contractor personnel on the Project will report to the Project Manager. The Project office will also include other Contractor management personnel necessary to perform the Services for the Project. Contractor will develop a Project Execution Plan and Quality Plan for Owner's approval, establish standards for all Project functions, develop Project level schedules and budgets and monitor and report on total Project progress. Contractor will also establish engineering standards and criteria, including standardized site arrangements and details and will produce a work process flow chart that shows the responsibilities and interfaces for the design and construction of a typical PCS-site and for assigned MSC locations. REGIONAL PROJECT MANAGEMENT TEAMS - --------------------------------- Since the construction of the PCS System will be spread across seven states, five Regional Offices will be established to effectively manage the network implementation. Preliminary locations for the Regional Offices are: o Jackson, MS - managing the state of Mississippi, except for the Gulf Coast o Birmingham, AL - managing the state of Alabama, except for the Gulf Coast o Knoxville, TN - managing the Knoxville, Chattanooga and Cleveland BTAs in Tennessee and the Dalton and Rome BTAs in Georgia o Nashville, TN - managing the Nashville, Cookeville and Clarksville BTAs in Tennessee and the Hopkinsville, Madisonville and Bowling Green BTAs in Kentucky o Louisville, KY - managing the Louisville, Lexington, Corbin and Owensboro BTAs in Kentucky A regional operations management team will be located in each Regional Office to provide support for site acquisition, site engineering, permitting, procurement, construction, testing and turnover of PCS-sites and MSC locations in the region. CONFIDENTIAL A-1 EXECUTION COPY The Contractor team will work with Owner's regional manager and function as Owner's representatives in the region, will coordinate RF engineering with other functions, will manage site acquisition, permitting, procurement, construction, schedule and budget progress and performance, and will manage Owner contracts, testing and turnover. PROJECT COST AND SCHEDULE CONTROLS - ---------------------------------- As overall Project manager, Contractor will assist with the development of project budgets and define the format and frequency for reporting schedule progress and performance against budgets, as appropriate. Contractor will provide annual budgets for its Services revised on a quarterly basis at least thirty (30) days prior to beginning of each quarter during the term of this Agreement. Owner's contracts will require that all Project participants (major equipment vendor, RF engineers, site acquisition contractors) will provide information to Contractor as specified, for incorporation into Project status reports. Schedule progress will be monitored using a hierarchical series of schedules of varying levels of detail. The schedule called the Project Milestone Summary Schedule will reflect target dates for all Regions, and will provide schedule status for the total Project. The schedules called the Regional Milestone Summary Schedules will be the basis for monitoring schedule status in each of the Regions, and will depict progress against critical path milestone activities. The database called the Project Critical Events database will track progress on each PCS-site (or candidate site) and MSC location for each Region. This database will be supported by all Project participants and will be used by Contractor to generate summary level critical/action items reporting for the Project. Owner will ensure that the following are obtained and made available to Contractor for performance of the Services: Inputs/Information Required - --------------------------- From Site Acquisition Contractor(s) o Detailed information on each site or candidate site o Progress reporting on all data base elements in SAC responsibility on a weekly basis, with exception reporting daily for critical/problem items. From RF Engineer(s) o Detailed information on RF design plan for each Region or sub-network, identifying critical items and restraints o Progress reporting on all RF data base elements on a weekly basis, with exception reporting daily for critical/problem activities. CONFIDENTIAL A-2 EXECUTION COPY From Major Equipment Vendor o Detailed information on BTS with demarcation points identified and switch equipment design and delivery schedule for each Region, including installation and test duration and restraints. o Progress reporting for all major equipment vendor responsibilities on a weekly basis, with exception reporting daily for critical/problem activities. As the job evolves, additions, deletions and changes to Project scope will be identified and submitted to Owner for review and approval. As scope changes are approved, they will be incorporated into the budget to provide a current assessment of the total Project cost. Standard reports will be issued on a regular basis to keep Owner informed on key and/or critical issues regarding the status of the Project. As required by Paragraph 2.2.10, a report called the Project Progress Report will be prepared monthly by the Jackson Project Office which will summarize activity in all Regions. This report will include narrative summaries of the RF engineering, site acquisition, facility design, construction management and spectrum clearing activities. It will also provide schedule performance calculations, percent complete assessment, action items list and the list of pending scope changes. Inputs/Information Required - --------------------------- From All Project Participants o Narrative description of activities ongoing for the month in each of the Regions. Highlight key accomplishments and critical problem areas. o Listing and description of any outstanding scope changes including their effect on cost and schedule. CONTRACT ADMINISTRATION - ----------------------- Contractor will interpret and maintain Owner's contracts for site design and construction, as agent for Owner. Contractor will also: o Provide control of contractor proposals and processing |X| Manage the award process for released PCS sites and MSC locations |X| Monitor contractors' overall compliance with contract terms and Project established procedures, and report any instances of noncompliance to Owner o Manage the contract changes/disputes and claims process Manage the Project backcharge process o Provide quality surveillance of contractors' work o Ensure final inspection items are completed o Perform contract close-out functions with all contractors and provide completed turnover package to Owner for all contracts ACCOUNTING/CONTROLLER MANAGEMENT - -------------------------------- Contractor will perform the following activities: CONFIDENTIAL A-3 EXECUTION COPY o Review all invoices for conformance to contract/purchase order, terms and receiving documents and submit to Owner for approval o Perform the accounts payable function as Owner's agent by writing all checks on Owner's check stock for Owner-approved invoices and providing monthly reconciliation for funds expended for materials, contracts and subcontracts in accordance with Attachment B o Provide detailed tax and property asset reporting for all expenses handled by Contractor accounting o Perform tracking and statusing of all invoices from the time they are received, through the review and approval cycle to payment and close-out of the bill o Code invoices with accounting and physical location codes to meet Owner's requirements o Provide information required for electronic interfaces to Owner's accounting and management systems. PROCUREMENT AND MATERIALS MANAGEMENT - ------------------------------------ Contractor will, as Owner's agent, assist Owner in procuring equipment, materials and services required for the construction of the PCS-sites and MSC locations, excluding the radio equipment and switches provided by major equipment vendor under contract to Owner. All purchase orders and contracts will be issued by Owner with Contractor acting as agent. Subject to the requirement set forth in Paragraph 17.1, Owner may request Contractor to perform these procurement and materials management services in the name of an affiliate or subsidiary of Owner. Procurement activities will include receipt of the specification and/or material requisition; supplier bidding and selection; formation and negotiation of Owner contracts and purchase orders; expediting and supplier surveillance; and coordination and management of delivery of materials to installation contractors, PCS-sites or MSC locations as required. A Project Procurement Manager ("PPM") will be assigned to the Project Office in Jackson to plan, organize, staff and manage procurement activities. The PPM will assist the Owner in developing a procurement plan for third-party materials which is consistent with the Regional Milestone Schedules. Each Regional Office will have a Procurement/Materials Manager assigned to perform the following functions: o Solicit proposals for A/E and construction contractors and award contracts for administration in the local markets. o Obtain material requirements and required delivery dates for approved sites and forward to Project office for ordering. o Coordinate with local contractors to confirm delivery of third-party material. o Prepare or obtain material receiving reports for third party material to allow for payment processing o Assist in the site material reconciliation process, as necessary, to develop material records, cost reports, etc. for turnover packages, etc. o Monitor contractors' control of customer-furnished material for inventory-tracking purposes. CONFIDENTIAL A-4 EXECUTION COPY Material releases to Owner contractors will be coordinated utilizing Contractor's automated PTS. Contractor will establish Owner agreements with vendors to ship material for each site to Owner's contractor responsible for construction. Material will be shipped on a "just in time" basis to meet the scheduled construction start dates. Owner's contractor will receive and store all Owner-furnished material for their respective PCS-sites and MSC locations. Each Region will maintain a small stock of items to be used in case of lost or damaged parts; i.e. connectors, jumpers, antennas, etc. ENGINEERING MANAGEMENT - ---------------------- The Contractor will assist Owner with its development of engineering standards, technical specifications, and design criteria utilizing information and data as provided by the Owner, RF engineering, site acquisition and BTS and MSC equipment suppliers. Contractor will maintain and update these standards as required and will manage and control the distribution and use of these documents. These documents will be provided to all local A/E firms for use in design of the PCS sites and MSC locations in order to standardize PCS sites and MSC locations and maintain quality throughout the BTAs. The Contractor will provide engineering support to the Owner to identify qualified local A/E firms and to establish contracts with a number of firms in each of the regional areas. Contractor will manage the firms employed by Owner to provide geotechnical reports and other required studies or analysis. Contractor will manage the A/E firms engaged to prepare the zoning, permitting, and construction documents to monitor compliance with the project design criteria, local codes and standards and Owner requirements. CONSTRUCTION MANAGEMENT - ----------------------- Contractor will provide construction management services for the construction of all assigned PCS-sites and MSC locations in the Owner PCS network. Contractor will assist Owner in identitfying qualified, local contractors in each of the Regions to perform the construction activities. Contractor will coordinate and inspect contractor work activities for quality and to maintain control of the Project schedule. Contractor will perform a constructability analysis for each MSC location and each primary PCS-site candidate as part of the overall site assessment effort. Contractor will manage all civil, electrical and mechanical construction performed by Owner's contractors to make the site ready for installation of the BTS or MSC equipment and will conduct site visits to verify compliance with the contract requirements. Major equipment vendor will be responsible for installation of the BTS and MSC equipment, under contract with Owner. Contractor will coordinate with major equipment vendor to verify demarcation points and schedule the installation and testing activities to meet the milestone dates on the Project schedule. Contractor will develop pro forma contracts and scope descriptions for construction of the PCSsites and MSC locations. When a sufficient number of PCS-sites have been released for CONFIDENTIAL A-5 EXECUTION COPY construction in a Region (target is 300%), Contractor will notify the appropriate contractors to begin construction. Contractor will prepare a Project Safety Plan for Owner's review and approval. Owner's contractors in each and every Region will be required by contract to implement a safety program consistent with the work performed and in conformance with Owner's Project Safety Plan. PCS-SITE AND MSC LOCATION TURNOVER - ---------------------------------- The Regional Document Control Center will collect and maintain PCS-site and MSC location records prior to turnover. Document Control will process records according to applicable Project procedures, prepare transmittal documents and obtain appropriate signatures for records turnover to Owner. Some PCS-site and MSC location records will be turned over progressively, upon approval and issuance of the documents. Other records will be turned over as a part of the PCS-site turnover package. Completion of initial and final inspection by Owner, completion of all punchlist items, and turnover of all required documents to Owner will be documented via a letter. Owner will acknowledge receipt and acceptance and will return the acknowledgment to the Contractor Regional Operations Manager. The Regional Operations Manager will be responsible for processing and implementing the PCSSite and MSC Location Turnover Procedure. Owner will be responsible for receiving turned-over records, verifying transmittals and returning acknowledgment receipts to the Regional Operations Manager. The following documents are to be turned over to Owner as the PCS-site or MSC turnover package. The Contractor Regional Operations Manager, or designee, will manage document compliance. o Site License/Lease Abstract (Summary) o Copy of lease/purchase agreement o Copy of easement agreements o Site Option Report/photos, etc. o Survey, Geotechnical and/or Tower Study o Intermodulation study report (if required) o Environmental Phase 1 Report o Title report, if required, and title insurance policy o Zoning documentation o FAA consultant study and FAA approval o FCC tower registration number - frequency band o Site Completion Checklist o Grounding Post-Test Results o Special installation and Inspection Reports o Sweep Test Results CONFIDENTIAL A-6 EXECUTION COPY o Concrete Cylinder Strength Test Reports o Photo Documentation o Construction As-Built Drawings (Hard copy and disk) o Vendor Drawings (foundations, poles towers) o Design Calculations o Third-Party Materials (type, quantity, cost) o Final Construction Owner-contractor Cost o Release of Lien BTAs Included in Owner Network Implementation MISSISSIPPI - ----------- BTA # 94 Columbus-Starkville BTA # 175 Greenville-Greenwood BTA # 186 Hattiesburg BTA # 210 Jackson BTA # 246 Laurel BTA # 269 McComb-Brookhaven BTA # 292 Meridian BTA # 315 Natchez BTA # 449 Tupelo-Corinth BTA # 455 Vicksburg ALABAMA - ------- BTA # 17 Anniston BTA # 44 Birmingham BTA # 108 Decatur BTA # 115 Dothan-Enterprise BTA # 146 Florence BTA # 158 Gadsden BTA # 198 Huntsville BTA # 305 Montgomery BTA # 334 Opelika-Auburn BTA # 415 Selma BTA # 450 Tuscaloosa KENTUCKY - -------- BTA # 52 Bowling Green-Glasgow BTA # 98 Corbin BTA # 252 Lexington BTA # 263 Louisville BTA # 273 Madisonville BTA # 338 Owensboro CONFIDENTIAL A-7 EXECUTION COPY TENNESSEE - --------- BTA # 76 Chattanooga BTA # 83 Clarksville, TN-Hopkinsville, KY BTA # 85 Cleveland BTA # 96 Cookeville BTA # 232 Knoxville BTA # 314 Nashville GEORGIA - ------- BTA # 102 Dalton BTA # 237 La Grange BTA # 384 Rome CONFIDENTIAL A-8 EXECUTION COPY ATTACHMENT B COMPENSATION 1. COMPENSATION: For performance of the Services described in Attachment A Owner shall pay Contractor's Compensation, consisting of Hourly Unit Rate Payments plus Other Direct Costs (as such terms are defined below): a. Hourly Unit Rate Payments. Owner shall pay Contractor for its labor costs incurred in the performance of the Services. Labor costs are based on hours worked, including scheduled and approved overtime in accordance with established Contractor's policies and procedures and billed at Hourly Unit Rates (whether straight time or overtime) as set forth in the table below. Contractor and Owner have agreed upon an initial staffing plan which is attached as Attachment D hereto. Further, Owner and Contractor shall agree at least fifteen (15) days prior to the commencement of each calendar quarter (commencing with the quarter beginning April 1, 1999) on any revisions to such staffing plan for each position defined below for the upcoming quarter. Contractor shall be paid at the Hourly Unit Rates in column A for all hours worked during that quarter that fall within the staffing plan for the position in question and at the Hourly Unit Rates in column B for the hours worked during that quarter that exceed the staffing plan for the position in question. CONFIDENTIAL A-7 EXECUTION COPY
- ------------------------------------------------------------------------------------------------ POSITIONS HOURLY UNIT RATES HOURLY UNIT RATES - ------------------------------------------------------------------------------------------------ A B - ------------------------------------------------------------------------------------------------ Project Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Assistant Project Manager/Business Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Contracts/QA Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Controls Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Engineering Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Operations Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Accounting Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Design Engineer Supervisor [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Lead Field Coordinator [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Procurement Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Records Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Regional Operations Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Contract Administrator [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Coordinators (Construction, Site Acquisition) [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Resident Engineer [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Safety Manager [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Accountants [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Cost/Schedule Engineer [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ CONFIDENTIAL B-4 EXECUTION COPY - ------------------------------------------------------------------------------------------------ Purchasing Specialist/Material Supervisor [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Standards/Design Engineer [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Regional Document Controls [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Accounts Payable Processor [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------ Clerical Support [CONFIDENTIAL [CONFIDENTIAL TREATMENT REQUESTED] TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------
Notes: Hourly Unit Rates shown above are inclusive of salaries; profit, cost of capital, allowances for holidays; paid time off and other paid absences; costs related to employee social, insurance, and retirement benefits; all payroll taxes; premiums for unemployment insurance, worker's compensation and corporate overhead expenses. Rates will remain unchanged through the two-year term of this Agreement. A description of each position is included as Attachment C to the Agreement. b. Other Direct Costs. Owner shall also reimburse Contractor for other direct costs incurred that are allocable to and reasonably necessary for the performance of the Services ("ODCs") ODCs will be passed through at Contractor's cost, and include: o Relocation (to and from) expenses (including shipping and storage allowances, shipment of automobile and en-route expenses), transportation, lodging, subsistence and other travel and living-related expenses of personnel engaged in the performance of the Services in accordance with Contractor's employment conditions as approved by Owner. o The identifiable and reasonable cost of office supplies, office space, computers, reproduction, communication requirements (including cellular telephones) and delivery services. o Costs of subcontracts, subconsultants and other outside services and facilities, if any. o Federal, state and local taxes of any kind (subject to the provisions of Paragraph 18.2), assessments, duties, permits, insurance and licenses, excepting only payroll taxes included in payroll costs and taxes levied solely on or measured by Contractor's net income. o Any and all other direct costs and expenses incurred by Contractor that are either preapproved by Owner or otherwise authorized under the Project procedures established by the parties, and that are not included in payroll costs as defined above, that are allocable to and reasonably necessary for the performance of the Services. An estimate of Project ODCs is included on Attachment D. 2. OWNER COSTS: Owner shall make available the amounts necessary to pay invoices submitted by Owner's contractors and suppliers and any other costs that Owner requests Contractor to pay as its agent. 3. PAYMENT: Payment of Compensation and Owner Costs shall be made as follows (supplemented by other procedures as may be agreed by the Parties from time to time): B-9 a. Owner shall maintain an account (a "Funding Account") for the purpose of paying the Compensation and Owner Costs. Owner shall at all times retain title to the balance in the Funding Account. Owner shall maintain, in coordination with Contractor, in the same financial institution in which the Funding Account is maintained, an operating account(s) (a "Zero Balance Operating Account"). All payments of Compensation and Owner Costs shall be made by checks drawn on the Zero Balance Operating Account and which shall be executed by duly authorized representatives of Contractor. No check shall be issued for any purpose other than that of making payments for Compensation, for Owner Costs, for expenses incurred in suspending or terminating the Services, or for such other expenses specifically provided in the Agreement or approved by Owner. b. The amount provided by Owner in the Funding Account will at all times be sufficient for the payment of Compensation and Owner Costs from the Zero Balance Operating Account as checks or transfers in payment for such are presented for payment to the financial institution where the Funding Account is maintained. Owner will determine the amounts of deposits to be made to the Funding Account using a monthly estimate of Compensation and Owner Costs to be prepared by Contractor (however, deposits may not necessarily be made on a monthly basis). As soon as practical after the effective date of the Contract, Contractor will prepare an estimate of Compensation to be payable to Contractor and of Owner Costs to be incurred during the initial month or fraction thereof and the following calendar month. By the 15th day of each subsequent calendar month, a similar estimate of Compensation and Owner Costs for the next calendar month will be prepared by Contractor and submitted to Owner. c. Contractor shall submit to Owner all invoices for Owner Costs upon receipt and verification and all Contractor invoices for Compensation once every two weeks. Such invoices shall be reviewed and approved in writing by Owner (with exceptions, if any, noted) within five (5) business days following Owner's receipt thereof. d. Thereafter, Contractor shall submit to Owner, at regular intervals as agreed by the Parties, complete lists of checks it has prepared for issuing. Such lists will be reviewed and approved in writing by the Owner (with exceptions, if any, noted) within three (3) business days following Owner's receipt of the list. Contractor may release checks in payment of the listed checks immediately upon Owner's approval, or if Owner fails to respond, after the third (3) business day following Owner's receipt of the list. e. Contractor shall submit to Owner the following: (i) Promptly after each series of checks have been issued, a statement of Compensation and Owner Costs paid during the period covered by the statement, prepared in such form and supported by copies of such invoices, payroll records, and other documents as Owner shall reasonably request and an electronic statement summarizing these matters in greater detail in accordance with the procedures to be established by the parties. (ii) Weekly, fixed asset reports. B-3 (iii) Within three (3) business days after receipt by Bechtel from the bank, a copy of the Zero Balance Operating Account bank statement and a reconciliation of the Account. This reconciliation will include a list of the checks which have cleared the account, funds transfers, and outstanding checks. Any discrepancies identified in the reconciliation process or by Contractor's audit of bank records shall be immediately brought to Owner's attention. These discrepancies will be resolved as appropriate and in a timely manner. f. Following Final Acceptance of the Project, Contractor shall submit to Owner a statement showing total Compensation and Owner Costs. Within ten (10) days after receipt thereof, Owner shall pay to Contractor the total amount of Compensation less amounts of Compensation previously paid by Owner to Contractor, or if amounts of Compensation previously paid to Contractor exceed the total amount of Compensation, Contractor shall refund such excess to Owner. EXECUTION COPY CONFIDENTIAL ATTACHMENT C DESCRIPTION OF CONTRACTOR POSITIONS Project Manager Team leader. Provides policy and procedures for the overall operation of the Project team. Serves as the focal point for Owner interface with Contractor. The Project Manager (PM) is the one person in the Contractor team accountable to the customer for applying Contractor resources for project execution. Assistant Project Manager/Business Manager Responsible to the Project Manager for the staffing of the project control, contract administration and accounting resources for the establishment of the Project schedule, Project code of accounts, resource budget, accounts payable and receivable systems, prime and other contract administration processes. The Assistant Project Manager (APM) serves as the senior member of the Contractor team in the absence of the PM. Contracts/QA Manager The Contracts/Quality Assurance Manager is responsible for contract formation, administration and management; personnel management of employees performing contracts functions; developing processes and procedures to effectively control and manage contract required activities; establishing and maintaining the Division of Responsibilities matrix and specific contract compliance responsibility matrices; and monitoring Project performance for compliance with contract terms and conditions. In addition to managing contracts, this manager is also responsible for monitoring quality assurance. These responsibilities include performing quality system audits and making all project participants aware of the quality program that they are expected to implement. Controls Manager The Controls Manager (a.k.a. - Project Controls Manager/PCM) is responsible for the preparation and maintenance of Project budgets and schedules. The PCM defines and implements the procedures employed in the Project to establish capital and non-capital cost budgets, to manage change, and to prepare and maintain Project schedules. Additionally, the PCM provides direction for the accounting function. Engineering Manager The Engineering Manager (PEM) is responsible for the PCS site architectural and/or engineering (A/E) Services for the Project. The PEM will direct Contractor project resources to manage the services provided to the Project by local A/E firms. The PEM will monitor the A/E firms' compliance with quality requirements and standard details for their engineering services of PCS site facilities. Operations Manager Assures uniformity of operation throughout the Project. Travel throughout the regions to train personnel for and monitor processes as developed for the Project. Direct development of procedures and standards for the Project. All Regional Operations Managers report to the Operations Manager for overall Project coordination. C-1 EXECUTION COPY Accounting Manager The Accounting Manager (PAM) is responsible to the PCM for the establishment of the Project accounting processes in accordance with the Generally Accepted Accounting Practices and the Contractor Commercial Operations and Finance and Accounting methods and procedures. The PAM operates the accounts payable and accounts receivable services vital to the Project's operations. Design Engineer Supervisor The Design Engineer Supervisor (DES) is responsible to the PEM for providing technical engineering management services to the Project team to prepare and maintain cell site engineering standards and specifications applied to define the services to be provided by local A/E firms and others. Lead Field Coordinator Responsible for interfacing with the contractors on day to day construction activities, schedules, material coordination and quality issues. Coordinate the construction schedules with all of the regional players, RF, site acquisition, project controls, RE's, equipment suppliers, contract administrator, fixed network designers, and Owner. Direct daily activities of the construction field coordinators. Coordinators Manages and coordinates individual cell site construction. Prepares and executes the individual cell site schedule and monitors the contractors to assure they meet the schedule. Witness all milestone points during the site construction (i.e., Concrete pours, Sweep testing, Ground testing, final tower erection etc.). Final inspection of turnover package to assure completeness. Procurement Manager The Procurement Manager (PPM) is responsible to the PM for the establishment and implementation of procurement process procedures and for material and procurement tracking processes. The PPM is the person in the Project team assigned to establish on Owner's behalf the material and services supply purchase orders and contracts for the development of the project cell sites. Records Manager The Records Manager (PRM) is responsible to the PM for the identification and implementation of Project administrative procedures and processes. The PRM will manage the document control processes in the program office and the regional offices to ensure consistent and effective control of the Project documentation and communications. Regional Operations Manager Responsible for the overall Project and construction management as Tritel's authorized agent for the region build out. Manages and coordinates the work flow process through all phases of the build out (i.e., site acquisition, RF design, construction, testing and turnover). Responsible for informing contractors about, and monitoring contractors' compliance with, the Safety and Health plan and the Quality plan implemented by these contractors. Accountable to the Project Manager for management of the capital budget and project schedule for the region. C-2 EXECUTION COPY Contract Administrator Within the authorization limitations specified by Owner, the Contract Administrator is responsible for administration of all contracts; monitoring, evaluating and negotiating changes, claims and disputes with contractors; processing backcharges; managing the contractor invoice/payment process; coordinating final acceptance process; and contract closeout and processing warranty claims. Resident Engineer The Resident Engineer (RE) is the person responsible for the direct interface with the project A/E firms. The RE provides oversight of the A/E firms, reviewing the design/engineering products prepared by the firms for the project. The RE coordinates the efforts of the A/E firms to ensure the site development work proceeds in accordance with the Project schedule. Safety Manager Responsible for and informing contractors about, and monitoring contractors' compliance with, the Project Safety and Health Plan implemented by these contractors. Provide appropriate training throughout the Project regions. Visit the regions on a regular visit to monitor compliance with the Safety Plan or individual contractor's plans, if applicable. Accountants The Accountants assigned to the Project team are responsible to the PAM for the processing of project accounting data. In particular, they shall be responsible for the processing of invoices provided to the Project by its suppliers, and for the preparation and issue of invoices for Contractor services for payment by Owner. The accountants shall maintain the necessary accounting records to provide timely deposit of funds to the ZBA and to provide accounting for the disbursement of funds from the ZBA. Cost/Schedule Engineer The Cost/Schedule (C/S) Engineer is responsible to the PCM for implementation of Project control procedures, providing monitoring and reporting of resource expenditures as compared to Project budgets and, schedules. The C/S Engineer is responsible for maintaining the Cell Site Status System (CS3) database for the region. Purchasing Specialist/Material Supervisor The Purchasing Specialist/Material Supervisor is responsible to the PPM for the implementation of blanket procurement actions, securing the necessary materials and services for the development of Project cell sites. The Purchasing Specialist/Material Supervisor is also responsible for the establishment and maintenance of an inventory of construction spares in the regional office, to be used to maintain construction schedules in the event of material shortages at a site under construction. Standards/Design Engineer The Standards/Design Engineer is a resource employable from the Contractor office in Gaithersburg, MD to provide and maintain Project design standards and specifications to be used by the local A/E firms. CONFIDENTIAL C-3 EXECUTION COPY Regional Document Control The Regional Document Control is responsible for the establishment and operation of the document and correspondence control processes employed in the Regional offices to collect, categorize, file and maintain for turnover, the necessary documentation defining the Project cell sites. Accounts Payable Processor The Accounts Payable Processor is a specialized accounting position responsible for the processing of supplier invoices and maintaining and documenting the disposition of supplier invoices. Clerical Support The position Clerical Support refers to clerk and secretarial services which will be required by the Project to free the Project staff to perform the technical tasks essential to the implementation of the Project. These positions will be all local hires. C-4 EXECUTION COPY ATTACHMENT D STAFFING PLAN AND ESTIMATED ODCS (See attached) CONFIDENTIAL ATTACHMENT D STAFFING PLAN
- ----------------------------------------------------------------------------------------------- TRITEL STAFFING PLAN - ----------------------------------------------------------------------------------------------- 1998 1999 - ----------------------------------------------------------------------------------------------- MONTHS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 - ----------------------------------------------------------------------------------------------- POSITION Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - ----------------------------------------------------------------------------------------------- JACKSON PROGRAM OFFICE - ----------------------------------------------------------------------------------------------- Project Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Assistant Proj. Manager 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Engineering Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Controls Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contracts/QA Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Procurement Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Purchasing 0 1 1 1 1 1 1 1 1 1 1 1 1 1 Specialist/Material Supervisor - ----------------------------------------------------------------------------------------------- Safety Manager 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Records Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 10.5 12 12 12 12 12 12 11 11 11 11 11 11 11 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- JACKSON REGIONAL OFFICE - ----------------------------------------------------------------------------------------------- Regional Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Resident Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Field Coordinator 3 3 5 5 5 5 5 5 5 5 5 3 2 1 - ----------------------------------------------------------------------------------------------- Power Coordinator 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Regional Document Controls Manager 2 2 2 2 2. 2 2 2 2 2 2 2 2 2 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 11 12 16 16 16 16 16. 16 16 16 16 12 8 6 - ---------------------------------------------------------------------------------------------- 1 - ---------------------------------------------------------------------------------------------- KNOXVILLE REGIONAL OFFICE - ---------------------------------------------------------------------------------------------- Regional Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Resident Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Purchasing Special/Material Supervisor 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- Field Coordinator 1 3 5 7 7 7 7 7 7 7 7 4 2 1 - ---------------------------------------------------------------------------------------------- Power Coordinator 2 2 2 2 2 2 2 2 - ---------------------------------------------------------------------------------------------- Regional Document Controls Manager 2 2 2 2 2 2 2 2 2 2 2 2 2 2 - ---------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 1 1 - ---------------------------------------------------------------------------------------------- SUBTOTAL 8 12 14 19 19 19 19 19 19 19 19 13 9 8 - ---------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- 11/24/98 15:19 - ------------------------------------------------------------------------------- 2000 - ------------------------------------------------------------------------------- MONTHS 15 16 17 18 19 20 21 22 TOTAL - ------------------------------------------------------------------------------- POSITION Jan Feb Mar Apr May Jun Jul Aug JOBHOURS - ------------------------------------------------------------------------------- JACKSON PROGRAM OFFICE - ------------------------------------------------------------------------------- Project Manager 1 1 1 1 1 1 1 1 3.564 - ------------------------------------------------------------------------------- Assistant Proj. Manager 1,134 - ------------------------------------------------------------------------------- Engineering Manager 1 1 1 1 1 1 1 3.402 - ------------------------------------------------------------------------------- Operations Manager 2,268 - ------------------------------------------------------------------------------- Controls Manager 1 1 1 2,754 - ------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 3,633 - ------------------------------------------------------------------------------- Contracts/QA Manager 1 1 1 1 1 1 1 3,402 - ------------------------------------------------------------------------------- Procurement Manager 1 1 1 1 1 1 1 3,402 - ------------------------------------------------------------------------------- Purchasing 2,249 Specialist/Material Supervisor - ------------------------------------------------------------------------------- Safety Manager 2,336 - ------------------------------------------------------------------------------- Records Manager 1 1 1 1 3,114 - ------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 3,633 - ------------------------------------------------------------------------------- SUBTOTAL 8 8 8 7 6 6 6 1 34,891 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- JACKSON REGIONAL OFFICE - ------------------------------------------------------------------------------- Regional Operations Manager 2,076 - ------------------------------------------------------------------------------- Resident Engineer 2,422 - ------------------------------------------------------------------------------- Contract Administrator 1,903 - ------------------------------------------------------------------------------- Contract Administrator 1,903 - ------------------------------------------------------------------------------- Cost/Schedule Engineer 2,422 - ------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 2,076 - ------------------------------------------------------------------------------- Lead Field Coordinator 2,076 - ------------------------------------------------------------------------------- Field Coordinator 9,861 - ------------------------------------------------------------------------------- Power Coordinator 1,557 - ------------------------------------------------------------------------------- Regional Document Controls Manager 4,844 - ------------------------------------------------------------------------------- Clerical support 2,249 - ------------------------------------------------------------------------------- SUBTOTAL 0 0 0 0 0 0 0 0 33,389 - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- KNOXVILLE REGIONAL OFFICE - ------------------------------------------------------------------------------- Regional Operations Manager 2,076 - ------------------------------------------------------------------------------- Resident Engineer 2,422 - ------------------------------------------------------------------------------- Contract Administrator 1,903 - ------------------------------------------------------------------------------- Contract Administrator 1,903 - ------------------------------------------------------------------------------- Cost/Schedule Engineer 2,422 - ------------------------------------------------------------------------------- Purchasing Special/Material Supervisor 1,903 - ------------------------------------------------------------------------------- Lead Field Coordinator 2,422 - ------------------------------------------------------------------------------- Field Coordinator 12,456 - ------------------------------------------------------------------------------- Power Coordinator 2,768 - ------------------------------------------------------------------------------- Regional Document Controls Manager 4,844 - ------------------------------------------------------------------------------- Clerical support 1 2,249 - ------------------------------------------------------------------------------- SUBTOTAL 0 0 0 0 0 0. 0 0 37,368 - -------------------------------------------------------------------------------
1
- ----------------------------------------------------------------------------------------------- TRITEL STAFFING PLAN - ----------------------------------------------------------------------------------------------- 1998 1999 - ----------------------------------------------------------------------------------------------- MONTHS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 - ----------------------------------------------------------------------------------------------- POSITION Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - ----------------------------------------------------------------------------------------------- MONTGOMERY SATELLITE OFFICE - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Field Coordinator 1 1 2 2 2 2 2 2 2 2 1 1 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 1 3 3 4 4 4 4 4 4 4 4 1 0 0 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- HUNTSVILLE SATELLITE OFFICE - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Field Coordinator 1 1 2 2 2 2 2 2 2 2 1 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 1 3 3 4 4 4 4 4 4 4 4 1 0 0 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- LOUSVILLE/LEXINGTON REGIONAL OFFICE - ----------------------------------------------------------------------------------------------- Regional Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Resident Engineer 1 1 1 1 2 2 2 2 2 2 2 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Field Coordinator 2 3 4 6 6 6 6 6 6 6 6 6 2 - ----------------------------------------------------------------------------------------------- Power Coordinator 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Regional Document Controls Manager 2 2 2 2 2 2 2 2 2 2 2 2 2 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 2 8 11 12 14 15 17 17 18 18 18 18 18 11 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- NASHVILLE REGIONAL OFFICE - ----------------------------------------------------------------------------------------------- Regional Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Resident Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Field Coordinator 2 3 4 6 6 6 6 6 6 6 6 6 3 2 - ----------------------------------------------------------------------------------------------- Power Coordinator 2 2 2 2 2 2 2 - ----------------------------------------------------------------------------------------------- Regional Document Controls Manager 2 2 2 2 2 2 2 2 2 2 2 2 2 2 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 9 11 13 15 17 18 18 18 18 18 18 18 12 10 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- BIRMINGHAM REGIONAL OFFICE - ----------------------------------------------------------------------------------------------- Regional Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Resident Engineer 1 1 1 3 3 3 3 3 3 3 3 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- 2000 - ---------------------------------------------------------------------------------- MONTHS 15 16 17 18 19 20 21 22 TOTAL - ---------------------------------------------------------------------------------- POSITION Jan Feb Mar Apr May Jun Jul Aug JOBHOURS - ---------------------------------------------------------------------------------- MONTGOMERY SATELLITE OFFICE - ---------------------------------------------------------------------------------- Lead Field Coordinator 1,903 - ---------------------------------------------------------------------------------- Field Coordinator 3,287 - ---------------------------------------------------------------------------------- Clerical support 1,730 - ---------------------------------------------------------------------------------- SUBTOTAL 0 6,920 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- HUNTSVILLE SATELLITE OFFICE - ---------------------------------------------------------------------------------- Lead Field Coordinator 1,903 - ---------------------------------------------------------------------------------- Field Coordinator 3,287 - ---------------------------------------------------------------------------------- Clerical support 1,730 - ---------------------------------------------------------------------------------- SUBTOTAL 0 0 0 0 0 0 0 0 6,920 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- LOUSVILLE/LEXINGTON REGIONAL OFFICE - ---------------------------------------------------------------------------------- Regional Operations Manager 1 1 1 1 1 1 3,460 - ---------------------------------------------------------------------------------- Resident Engineer 1 1 1 1 1 4,152 - ---------------------------------------------------------------------------------- Contract Administrator 1,903 - ---------------------------------------------------------------------------------- Contract Administrator 1 1 1 1 1 1,903 - ---------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 3,287 - ---------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 1 1 1 1 1 2,249 - ---------------------------------------------------------------------------------- Lead Field Coordinator 2,422 - ---------------------------------------------------------------------------------- Field Coordinator 2 2 2 2 2 1 13,148 - ---------------------------------------------------------------------------------- Power Coordinator 1,384 - ---------------------------------------------------------------------------------- Regional Document Controls Manager 1 1 1 1 1 1 1 5,536 - ---------------------------------------------------------------------------------- Clerical support 2,249 - ---------------------------------------------------------------------------------- SUBTOTAL 8 8 8 8 8 4 0 0 41,693 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- NASHVILLE REGIONAL OFFICE - ---------------------------------------------------------------------------------- Regional Operations Manager 1 2,595 - ---------------------------------------------------------------------------------- Resident Engineer 2,422 - ---------------------------------------------------------------------------------- Contract Administrator 2,076 - ---------------------------------------------------------------------------------- Contract Administrator 1 1,730 - ---------------------------------------------------------------------------------- Cost/Schedule Engineer 1 2,595 - ---------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 1,903 - ---------------------------------------------------------------------------------- Lead Field Coordinator 2,422 - ---------------------------------------------------------------------------------- Field Coordinator 1 11,937 - ---------------------------------------------------------------------------------- Power Coordinator 2,768 - ---------------------------------------------------------------------------------- Regional Document Controls Manager 1 5,017 - ---------------------------------------------------------------------------------- Clerical support 2,249 - ---------------------------------------------------------------------------------- SUBTOTAL 5 0 0 0 0 0 0 0 37,714 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- BIRMINGHAM REGIONAL OFFICE - ---------------------------------------------------------------------------------- Regional Operations Manager 1 1 2,768 - ---------------------------------------------------------------------------------- Resident Engineer 5,190 - ---------------------------------------------------------------------------------- Contract Administrator 1 1 2,768 - ---------------------------------------------------------------------------------- Contract Administrator 1,903 - ---------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 2,768 - ---------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 2,076 - ----------------------------------------------------------------------------------
2
- ----------------------------------------------------------------------------------------------- TRITEL STAFFING PLAN - ----------------------------------------------------------------------------------------------- 1998 1999 - ----------------------------------------------------------------------------------------------- MONTHS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 - ----------------------------------------------------------------------------------------------- POSITION Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Field Coordinator 2 4 6 6 6 6 6 6 6 6 6 6 3 - ----------------------------------------------------------------------------------------------- Power Coordinator 2 2 2 2 2 2 2 2 2 2 - ----------------------------------------------------------------------------------------------- Regional Document Controls Manager 2 2 2 2 2 2 2 2 2 2 2 2 2 2 - ----------------------------------------------------------------------------------------------- Clerical support 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- SUBTOTAL 7 10 13 20 20 20 20 20 20 20 20 18 8 13 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- FREDERICK OFFICE - ----------------------------------------------------------------------------------------------- Accounting Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accountant 0.5 0.5 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounts Payable Processor 0 0.5 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounts Payable Processor 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounts Payable Processor 0 0 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Clerical support 0 0 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Design Engineering Supervisor 1 1 1 1 - ----------------------------------------------------------------------------------------------- Standards/Design Engineer 3 3 3 3 1 1 - ----------------------------------------------------------------------------------------------- Clerical Support - ----------------------------------------------------------------------------------------------- SUBTOTAL 6 7 8 8 5 5 6 6 6 6 6 6 6 6 - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- 2000 - ---------------------------------------------------------------------------------- MONTHS 15 16 17 18 19 20 21 22 TOTAL - ---------------------------------------------------------------------------------- POSITION N Jan Feb Mar Apr May Jun Jul Aug JOBHOURS - ---------------------------------------------------------------------------------- Lead Field Coordinator 1 1 2,768 - ---------------------------------------------------------------------------------- Field Coordinator 1 1 12,283 - ---------------------------------------------------------------------------------- Power Coordinator 3,460 - ---------------------------------------------------------------------------------- Regional Document Controls Manager 2 1 5,363 - ---------------------------------------------------------------------------------- Clerical support 1 2,422 - ---------------------------------------------------------------------------------- SUBTOTAL 8 6 0 0 0 0 0 0 43,769 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- FREDERICK OFFICE - ---------------------------------------------------------------------------------- Accounting Manager 1 1 1 1 1 3,287 - ---------------------------------------------------------------------------------- Accountant 0 1 1 1 1 1 2,768 - ---------------------------------------------------------------------------------- Accounts Payable Processor 1 1 1 0.5 0.5 2,509 - ---------------------------------------------------------------------------------- Accounts Payable Processor 0 1 1 1 0.5 0.5 3,028 - ---------------------------------------------------------------------------------- Accounts Payable Processor 1 1 1 0.5 0.5 2,422 - ---------------------------------------------------------------------------------- Clerical support 1 1 1 0.5 0.5 2,422 - ---------------------------------------------------------------------------------- Design Engineering Supervisor 692 - ---------------------------------------------------------------------------------- Standards/Design Engineer 2,422 - ---------------------------------------------------------------------------------- Clerical Support 0 - ---------------------------------------------------------------------------------- SUBTOTAL 6 6 6 4 4 0 0 0 19,549 - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------
3
- ----------------------------------------------------------------------------------------------- TRITEL STAFFING PLAN - ----------------------------------------------------------------------------------------------- 1998 1999 - ----------------------------------------------------------------------------------------------- MONTHS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 - ----------------------------------------------------------------------------------------------- POSITION Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - ----------------------------------------------------------------------------------------------- TOTAL PROJECT STAFFING - ----------------------------------------------------------------------------------------------- PROJECT MANAGER 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Assistant Proj. Manager/Business Manager 1 1 1 1 1 1 1 0 0 0 0 0 0 0 - ----------------------------------------------------------------------------------------------- Engineering Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Operations Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Controls Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounting Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accountant 0.5 0.5 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounts Payable Processor 0 0.5 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounts Payable Processor 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Accounts Payable Processor 0 0 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Clerical Support 0 0 0.5 0.5 0.5 0.5 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Contracts/QA Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Procurement Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 0 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Safety Manager 0.5 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Regional Operations Manager 5 5 5 5 5 5 5 5 5 5 5 5 3 3 - ----------------------------------------------------------------------------------------------- Resident Engineer 4 4 5 7 7 7 8 6 6 8 8 6 6 5 - ----------------------------------------------------------------------------------------------- Contract Administrator 4 4 5 5 5 5 5. 5 5 5 5 3 2 1 - ----------------------------------------------------------------------------------------------- Contract Administrator 0 0 1 3 3 4 4 4 6 6 5 5 5 4 - ----------------------------------------------------------------------------------------------- Cost/Schedule Engineer 4 5 5 5 5 5 5 5 5 5 5 5 5 5 - ----------------------------------------------------------------------------------------------- Purchasing 1 2 4 4 4 4. 5 5 5 5 5 5 3 2 Specialist/Material Supervisor - ----------------------------------------------------------------------------------------------- Lead Field Coordinator 7 7 7 7 7 7 7 7 7 7 7 5 4 4 - ----------------------------------------------------------------------------------------------- Field Coordinator 6 15 23 32 34 34 34 34 34 34 34 27 19 9 - ----------------------------------------------------------------------------------------------- Power Coordinator 0 0 1 5 7 8 8 8 8 8 8 5 3 30 - ----------------------------------------------------------------------------------------------- Records Manager 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - ----------------------------------------------------------------------------------------------- Regional Document Controls 8 10 10 10 10 10 10 10 10 10 10 10 10 10 Manager - ----------------------------------------------------------------------------------------------- Clerical support 1 8 8 8 8 8 8 8 8 8 8 6 6 6 - ----------------------------------------------------------------------------------------------- Design Engineering 1 1 1 1 0 0 0 0 0 0 0 0 0 0 Supervisor - ----------------------------------------------------------------------------------------------- Standards/Design Engineer 3 3 3 3 1 1 0 0 0 0 0 0 0 0 - ----------------------------------------------------------------------------------------------- TOTAL 55.5 78 93 110 111 113 116 115 116 116 116 98 82 65 - ----------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------- - --------------------------------------------------------------------------------- 2000 - --------------------------------------------------------------------------------- MONTHS 15 16 17 18 19 20 21 22 TOTAL - --------------------------------------------------------------------------------- POSITION Jan Feb Mar Apr May Jun Jul Aug JOBHOURS - --------------------------------------------------------------------------------- TOTAL PROJECT STAFFING - --------------------------------------------------------------------------------- PROJECT MANAGER 1 1 1 1 1 1 1 1 3,564 - --------------------------------------------------------------------------------- Assistant Proj. Manager/Business Manager 0 0 0 0 0 0 0 0 1,134 - --------------------------------------------------------------------------------- Engineering Manager 1 1 1 1 1 1 1 0 3,402 - --------------------------------------------------------------------------------- Operations Manager 0 0 0 0 0 0 0 0 2,268 - --------------------------------------------------------------------------------- Controls Manager 1 1 1 0 0 0 0 0 2,754 - --------------------------------------------------------------------------------- Cost/Schedule Engineer 1 1 1 1 1 1 1 0 3,633 - --------------------------------------------------------------------------------- Accounting Manager 1 1 0 0 0 3,287 - --------------------------------------------------------------------------------- Accountant 1 1 1 1 1 0 0 0 2,768 - --------------------------------------------------------------------------------- Accounts Payable Processor 1 1 1 0.5 0.5 0 0 0 2,509 - --------------------------------------------------------------------------------- Accounts Payable Processor 1 1 1 0.5 0.5 0 0 0 3,028 - --------------------------------------------------------------------------------- Accounts Payable Processor 1 1 1 0.5 0.5 0 0 0 2,422 - --------------------------------------------------------------------------------- Clerical Support 1 1 1 0.5 0.5 0 0 0 2,422 - --------------------------------------------------------------------------------- Contracts/QA Manager 1 1 1 1 1 1 1 0 3,402 - --------------------------------------------------------------------------------- Procurement Manager 1 1 1 1 1 1 1 0 3,402 - --------------------------------------------------------------------------------- Purchasing Specialist/Material Supervisor 0 0 0 0 0 0 0 0 2,249 - --------------------------------------------------------------------------------- Safety Manager 0 0 0 0 0 0 0 0 2,336 - --------------------------------------------------------------------------------- Regional Operations Manager 3 2 1 1 1 1 0 0 12,975 - --------------------------------------------------------------------------------- Resident Engineer 1 1 1 1 1 0 0 0 16,608 - --------------------------------------------------------------------------------- Contract Administrator 1 1 0 0 0 0 0 0 10,553 - --------------------------------------------------------------------------------- Contract Administrator 2 1 1 1 1 0 0 - --------------------------------------------------------------------------------- Cost/Schedule Engineer 3 2 1 1 1 1 0 0 13,494 - --------------------------------------------------------------------------------- Purchasing 1 1 1 1 1 0 0 0 10,207 Specialist/Material Supervisor - --------------------------------------------------------------------------------- Lead Field Coordinator 1 1 0 0 0 0 0 0 15,916 - --------------------------------------------------------------------------------- Field Coordinator 4 3 2 2 2 1 0 0 66,259 - --------------------------------------------------------------------------------- Power Coordinator 0 0 0 0 0 0 0 0 11,937 - --------------------------------------------------------------------------------- Records Manager 1 1 1 1 0 0 0 0 3,114 - --------------------------------------------------------------------------------- Regional Document Controls 4 2 1 1 1 1 0 0 25,604 Manager - --------------------------------------------------------------------------------- Clerical support 2 1 1 1 1 1 1 0 18,511 - --------------------------------------------------------------------------------- Design Engineering 0 0 0 0 0 0 0 0 692 Supervisor - --------------------------------------------------------------------------------- Standards/Design Engineer 0 0 0 0 0 0 0 0 2,422 - --------------------------------------------------------------------------------- TOTAL 35 28 22 19 18 10 6 1 262,213 - ---------------------------------------------------------------------------------
ATTACHMENT D ESTIMATED OCDS [CONFIDENTIAL TREATMENT REQUIRED] EX-10.25 26 SERVICES AGREEMENT SERVICES AGREEMENT THIS SERVICES AGREEMENT (this "Agreement"), dated as of the 28th day of July, 1998, is made by and between TRITEL COMMUNICATIONS, INC., a Delaware corporation ("Tritel"), and SPECTRASITE COMMUNICATIONS, INC., a Delaware corporation ("SpectraSite"). In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows: SECTION 1. THE SERVICES 1.1. SERVICES. SpectraSite will perform the services described on Exhibit A (the "Services") for Tritel (or subsidiaries or entities under common control with Tritel, as directed by Tritel) regarding the project described therein (the "Project") in accordance with the terms and conditions of this Agreement. SpectraSite will perform the Services in a professional, workmanlike manner, will exercise reasonable skill, care and diligence in the performance of the Services and will carry out its responsibilities in accordance with industry accepted good professional engineering practices and in compliance with all standards and rules reasonably established by Tritel from time to time; provided, however, that any timetables agreed to by SpectraSite shall be subject to appropriate adjustment in the event Tritel materially changes its established standards and rules. Unless otherwise agreed by Tritel in writing, SpectraSite will provide all personnel, equipment and supplies necessary or appropriate to perform the Services. 1.2. EXAMINATION OF THE SERVICES. SpectraSite has examined the applicable ordinances, rules and regulations, and has examined the markets where the Services will be provided and satisfied itself as to all conditions to be encountered in the performance of the Services; provided, however, Tritel acknowledges that such ordinances, rules and regulations may change from time to time and that such ordinances, rules and regulations may be subject to conflicting interpretations. SpectraSite shall not be liable to Tritel for any damages or delays which may be caused by changes in or ambiguities associated with such ordinances, rules and regulations. In any event, SpectraSite shall be entitled to rely upon the advice and opinions of counsel engaged by Tritel. 1.3. TIME IS OF THE ESSENCE. Upon execution of this Agreement, the parties shall promptly negotiate and establish a general overall progress schedule for the performance of the Services in all markets subject to this Agreement and completion of the Project, which schedule shall be supplemented (prior to commencing individual site Services in any market) with more detailed and mutually established market by market progress schedules (the general and more detailed progress schedules may be hereafter referred to collectively as the "Progress Schedule") which shall include a description of milestones marking the completion of certain successive phases of the Services (the 1 "Milestones"). The Progress Schedule, when executed by Tritel and SpectraSite, shall be deemed an addendum to this Agreement and become an integral part of this Agreement. The Progress Schedule may be amended by mutual agreement of Tritel and SpectraSite in writing. In the performance of SpectraSite's obligations under this Agreement, time is of the essence. SpectraSite agrees to see to the timely performance of the Services in accordance with the Progress Schedule and will not delay (beyond deadlines established in the Progress Schedule) or interfere with other portions of work on the Project. SpectraSite recognizes that Tritel will incur severe economic loss if the Project is not timely completed, and that SpectraSite will be responsible to compensate Tritel for such loss in accordance with Section 1.9 if SpectraSite does not comply with the Progress Schedule. 1.4. COMMENCEMENT AND PROGRESS. Upon execution of this Agreement, SpectraSite will commence providing preliminary Services to Tritel prior to the establishment of the Progress Schedule. Tritel shall compensate SpectraSite for such preliminary Services in accordance with Exhibit B. Upon Tritel and SpectraSite's mutual execution of the Progress Schedule, SpectraSite will commence providing Services within a market specified by Tritel within three (3) weeks after written notice from Tritel to SpectraSite, and shall provide the Services diligently and in accordance with the Progress Schedule. 1.5. PRIORITY OF SERVICES. Within the parameters of the Progress Schedule, Tritel shall have the right to decide the time, order and priority in which the various portions of the Services shall be performed and all other matters relevant to the timely and orderly conduct of SpectraSite's Services. 1.6. COORDINATION. SpectraSite shall cooperate with Tritel and all other contractors involved in the Project in the provision of the Services. Tritel shall cooperate with SpectraSite in connection with its provision of the Services, and shall instruct its contractors and agents involved in the Project to do likewise. 1.7. AUTHORIZED REPRESENTATIVE; PERSONNEL. SpectraSite shall designate one or more persons who shall be SpectraSite's authorized representative(s) on-site and off-site. Tritel shall have the right to approve any personnel (whether employees, contractors or otherwise) assigned by SpectraSite to perform any Services, which approval shall not be unreasonably withheld or delayed. 1.8. ASSIGNMENT AND SUBCONTRACTING. SpectraSite will not assign the work under this Agreement, or subcontract any portion of it, without the written consent of Tritel. Notwithstanding the foregoing, SpectraSite shall be entitled to enter into independent contractor relationships with agents to perform site acquisition 2 services. SpectraSite will not make any assignment of payments to be earned by SpectraSite under this Agreement without the prior written approval of Tritel. 1.9 CONSEQUENCES FOR DELAY. Except as noted below, in the event of a delay of SpectraSite referred to in Section 1.3, there shall be deducted from the Compensation payable to SpectraSite the following amounts: (a) a charge equal to [CONFIDENTIAL TREATMENT REQUESTED] per day per search ring for each day of delay in the Progress Schedule solely attributable to SpectraSite, subject to a maximum delay charge of [CONFIDENTIAL TREATMENT REQUESTED] per search ring. References to "search ring" shall mean any search rings as is issued by Tritel or its RF engineering contractor(s) or as such may be modified pursuant to mutual agreement of Tritel and SpectraSite. SpectraSite will be excused for any delay caused by acts of God, war (including civil war), civil unrest, acts of government (including moratoriums, changes in statutes, rules, ordinances or regulations, or changes in the interpretation or application of statutes, rules, ordinances or regulations), fire, floods, explosions, inclement weather, epidemics, quarantine restrictions, delays caused by Tritel or its vendors or other contractors, extraordinary delays caused by the review, negotiation and execution of leases by prospective lessors or other events beyond the control of SpectraSite. SpectraSite will be entitled to extensions of time for such delay only upon written notice to Tritel within ten (10) days after SpectraSite discovers that an event has occurred which will cause such delay. The foregoing sums represent the amount of liquidated damages which the parties have agreed upon as compensation to Tritel for any delay in placing Tritel's systems in commercial service in accordance with the Progress Schedule as a result of SpectraSite's delay or interference. The parties acknowledge that such sums represent a fair and equitable amount of compensation for delay in view of the impossibility of ascertaining actual damages. SECTION 2. COMPENSATION. 2.1. COMPENSATION. Tritel will pay SpectraSite for Services rendered and reimburse SpectraSite for expenses in accordance with Exhibit B (the "Compensation"). Any state and local sales or use taxes arising from Tritel's payment of the Compensation are not included and, if applicable, shall be payable by Tritel. 2.2. PAYMENT TERMS. SpectraSite will submit invoices to Tritel monthly. Tritel will remit all properly payable amounts within thirty (30) days of Tritel receipt of any such invoice unless Tritel elects the financing option set forth below. Tritel may elect to finance the payment of any service fees on a given invoice for a period of up to nine months, but Tritel shall not be allowed to finance any Reimbursable Expenses or Direct Expenses and those sums shall continue to be due and payable within thirty (30) days of the date of Tritel's receipt of SpectraSite's invoice. If Tritel so elects, it shall provide written notice to SpectraSite not later than thirty (30) days after receipt of the 3 invoice that Tritel wishes to finance and interest will begin to accrue on all charges set forth in any deferred invoice at a floating per annum rate equal to the prime rate of interest published in The Wall Street Journal plus three percent beginning on the thirty-first day following Tritel's receipt of any such invoice. Tritel agrees to execute a promissory note evidencing said indebtedness if such a request is made by SpectraSite. Tritel agrees that SpectraSite may accelerate the outstanding balance of any outstanding indebtedness together with accrued interest in the event of a breach or other default by Tritel under the terms of this Agreement or in the event that Tritel elects to terminate this Agreement pursuant to section 11 of this Agreement. Each invoice will describe in reasonable detail and with respect to the relevant invoice period a description of the Services provided. The Compensation shall not be altered except as specifically provided for in this Agreement. 2.3. INVOICE REPRESENTATION. All invoices must be accompanied by a representation and warranty of SpectraSite that all laborers, subcontractors, suppliers and others who might claim lien rights on the Project have been or will be timely paid in full. 2.4. PAYMENT NOT ACCEPTANCE. Payment to SpectraSite alone does not constitute or imply acceptance by Tritel of any portion of SpectraSite's Services. 2.5. SPECTRASITE PAYMENT FAILURE. If it appears to Tritel that the labor, material and other bills incurred in the performance of SpectraSite's Services (which if unpaid may give rise to lien rights or claims on the Project) are not being currently paid, Tritel may take such steps as it deems necessary to insure that the money paid to SpectraSite will be utilized to pay such bills. 2.6. BACK CHARGES AND WITHHOLDS. Tritel may withhold payments from SpectraSite in amounts that are sufficient to protect Tritel in the event of any of the following: (a) Any claims Tritel may have against SpectraSite arising out of other projects; (b) Reasonable evidence brought to Tritel's attention that any claims, demands, suits, attachments and/or liens are to be filed against SpectraSite which could potentially affect the Project; (c) Any bona fide claim or lien against Tritel or the premises upon which the Services were performed which arises out of SpectraSite's default in its performance of this Agreement. 4 2.7. FINAL PAYMENT. The final payment for any portion of the Project will be due when SpectraSite's Services relating to such portion of the Project have been completed and accepted by Tritel, which acceptance shall not be unreasonably withheld. For purposes of this Section 2.7, final payment shall be deemed to have been made upon Tritel's election to finance the charges subject to the final payment, effective upon Tritel's provision of notice of such election to SpectraSite. Prior to final payment SpectraSite shall submit to Tritel: (a) SpectraSite's affidavit that all payrolls, bills for materials and equipment, and other indebtedness connected with SpectraSite's Services regarding such portion of the Project for which Tritel or its property might in any way be liable, have been paid, or otherwise satisfied; and (b) Other data as reasonably required by Tritel, such as receipts, releases, and waivers of liens. SECTION 3. TERM. The term of this Agreement will commence on the date hereof and, unless otherwise earlier terminated pursuant to Section 11 or extended upon mutual agreement of the parties, will end upon the earlier of:(i) SpectraSite's completion and Tritel's acceptance of the Services; or (ii) three (3) years from the date of SpectraSite's commencement of Services in the last market of Tritel in the Project covered by this Agreement. SECTION 4. INDEPENDENT CONTRACTOR. SpectraSite will perform the Services as an independent contractor of Tritel, and this Agreement will not be construed to create a partnership, joint venture or employment relationship between SpectraSite and Tritel. SpectraSite will not represent itself to be an employee or agent of Tritel or enter into any agreement on Tritel's behalf or in Tritel's name, unless SpectraSite is specifically authorized in writing by Tritel to do so. SECTION 5. COMPLIANCE WITH LAWS. SpectraSite will at its own cost (a) comply with all federal, state and local laws, ordinances, regulations and orders with respect to its performance of the Services (collectively, the "laws", (b) file all reports relating to the Services (including, without limitation, tax returns), (c) pay all filing fees and federal, state and local taxes applicable to SpectraSite's business as the same shall become due, and (d) pay all amounts required under local, state and federal workers' compensation acts, disability benefit acts, unemployment insurance acts and other employee benefit acts when due, SpectraSite will provide Tritel with such documents and other supporting materials as Tritel may reasonably request to evidence SpectraSite's continuing compliance with this Section 5. SpectraSite is liable to Tritel for all fines and penalties attributable to any acts of commission or omission by SpectraSite, its employees and agents resulting from the failure to comply with laws. 5 SECTION 6. INSURANCE. SpectraSite will procure and maintain, during the term of this Agreement, insurance of the following types and coverage amounts: (a) Workers compensation insurance in accordance with the provisions of the applicable workers compensation or similar law of the state applicable to Contractor's personnel; (b) Comprehensive general liability insurance with minimum coverage of $1,000,000 combined single limit per occurrence for bodily injury or property damage; (c) Automobile liability insurance insuring all owned, non-owned and hired automotive equipment in minimum combined single limit amounts of $1,000,000; (d) Umbrella coverage of not less than $4,000,000 combined single limit in excess of the coverage required in subsections (b) and (c) above; (e) Errors and omissions coverage of not less than $1,000,000 per occurrence. Tritel shall be named as additional insured under the insurance required under subsections (b), (c), (d), and (e). SpectraSite shall provide Tritel with certificates of insurance evidencing the coverage required above. Such insurance will provide for 30 days prior written notice to Tritel in event of cancellation, non-renewal, or material changes in coverage. SECTION 7. CONFIDENTIAL INFORMATION. SpectraSite acknowledges that all documents and records containing Confidential Information, whether prepared by SpectraSite, Tritel or others, are the property of and belong to Tritel and shall be returned to Tritel upon request. No Confidential Information shall be used by SpectraSite for any purpose other than rendering the Services hereunder, and SpectraSite shall not disclose Confidential Information to others except as may be necessary to render the Services hereunder. This term shall survive the termination of this Agreement. This term "Confidential information" means information, except as may be properly in the public domain, about Tritel's projects, processes, management, operations, services, manufacturing, purchasing, accounting, marketing, merchandising, selling, research and development, any other information of a proprietary or competitively sensitive nature or such other information designated by Tritel in writing to be Confidential Information. Further, Tritel is a party to certain confidentiality and non-isclosure agreements with other vendors/service providers and, as a contractor of Tritel, SpectraSite may be granted access to certain confidential and proprietary information of such third parties. As to any such information provided to SpectraSite, it shall fully comply with all requirements of any confidentiality or non-disclosure agreements applicable to such information. SECTION 8. NO CONFLICTING OBLIGATIONS. 8.1. OTHER AGREEMENTS. SpectraSite's execution, delivery and performance of this Agreement will not violate any other employment, nondisclosure, confidentiality, consulting or other agreement to which SpectraSite is a party or by which it may be bound. 6 8.2. THIRD-PARTY CONFIDENTIAL INFORMATION. SpectraSite will not use, in the performance of the Services or the creation of any Proprietary Materials, or disclose to Tritel any confidential or proprietary information to any other person if such use or disclosure would violate any obligation or duty that SpectraSite owes to such other person. SpectraSite's compliance with this Section 8.2 will not prohibit, restrict or impair SpectraSite's performance of the Services and it's other obligations and duties to Tritel. SECTION 9. INDEMNIFICATION. SpectraSite shall indemnify, defend and hold Tritel (and Tritel's agents, legal representatives, officers, directors, shareholders and employees) harmless from all claims, damages, losses, costs, expenses (including attorneys' fees) and liabilities, including any amounts paid in satisfaction of judgments, in compromise or as fines and penalties, arising out of or resulting from any claim, action, investigation or other proceeding (including any proceeding by any of SpectraSite's employees, agents or subcontractors), actual or threatened, that is based upon (a) a default by SpectraSite in the performance of its obligations under this Agreement, (b) any representation or warranty of SpectraSite being untrue in any material respect, (c) the conduct of SpectraSite's business, (d) any negligent act or omission of SpectraSite, or (e) the infringement or misappropriation of any foreign or United States patent, copyright, trade secret or other proprietary right by the Proprietary Materials originating from SpectraSite. Tritel shall indemnify, defend and hold Tritel (and Tritel's agents, legal representatives, officers, directors, shareholders and employees) harmless from all claims, damages, losses, costs, expenses (including attorneys' fees) and liabilities, including any amounts paid in satisfaction of judgments, in compromise or as fines and penalties, arising out of or resulting from any claim, action, investigation or other proceeding (including any proceeding by any of Tritel's employees, agents or subcontractors), actual or threatened, that is based upon (a) a default by Tritel in the performance of its obligations under this Agreement or (b) any representation or warranty of Tritel being untrue in any material respect. SECTION 10. NONDISCLOSURE AGREEMENT. As a condition to Tritel's obligations under this Agreement, SpectraSite agrees to abide by all the terms and conditions of that certain Non-disclosure Agreement dated as of July 28, 1998 executed by and between Tritel and SpectraSite (the "Non-disclosure Agreement"). SECTION 11. TERMINATION. 11.1. TERMINATION FOR CAUSE. Tritel may terminate this Agreement upon an Event of Default (defined below), provided, however, that as to any of the matters set forth in subparagraphs (iii) through (vii) of Section 13: (a) Tritel sends written notice to SpectraSite describing the breach in reasonable detail, (b) SpectraSite does not cure the breach within thirty (30) days following its receipt of such notice, and (c) following the expiration of the thirty-day cure period, Tritel sends a second written notice to SpectraSite indicating Tritel's desire to terminate this Agreement. If an Event of Default results from any of the matters set forth in subparagraphs (i) and (ii) of Section 13, Tritel's 7 termination of this Agreement shall be effective upon giving notice of termination to SpectraSite. SpectraSite may terminate this Agreement upon Tritel's material breach of this Agreement, provided that (a) SpectraSite sends written notice to Tritel describing the breach in reasonable detail, (b) Tritel does not cure the breach within thirty (30) days following its receipt of such notice, and (c) following the expiration of the thirty-day cure period, SpectraSite sends a second written notice to Tritel indicating SpectraSite's desire to terminate this Agreement. 11.2. TERMINATION FOR CONVENIENCE. Either Tritel or SpectraSite may terminate this Agreement at any time upon thirty (30) days' written notice to the other (a "Termination for Convenience"). Upon a Termination for Convenience, SpectraSite shall be compensated for any Services rendered but which have not been paid ("Unpaid Services") on a time and materials basis as set forth in Exhibit B. 11.3. SURVIVAL. Sections 5 and 7 and Sections 9 through 24 (together with all other provisions of this Agreement that may reasonably be interpreted or construed as surviving termination of the Term) will survive the termination of the Term. SECTION 12. NOTICES. All notices given hereunder will be given (and shall be deemed to have been given upon receipt) in writing, will refer to this Agreement and will be personally delivered or by registered or certified mail (return receipt requested) to the address set forth below the parties' signatures at the end of this Agreement. Any party may from time to time change such address by giving the other party notice of such change in accordance with this Section 12. SECTION 13. EVENT OF DEFAULT. For the purposes of this Agreement, an "Event of Default" shall be if: (i) At any time there shall be filed by or against SpectraSite in any court a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of the property of SpectraSite, and within twenty (20) days from the filing date SpectraSite fails to secure a discharge; or (ii) SpectraSite makes an assignment for the benefit of creditors or petitions for or enters into an agreement or arrangement with its creditors; or (iii) SpectraSite materially fails to prosecute the Services in accordance with the Acceptance Criteria, and therefore, fails to complete the Services entirely on or before any date established in the Process Schedule for partial, substantial or final completion (except for delays for which SpectraSite is entitled to additional time); or 8 (iv) There is a breach of any of SpectraSite's representation or warranties contained in this Agreement or required to accompany any invoice rendered under this Agreement; or (v) SpectraSite fails to supply sufficient labor, material and/or equipment so as to complete the Services in accordance with the Progress Schedule, unless such delay is excused in accordance with Section 1.9; or (vi) SpectraSite performs defective work and fails to correct promptly and properly such defective work; or (vii) Without limitation, SpectraSite fails to perform any material provision of this Agreement. SECTION 14. ASSIGNMENT. SpectraSite may not assign this Agreement, in whole or in part, without Tritel's prior written consent. Tritel may assigns its rights hereunder to 9(a) any corporation or other entity resulting from any merger, consolidation or other reorganization to which Tritel is a party, (b) any corporation, partnership, association or other entity or person to which Tritel may transfer all or substantially all of the assets and business of Tritel existing at such time, or (c) any subsidiary of or entity under common control with Tritel. Notwithstanding any such assignment, Tritel shall remain fully liable for the performance of its duties hereunder. All the terms and provisions of this Agreement will be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. SECTION 15. PERSONNEL. The terms and conditions of this Agreement will be binding upon SpectraSite's employees, agents, subcontractors and affiliates. SECTION 16. WAIVERS. No delay or failure by any party hereto in exercising or enforcing any of its rights or remedies hereunder, and no course of dealing or performance with respect thereto, will constitute a waiver thereof. The express waiver by a party hereto of any right or remedy in a particular instance or will not constitute a waiver thereof in any other instance. All rights and remedies will be cumulative and not exclusive of any other rights or remedies. SECTION 17. AMENDMENTS. No amendment, waiver or discharge of any provision of this Agreement will be effective unless made in writing that specifically identifies this Agreement and the provision intended to be amended, waived or discharged and signed by Tritel and SpectraSite. Each such amendment, waiver or discharge will be effective only in the specific instance and for the specific purpose for which given. 9 SECTION 18. APPLICABLE LAW. This Agreement and each of the documents referred to herein shall be interpreted, construed, applied and enforced in accordance with the laws of the State of Mississippi, without regarding to any rules governing conflicts of laws. Any action to enforce arising out of, or relating in any way to, any of the provisions of this Agreement may be brought and prosecuted only within such court or courts located in the State of Mississippi as is provided by law; and the parties consent to the jurisdiction of said court or courts located in the State of Mississippi and the service of process by registered mail, return receipt requested, or by any other manner provided by law. SECTION 19. SEVERABILITY. If any provision of this Agreement is held invalid, illegal or unenforceable in any jurisdiction, for any reason, then, to the full extent permitted by law (a) all other provisions hereof will remain in full force and effect in such jurisdiction and will be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability will not affect the jurisdiction therefor will have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law. SECTION 20. ENTIRE AGREEMENT. This Agreement and the Non-disclosure Agreement, including the exhibits and schedules hereto and thereof, constitute the entire agreement between the parties with respect to their subject matters, and all prior or contemporaneous oral or written communications, understandings or agreements between the parties with respect to such subject matters are hereby superseded in their entireties. SECTION 21. DISPUTES. 21.1. AGREEMENT TO ARBITRATE. All claims, disputes and matters in question arising out of, or relating to, this Agreement or any claimed breach of this Agreement, except for claims of SpectraSite which have been waived by its acceptance of final payment, shall be decided by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable. 21.2. DEMAND FOR ARBITRATION. Notice of demand for arbitration shall be filed in writing with the other party to this Agreement and with American Arbitration Association. The demand for arbitration shall be made within thirty (30) days after written notice of the claim, dispute or other matter in question has been given, and in no event shall it be made after the time when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred 10 by the applicable statute of limitations, whichever occurs first. The location of the arbitration proceeding shall be Jackson, Mississippi. 21.3. AWARD. The award rendered by the arbitrator(s) shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction. 21.4. SAME ARBITRATORS. At the election of Tritel, any arbitration proceeding instituted by either party under this Agreement may be consolidated with any other arbitration proceeding then or thereafter pending between either party and any other person or entity if the respective arbitrations involve similar questions of fact or law or arise out of any work done or services supplied for the design or construction of the Project. 21.5. EXCEPTIONS. This agreement to arbitrate shall not apply to any claim of contribution or indemnity asserted by one party of this Agreement against the other party and arising out of an action brought in a state or federal court or in arbitration by a person who is under no obligation to arbitrate the subject matter of such action with either of the parties to this Agreement, or who does not consent to such arbitration. SECTION 22. COUNTERPARTS. This Agreement may be executed in two or more counterparts that together shall constitute a single agreement. SECTION 23. HEADINGS. The headings contained in this Agreement are for ease of reference and shall not affect the interpretation or meaning of this Agreement. SECTION 24. PUBLICITY. So long as this Agreement is in effect, neither SpectraSite, nor any of its affiliates, officers, directors, employees or agents shall issue any press release or otherwise make any public statement with respect to the existence of this Agreement or the subject matter of this Agreement without the prior written consent of Tritel. SECTION 25. LIMITATION OF LIABILITY. Except for the liquidated damages and other payment undertakings of SpectraSite as set forth in Section 1.9, expenses of arbitration and awards of attorneys fees and expenses, in no event shall SpectraSite be liable under this Agreement for: (i) special incidental or consequential damages (including loss of profits) regardless of legal theory advanced, whether foreseen or 11 unforeseen; or (ii) an amount exceeding the price of Services rendered through the date of any termination or expiration of this Agreement. SECTION 26. FORCE MAJEURE. In the event a party's performance of an obligation hereunder is rendered impossible or commercially impractical (rather than simply delayed) due to causes beyond its control and without its fault or negligence, including, but not limited to, acts of God, war (including civil war), civil unrest, acts of government (including moratoriums, changes in statutes, rules, ordinances or regulations, or changes in the interpretation or application of statutes, rules, ordinances or regulations), fire, floods, explosions, inclement weather, epidemics, quarantine restrictions, strikes or labor unrest (of third parties but not of such party), material shortage, or delays in transportation, such party's performance of such obligation shall be excused. The parties have executed this Agreement as of the date first set forth above. TRITEL COMMUNICATIONS, INC. By:_________________________________ Jerry M. Sullivan, Jr. Executive Vice President Chief Operating Officer ADDRESS: 1410 Livingston Lane Jackson, Mississippi 39213-8003 Attn.: Jerry M. Sullivan, Jr. SPECTRASITE COMMUNICATIONS, INC. By: -------------------------------- Name: Tracy E. Gill ------------------------------ Its: Vice President ------------------------------ ADDRESS: SpectraSite Communications, Inc. 11 Corporate Hill Drive, Suite 100 Little Rock, Arkansas 72205 Attn: Tracy E. Gill EXHIBIT A SCOPE OF WORK Following is the Scope of Services for the Tritel PCS system build-out. These outlined procedures are designed to reflect site acquisition from pre-deployment through delivery by SpectraSite of an approved site to the construction group. It is understood that this work shall be reimbursed on a time and materials basis pursuant to the fee schedule and expense responsibility set out in Exhibit B. It is further understood that this Scope of Work may be modified by mutual written agreement of the parties as the scope of services required expands. Services under this Agreement shall be rendered as, when and where requested by Tritel subject to required advance notice provisions set forth in the Agreement to which this Exhibit is attached. I. PRE-DEPLOYMENT SpectraSite shall coordinate strategic planning and procedure development for infrastructure development and coordination of Tritel, RF, site acquisition and construction as requested by Tritel. SpectraSite shall undertake any research and preparation of analysis of real estate, zoning, community issues, existing structures, municipal sites, etc. that Tritel shall request in the BTAs prior to actual site acquisition. Prior to commencing this work, SpectraSite shall prepare and Tritel shall acknowledge the scope of the work and the nature and format of the deliverables to Tritel or its designee. The priority and timing of this work shall be at Tritel's direction. SpectraSite shall provide suggested format for communication of all deliverable information. Tritel shall approve such format prior to the delivery. This work shall be performed on a time and materials basis pursuant to Exhibit B. II. INITIAL SEARCH Receive search area from Project Director or equivalent. Review with RF engineer if appropriate. Review and identify zoning categories and boundaries within the search area. Identify critical dates for zoning application filings and hearing dates. Drive search area. Look for existing towers or other structures of appropriate height in or around search area limits. Identify appropriate property owners within the search area through research of tax maps. Contact any appropriate existing tower owners, or building top owners first. Then contact remaining property owners. Investigate all appropriate lease or purchase options. Provide copies of sample lease or purchase documents where appropriate. 1 EXHIBIT A III. SITE OPTION REPORT Provide a Site Option Report to Tritel Director or equivalent. This memo should include the following information on a minimum of two sites; Regarding Zoning Identify potential opposition issues. Identify required approvals and associated application and hearing dates, etc. Establish potential lease/purchase price and terms. Contact name, phone number. Topographic maps representing each potential site, preliminary GPS coordinates and approximate elevation. Proposed tower height and recommended type. Site address and directions to site. Property size. Photographs of site and easements. Utility location information. Signed Option if possible at this time [ assuming Tritel is using the Option/Lease or Purchase method of securing prospective properties] Arrange site visits as necessary for team decision making. IV. SITE SELECTION Project Director will select a primary and an alternate site to be purchased (or leased). Proceed with negotiations for first and second site choices. Consult with approved attorneys regarding any legal changes to document. Consult with Project Director regarding significant deviations from approved business terms. Request preliminary title review for primary site. Coordinate with construction group to confirm necessary access easements for primary site. 2 EXHIBIT A Submit lease/purchase contract package to Project Director for review and signature. This package should include the following: Lease/purchase contracts, and access. Obtain final copy of title report and insurance for primary site. Coordinate any curative measures as needed. Environmental Phase I FAA consultant study and FAA application (if necessary) FCC tower registration (if necessary) V. ZONING Coordinate the completion and submission of appropriate applications for zoning, special use permits, etc. for primary site. Coordinate the organization of neighborhood meetings for addressing public opposition as needed. Coordinate preparation of appropriate presentation materials. Coordinate other professional presentations as needed. Coordinate attendance of necessary individuals at all zoning meetings. VI. MONITORING TIMELINE At least one weekly contact should be made with RF engineer to discuss site options until site is approved. SpectraSite designed timeline will be used to establish coordinated flow of project progress. Close purchase or lease as necessary. Notify Project Director (in written and in verbal form) when project is complete and construction may begin. VII. SITE INFORMATION PACKAGE Prior to construction, provide Tritel with one copy of a Project Completion File including: Original lease/purchase agreement Original easement agreements 3 All correspondence Site Option Report/photos, etc. Survey Geotechnical report Environmental report Title report and insurance policy FAA consultant study FAA approval 4 EXHIBIT B
- ---------------------------------------------------------------------------------------------------------------------------- TRITEL COMMUNICATIONS, INC. - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- DAY RATES FOR SPECTRASITE PERSONNEL - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- REGIONAL MANAGER [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- VICE PRESIDENT PROJECT DESIGN [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- PROJECT MANAGER [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- AGENT MANAGER [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- FIELD AGENT [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- ZONING COORDINATOR [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- LEASE COORDINATOR [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- OPERATIONS ASSISTANT [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- FIELD IMPLEMENTATION MANAGER [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- FIELD IMPLEMENTATION COORD [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- FIELD SPECIALIST [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- TITLE/CLOSING MANAGER [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- PRECONSTRUCTION RPTS MGR [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- OPERATIONS CLERK [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- DATABASE PROGRAMMER [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- Tritel Communications, Inc. - ---------------------------------------------------------------------------------------------------------------------------- SpectraSite Services - ---------------------------------------------------------------------------------------------------------------------------- Expense Reimbursement (at actual cost) - ---------------------------------------------------------------------------------------------------------------------------- Expense Direct - ---------------------------------------------------------------------------------------------------------------------------- Reimbursement Expense - ---------------------------------------------------------------------------------------------------------------------------- Cellular Phone and Pagers X - ---------------------------------------------------------------------------------------------------------------------------- Cellular Phone and Pagers Service X - ---------------------------------------------------------------------------------------------------------------------------- Expert Testimony (if necessary) X - ---------------------------------------------------------------------------------------------------------------------------- Field Exps: maps, deeds, films/processing, etc. X - ---------------------------------------------------------------------------------------------------------------------------- Lease Option Fees X - ---------------------------------------------------------------------------------------------------------------------------- Mileage - Project Related X - ---------------------------------------------------------------------------------------------------------------------------- Noise Assessment Studies X - ---------------------------------------------------------------------------------------------------------------------------- Office Equipment X - ---------------------------------------------------------------------------------------------------------------------------- Office Rent X - ---------------------------------------------------------------------------------------------------------------------------- Office Supplies X - ---------------------------------------------------------------------------------------------------------------------------- Overnight Mail Fees X - ---------------------------------------------------------------------------------------------------------------------------- Photo Simulation Fees X - ---------------------------------------------------------------------------------------------------------------------------- Recording Fees X - ---------------------------------------------------------------------------------------------------------------------------- Telephone Service Cost X - ---------------------------------------------------------------------------------------------------------------------------- Title Report Expenses X - ---------------------------------------------------------------------------------------------------------------------------- Tower Stress and Foundation Analysis X - ---------------------------------------------------------------------------------------------------------------------------- Travel & Living Costs for Infrastructure Psn. X - ---------------------------------------------------------------------------------------------------------------------------- Zoning Filing Fees - ---------------------------------------------------------------------------------------------------------------------------- Zoning Permit Fees X - ----------------------------------------------------------------------------------------------------------------------------
6 EX-10.26 27 ACQUISITION AGREEMENT #9152 REV. D Rev. D - -------------------------------------------------------------------------------- ACQUISITION AGREEMENT ERICSSON CMS 8800 CELLULAR MOBILE TELEPHONE SYSTEM TABLE OF CONTENTS ARTICLE 1 DEFINITIONS..................................................2 ARTICLE 2 SCOPE OF AGREEMENT...........................................6 ARTICLE 3 TERM OF AGREEMENT............................................8 ARTICLE 4 PRICES.......................................................8 ARTICLE 5 TERMS OF PAYMENT.............................................9 ARTICLE 6 ORDERS AND SCHEDULING.......................................10 ARTICLE 7 ORDER DELAY/CANCELLATION....................................12 ARTICLE 8 INSTALLATION................................................12 ARTICLE 9 ACCEPTANCE TESTING AND ACCEPTANCE...........................13 ARTICLE 10 DELAY.......................................................15 ARTICLE 11 PURCHASER'S AND SELLER'S RESPONSIBILITIES...................16 ARTICLE 12 LICENSES, PERMITS AND APPROVALS.............................17 ARTICLE 13 WARRANTIES..................................................17 ARTICLE 14 CONFIDENTIAL INFORMATION....................................23 ARTICLE 15 CONTINUITY OF EXPANSION FUNCTIONALITY.......................24 ARTICLE 16 AMENDMENTS..................................................24 ARTICLE 17 TITLE; RISK OF LOSS.........................................24 ARTICLE 18 INSURANCE...................................................25 ARTICLE 19 SOFTWARE....................................................26 ARTICLE 20 TAXES.......................................................27 ARTICLE 21 INDEMNIFICATION AND LIMITATION OF LIABILITY.................27 ARTICLE 22 INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT...................28 ARTICLE 23 DISPUTE RESOLUTION..........................................29 ARTICLE 24 TERMINATION AND DEFAULT.....................................30 ARTICLE 25 ADVERTISING.................................................32 ARTICLE 26 LATE PAYMENTS...............................................33 ARTICLE 27 PERSONNEL...................................................33 ARTICLE 28 ASSIGNMENT..................................................33 ARTICLE 29 NOTICES.....................................................33 ARTICLE 30 AUTHORITY AND COMPLIANCE WITH LAWS..........................34 ARTICLE 31 HEADINGS....................................................34 ARTICLE 32 GOVERNING LAW; SEVERABILITY.................................35 ARTICLE 33 NO WAIVER...................................................35 ARTICLE 34 ENTIRETY OF AGREEMENT; NO ORAL CHANGE.......................35 ARTICLE 35 ATTACHMENTS AND INCORPORATIONS..............................35 ARTICLE 36 FINANCING AND BOARD APPROVAL................................36 ACQUISITION AGREEMENT ERICSSON CMS 8800 CELLULAR MOBILE TELEPHONE SYSTEM This Agreement (the "Agreement"), is made and effective as of December 30, 1998 (the "Effective Date"), by and between TRITEL FINANCE, INC., a Delaware corporation, and TRITEL COMMUNICATIONS, INC., a Delaware corporation, with their principal places of business in Jackson, Mississippi (jointly, "PURCHASER") and ERICSSON INC., a Delaware Corporation acting through its Network Operators Group with its principal place of business in Richardson, Texas ("SELLER"). ARTICLE 1 DEFINITIONS As used herein: (a) "Affiliate" means any individual, corporation, partnership, joint venture, proprietorship, or other entity directly or indirectly owning, owned by or under common ownership with either party to the extent of more than fifty percent (50%) of the voting shares or controlling interests owned beneficially by such entity or party, as the case may be. (b) "AT&T Standards" means those certain core features, quality standards and technology requirements for Equipment and related Services and Software utilized in Tritel PCS Markets as specified in that certain Securities Purchase Agreement between Tritel, Inc., and AT&T Wireless PCS, Inc. and certain other parties dated May 20, 1998. (c) "Cause" means that degree of responsibility or causation equal to at least 66.67% of the responsibility for or cause of an event on a comparative basis. (d) "Cell Site" generally refers to a single physical location and enclosures thereof of one or more radio base stations (i.e., "cell(s)") in the System. (e) "Cell Site Configuration" means the Equipment, Software, Installation and other applicable Services rendered hereunder at a Cell Site required to operate and control a particular cell at a Cell Site. (f) "Cell Site Configuration Engineering" means the engineering required, on a site-specific basis, to establish the Cell Site Configuration Installation specifications, including; preparing Equipment lists, Equipment layout drawings, Equipment labels, cable ladder layout drawings, and "as-built" drawings and Documentation. Cell Site Configuration Engineering also includes the design for DC power distribution for Cell Site Configurations. (g) "Cell Site Facilities Engineering" means the engineering required to design a specific Cell Site, including; property surveys, soil reports, Cell Site layouts, drawings and specifications for the construction of the Cell Site, shelters, towers, generators, grounding analysis, and all other items required to make the Cell Site functional. Cell Site Facilities Engineering does not include Cell Site Configuration Engineering. 2 (h) "Civil Work" means the labor and materials necessary in the performance of demolition, construction and renovation work (e.g., roads, grading, fencing, structural improvements, etc.) at the MSC location and at each Cell Site to assure that each Cell Site and MSC location is ready for Installation of the Equipment. (i) "Civil Work Supervision" means the supervision of Civil Work. (j) "Confidential Matters" means all information about the business and financial matters (including costs, profits and plans for future development, training materials, Documentation, methods of operation and marketing concepts) and any other proprietary information relating to a party hereto or its Affiliates and their respective operations, businesses and financial affairs, that is obtained by the other party hereto as a result of the working relationship between the parties hereto with respect to the subject matter hereof, whether obtained prior to or after the date hereof; provided, however, that Confidential Matters shall not include information that (a) is or becomes generally available to the public other than as the result of wrongful disclosure by the recipient hereunder, its Affiliates or their respective representatives, or (b) was available to the recipient or its Affiliates or their respective representatives on a non-confidential basis prior to disclosure hereunder, or (c) is independently developed by the recipient hereunder, or (d) becomes rightfully available to the recipient from a third party that is under no obligation to maintain such information as confidential, or (e) is required to be disclosed through government regulation or court order. Recipient shall have the burden of proving by a preponderance of the evidence the applicability of any of the foregoing exceptions. (k) "Consent" means the prior written approval of a party to do the act or thing for which the consent or approval is solicited, or the act of granting such consent or approval, as the context may require, which consent or approval shall not be unreasonably withheld, conditioned or delayed. (l) "Documentation" means the documentation for the System described in Attachment E. (m) "Equipment" means the equipment specified in Attachment A to this Agreement and purchased from SELLER, and such other wireless telecommunications equipment as SELLER or its Affiliates may hereafter make available to PURCHASER and which PURCHASER hereafter orders from SELLER under this Agreement. Equipment does not include subscriber equipment, which shall mean mobile telephone handsets, mounting hardwire, test equipment, antennas and similar subscriber equipment. (n) "Facilities Preparation Services" means Civil Work, Civil Work Supervision, Ground Plan Architectural Work, Structural Architectural Work, and Utilities Work. (o) "FCC" means the Federal Communications Commission or any successor agency thereto. (p) "Ground Plan Architectural Work" means the preparation of architectural drawings necessary to obtain zoning permits and conditional use permits. 3 (q) "In Revenue Service" means the commercial use of the System, or a portion thereof, exclusive of operation for purposes of conducting Acceptance Tests. (r) "Initial Configuration" means the portion of the System, on a per market basis, which is intended by the parties to be constructed, Installed and operated as the primary phase of the System, as more specifically set out in Attachment A. Initial Configuration does not include expansions thereto (e.g., additional Cell Site Configurations or additional MSC Configurations). (s) "Installation" means the performance and supervision by SELLER of all installation purchased from and performed by SELLER of Equipment and Software and as further described in Article 8 and Attachment B. (t) "MSC" means Mobile Switching Center, which generally refers to the physical location and enclosures thereof. (u) "MSC Configuration" means the Equipment, Software, Installation and other applicable Services rendered hereunder at an MSC required to operate and control the MSC Configuration as the switching function of the System. (v) "MSC Configuration Engineering" means the engineering required to establish the MSC Configuration Installation specifications, including; preparing Equipment lists, Equipment layout drawings, Equipment labels, cable tray layout drawings, and "as-built" drawings and Documentation. MSC Configuration Engineering also includes the design for DC power distribution for MSC Configurations. (w) "MSC Facilities Engineering" means the engineering required to design a specific MSC, including; property surveys, soil reports, building layouts, drawings and specifications for the construction of the building, towers, generators, grounding analysis, and all other items required to make the MSC functional. MSC Facilities Engineering does not include MSC Configuration Engineering. (x) "Network Element" means Equipment and Software required to perform switching or network node functions for a System (e.g., Authentication Center, Equipment Identity Register, Messaging System, Mobile Switching Center/Visitor Location Register, Mobile Intelligent Network, Service Signaling Point Home Location Register, Service Control Point, Signal Transfer Point, MSC, Short Message Service, Mobile Data Network Intermediate System, Mobile Data Base Station, Network Management Server). (y) "Notice" means a writing containing the information required by this Agreement to be communicated to either party hereto, sent by (a) registered or certified mail, postage prepaid, (b) personal delivery, (c) confirmed air courier, or (d) by facsimile transmittal to such party at the address provided herein. (z) "Operations Support System Services" means a combination of hardware and software platforms that provide tools for operating, maintaining, analyzing and provisioning the System, as further described in Attachment I. 4 (aa) "Order" means PURCHASER's purchase order generated as detailed in Article 6, which is accepted by SELLER, or any document that the parties mutually agree upon as the vehicle for procuring Equipment, Software and Services pursuant to this Agreement. (bb) "Professional Services" means those services offered by SELLER relating to System design, enhancement and optimization as set forth in Attachment N. (cc) "Software" means all software furnished hereunder including, but not limited to, computer programs contained on a magnetic or optical storage medium, in a semiconductor device, or in another memory device or system memory consisting of (i) hardwired logic instructions which manipulate data in central processors, control input-output operations, and error diagnostic and recovery routines, and (ii) instruction sequences in machine-readable code that control call processing, radio infrastructure, peripheral equipment and administration and maintenance functions. The term "Software" includes all Software Updates, Software Enhancements, and Software Features. (dd) "Software Enhancements" means modifications or improvements made to the Software which improve performance or capacity of the Software, but shall not include Software Updates. (ee) "Software Features" means distinct programs which constitute additional functions to the Software. (ff) "Software Updates" means periodic updates to the Software issued by SELLER to correct defects in the Software, but shall not include Software Enhancements. (gg) "Specifications" means the specifications and performance standards of the Equipment, Software and the System as set forth in the SELLER's Documentation. Specifications shall also include any specifications and performance standards delivered to PURCHASER by SELLER in the future, which relate to the System, Equipment or Software; however, no future specifications or performance standards shall reduce, diminish or otherwise adversely impact previously delivered specifications. (hh) "Structural Architectural Work" means the preparation of all architectural drawings and blueprints relating to the structural specifications for the MSC and/or Cell Sites. (ii) "System" means the Initial Configuration and all expansions thereto purchased by PURCHASER from SELLER pursuant to this Agreement, including all Equipment, Software, Installation and other Services purchased from SELLER by PURCHASER hereunder relating to the System. (jj) "System Support Services" means those services to be provided by SELLER to PURCHASER for maintenance of Equipment and Software as described further in Attachment D. 5 (kk) "Services" means Cell Site Configuration Engineering, Cell Site Facilities Engineering, Civil Work, Civil Work Supervision, Facilities Preparation Services, Ground Plan Architectural Work, Installation, Network Element Configuration Engineering, Network Element Facilities Engineering, Network Services, RF Services, Structural Architectural Work, Support System Services, Technical Education, Transmission Services and all other services as SELLER provides or makes available to its customers, and which are more fully described in Attachment N. (ll) "Technical Education" means the training courses offered by SELLER as set forth in Attachment C. (mm) "Tritel PCS Markets" means those areas within the customer markets set forth in Attachment K in which PURCHASER or its Affiliates has FCC licenses to provide PCS services. (nn) "Utilities Work" means the installation of electric and telephone utilities at the MSC and Cell Sites. Unless the context otherwise requires, the terms defined in Article I hereof or herein shall have the meanings therein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms defined herein. When a reference is made in this Agreement to a paragraph, such reference shall be to a paragraph of this Agreement unless otherwise indicated. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation". The use of a gender herein shall be deemed to include the neuter, masculine and feminine genders wherever necessary or appropriate. Whenever the word "herein" is used in this Agreement, it shall be deemed to refer to the Agreement and not to a particular paragraph of the Agreement unless expressly stated otherwise. ARTICLE 2 SCOPE OF AGREEMENT 2.1 Upon the terms and conditions herein set forth, PURCHASER hereby agrees to purchase from SELLER, and SELLER hereby agrees to sell, deliver, provide to PURCHASER and install in the Tritel PCS Markets, the Initial Configuration of the System, including the Equipment and Software and Installation therefor, as well as Documentation, Cell Site Configuration Engineering, MSC Configuration Engineering, Operations Support System Services, System Support Services, Professional Services and the other Services described herein which may be ordered by PURCHASER as part of the Initial Configuration. SELLER shall render such Services provided that PURCHASER is in compliance in all material respects with its obligations and requirements under this Agreement. At PURCHASER's option, additional markets may be designated for inclusion within the scope of this Agreement with SELLER's prior written Consent and utilizing the same pricing as provided for the Initial Configuration of the System. 2.2 The commitments of the Parties with respect to this Agreement or any Order thereunder shall be expressly conditioned upon PURCHASER having obtained and maintained an 6 effective FCC license as aforesaid and financing for the Market Area referenced in said Order. 2.3 During the Term of this Agreement, PURCHASER agrees to purchase a minimum of [CONFIDENTIAL TREATMENT REQUESTED] of Equipment, Software and Services from SELLER and to utilize SELLER as its exclusive Equipment provider in the Tritel PCS Markets, for all Expansions of Equipment and Software to the Initial Configuration. PURCHASER's minimum purchase commitment and grant of exclusivity is conditioned upon (i) SELLER continuing to make available to PURCHASER sufficient quantities of Equipment and Software, under the terms and conditions of this Agreement, to meet PURCHASER's needs, (ii) SELLER's compliance with this Agreement in all material respects, (iii) SELLER's continued ability to provide PURCHASER with first class quality, state of the art Equipment, Software and Services, (iv) SELLER's compliance in all material respects with any FCC requirements for its Equipment, Software and Services, and (v) SELLER's ability to provide Equipment, Software and Services which will enable PURCHASER to meet the AT&T Standards in all material respects. For purposes of this Section 2.3, "state of the art" means Equipment or Software, as applicable, which is the general functional equivalent in features, size and performance with equipment offered by any other PCS equipment vendor for sale in the United States. 2.4 SELLER shall, in accordance with the procedures set forth in Article 6, make available to PURCHASER Cell Site Facilities Engineering, Facilities Preparation Services, MSC Facilities Engineering, Professional Services, and such other Services as SELLER may from time to time offer to its customers. 2.5 SELLER hereby agrees to provide, upon request of PURCHASER, Technical Education in accordance with Attachment C, System Support Services in accordance with Attachment D and Installation for any Equipment and Software purchased under this Agreement. 2.6 PURCHASER hereby engages Seller to provide Installation for any MSC purchased under this Agreement. 2.7 SELLER will furnish PURCHASER, at no charge, one (1) set of Documentation (CD-ROM) as set forth in Attachment E for each of PURCHASER's MSC and Home Office locations. 2.8 Within a reasonable time after the Effective Date, SELLER shall, at no expense to PURCHASER, establish a Key Account Management ("KAM") organization. The KAM organization shall be located in offices in the metro Jackson, Mississippi area and shall be staffed at levels mutually agreeable to the parties hereto, and shall be provided to PURCHASER for the Term of this Agreement. 2.9 All Equipment and Software purchased by PURCHASER hereunder, other than Equipment purchased for repair and maintenance purposes, shall be new. For purposes of this Section 2.9 "new" shall mean Equipment and Software which has not been used In Revenue Service or for training or extended testing. 7 ARTICLE 3 TERM OF AGREEMENT This Agreement shall commence on the Effective Date hereof and continue for a period of five (5) years (hereinafter, the "Term") unless terminated on an earlier date as provided herein, except as to those provisions which by their express terms survive such termination. ARTICLE 4 PRICES 4.1 The prices, fees and discount schedules for the Initial Configuration, including the Equipment, Software, Installation, test equipment and spare parts, are set forth in Attachment A. Any such prices not set forth in Attachment A shall be no greater than SELLER's ATP Prices (as defined in Attachment A) in effect during the time of this Agreement, less any applicable discounts. SELLER represents, warrants and covenants to PURCHASER that ATP Partner Prices are and shall, for the Term be no greater than SELLER's United States list prices. 4.2 The prices, fees and discount schedules for Equipment, Software and Services ordered by PURCHASER for expansions to the Initial Configuration shall be those set forth in Attachment A, subject to the price variation provisions contained in Attachment O. Prices for Equipment, Software, Documentation and Services not set forth in Attachments A, C, and D, if not otherwise set forth in this Agreement, shall be no greater than SELLER's ATP Partner prices in effect at the time of ordering by PURCHASER. 4.3 The unit prices of the Equipment are delivered prices, with the Equipment delivered by common carrier to PURCHASER's job site. Notwithstanding the foregoing, if the Equipment is delivered to SELLER's storage facility prior to delivery to the job site, SELLER shall be responsible for any ordinary common carrier charges to deliver the Equipment from the storage facility to the job site. PURCHASER will be responsible for any additional abnormal costs for delivery by private or contract carriers (e.g., helicopter, cranes for high-rise buildings, permits to close roads). 4.4 The prices, fees and applicable discount schedules for Operations Support System Services are set forth in Attachment I. 4.5 The prices, fees and applicable discount schedules regarding Technical Education are specified in Attachment C. 4.6 If applicable, the prices, fees and applicable discount schedules regarding System Support Services is specified in Attachment D. 4.7 The prices, fees and applicable discount schedules regarding Professional Services are set forth in Attachment N. 4.8 The prices of Cell Site Facilities Engineering, MSC Facilities Engineering, and Cell Site Configuration Engineering (if Installation is not furnished by or purchased from SELLER) shall be determined by SELLER on a quote basis, but is subject to the application of the discounts referred to in Attachment A. 8 4.9 The price for Facilities Preparation Services shall be determined in accordance with the procedure set forth in paragraph 6.4. ARTICLE 5 TERMS OF PAYMENT 5.1 PURCHASER shall pay for the Initial Configuration Equipment and Software, in cash, as follows: (a) [CONFIDENTIAL TREATMENT RE QUESTED] of the mutually agreed-upon estimate of the total price of the Initial Configuration Equipment and Software shall be paid within thirty (30) days of (i) the Effective Date, or (ii) the closing of the SELLER finance facilities (described in Article 36), whichever is later, and invoice therefor; (b) An additional [CONFIDENTIAL TREATMENT REQUESTED] shall be paid within thirty (30) days of delivery to the location(s) specified in the applicable order within the Tritel PCS Markets and invoice therefor; (c) An additional [CONFIDENTIAL TREATMENT REQUESTED] shall be paid within thirty (30) days of Acceptance of the Initial Configuration as provided in paragraph 9.2 and invoice therefor; (d) The balance shall be due thirty (30) days from the correction of all Punch List items pertaining to such Network Element and invoice therefor. 5.2 PURCHASER shall pay for the Initial Configuration Installation, in cash, as follows: (a) [CONFIDENTIAL TREATMENT REQUESTED] shall be paid within thirty (30) days of Acceptance as provided in paragraph 9.2 and invoice therefor; (b) On a site-by-site basis, the balance shall be paid within thirty (30) days from the correction of all punch list items and invoice therefor. 5.3 PURCHASER shall pay the price in full for any Equipment and Software ordered for expansions to the Initial Configuration, in cash, within thirty (30) days after delivery and invoice therefor, unless any such expansion is installed by SELLER as a significant expansion, then in such case, within thirty (30) days after Acceptance and invoice therefor. 5.4 PURCHASER shall pay the price in full of Installation ordered for expansions to the Initial Configuration within thirty (30) days after Acceptance of the Equipment and Software installed and invoice therefor. 5.5 PURCHASER shall pay for Operations Support System Services in accordance with the terms set forth in Attachment I. 5.6 PURCHASER shall pay the price in full of each Technical Education course within thirty (30) days after completion and invoice therefor. SELLER hereby grants PURCHASER 9 an education and training credit equal to [CONFIDENTIAL TREATMENT Requested] to be used during the Term of this Agreement, but in no event shall usage of the credit exceed [CONFIDENTIAL TREATMENT REQUESTED] during the first year of the Term.. 5.7 Following the period in which System Support Services are provided to PURCHASER without charge, PURCHASER shall pay for System Support Services, in arrears, within thirty (30) days after invoice therefor. 5.8 PURCHASER shall pay for all other Services, including Facilities Preparation Services, Professional Services, Cell Site Facilities Engineering, MSC Facilities Engineering, and Cell Site Configuration Engineering (if Installation is not purchased from SELLER), within thirty (30) days after completion and invoice therefor. ARTICLE 6 ORDERS AND SCHEDULING 6.1 Attachment H sets forth all final engineering and preparatory details, and the time schedule therefor, necessary for delivery and Installation of the Initial Configuration. PURCHASER and SELLER shall be responsible for the successful completion of their respective responsibilities as set forth in Attachment F. 6.2 When PURCHASER desires to place an Order with SELLER for Equipment or Software for an expansion or improvement of the Initial Configuration, PURCHASER shall submit to SELLER the information reasonably necessary for the furnishing by SELLER of a proposal. SELLER shall within fifteen (15) working days, generate a proposal including documents corresponding to separate Attachments A, F and H for each such request which proposal shall include all applicable discounts. Upon acceptance of any such proposal by PURCHASER, PURCHASER and SELLER shall be responsible for the successful completion of their respective items according to the schedule therein set forth. 6.3 When PURCHASER desires to place an Order with SELLER for Professional Services, PURCHASER shall submit to SELLER all information in PURCHASER's possession or any information requested by SELLER reasonably necessary for the furnishing by SELLER of a proposal. Within fifteen (15) working days, thereafter, SELLER shall generate a proposal including a scope of work and schedule for each such request which proposal shall include a staffing schedule and a "not to exceed" price. Upon acceptance of any such proposal by PURCHASER, PURCHASER and SELLER shall be responsible for the successful completion of their respective items according to the schedule therein set forth. 6.4 (a) When PURCHASER desires to place an Order for any Facilities Preparation Services, PURCHASER shall submit to SELLER all information in PURCHASER's possession reasonably requested by SELLER necessary for the furnishing by SELLER of a proposal. SELLER shall within fifteen (15) working days, generate a proposal for each Facilities Preparation Service, which bid shall include the complete purchase price of such service, including, without limitation, all costs of equipment, materials and supplies, labor, transportation and other 10 related costs, terms of payment, and completion dates for such Services as well as a staffing schedule and a "not to exceed" price. In the case of any Facilities Preparation Service performed in accordance with this paragraph 6.4(a), SELLER shall be responsible for the execution, delivery, and timely performance of such Facilities Preparation Service. Upon acceptance of any such proposal by PURCHASER, SELLER shall render the applicable Facilities Preparation Services in accordance with the schedule therein set forth. (b) If PURCHASER rejects a proposal for Facilities Preparation Services submitted by SELLER under paragraph 6.4(a) above, PURCHASER may elect (i) to perform such Services itself, (ii) to have such Services performed on its behalf by a direct subcontractor of PURCHASER, or (iii) subject to SELLER's approval, which may be granted or withheld in SELLERS reasonable discretion, designate a third party subcontractor as the subcontractor of SELLER to perform such Services. (c) In the case of any Facilities Preparation Services performed pursuant to clauses (i) and (ii) of paragraph 6.4(b) above, SELLER shall have no responsibility whatsoever for such Services, notwithstanding that such Services may have been performed in accordance with suggestions from SELLER. (d) In the case of any Facilities Preparation Services performed in accordance with clause (iii) of paragraph 6.4(b) above, SELLER shall be responsible for the execution, delivery, and performance of such Services, but shall accept no responsibility for any delays of the third party subcontractor unless the subcontractor is selected or approved by SELLER. SELLER shall invoice PURCHASER the amounts charged by such subcontractor plus a fee to be mutually agreed upon by the parties, but not to exceed sixteen percent (16%) of the subcontractor's price as compensation for SELLER's role as prime contractor 6.5 Proposals submitted by SELLER pursuant to paragraphs 6.2 through 6.4 may be accepted by PURCHASER by issuance of PURCHASER's Order referencing or incorporating the proposal. SELLER shall acknowledge receipt of PURCHASER's Orders within three (3) working days. Orders issued pursuant to this Agreement shall be governed by and performed in accordance with the terms and conditions of this Agreement, unless the parties mutually agree otherwise in accordance with Article 16. 6.6 (a) Subject to Section 6.6(b), SELLER agrees to deliver Equipment and Software and perform Installation in accordance with Orders submitted by PURCHASER to SELLER, which Orders shall be in accordance with SELLER's standard delivery and Installation lead times being quoted at the time such Order is placed by PURCHASER (or, if shorter, delivery and lead times set forth in Attachment A), to SELLER's most favored customers under comparable conditions, which lead times shall in no event be greater than the lead times specified in Attachment A hereto. 11 (b) All Orders that are within SELLER's delivery and Installation lead times (as described in Section 6.6(a) above), and which are otherwise in accordance with the terms of this Agreement, shall be deemed automatically accepted upon receipt by SELLER. Should SELLER receive an Order with lead times that are shorter than SELLER's the above lead times, SELLER shall, within fifteen (15) working days, indicate in writing to PURCHASER whether such shortened lead times are acceptable. If SELLER shall deem a shortened lead time unacceptable, the parties hereto shall endeavor to agree upon lead times that are mutually acceptable. Should SELLER not notify PURCHASER of its non-acceptance of a shortened lead time within fifteen (15) working days of its receipt of the Order containing the shortened lead time, such Order shall be deemed accepted without any further confirmatory action by either party. 6.7 No provisions or data on an Order or in subordinate documents (such as shipping releases) or any form originated by PURCHASER or SELLER shall be incorporated in this Agreement unless the provisions or data merely supply information contemplated by this Agreement but do not vary the provisions of this Agreement. Whenever any such provisions conflict with this Agreement, this Agreement shall control unless the parties expressly otherwise agree in writing. ARTICLE 7 ORDER DELAY/CANCELLATION 7.1 By providing Notice at least forty-five (45) days prior to the scheduled delivery of any Order or combination of Orders, PURCHASER may, without penalty or additional cost direct in writing that SELLER's delivery of such Order(s) be delayed by not more than one hundred twenty (120) days, except that PURCHASER may exercise such delay directive one time only during the Term of this Agreement. PURCHASER may at any time prior to delivery of the applicable Equipment or Software, cancel, in whole or in part, any Order other than (a) the Initial Configuration, (b) any Order for an MSC Configuration, or (c) any Order after Installation of ordered items has materially commenced, even if delivery of the entire Order has not been completed. In the event of a cancellation permitted hereunder, PURCHASER shall pay to SELLER Order cancellation charges in accordance with Attachment Q. PURCHASER reserves the right, without penalty or additional cost, to direct changes in the scheduled delivery location of any Order(s) so long as such changes are communicated to SELLER at least ten (10) working days prior to the scheduled delivery. 7.2 PURCHASER may, at any time prior, to their completion, cancel any Services ordered hereunder which are optional and not part of the Initial Configuration; provided, however, that PURCHASER shall pay SELLER for all Services performed prior to such cancellation at the prices set forth in Attachment A or as otherwise agreed. ARTICLE 8 INSTALLATION 8.1 (a) As provided in Attachment F, either PURCHASER or SELLER shall install the Equipment and Software at the sites to be selected by PURCHASER so as to be ready for Acceptance Tests with regard to the Initial Configuration in accordance 12 with the procedures set forth in the applicable provisions of SELLER's then current installation manual(s) and the time schedule set forth in Attachment H. (b) When Installation of Equipment or Software not comprising part of the Initial Configuration of a System is ordered by PURCHASER from SELLER, SELLER shall Install the Equipment and Software at the sites to be selected by PURCHASER in accordance with (i) Installation specifications prepared by SELLER, and (ii) the time schedules set forth in the applicable Attachment H. (c) SELLER shall perform Installation, activation of Software and any other Services ordered hereunder, with regard to a System or other systems networked to the System, so as to cause no unreasonable interference with service to subscribers, System performance, billing, administration or maintenance. SELLER shall (i) advise PURCHASER whenever such Installation, activation of Software or other Services will or are likely to cause such interference to a System or such networked systems, and (ii) use its reasonable best efforts to work with PURCHASER to prevent or minimize such interference. 8.2 As provided in Attachment F, either PURCHASER or SELLER shall install the System so as to cause no unreasonable interference with or obstruction to lands and thoroughfares or rights of way on or near which the Installation work may be performed. The party installing the Equipment shall exercise every reasonable safeguard to avoid damage to existing facilities, and if repairs or new construction are required in order to replace facilities damaged by the party installing the Equipment due to its carelessness or negligence, such repairs or new construction shall be at the installing party's own expense. ARTICLE 9 ACCEPTANCE TESTING AND ACCEPTANCE 9.1 Attached as Attachment J are descriptions of acceptance testing ("Acceptance Tests") to be conducted, and deliverables related thereto (e.g., test results, inventory reports, Acceptance Certificates, initial tests, RF call tests, RF tuning, handoff tests, border tests), regarding Installation of the Initial Configuration Equipment and Software (and, as applicable, regarding Installation of Equipment and Software added to the Initial Configuration) to demonstrate that the Equipment and Software installed by SELLER will operate in accordance with the requirements of this Agreement and the Specifications. Such Acceptance Tests shall include separate procedures for testing (i) Cell Site Configuration Installation and integration, (ii) MSC Configuration Installation and integration, and (iii) System radio frequency coverage, radio network initial tuning and handoff parameters. 9.2 (a) SELLER shall notify PURCHASER as soon as it knows, but at least ten (10) days before, the date on which Acceptance Tests shall be conducted. Not more than once for each identical set of Acceptance Tests and at least twenty (20) days before any Acceptance Test is conducted, SELLER shall provide PURCHASER with detailed test instructions, procedures and schedules relating to the scheduled Acceptance Test. At the first practicable date thereafter, SELLER and 13 PURCHASER shall each sign off on any pretest forms provided as part of the particular Acceptance Test being conducted. If PURCHASER or its nominee does not attend the Acceptance Tests, SELLER shall proceed with the tests and immediately forward the test results to PURCHASER. (b) If the Equipment, Software or the System, as a whole, comprising the Initial Configuration does not fulfill the requirements of the Acceptance Tests, SELLER shall, at its expense, correct the defects as soon as practicable; provided, however, that SELLER shall not be obligated to correct deficiencies in the System Caused by PURCHASER's radio frequency design for the System. SELLER shall also provide PURCHASER with detailed documentation of the severity of any defect, the impact upon system functionality and performance and the targeted date by which SELLER expects to remedy the defect. The Acceptance Tests (or so much of them as necessary) shall be recommenced immediately after such correction in accordance with this Article 9. (c) Upon the successful completion of any Acceptance Tests conducted by SELLER, SELLER shall submit to PURCHASER an Acceptance Certificate certifying (i) successful completion of the Acceptance Tests, (ii) the Equipment and Software, to that stage completed, have been installed in accordance with the requirements of this Agreement and the Specifications, subject to documented resolution of minor punch list items, and (iii) that the System (or System segment) is ready to be placed In Revenue Service. PURCHASER shall acknowledge same by signing the Acceptance Certificate prior to the System (or System segment) being placed In Revenue Service. At such time, punch list items will be identified and the Equipment, Software or Installation covered by such certificate shall be deemed "Accepted" (i.e., "Acceptance" shall have occurred). PURCHASER may ---------- add bona fide (e.g., non-cosmetic) items to the punch list up to fifteen (15) days after Acceptance.. Defects in components any arising after Acceptance that are covered by Article 13 shall not be considered punch list items. SELLER shall, as promptly as reasonably practicable, complete and correct all punch list items. Upon resolution of punch list items by SELLER, SELLER shall submit to PURCHASER, and PURCHASER shall sign, a certificate verifying that no further punch list items remain unresolved. In the event of any dispute as to the results of any Acceptance Tests, such dispute shall be resolved by a Third Party Engineer selected pursuant to paragraph 23. 1. (d) Only service affecting deficiencies identified in Attachment J, in conjunction with this Article 9, shall be grounds for delay of Acceptance of the System. (e) PURCHASER's use of any part of the Initial Configuration Equipment In Revenue Service prior to the in-service date(s) as shown in Attachment H, or the Acceptance Date determined in accordance with subparagraph (c) of this paragraph 9.2, shall constitute Acceptance of such part of the Initial Configuration, and the date PURCHASER first uses any item of Equipment In Revenue Service shall be the Acceptance Date for such item of Equipment. Equipment ordered for expansions to an Initial Configuration shall, for purposes 14 of Articles 13 and 17, be deemed to be Accepted by PURCHASER upon delivery, or in the case of significant expansions installed by SELLER, upon Acceptance. ARTICLE 10 DELAY 10.1 (a) If Caused by the fault or negligence of SELLER, Installation and Acceptance of the Initial Configuration does not occur within the period stated in Attachment H (as such period may be extended pursuant to the terms of this Agreement), PURCHASER shall be entitled to, and SELLER shall pay to PURCHASER, damages in accordance with this paragraph 10.1. (b) The Parties agree that damages for delay are difficult to calculate accurately and, therefore, agree to fix as liquidated damages, and not as a penalty, an amount determined in accordance with the table in paragraph 10.1(c). The amount of liquidated damages shall be calculated by multiplying the applicable percentage for each week or fraction of a week of delay times the Equipment and Software charges which comprise or are to comprise the Initial Configuration and which have not been placed In Revenue Service within the period scheduled for Acceptance as set forth on Attachment H as a result of such delay ("Delayed Equipment and/or Software"). If any portion official Initial Configuration is In Revenue Service, the percentage per week amount shall be imposed only against the full price of all Delayed Equipment and/or Software, but shall not in any event exceed [CONFIDENTIAL TREATMENT REQUESTED] thereof. Liquidated damages shall be in addition to PURCHASER's other remedies under this Agreement, particularly Paragraph 24. If SELLER's delay exceeds eight (8) weeks PURCHASER may, at its sole option, terminate any exclusivity provisions of this Agreement. (c) LIQUIDATED DAMAGE TABLE Weeks Late (Full or Partial) Percentage ---------------------------- --------------------------------------- 0 through 2 [CONFIDENTIAL TREATMENT REQUESTED] 3 through 4 [CONFIDENTIAL TREATMENT REQUESTED] 5 through 6 [CONFIDENTIAL TREATMENT REQUESTED] 7 through 8 [CONFIDENTIAL TREATMENT REQUESTED] 9 and above [CONFIDENTIAL TREATMENT REQUESTED] 10.2 Any delay caused by PURCHASER shall entitle SELLER to: (a) A day-to-day delay in performance of SELLER's obligations, or a longer equitable adjustment if SELLER has reassigned Installation personnel or suspended deliveries of Equipment as a result of PURCHASER's delay; and (b) Unless covered by Article 7, reimbursement of (i) any reasonable out-of-pocket expenses incurred by SELLER for subcontractor labor charges, extra storage or 15 delivery charges, (ii) salaries of SELLER's Installation personnel, and (iii) if applicable, capital costs on delayed Equipment Caused by PURCHASER's delay or the resumption of work following such delay; provided, however, that SELLER shall use reasonable efforts to minimize such expenses by working around delays caused by PURCHASER. 10.3 (a) Neither SELLER nor PURCHASER will be liable for nonperformance or defective or late performance of any of their obligations hereunder to the extent and for such periods of time as such nonperformance, defective performance or late performance is due to acts of God, war (declared or undeclared), unforeseeable acts (including failure to act) of any governmental authority (de jure or de facto), riots, revolutions, fire, floods, explosions, sabotage, nuclear incidents, earthquakes, storms, sinkholes, epidemics, strikes, (other than strikes of such party's own (or its Affiliates' own) employees), or delays of suppliers or subcontractors if no equivalent source for such supplies or services can reasonably be obtained for the same causes. (b) The party claiming the benefit of excusable delay hereunder shall promptly notify the other of the circumstances creating the delay and provide a statement of the impact. ARTICLE 11 PURCHASER'S AND SELLER'S RESPONSIBILITIES 11.1 Attachment F is the responsibility matrix that details those obligations for which SELLER and PURCHASER are respectively responsible. 11.2 The obligations as set forth in Attachment F shall be performed in a timely fashion in accordance with the schedule set forth in Attachment H, or with respect to items inadvertently omitted from Attachment F, in a timely fashion on reasonable notice. Any delay by either party shall be subject to Article 10 of this Agreement. 11.3 PURCHASER shall provide SELLER complete access to the System and agrees that SELLER may, upon reasonable advance Notice to PURCHASER (and with PURCHASER's Consent) and at reasonable times and only when necessary, interrupt operation of the System while conducting testing or correcting deficiencies. SELLER shall use all best efforts to minimize the length and impact of any such interruption of operation. 11.4 Each party shall provide all information in its possession that is reasonably necessary to properly install the System or as otherwise required by either party to perform its obligations under this Agreement. 11.5 PURCHASER shall be responsible for all site acquisition, zoning and permitting. 11.6 PURCHASER shall be responsible for and shall provide security for safeguarding the Cell Sites and MSC(s). This security shall be provided prior to the commencement of any SELLER activities at such locations. 16 11.7 SELLER shall be responsible and provide, at its expense, storage facilities for Equipment delivered by SELLER under this Agreement until the later of (i) completion of SELLER's installation activities relating to the Initial Configuration or (ii) such time as PURCHASER provides storage facilities. ARTICLE 12 LICENSES, PERMITS AND APPROVALS 12.1 Any licenses, permits or approvals required by any Federal, state, or other governing authority relating to the manufacture, type acceptance, importation, safety or use of the Equipment throughout the United States or any state shall be the sole responsibility and expense of SELLER. Any licenses, permits or approvals required by any Federal, state or local governing authority relating to use of the Equipment or System in a specific locality shall be the sole responsibility of PURCHASER. Upon request, the responsible party shall furnish evidence that such licenses or permits have been obtained and are in force. 12.2 Each party shall be responsible for ensuring that it and its subcontractors are and remain eligible under local laws to perform the work under this Agreement in the various jurisdictions involved. 12.3 PURCHASER agrees to reasonably assist SELLER, at SELLER's expense, to obtain and maintain (i) licenses,, permits or approvals for importation, re-exportation of the Equipment and Software on a duty and customs free basis and (ii) entry or work permits or visa required for personnel engaged by SELLER to perform work under this Agreement. ARTICLE 13 WARRANTIES 13.1 (a) SELLER warrants that, for a period of [CONFIDENTIAL TREATMENT REQUESTED] from the date of Acceptance, (the "Warranty Period"), Equipment and the Installation thereof shall conform with and perform the functions set forth in the Specifications and shall be free from defects in material or workmanship which impair service to subscribers, System performance, billing, administration or maintenance. If SELLER becomes aware of or is notified in writing by PURCHASER of any such defects in material or workmanship or nonconformity with Specifications within the Warranty Period, SELLER shall, at its election and expense, repair or replace any such defective Equipment or Installation. Such repair or replacement includes material, labor and Services, and shall, except as otherwise provided herein, be PURCHASER's sole remedy and SELLER's sole obligation in the event this warranty is breached. Any Equipment or Installation so repaired or replaced shall likewise be covered by the warranty set forth in this paragraph 13.1 for the remainder of the original warranty period or ninety (90) days, whichever is greater. (b) If PURCHASER claims a breach of warranty under this paragraph 13.1, it shall notify SELLER promptly in writing of the claimed breach. If SELLER becomes aware of any breach of warranty it shall notify PURCHASER promptly of such breach, the severity of the breach and the expected resolution date of such breach. 17 PURCHASER shall allow SELLER to inspect the Equipment or Software at PURCHASER's location, or, upon SELLER's reasonable request, return the Equipment to SELLER's U.S. repair facility, provided, however, PURCHASER shall not be obligated to remove or return any Equipment other than small circuit board components (excluding radios) nor shall it be required to remove or return any item which would materially interrupt service or other features of PURCHASER's System unless SELLER provides and installs temporary replacement items at SELLER's expense. (c) During the Warranty Period, electronic circuit board components, RBS subassemblies and other Equipment (which may be de-installed and reinstalled by PURCHASER in the ordinary course of business) will be repaired or replaced, with PURCHASER responsible for fault isolation (except to the extent that PURCHASER could not have reasonably been expected to isolate such fault without the assistance of SELLER), removal of defective boards, subassemblies or Equipment and replacement from spare stock (except to the extent that such removal and replacement requires the specialized expertise of SELLER), and packing and shipping to SELLER's U.S. repair facility. PURCHASER will maintain a stock of spare board components, subassemblies or other Equipment as recommended by SELLER for this purpose. SELLER's recommendation shall be accompanied by and based upon its mean time between failure analysis regarding such board components, subassemblies and Equipment, and such recommendation and supporting data shall be updated no less than quarterly. In the event that PURCHASER experiences board component, subassembly or Equipment failures that materially exceed the number and frequency of such failures contemplated by the spare board component, subassembly and Equipment stock recommended by SELLER, at the request of PURCHASER, SELLER shall supply to PURCHASER additional spare board components, subassemblies and Equipment of each type so depleted, as necessary to maintain an adequate emergency replacement stock, without charge to PURCHASER, until implementation of a permanent remedy. Upon implementation of such remedy of (i) all excess items supplied under this paragraph shall be returned to SELLER, and (ii) all in-service and spare stocks of such items which are the subject of the corrections contemplated by this paragraph 13(c) shall be updated, at no charge to PURCHASER, to the revision level incorporating the permanent remedy. (d) In the event that, during the Warranty Period, PURCHASER experiences failures of Equipment (other than electronic circuit board components, RBS subassemblies or other Equipment which may be de-installed and reinstalled by PURCHASER in the ordinary course of business), which PURCHASER believes in good faith to be excessive, PURCHASER shall bring such failures to the attention of SELLER by giving written notice to SELLER under Article 29 hereof, and SELLER shall give high priority to the remedy of the cause of the failures. If during the period prior to the implementation of a permanent remedy, the supplying to PURCHASER by SELLER of additional items of such Equipment is inappropriate, SELLER agrees during such period to negotiate in 18 good faith for adjustments commensurate with the operational and/or financial effect upon PURCHASER caused by such failures. (e) Freight charges incurred in connection with SELLER's obligations under this paragraph 13.1 shall be borne by SELLER, unless the Equipment returned is not defective or otherwise not covered by SELLER's limited warranty, in which case PURCHASER shall pay for all freight charges between PURCHASER's point of origin and SELLER's U.S. repair facility. 13.2 SELLER warrants that during the Warranty Period, the Software, Software Updates, Software Enhancements and Software Features shall conform with and perform the functions set forth in the Specifications, and shall be free from defects in material and workmanship which impair service to subscribers, System performance, billing, administration or maintenance. If during the Warranty Period, SELLER becomes aware of or is notified that the Software is defective or fails to so perform, SELLER shall correct such defects or failure and ensure that the Software, Software Updates, Software Enhancements and Software Features conform with, and perform the functions set forth in, the Specifications. SELLER's obligation under this warranty is limited to correction of any Software, Software Update, Software Enhancement or Software Feature failures and, except as otherwise provided herein, SELLER's performance thereof shall be PURCHASER's sole remedy in the event this warranty is breached. For additional Software purchased in accordance with Article 6, a new Warranty Period shall apply as described above except that the new Warranty Period shall only apply with respect to new functions (as specified in the additional Specifications) and the new Warranty Period shall begin on the date of Acceptance. 13.3 SELLER will return to PURCHASER the repaired or replaced Equipment or provide the remedy for the defect in Software or Installation within twenty (20) working days from the date PURCHASER makes a request for service under this warranty to Equipment, Software or Installation not materially impairing service with respect to subscribers, System performance, billing, administration or maintenance. 13.4 SELLER agrees to commence work under this warranty on all Equipment, Software or Installation defects materially impairing service to subscribers, System performance, billing, administration or maintenance as soon as practicable, but in no event later than eight (8) hours after notification of such defect, and will cure such defect as promptly as practicable. 13.5 SELLER shall maintain a Technical Assistance Center in the United States or Canada, and during the relevant warranty period shall make such support center available to PURCHASER twenty-four (24) hours per day free of charge to PURCHASER. During the Warranty Period. SELLER shall provide PURCHASER with a KAM organization at no additional charge to PURCHASER. Upon the expiration of the Warranty Period. SELLER and PURCHASER agree to negotiate, in good faith and within a reasonable time period, a System Support Services Agreement based on a KAM organization and including Hardware Repair and Replacement, Software Maintenance, and Consultation Services, the prices for which shall not exceed the prices specified in Attachment D. 19 13.6 If any Equipment or Software is rendered inoperative as a result of a natural or other disaster, SELLER will make all reasonable efforts to supply at PURCHASER's expense, help locate backup or replacement Equipment or Software for PURCHASER by using its reasonable best efforts to obtain the waiver of any delivery schedule priorities and by making replacement Equipment or Software available at PURCHASER's expense, from the facility then producing such products, or from inventory. 13.7 SELLER's limited warranty under this Article 13 shall not apply to: (a) damage or defects Caused by PURCHASER's negligence, including, but not limited to: (i) Exposure of Equipment or Software by PURCHASER to environmental conditions other than those specified in Attachment G, or use by PURCHASER other than in accordance in all material respects with written instructions furnished by SELLER; (ii) Material modification by PURCHASER of Equipment or Software without SELLER's written Consent; (iii) Interaction with the System caused by PURCHASER's use of equipment or software not purchased under this Agreement, unless SELLER has represented in writing that such equipment or software is compatible with the System; (iv) Operation or servicing of the System by PURCHASER's personnel or contractors who have not received Technical Education from SELLER commensurate with the operational or servicing tasks performed by such personnel. (v) PURCHASER has not implemented, within ninety (90) days from receipt, for fault preventive purposes, the Software Updates in the System that SELLER supplies to PURCHASER with from time to time during the Warranty Period, provided, however, that such Software Update would have prevented the damage or defect to which the warranty claim relates. (b) Any Equipment or Software damaged by accident or disaster, including without limitation, fire, flood, wind, water, lightning or power failure; or (c) Incidental hardware normally consumed in operation or which has a normal life inherently shorter than the term of this Agreement (e.g., fuses, lamps, magnetic tape). 13.8 PURCHASER shall reimburse SELLER for SELLER's reasonable out-of-pocket expenses incurred, at PURCHASER's request, in responding to and/or remedying Equipment, Software, or service deficiencies not covered by the warranties set forth 20 herein or under a System Support Services Agreement between SELLER and PURCHASER. 13.9 If SELLER purchases or subcontracts for the manufacture of any part of the System or the performance of any of the Services to be provided hereunder from a third party, the warranties given to SELLER by such third party shall inure, to the extent applicable or permitted, to the benefit of PURCHASER, and PURCHASER shall have the right to enforce such warranties directly or through SELLER. The warranties of such third parties shall not be in lieu of any warranties given by SELLER under this Agreement. If PURCHASER independently purchases any third party equipment or software to be used with or as part of the System, PURCHASER agrees to obtain warranty or maintenance service solely from such third party providers of equipment and/or software, and PURCHASER will provide SELLER with proof of such maintenance support. 13.10 THE LIMITED WARRANTIES IN THIS ARTICLE 13 CONSTITUTE THE ONLY WARRANTIES OF SELLER WITH RESPECT TO THE EQUIPMENT OR SOFTWARE, AND ARE IN LIEU OF ALL OTHER WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTIES ARE MADE BY SELLER ON BEHALF OF ANY OTHER PARTY FROM WHOM EQUIPMENT MAY HAVE BEEN INDEPENDENTLY PURCHASED BY PURCHASER. SELLER's warranty obligations under this Article 13 shall not be enlarged, diminished or affected by, and no warranty obligation or liability shall arise from SELLER's performance of System Support Services or other advice or service made in connection with the System. 13.11 With regard to Equipment or Software that is covered by contractual warranty or extended warranty maintenance as of January 1, 2000, ("Covered Product"), SELLER warrants that the Covered Products will be able to accurately process date data from, into and between the twentieth and the twenty-first centuries, including leap year calculations and correct handling of the date September 9, 1999, provided that; (i) all products (including software products) not delivered by or licensed from SELLER under this Agreement and used with the products, properly exchange date and data; (ii) the products are used under normal conditions and in accordance with the Specifications; and (iii) PURCHASER has installed the latest software update or software corrections offered or supplied by SELLER and creating functional ability to handle conversion to the twenty-first century. In the event of a breach of this warranty SELLER shall, if it receives Notice before the 1st of July 2000, at its option and without undue delay, correct or replace the non-compliant Covered Products, without charge to PURCHASER, by providing PURCHASER with the latest product software update or correction creating functional 21 ability to accurately process date data (including, but not limited to, calculating, comparing and sequencing) from, into and between the twentieth and the twenty-first centuries, including leap year calculations. THE WARRANTY GIVEN IN THIS ARTICLE CONSTITUTES THE ONLY WARRANTY AND OBLIGATION MADE BY SELLER WITH RESPECT TO THE COVERED PRODUCTS' ABILITY TO ACCURATELY PROCESS DATE DATA FROM, INTO AND BETWEEN THE TWENTIETH AND THE TWENTY-FIRST CENTURIES, INCLUDING LEAP YEAR CALCULATIONS AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND THE REMEDIES ABOVE ARE THE SOLE AND EXCLUSIVE REMEDIES TO BE USED IN CASE OF A BREACH OF THE ABOVE WARRANTY. IN NO EVENT SHALL SELLER BE LIABLE TO BUYER UNDER THIS WARRANTY FOR ANY INACCURACIES, DELAYS, INTERRUPTIONS OR ERRORS AS A RESULT OF (I) RECEIVING DATE DATA FROM ANY NON-SELLER PRODUCTS, SOFTWARE OR SYSTEMS IN A FORMAT THAT IS INCONSISTENT WITH THE FORMAT AND PROTOCOLS ESTABLISHED FOR THE COVERED PRODUCTS OR (II) ANY CHANGE, MODIFICATION, UPDATE OR ENHANCEMENT MADE OR ATTEMPTED TO BE MADE TO THE COVERED PRODUCTS BY PARTIES OTHER THAN BY SELLER, OR FOR ANY LOSS OF PRODUCTION, LOSS OF USE, LOSS OF BUSINESS, LOSS OF DATA OR REVENUE OR FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT THE POSSIBILITY OF SUCH DAMAGES COULD HAVE BEEN REASONABLY FORESEEN. NOTHING IN THIS WARRANTY SHALL BE CONSTRUED TO LIMIT ANY RIGHTS OR REMEDIES THE BUYER MAY OTHERWISE HAVE UNDER OTHER WARRANTIES UNDERTAKEN BY SELLER WITH RESPECT TO DEFECTS OTHER THAN THE ABILITY TO ACCURATELY PROCESS DATE DATA. BUYER UNDERSTANDS AND AGREES THAT THE ABOVE MENTIONED WARRANTY IS NOT APPLICABLE TO ANY OTHER GOODS OR PRODUCTS DELIVERED OR PROVIDED BY SELLER THAT ARE NOT COVERED PRODUCTS. 13.12 In addition to and not in limitation of any other warranties provided hereunder, SELLER warrants that the Equipment and Software will enable the System to be operated in full compliance in all material respects with all federal, state and local laws, regulations and codes, including, without limitation, all FCC regulations, rules and policies. 13.13 SELLER shall comply with the legal requirements for advanced lawful intercept under the Communications Assistance for Law Enforcement Act of 1994, as well as Enhanced 911 and TTY service requirements upon the schedule required by law, including any extensions that may be granted as provided below. The price for any features to implement the above shall be commercially reasonable and shall be identified by SELLER as the features are further along in the development process. If SELLER is unable to meet the legally required implementation date for the above matters, PURCHASER will seek a reasonable extension of such date upon written request by 22 SELLER. If granted such an extension, SELLER's failure shall not be deemed to be a default of this Agreement. SELLER shall promptly reimburse PURCHASER for its reasonable legal and other expenses in requesting such extension, whether or not granted. Should PURCHASER be fined or otherwise have a monetary forfeiture imposed upon it by a governmental agency for PURCHASER's failure to meet the above requirements where such failure is due to SELLER's inability to timely deliver such feature, SELLER shall reimburse PURCHASER for the same. ARTICLE 14 CONFIDENTIAL INFORMATION 14.1 (a) The parties hereto agree, except as may be required to comply with any applicable law, regulation or order of any governmental or other authority, including the trier of fact under Article 23, to: (i) maintain, or cause to be maintained, the confidentiality of Confidential Matters of the other party and not disclose, or permit to be disclosed, any such Confidential Matters, unless authorized in writing by such other party; (ii) not use, or permit to be used, any such Confidential Matters, except in accordance with the scope of this Agreement; (iii) restrict or cause to be restricted, disclosure of such Confidential Matters to its respective officers, employees, and agents and those Affiliates and their respective officers, employees and agents who need to know such Confidential Matters in the performance of work relating to the subject matter of this Agreement (it being understood that such Affiliates and their respective officers, employees and agents shall be informed of the confidential nature of such Confidential Matters and shall be directed to treat such Confidential Matters confidentially and not use such Confidential Matters other than for the purpose described above); and (iv) take precautions necessary or appropriate to guard the confidentiality of such Confidential Matters. (b) If any party becomes obligated to disclose Confidential Matters pursuant to an order of any governmental or other authority, such party shall notify the other party so that such other party shall have the opportunity to seek a protective order or other appropriate remedy that will permit such party to avoid such disclosure. In the event that such protective order or other remedy is not obtained, such party will disclose only that portion of the Confidential Matters as it is obligated to disclose pursuant to such order, and will use all reasonable efforts to obtain assurances that confidential treatment will be accorded to any Confidential Matters so disclosed. 14.2 Notwithstanding the provisions of Article 23 of this Agreement the parties agree that SELLER may enforce provisions of Article 19 and this Article 14 regarding restrictions 23 on use and transfer and obligations of confidentiality with respect to the Software by an action for injunctive relief or other equitable remedies. 14.3 Except as expressly provided herein, nothing contained in this Agreement shall be construed or deemed to grant, either directly or indirectly or by implication, any license under any existing or future intellectual property rights of SELLER. ARTICLE 15 CONTINUITY OF EXPANSION FUNCTIONALITY 15.1 For a period of four (4) years following the expiration of this Agreement, SELLER shall make available for sale to PURCHASER, at SELLER's then current prices, Equipment and Software to enable PURCHASER to expand the System, which Equipment and Software will provide equivalent functionality for and shall be fully compatible with the System, or any other system supplied by SELLER to AT&T Wireless Services, Inc. or its Affiliates or successors so long as PURCHASER maintains an affiliation with AT&T Wireless Services, Inc. or its Affiliates or successors. 15.2 SELLER may at any time cease production or purchase, as the case may be, of any part of a System so long as SELLER maintains a sufficient inventory of Equipment and Software to meet its obligations pursuant to Section 15.1 above. In the event that such discontinuance of production or purchase is in anticipation of migration to new generation Equipment which is not compatible with that purchased by PURCHASER hereunder, SELLER shall notify PURCHASER of its intent to discontinue production or purchase, as the case may be, specifying the approximate number of such items of Equipment, Software or other parts SELLER then has in inventory, sufficiently in advance of the final production run or purchase to allow PURCHASER to purchase any additional items of Equipment, Software or other parts it may desire for inclusion in such final production run or purchase. ARTICLE 16 AMENDMENTS The terms and conditions of this Agreement, including the provisions of the Attachments, may be amended by mutually agreed contract amendments. Each amendment shall be in writing and shall identify the provisions to be changed and the changes to be made. Contract amendments shall be signed by duly authorized representatives of SELLER and PURCHASER. Any acknowledgment form or other form of SELLER or PURCHASER containing terms and conditions of sale or purchase shall not have the effect of modifying the terms and conditions of this Agreement, and all deliveries and Installation of goods and performance of Services by SELLER shall be deemed to be only upon the terms and conditions of this Agreement. ARTICLE 17 TITLE; RISK OF LOSS 17.1 Title to each item of Equipment shall pass to PURCHASER upon delivery to PURCHASER's job site. Prior to acquiring title to the Equipment, PURCHASER shall not cause or permit the System or any portion of it to be sold, leased or subjected to a lien or other encumbrance. 24 17.2 Risk of loss to each item of Equipment shall pass to PURCHASER upon delivery to PURCHASER's job site. ARTICLE 18 INSURANCE 18.1 SELLER shall maintain and keep in force all risk insurance, in form and substance and with insurers reasonably satisfactory to PURCHASER, covering all Equipment delivered to PURCHASER the risk of loss to which has not passed to PURCHASER, and shall furnish PURCHASER with proof that such insurance has been obtained and is in force. 18.2 Upon risk of loss passing to PURCHASER, PURCHASER shall maintain and keep in force all risk insurance, in form and substance and with insurers reasonably satisfactory to SELLER, covering all Equipment delivered to PURCHASER the title to which has passed to PURCHASER, and shall furnish SELLER with proof that such insurance has been obtained and is in force. 18.3 SELLER shall at all times while performing Services on PURCHASER's premises carry insurance with limits not less than the limits described as follows: (a) Employer's General Liability - Limits $2,000,000. (b) Comprehensive General Public Liability: $2,000,000 single limit bodily injury and property damage combined; such coverage shall include a broad form liability rider, completed operations coverage rider and contractual liability rider. (c) An umbrella policy with $1,000,000 single limit bodily injury and property damage combined. (d) Workmen's Compensation (Statutory limits in state or states in which this Agreement is to be performed). 18.4 Upon request, each party shall provide the other with certificates of insurance (i) evidencing the insurance to be carried under this Article 18 and in the case of the insurance required under Paragraph 18.3, naming the other party as an additional insured, and (iii) including provisions that such insurance policy(ies) shall not be subject to cancellation, expiration or reduction without thirty (30) days written notice to the other party. 18.5 Notwithstanding the requirements as to insurance to be carried, the insolvency, bankruptcy or failure of any insurance company carrying insurance for either party, or failure of any such insurance company to pay claims accruing, shall not be held to waive any of the provisions of this Agreement or relieve either party from any obligations under this Agreement. 18.6 The parties waive all rights against each other and against their separate subcontractors, and all other subcontractors for damages caused by negligence, fire or other perils to the extent covered by liability or any other property insurance purchased as required by this Agreement, except such rights as they may have to the proceeds of such insurance. 25 ARTICLE 19 SOFTWARE 19.1 Except as may be limited by the terms of this Agreement, SELLER grants PURCHASER a perpetual, royalty-free Right-to-Use ("RTU") license for the Software (including Software Updates, Software Enhancements and Software Features) delivered to PURCHASER under this Agreement for which PURCHASER has paid the appropriate license fees. Fees for any Software licensed on a "pay-as-you-grow basis" or on an added functionality basis will be calculated on an annual basis based on the same pricing criteria as was used in determining the initial license fee (e.g., number of sectors, switch reports, features, Network Elements, servers, or subscribers). PURCHASER agrees to provide SELLER with information necessary and appropriate for calculation of such fees or otherwise agree to SELLER's right to obtain such information during the regular course of its business, and SELLER agrees to limit the use of such information to the calculation and invoicing of such fees. PURCHASER's right to continued use of Software licensed on a pay-as-you-grow basis or otherwise used In Revenue Service Will be contingent upon the payment of appropriate fee adjustments within thirty (30) days of invoice therefor, subject to any bona fide disputes regarding amounts due as a result of threshold "pay-as-you-grow" fee adjustments. 19.2 PURCHASER acknowledges that the Software is the property and confidential proprietary information of SELLER or third party licensors. Title and ownership rights to Software, including any reproductions, modifications or derivatives thereof, shall remain at all times with SELLER or third party licensors. PURCHASER may not sell, assign, transfer, license, or otherwise make available the Software to any third party, except as provided herein, nor shall PURCHASER adapt or create any derivative work using the Software or decompile or reverse engineer the Software without the prior written Consent of SELLER. PURCHASER may not copy or duplicate the Software, except that PURCHASER may make one (1) copy of the Software for each of its MSC and its Home Office locations for back-up or archival purposes, provided such copies bear all copyright or other proprietary notices as are contained on the original copy (or as SELLER may reasonably require from time to time). PURCHASER shall not alter or remove any copyright or other proprietary notices on or in copies of the Software. In no event may PURCHASER, other than as set forth in paragraphs 19.4 and 28.2 hereof, sell, assign, transfer, license, or otherwise make available any of the Software to any person not purchasing the System, in whole or in part. Except as expressly permitted in this Article 19 and in Article 28, PURCHASER agrees not to disclose or cause to be disclosed the Software to any person other than employees and contractors of PURCHASER duly authorized to use the Software on PURCHASER's behalf and who have been informed by PURCHASER of the use and disclosure restrictions set forth herein. 19.3 The Software supplied under this Agreement shall not, without SELLER's prior written Consent, which shall not be unreasonably withheld, be implemented on or used to directly control hardware other than that purchased under this Agreement, except for hardware which is capable of interfacing with the System at a point of open interface. 19.4 PURCHASER may transfer this RTU Software license to any subsequent Purchasers of all or part of the System (on a market by market basis) from PURCHASER without 26 further approval of SELLER provided the subsequent Purchasers are purchasing markets or portions of PURCHASER's markets and are not direct competitors of SELLER and further provided the subsequent Purchasers agree in a writing delivered to SELLER to assume PURCHASER's obligations set forth in this Agreement relating to the Software. 19.5 Modifications of the Software made by SELLER which constitute Software Enhancements or Software Features will be made available to PURCHASER on an RTU license basis at the prices set forth in Attachment A, and if not therein set forth, at no greater than SELLER's then current ATP price, including discounts therefor. Software Updates shall be provided to PURCHASER without charge during the Warranty period. Thereafter, Software Updates shall be made available to PURCHASER pursuant to agreements for System Support Services, except any Enhancements released within one hundred eighty (180) days of this Agreement shall be made available to PURCHASER at no additional cost. 19.6 Notwithstanding the provisions of Article 23 of this Agreement the parties agree that SELLER may enforce provisions of this Article 19 regarding restrictions on transfer and confidentiality of the Software by an action for injunctive relief or other equitable remedies. 19.7 SELLER represents and warrants that the Software delivered to PURCHASER with a System or with any Equipment, as the case may be, is all of the Software reasonably necessary to use, operate or maintain the System or Equipment, as the case may be. ARTICLE 20 TAXES The amounts to be paid by PURCHASER under this Agreement do not include any state or local sales and use taxes, however designated, which may be levied or assessed on the System or any component thereof, including, but not limited to, Services. With respect to such taxes, PURCHASER shall either furnish SELLER with an appropriate exemption certificate applicable thereto or pay to SELLER, upon presentation of invoices therefor, such amounts thereof as SELLER determines it is required to collect or pay. In addition, PURCHASER shall reimburse SELLER for any property taxes incurred by SELLER with respect to the Equipment and Software following Installation of such Equipment or Software but prior to the passage of title thereof to PURCHASER. PURCHASER shall have no obligation to SELLER with respect to other taxes, including, but not limited to, those relating to franchise, net or gross income or revenue, license, occupation, other real or personal property, and fees relating to importation of the Equipment and Software. ARTICLE 21 INDEMNIFICATION AND LIMITATION OF LIABILITY 21.1 SELLER and PURCHASER agree to indemnify and hold each other harmless from and against all losses, claims, demands, damages (to person or property), and causes of action (including reasonable legal fees) resulting from the intentional or negligent acts or omissions, or strict liability, of either party, its officers, agents, employees, or subcontractors. If SELLER and PURCHASER jointly cause such losses, claims, 27 demands, damages, or causes of action, the parties shall share the liability in proportion to their respective degree of causal responsibility. 21.2 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE OR INFRINGEMENT), SHALL SELLER OR PURCHASER BE LIABLE UNDER THIS AGREEMENT FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER, INCLUDING LOST PROFITS OF THE OTHER PARTY, BEFORE OR AFTER ACCEPTANCE. ARTICLE 22 INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT 22.1 SELLER agrees that it will defend, at its own expense, all suits and claims against PURCHASER for infringement or violation of any patent, trademark, copyright, trade secret or other tangible or intangible property rights of any kind whatsoever, whether United States or foreign (collectively, "Property Rights"), covering, or alleged to cover, the Equipment, Software, or the System or any component thereof, in the form furnished or as subsequently modified by SELLER or with SELLER's Consent, and SELLER agrees that it will pay all sums, including, without limitation, attorneys' fees and other costs, which, by final judgment or decree, or in settlement of any suit or claim, may be assessed against or incurred by PURCHASER on account of such infringement or violation, provided (a) SELLER shall be given prompt written notice of all claims of any such infringement or violation and of any suits or claims brought or threatened against PURCHASER or SELLER of which PURCHASER has express knowledge, and SELLER shall be given full authority to assume control of the defense thereof through its own counsel at its expense and to compromise or settle any suits or claims so far as this may be done without prejudice to the right of the PURCHASER to continue the use, as contemplated, of the Equipment, the Software or the System or any component thereof so furnished; and (b) PURCHASER shall cooperate fully with SELLER in the defense of such suit or claims and provide SELLER such assistance as SELLER may reasonably require in connection therewith provided that SELLER shall pay the actual expenses of PURCHASER in providing such assistance. PURCHASER may in its discretion and at its own expense participate directly or through its own counsel in the defense of such suits or claims. 22.2 If in any such suit so defended, all or any part of the Equipment, Software, or the System, or any component thereof is held to constitute an infringement or violation of any other person's Property Rights and its use is enjoined, or if in respect of any claim of infringement or violation SELLER deems it advisable to do so, SELLER shall at its sole option take one or more of the following actions at no additional cost to PURCHASER: (a) procure the right to continue the use of the same without interruption for PURCHASER; (b) replace the same with non-infringing Equipment or Software that meets the Specifications; (c) modify such Equipment or Software so as to be non-infringing, provided that the Equipment or Software as modified meets all of the Specifications; or (d) in the case of Equipment or Software not essential to the operation of the System, and for which PURCHASER can readily obtain competitive replacements, 28 take back the infringing Equipment or Software and credit PURCHASER with an amount equal to its price less a mutually agreeable allowance for use. If SELLER fails to perform its obligations under this Section 22.2, PURCHASER may, at SELLER's expense, take any of the foregoing actions on behalf of SELLER or, if PURCHASER is unable to do so, exercise its remedies under Section 24.1 hereof. 22.3 SELLER's indemnity under this Article 22 shall not apply to any infringement caused by PURCHASER's modification of the Equipment and any infringement caused solely by PURCHASER's use of the Equipment other than in accordance with the Specifications and the purposes contemplated by this Agreement, except as expressly authorized or permitted by SELLER. PURCHASER shall indemnify SELLER against all liability and cost of defense, including reasonable attorney's fees, for any and all claims against SELLER for infringement based upon the foregoing. 22.4 The remedies stated in this Article 22 shall be the parties' exclusive remedies for infringement or violation of any property rights. Except as expressly provided in paragraph 22. 1, in no event shall either party be liable to the other for money damages for infringement. ARTICLE 23 DISPUTE RESOLUTION 23.1 If there is a disagreement relating to Installation and Acceptance, the parties will attempt to negotiate a solution within fourteen (14) days of notification of such disagreement. If no solution can be reached, the parties shall select a third party engineer ("Third Party Engineer') (whose fees and expenses will be shared equally by PURCHASER and SELLER) who will, after conducting such examination or testing as he/she deems necessary, render a decision in the matter by stating whether the Equipment, Software or Installation in question shall be Accepted. If the parties are unable to agree on the selection of the Third Party Engineer, the Third Party Engineer will be selected by the then President of the Institute of Electrical & Electronics Engineers. The Third Party Engineer's decision shall be final and binding and neither party shall appeal or otherwise contest it. Once a Third Party Engineer is selected for resolving a dispute relating to Installation or Acceptance, he/she shall be selected for the resolution of any further disputes hereunder relating to Installation and Acceptance unless otherwise agreed to by both parties or unless The Third Party Engineer refuses to continue to serve in that function. 23.2 (a) Any controversy or claim arising out of or relating to this Agreement for the breach hereof which cannot be settled by the parties except for (i) disputes to be settled by a Third Party Engineer under paragraph 23.1, or (ii) action for equitable relief under Articles 19 or 28 which shall be resolved as provided therein, shall be settled by arbitration in accordance with the commercial arbitration rules of the American Arbitration Association as set forth herein. (b) Each party may select one arbitrator. Selection shall be completed within ten (10) days of the receipt of a demand for arbitration. If either party fails to select an arbitrator within such ten- (10) day period, the one selected shall act as sole 29 arbitrator. If two arbitrators have been selected, the two arbitrators selected shall select a third within fifteen (15) days after their selection. If they fail to do so, the third arbitrator shall be selected by the American Arbitration Association. The arbitrators shall set a date of hearing no later than sixty (60) days from the date all arbitrators have been selected. (c) All proceedings shall be conducted in the English language. (d) The arbitration shall take place at a location to be agreed upon by the parties. If the parties are unable to agree, the arbitrators shall select a location in New Orleans, Louisiana for the arbitration, preferably, the regional office, if any, of the American Arbitration Association. (e) In any such arbitration proceeding the arbitrators shall adopt and apply the provisions of the Federal Rules of Civil Procedure relating to discovery so that each party shall allow and may obtain discovery of any matter not privileged which is relevant to the subject matter involved in the arbitration to the same extent as if such arbitration were a civil action pending in a United States District Court; provided, however, that each party shall be entitled to no more than four (4) depositions upon oral examination of no more than one (1) day in length each. (f) The award of any arbitration shall be final, conclusive and binding on the parties hereto. (g) The arbitrators may award any legal or equitable remedy. The arbitration award shall include an award of attorney's fees, in the amount of such fees, to the prevailing party. Judgment upon any arbitration award may be entered and enforced in any court of competent jurisdiction. (h) Either party to an arbitration hereunder may bring an action for injunctive relief against the other party if such action is necessary to preserve jurisdiction of the arbitrators or to maintain status quo pending the arbitrators' decision. Any such action called pursuant to this paragraph shall be discontinued upon assumption of jurisdiction by the arbitrators and their opportunity to consider the request for equitable relief pending final decision in the arbitration. ARTICLE 24 TERMINATION AND DEFAULT 24.1 (a) PURCHASER may, upon written notice to SELLER, terminate this Agreement in whole or in part, at its option, without penalty: (i) if the Nashville and Knoxville markets within the Initial Configuration scheduled to be installed and completed as set forth in the final Attachment H, in general, as opposed to Cell Site Configuration Equipment at a specific site, (other than by the fault of PURCHASER or due to an event specified in paragraph 10.3) has been rightfully rejected by PURCHASER and has not thereafter been Accepted within [CONFIDENTIAL TREATMENT REQUESTED] after such rejection; or (ii) if SELLER 30 fails to perform its obligations under paragraph 22.2 and such failure results in a judicial imposition of legal damages or expenses which are not fully reimbursed by SELLER or injunctive relief upon PURCHASER materially affecting its ability to provide first class service on the System. (b) In the event PURCHASER terminates this Agreement in accordance with this paragraph 24.1, PURCHASER may at its option: (i) return to SELLER, freight collect all Equipment delivered, in which event SELLER shall refund to PURCHASER all amounts paid to SELLER under this Agreement; or (ii) retain so much of the Equipment as it elects and return to SELLER, freight collect, all other Equipment, in which event SELLER shall refund to PURCHASER all amounts paid in respect to Equipment returned by PURCHASER and the related Installation charges and payment for Services thereof. 24.2 (a) PURCHASER may, at its option and upon written notice to SELLER, terminate this Agreement in whole or in part, if (i) if at any time there shall be filed by or against the SELLER in any court a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of the property of the SELLER or makes a general assignment for the benefit of creditors or petitions for or enters into such an agreement or arrangement with its creditors; (ii) SELLER Causes a delay as defined in paragraph 10.1 of more than [CONFIDENTIAL TREATMENT REQUESTED] in the Installation of an Initial Configuration other than the first one referenced in paragraph 24.1 (a) above, (iii) if SELLER's Equipment Software and Services materially fails to meet the AT&T Standards, or (iv) SELLER is in default under any material terms of this Agreement, other than those specified in paragraph 24.1 (a) (i) and (ii) above, and action to correct such default is not commenced within [CONFIDENTIAL TREATMENT REQUESTED] after receipt of Notice from PURCHASER and such default is not thereafter cured within sixty (60) days after commencement of correction, unless SELLER cannot complete such cure within such period for reasons beyond its control and SELLER is continuing to diligently pursue the cure, in which case such default shall be cured no later than [CONFIDENTIAL TREATMENT REQUESTED] after SELLER's original receipt of Notice under this paragraph 24.2 (a). (b) In the event PURCHASER terminates this Agreement in accordance with paragraph 24.2 (a), PURCHASER may at its option return to SELLER, freight collect, any specific items of Equipment delivered or Software installed which is the subject of the default in paragraph 24.2 (a) above, in which event SELLER shall refund to PURCHASER all amounts paid to SELLER under this Agreement with regard to such Equipment, Software and the Installation thereof 24.3 SELLER may terminate this Agreement without any obligation to deliver Equipment not yet delivered, or, at its option, temporarily suspend its performance, without liability, under this Agreement, in the event that: (a) PURCHASER is in default under any material terms of this Agreement, except as provided for in Article 24.3(b), and correction is not commenced within [CONFIDENTIAL TREATMENT REQUESTED] after receipt of Notice from SELLER and such default is not thereafter cured within [CONFIDENTIAL 31 TREATMENT REQUESTED] after commencement of correction, unless PURCHASER cannot complete such cure within such period for reasons beyond its control and PURCHASER is continuing to diligently pursue the cure, in which case such default shall be cured no later than one hundred fifty (150) days after SELLER's original receipt of Notice under this paragraph 24.3 or (b) PURCHASER materially breaches any confidentiality agreement with SELLER, including the provisions of Article 14 and 19 or otherwise materially fails to meet the provisions of Article 2.2, and SELLER, while reserving all other remedies available under this Agreement for such a breach, has provided PURCHASER with Notice of such breach or (c) PURCHASER (i) applies for or consents to the appointment of or the taking of possession by a receiver, custodian, trustee, or liquidator of itself or of all or a substantial part of its property, (ii) makes a general assignment for the benefit of its creditors, (iii) commences a voluntary proceeding under the Federal Bankruptcy Code or under any other law relating to relief from creditors generally, or (iv) fails to contest in a timely or appropriate manner, or acquiesces in writing to, any petition filed against it in an involuntary proceeding under the Bankruptcy Code or under any other law relating to relief from creditors generally, or any application for the appointment of a receiver, custodian, trustee, or liquidator of itself or of all or a substantial part of its property, or its liquidation, reorganization, dissolution, or winding-up. 24.4 Except as provided above, if either party terminates this Agreement, SELLER's obligations hereunder with respect to Equipment already delivered, installed and not returned, and PURCHASER's obligations with respect to payments for Accepted Equipment not returned, shall continue in full force and effect. ARTICLE 25 ADVERTISING 25.1 Neither SELLER nor PURCHASER shall publicly advertise or, except as required by law, publish information concerning the entry into, execution or delivery of this Agreement, its nature, or the terms and conditions hereof, without the other party's prior written Consent; provided, however, that either party or its Affiliates may refer generally to the performance of this Agreement in its annual report to shareholders, and PURCHASER may disclose this Agreement or information related to this Agreement to its representatives, agents and lenders involved with PURCHASER's debt and/or equity financing and may make any public disclosures required by government regulatory agencies including, but not limited to, the SEC, FCC and FAA. PURCHASER shall endeavor to provide SELLER with reasonable advance Notice of any expected required disclosure and consider in good faith SELLER's request to redact portions of the Agreement prior to disclosure to such agencies. 25.2 Seller shall provide PURCHASER with an advertising allowance of [CONFIDENTIAL TREATMENT REQUESTED] to assist PURCHASER in the promotion of its System as well as the joint promotion of SELLER's participation in the System. No more than one half (1/2) of such allowance may be used by PURCHASER in the first year of the Term. The parties shall mutually agree on the form and content of such advertising. 32 ARTICLE 26 LATE PAYMENTS All amounts payable under this Agreement which are past due shall accrue interest from their due date at the rate of [CONFIDENTIAL TREATMENT REQUESTED] per annum (or such lesser rate as may be the maximum permissible rate under applicable law). ARTICLE 27 PERSONNEL Neither party shall actively solicit any employees of the other party or any of its Affiliates who are assigned to perform work hereunder during the period of such assignment and for one (1) year thereafter, without the Consent of the party whose employee is so solicited. Such Consent is not required for responses to advertisements placed or posted in periodicals, electronic bulletin boards, or other media of general circulation. ARTICLE 28 ASSIGNMENT 28.1 The parties may assign or transfer this Agreement to their respective Affiliates. PURCHASER reserves the right to assign this Agreement to any bona fide purchaser of the Tritel PCS Markets, or any portion thereof, or to AT&T Wireless Services, Inc. or its Affiliates or successors. Neither party may otherwise assign this Agreement, or any part of its rights or obligations hereunder, without the other party's Consent 28.2 PURCHASER shall have the right to lease or license the use of the System or any component thereof to any other cellular mobile telephone service provider on a time-sharing or other basis. Such lease or license shall not serve to expand or otherwise alter SELLER's warranty obligations under this Agreement. 28.3 Notwithstanding the provisions of Article 23 of this Agreement, the parties agree that either party may enforce provisions of this Article 28 regarding assignment by an action for injunction or other equitable remedies. ARTICLE 29 NOTICES 29.1 Any notice required under this Agreement shall be given to the appropriate party, at the following addresses: If to PURCHASER: Tritel Communications, Inc. 1080 River Oaks Dr. -- Suite B-100 Jackson, Mississippi 39208 Facsimile: (601) 936-6045 Attention: Jerry M. Sullivan, Jr., Executive Vice President/Chief Operating Officer Tritel Communications, Inc. 112 E. State Street Ridgeland, Mississippi 39157 Facsimile: (601) 898-6216 33 Attention: David Walsh, Vice President-Program Development Young, Williams, Henderson & Fuselier, PC P.O. Box 23059 Jackson, Mississippi 39225-3059 Facsimile: (601) 355-6136 Attention: James H. Neeld, IV and to those persons listed on Attachment P, if any. If to SELLER: ERICSSON INC., Network Operators Group 740 E. Campbell Road Richardson, Texas 75081 Attention: Group General Counsel Facsimile: (972) 583-1810 29.2 Either party may change the address to which notice to it shall be sent by notifying the other party of the change and the new address on thirty (30) days notice given in accordance with this Article. 29.3 Notice given under this Article 29 shall be deemed to have been given upon receipt by the other party. ARTICLE 30 AUTHORITY AND COMPLIANCE WITH LAWS 30.1 PURCHASER and SELLER represent and warrant that (a) all necessary approvals and authority to enter into this Agreement and bind the parties have been obtained, (b) the person executing this Agreement on behalf of PURCHASER or SELLER has express authority to do so and, in so doing, to bind PURCHASER or SELLER hereto, and (c) the execution of this Agreement by PURCHASER or SELLER does not violate any provision of any by-law, charter, regulation or any other governing authority of such party. Each party agrees to furnish the other with such documents as either party may reasonably request showing proof of authority in accordance with this Article. 30.2 PURCHASER and SELLER shall comply with all applicable laws in the performance of this Agreement, including the laws and regulations of the United States Department of Commerce and State Department and any other applicable agency or department of the United States regarding the export or re-export of products or technology; and (b) indemnify each other for any loss, liability or expense incurred as the result of breach of this paragraph 30.2. ARTICLE 31 HEADINGS The headings given to the Articles herein are inserted only for convenience and are in no way to be construed as part of this Agreement or as a limitation of the scope of the particular Article to which the title refers. 34 ARTICLE 32 GOVERNING LAW; SEVERABILITY TIES AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW THEREOF. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under such applicable law, but, if any provision of this Agreement shall be held to be prohibited or invalid in any jurisdiction, the remaining provisions of this Agreement shall remain in full force and effect and such prohibited or invalid provisions shall remain in effect in any jurisdiction in which it is not prohibited or invalid. ARTICLE 33 NO WAIVER The failure of either party to insist, in any one or more instances, upon the performance of any of the terms, covenants or conditions of this Agreement, or to exercise any right hereunder, shall not be construed as a waiver or relinquishment of the future performance of any such terms, covenants, or conditions or the future exercise of such right, and the obligation of the other party with respect to such future performance shall continue in fall force and effect. ARTICLE 34 ENTIRETY OF AGREEMENT; NO ORAL CHANGE This Agreement and the Attachments referenced herein constitute the entire Agreement between the parties with respect to the subject matter hereof, and supersedes all proposals, oral or written, all previous negotiations, and all other communications between the parties with respect to the subject matter hereof. No modifications, alterations or waivers of any provisions herein contained shall be binding on the parties hereto unless evidenced in writing signed by duly authorized representatives of both parties as set forth in Article 16. ARTICLE 35 ATTACHMENTS AND INCORPORATIONS 35.1 The following documents attached hereto, are hereby incorporated by reference herein, and made a part of this Agreement with the same force and effect as though set forth in their entirety herein (such documents together with this Agreement are herein referred to as the "Agreement"). - ---------------------------------------------------------- ATTACHMENT TITLE/DESCRIPTION - ---------------------------------------------------------- A Pricing - ---------------------------------------------------------- B Installation - ---------------------------------------------------------- C Technical Education - ---------------------------------------------------------- D System Support Services - ---------------------------------------------------------- E Documentation - ---------------------------------------------------------- F Responsibility Matrix - ---------------------------------------------------------- G Environmental Conditions - ---------------------------------------------------------- H Time Schedule - ---------------------------------------------------------- I OSS - ---------------------------------------------------------- J Acceptance Tests/Certificate - ---------------------------------------------------------- K Tritel PCS Markets - ---------------------------------------------------------- 35 - ---------------------------------------------------------- ATTACHMENT TITLE/DESCRIPTION - ---------------------------------------------------------- L AXE 10 Functions for CMS 8800 - ---------------------------------------------------------- M (Reserved) - ---------------------------------------------------------- N Services - ---------------------------------------------------------- 0 Price Variation - ---------------------------------------------------------- P Recipients of Notices to PURCHASER - ---------------------------------------------------------- Q Order Cancellation Policy - ---------------------------------------------------------- 35.2 Except where otherwise noted, in the event of any conflict or inconsistency among the provisions of this Agreement and the documents attached and incorporated herein, such conflict or inconsistency shall be resolved, by giving precedence to this Agreement, thereafter to the Attachments (except Attachment E), and thereafter to Attachment E.. No provisions or data on an Order or in subordinate documents (such as shipping releases) or any form originated by PURCHASER or SELLER shall be incorporated in this Agreement unless the provisions or data merely supply information contemplated by this Agreement but do not vary the provisions of this Agreement. Whenever any such provisions conflict with this Agreement, this Agreement shall control unless the parties expressly otherwise agree in writing. ARTICLE 36 FINANCING AND BOARD APPROVAL Pursuant to a letter agreement between SELLER and Airwave Communications, LLC dated December 14, 1998, SELLER has committed to provide certain loan facilities and financing payments to PURCHASER and certain investors in PURCHASER. PURCHASER'S obligations hereunder are conditioned upon SELLER's fulfillment of the terms of the Financing Commitment. Further, PURCHASER'S obligations hereunder are also conditioned upon approval of this Agreement by PURCHASER'S Board of Directors. 36 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
ERICSSON INC. TRITEL COMMUNICATIONS, INC. Network Operators Group By: By: --------------------------------------- --------------------------------------- Title: Executive Vice President & General Jerry M. Sullivan, Jr. Manager Title: Executive Vice President & General Manager Date: Date: ------------------------------------- -------------------------------------- TRITEL FINANCE, INC. By: ---------------------------------------- Jerry M. Sullivan, Jr. Title: Executive Vice President & General Manager Date: --------------------------------------
37 ATTACHMENT A - PRICING ERICSSON INC. / TRITEL COMMUNICATIONS, INC. & TRITEL FINANCE, INC. 1 PRICING 1.1 "ATP PRICES" AT&T Partnership (ATP) market prices are used as Seller's list prices for the purposes of calculating Purchaser's Initial Configuration and expansion prices. 1.2 INITIAL CONFIGURATION 1.2.1 DEFINITION Purchaser's Initial Configuration is defined as Phase IA in Attachment A. The sales object level MSC configurations upon which the Initial Configuration is priced are included in Attachment A. All Initial Configuration pricing shall be subject to verification based on Seller's ATP prices and based on the revised Initial Configuration as described in Section 2.1 of Attachment A. Base station models include Tower Mounted Amplifiers (TMAs), 2-hour battery backup, RBS software, Self Contained Cell Site (SCCS) cabinet, cable sets, as well as all required installation materials. Switch pricing includes spares and power equipment with 8-hour battery backup, as well as installation materials and cable sets. 1.2.2 DISCOUNTS The following discounts are applied to Seller's ATP prices in order to calculate the net prices for Purchaser's Initial Configuration: RBS, including TMAs, power, battery [CONFIDENTIAL TREATMENT REQUESTED] backup, spares, & RBS software Self Contained Cell Site (SCCS) [CONFIDENTIAL TREATMENT REQUESTED] cabinet, including cable sets MSC, including basic software, [CONFIDENTIAL TREATMENT REQUESTED] power, battery backup, & spares MSC optional software feature set [CONFIDENTIAL TREATMENT REQUESTED] (defined according to Section 1.3) With the exception of the SCCS, all discounts off of ATP prices are applicable only to the Initial Configuration. The SCCS cabinet continues to receive the [CONFIDENTIAL TREATMENT REQUESTED] discount off of ATP prices for the term of the Agreement. 1.3 SOFTWARE PRICING Purchaser's pricing for MSC software is based on Seller's CMS 8800 Version 5 software release. The pay-as-you-grow component of the MSC software is priced according to Subscriber Concurrent Call (SCC) capacity. SCC is calculated according to the procedure described in Seller's 1999 Budget Planning Guide for ATP markets. The MSC optional software feature set is defined in Attachment A and includes all features necessary for Purchaser to achieve the same "look and feel" as AT&T Wireless Services. 1.4 SERVICES PRICING Ad hoc labor rates and Services pricing is included in Seller's 1999 Budget Planning Guide for ATP markets. 1.5 PRICE ADJUSTMENTS Purchaser's Equipment and Software purchases for which ATP prices have not been firmly established shall be subject to later price adjustment, with corresponding payment credit to Purchaser, by Seller once ATP prices have been finalized. 2 PURCHASER'S OPTIONS 2.1 INITIAL CONFIGURATION CHANGE OPTION Seller grants Purchaser the option to alter its Initial Configuration subject to the following conditions: o Purchaser may elect to change its Initial Configuration once, no later than three months following the execution date, by giving Seller written notice of the new configuration, o Initial System discounts shall apply to the revised Initial Configuration, o The dollar value of the change shall be limited to [CONFIDENTIAL TREATMENT REQUESTED] of the value of the original Initial Configuration, o Purchaser's change option is limited to MSC and RBS Equipment and Software. Purchaser's Initial Configuration shall be re-calculated based on the change option, and any invoicing shall be adjusted by Seller according to the revised Initial Configuration. 2.2 MSC-2000 UPGRADE OPTION Seller grants Purchaser the option to purchase MSC-5000 models for its Initial Configuration although those models are not Generally Available (GA) at the time they are required for installation. Seller will charge Purchaser for the appropriate MSC-5000 models as part of the Initial Configuration and install MSC-2000 models in the markets specified by the Purchaser and will upgrade those nodes to MSC-5000 equivalents at no additional charge to Purchaser. 3 DELIVERY COMMITMENTS 3.1 LEAD TIMES The following sections detail the maximum lead times required for RBS and switch hardware as defined for the delay provisions of the Agreement. All lead times given are stated in working days and assume that Purchaser has fulfilled its obligations (site readiness, etc.) according to Seller's installation specifications. Seller represents that the following lead times are no greater than those offered to Seller's most favored customers under comparable conditions. Seller's lead time commitment for switch hardware is 120 days if forecasted and 180 days if not forecasted. Seller's lead time commitment for base station hardware is 45 days if forecasted and 90 days if not forecasted. 3.2 EQUIPMENT QUANTITIES Seller agrees to make available to Purchaser for order and delivery during 1999 no less than six (6) MSCs and no less than six hundred (600) RBS 884 Macro 1900 base stations. 3.3 MSC-5000 AVAILABILITY Seller represents to Purchaser that the estimated GA date for the MSC-5000 model is July 15, 1999. However, in no event shall GA of the MSC-5000 model be later than second quarter of 2000. Seller understands that a portion of Purchaser's network deployment will be based on the MSC-5000's timely introduction. ATTACHMENT B ACQUISITION AGREEMENT # 9152 TRITEL INC. INSTALLATION ------------
AXE SWITCH - ---------- 1. Installation 1.1 Unpacking of and Inventorying of Mechanical Parts and Cables (Package A) 1.2 Assembly and Installation of Exchange Framework (BYB 102/202) and Power Plant; Check for fit and finish 1.3 Designation of Suites, Cabinets, Cableways, and Shelves 1.4 Assembly and Installation of Ancillary Equipment (as needed) 1.5 Assembly and Connectorizing of External Cabling 1.6 Installation of Internal Cabling 1.7 Connection of Commercial Power to Power Plant; Functional Test Power Plant 1.8 Installation of Equipped Magazines (Package B) 1.9 Install Cover Plates/Doors 2. Testing 2.1 Hardware/Functional Test of APZ 2.2 Test of Switching Network 2.3 Functional Test of Operation and Maintenance Functions 2.4 Test of Trunk Circuits 2.5 Test of Traffic Routing/Generation of Test Traffic 2.6 Test of Individual Multiple Positions 2.7 Test of Individual Trunks 2.8 Combined Operational Testing of APZ & APT with Traffic 2.9 Acceptance Testing 3. Functional Test of Traffic Handling Functions in APT 3.1 Test of Traffic Routes 3.2 Test of Individual Multiple Positions 3.3 Test of Individual Trunks 3.4 Generation of Test Traffic 3.5 Combined Test 3.6 Operation Test BASE STATIONS 1. Activities Before Shipping 1.1 Assembly of Base Station Configurations 1.2 Test of Base Stations and Preparation of Test Protocols 1.3 Preparation of Transport and Packing 1.4 Transport by Common Carrier to Cell Site 2. Activities at Cell Site 2.1 Unpacking and Checking Equipment for Correct Specifications and Possible Damage 2.2 Assembly of Equipment 2.3 Cabling and Wiring 2.4 Connection to the DC Power Supply 2.5 Connection to Antenna Feeders 2.6 Connection to 4W Circuits to Switch 2.7 Test of Base Station Equipment Preparation of Base Station Final Test Protocols 2.8 Connection of Base Station Equipment to Commercial Power within Room 2.9 Install Antennas on Tower
3. SYSTEM TEST Overall test carried out from MTSO with Initial Configurations of Cell Site Configurations, as well as telco lines connected and mobile stations operating. SELLER will interconnect and/or cross connect the equipment at the POP to the circuits of the PSTN provided by PURCHASER within the same building and the interconnection and/or cross connect at the POP of the facilities between the MTSO Equipment, and each Cell Site Configuration. In the event analog circuits are used between the MTSO and the Cell Sites, the required circuits will be supplied by PURCHASER. Attachment C Acquisition Agreement #9152 Tritel Inc. TECHNICAL EDUCATION TECHNICAL EDUCATION CENTER STUDENT CERTIFICATE PROGRAM The program is a competency development program with basic core courses and several areas of concentration. At the present time, three areas for the CMS 8800 are available: MSC, RBS, and RF Engineering. These areas are available in both the 850Mhz systems and the 1900 Mhz systems. Within each area of concentration, multiple levels of technical competence are possible. The MSC area has four levels and the RBS and RF areas have three levels each. One important note about this program is that it is not intended to certify the competence of anyone. This program is a method of providing a customized training path for technicians and RF Engineers for the companies that utilize Ericsson CMS 8800 systems. This program is NOT a substitute for and should not be confused with the official Ericsson Standardized On-The-Job Training Program or the Certification programs that Ericsson designs for it's customers. An expanded list of CMS 8800 courses appears at the end of this Attachment C. o LEVEL 1 Provides training required to perform basic routines and administration under the guidance of a technician that has achieved certificate level 3 through this certificate program. o LEVEL 2 For the technician required to perform normal operation and maintenance activities using standard Ericsson exchange documentation. o LEVEL 3 For the technician who will diagnose and repair both hardware and some software faults as well as perform extended operations and maintenance functions. o LEVEL 4 For the technician/engineer who is trained to be a trouble shooter on both hardware and software as well as have a strong command of advanced functions, features an system capabilities. STEPS: To participate in the Certificate program the three steps listed below must be followed; 1. Successfully complete at the courses identified (80% or better score in each course). These required courses are listed in the Ericsson course catalog specific to the CMS 8800 system. 2. Have the specified amount of work field experience verified by the applicants 44 supervisor on the certificate request form. 3. Submit an application for certificate at which time Ericsson will notify the employee's supervisor or team leader of student competency development certificate eligibility. If the employee has met all requirements for the level requested, Ericsson will send to the employee's supervisor. NOTES: 1. Credit for passing courses will not be automatic. Students will be evaluated via written quizzes, performance of lab exercises, and observation of the student's ability to perform. 2. All instructors teaching concentration courses are required to be certified to instruct the class. Instructor certification includes two elements: Professional Certification and Technical Certification. 3. All courseware has been revised to include the new evaluation criteria, as well as recent CNA improvements. Also, additional lab exercises are added as needed. 4. In the event that a student wishes to waive a course that is required for this program, his/her supervisor must submit a course description or outline of an equivalent course plus a certificate of completion for the substituted course. The Certificate office will determine the eligibility of the substituted course descriptions or outlines. PRICING: All Ericsson Technical Education Center (E-TEC) courses are priced based on Credit Units. The value of each Credit Unit is [CONFIDENTIAL TREATMENT REQUESTED] USD each. The price for the Credit Unit remains the same whether the course is conducted at the E-TEC facility in Richardson Texas or at the customers location. The number of Credit Units for each course is based on the extent of technical knowledge imparted during the training. The majority of the courses are 10 Credit Units per day. This may vary at customer request if the customer has asked specifically for a course that is shorter in duration but contains the same information. It may also vary if the course is of such a high technical level that it warrants special skills by the instructor. All courses conducted at other then the E-TEC facility must be prefaced by a quote of costs originated by the Ericsson manager setting up the class and signed by the customer manager coordinating the course. In addition, the customer must pay for all of the instructors expenses to include: airfare, rental car, hotel, meals and incidentals. No courses will be scheduled until the Ericsson training manager responsible for the course receives the customer signed quote from the customer along with a purchase order number covering all of the expected costs for the class. 45 CMS 8800, 1998 COURSE OFFERINGS: INTRODUCTION: The course offerings for CMS 8800 include curriculum designed specifically for the CMS 8800 product line. Additional courses will be included from the Ericsson product line as applicable. (A) CMS 8800, 1998 Course/Price List
- ---------------------------------------------------------------------------------------------------------------------------- COURSE NAME # OF CREDIT END CUSTOMER DAYS UNITS PRICE/$ - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 Ericsson Cellular Overview 1 10 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RBS 882M/DM Overview 1 10 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 Digital Overview 1 10 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 Digital Operation & Maintenance 3 30 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 MSC Advanced Operation & Maintenance 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- AS 45/46 Features 3 30 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- Introduction To Cellular Digital Packet Data (CDPD) 1 10 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 System Introduction 4 40 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- AS 94/34 Features 1 10 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RBS 884 Overview 1 10 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RBS 884 Macro Operations & Maintenance 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 System Survey 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RF Engineering 1 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- AS 100/101 Features 2 20 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RF Engineering 2 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 Measurement and Statistical Analysis for 4 40 [CONFIDENTIAL TREATMENT REQUESTED] the Trunk and Switch Environment - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 Measurement and Statistical Analysis for 5 50 [CONFIDENTIAL TREATMENT REQUESTED] the RF and RBS Environment - ---------------------------------------------------------------------------------------------------------------------------- RF Engineering 3 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- Multi-Line Fixed 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- Air Interface 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 MSC Operations 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RF Engineering 1, Accelerated 4 40 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RF Engineering 2, Accelerated 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RF Engineering 3, Accelerated 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- AS 100/101 O & M 2 20 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 MSC Maintenance 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- MSC Operations (CBT) 10 100 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RBS 882 Operation & Maintenance 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RBS 882 Microcell Installation, Operation & Maintenance 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- RBS 884 Micro/Compact Installation, Operation and 5 50 [CONFIDENTIAL TREATMENT REQUESTED] Maintenance - ---------------------------------------------------------------------------------------------------------------------------- CMS 8800 RBS Basics 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- 884 1900 Macro IO&M 5 50 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- AS 100/101 DCCH Seminar 3 30 [CONFIDENTIAL TREATMENT REQUESTED] - ---------------------------------------------------------------------------------------------------------------------------- 884 DBC Macro IO&M TBD - ---------------------------------------------------------------------------------------------------------------------------- AS 123/124 Tech. Overview TBD - ----------------------------------------------------------------------------------------------------------------------------
For a complete listing of all E-TEC CMS 8800 courses and a detailed description of the Student Certificate programs, see the E-TEC Homepage on the Internet. Revised 4/18/97 46 47 Attachment D Acquisition Agreement # 9152 System Support Services CMS 8800 Tritel Inc. Revision PA3 System Services Contract (48) SYSTEMS SERVICES CONTRACT TABLE OF CONTENT 1 Heading 3 2 Preamble (Background) 3 3 Definitions 3 4 Scope of Contract 4 5 Services 5 6 Prices and Terms of Payment 5 7 General PURCHASER's Obligations 5 8 Delays 6 9 Warranty 6 10 Excluded Equipment 7 11 Term and Termination 7 ANNEX 1 CONTRACT DOCUMENTS ANNEX 2 HARDWARE AND SOFTWARE ANNEX 3A SERVICE PRODUCT SPECIFICATION FOR SW MAINTENANCE APPENDIX 1 SPECIFICATIONS OF VARIABLES FOR SW MAINTENANCE MAINTENANCE ANNEX 3B SERVICE PRODUCT SPECIFICATION FOR REPAIR & REPLACEMENT APPENDIX 1 SPECIFICATIONS OF VARIABLES FOR REPAIR & REPLACEMENT ANNEX 4A PRICES FOR SW MAINTENANCE ANNEX 4B PRICES FOR HW MAINTENANCE System Services Contract (49) 1. HEADING This Contract is made and entered into on ....... 1998, between Tritel Inc., a company with its principal place of business in Jackson, Mississippi hereinafter called the "PURCHASER", and Ericsson Inc., a company with its principal place of business in Richardson, TX, hereinafter called the "SELLER". PURCHASER and SELLER may also hereinafter be referred to as the "Party", or, collectively the "Parties". 2. PREAMBLE (BACKGROUND) System Services Contract (50) WHEREAS, PURCHASER has purchased a mobile telephone system from SELLER in accordance with the Acquisition Agreement, and WHEREAS, PURCHASER would like to acquire Services for such system, and WHEREAS, SELLER would like to supply such Services to PURCHASER in accordance with the terms and conditions of this Contract. Now, therefore, in consideration of the mutual promises and the mutual covenants herein contained, the Parties hereby agree as follows: 3. DEFINITIONS The following expressions shall have the meaning hereby assigned to them unless the context would obviously require otherwise. "ACQUISITION AGREEMENT", means the contract entered into between the Parties for the supply and installation of the System and shall include any amendment thereto. "CONTRACT", means this contract concluded between PURCHASER and SELLER including all Annexes which are incorporated into the said Contract in accordance with Annex 1, Contract Documents, as well as any Contract Amendment. "CONTRACT AMENDMENT", means a document duly signed by the Parties by which any alterations, amendments or modifications of the Contract shall be introduced in the Contract. "SELLER", means Ericsson Inc. "DATE OF ACCEPTANCE", means the date when the System or Part of the System is accepted or deemed as accepted in accordance with the Acquisition Agreement. "HARDWARE", means such equipment included in the System as is specified in Annex 2. "NORMAL WORKING HOURS", means the time from 8.00 am to 5:00 p.m. local time Monday to Friday, local and national holidays excluded. "PROCEDURES MANUAL", means the manual describing the SELLER's and PURCHASER's required procedures for requesting Services and answering Services requests. "PURCHASER", means ............. , and legal successors in title to the PURCHASER and any assignee of the PURCHASER approved by the SELLER. System Services Contract (51) "SELLER'S EQUIPMENT", means such tools, instruments, test equipment and any other item belonging to or procured by SELLER or its subcontractors as are required for the execution of the Contract and not intended to be incorporated into the System or otherwise acquired by PURCHASER. "SERVICE(S)", means the Service Products specified in Annex 3. "SOFTWARE", means any such computer program, software module or package or any part thereof in binary code form and included in the System as is specified in Annex 2. "SYSTEM", means the Hardware and Software jointly forming the Mobile Telephone System specified in Annex 2 and any additional system component approved of in writing by SELLER for Services under this Contract. "TERRITORY", means . . . . . Additional definitions are to be found in each Service specification in Annex 3. Other capitalized expressions used in this Contract shall have the meanings respectively assigned to them elsewhere in this Contract. Words indicating the singular only also include the plural and vice versa, where the context so requires. The headings of the Articles are for convenience only and shall not affect their interpretation. 4. SCOPE OF CONTRACT Upon the terms and conditions set forth in this Contract, the SELLER shall supply, and the PURCHASER shall acquire and pay for Services for the System acquired by the PURCHASER from the SELLER. Unless modified, herein, the terms and conditions contained in the Acquisition Agreement shall apply. 5. SERVICES The SELLER shall offer the PURCHASER the Services specified in Annex 3. PURCHASER agrees to purchase the services specified in Annex 4 at the prices set forth, therein, and as modified from time-to-time by agreement of the parties. System Services Contract (52) 6. PRICES AND TERMS OF PAYMENT The PURCHASER shall pay the prices for the Services specified in Annex 4. Payments shall be made against the SELLER's invoice. Terms of payment are within thirty (30) days after date of invoice. 7. GENERAL PURCHASER'S OBLIGATIONS In order for the SELLER to be able to supply the Services to the PURCHASER, the PURCHASER must conduct the following obligations and the obligations stated in each Services specification : i) The PURCHASER shall carry out the recommended operation and maintenance of the System and seek to remedy all faults which can reasonably be remedied and handle problems which can reasonably be handled without expert assistance from the SELLER. ii) The PURCHASER shall keep an operational logbook and record of faults in accordance with the instructions received in the B-Module. iii) The PURCHASER shall provide the SELLER with regular and accurate statistical information regarding the performance of the System. The information required is specified in the B-Module. iv) The PURCHASER shall seek to ensure its maintenance personnel are sufficient in number and are competent in order to carry out the PURCHASER obligations stipulated in this Article 7. The personnel should have satisfactorily completed the training equivalent to the SELLER's recommended training path for operation and maintenance personnel and they should have adequate on-site experience and follow-up training. v) The PURCHASER shall be responsible for the provision of all the necessary consumables and spare parts needed during the conduct of the Services. vi) The PURCHASER shall appoint suitable personnel for the purpose of liaison with the SELLER relating to the Services. vii) The PURCHASER shall provide at no cost, the SELLER's service personnel with operating supplies and consumables such as paper, magnetic tapes, ribbons, cards, format tapes, disc cartridges and such similar items as the PURCHASER would use during normal operation. viii) The PURCHASER shall at all time maintain a security back up of PURCHASER generated data/information in the System. System Services Contract (53) ix) The PURCHASER shall during the term of this Contract keep the System upgraded to the latest Software release level. 8. DELAYS In the event that any of the Services, as defined in Annex 3, are not executed within the respective times stipulated in this System Services Contract, due to circumstances for which the SELLER is responsible, or within any extended or postponed period, as the case may be, the PURCHASER shall be entitled to an adjustment in price regarding these Services, the amount of which shall be agreed upon between the Parties on a yearly basis. It is understood that the total sum of the aforesaid adjustment, during each year, in no event shall exceed a reduction of five (5) percent of the price for the delayed Service in question during the corresponding year. The aforesaid adjustment, or when applicable the price rebate, shall be full and exclusive compensation for any delay in performing the Services or part thereof. Applicable price rebate means the rebate of the price agreed upon by the parties to apply if SELLER does not reach a certain performance level. 9. WARRANTY Provided that PURCHASER has met all obligations contained in Article 7, and otherwise excluded by Article 10, the SELLER agrees to provide warranty coverage as provided herein. The SELLER shall, free of charge, remedy faulty repaired Hardware by repairing such Hardware, without undue delay. The above stated liabilities are limited to a period of three (3) months from date of delivery by the SELLER to the PURCHASER of the repaired or replaced unit. 10. EXCLUDED EQUIPMENT System Services Contract (54) The Service does not cover Hardware and Software damaged due to the PURCHASER's or third parties misuse, packing, repair or attempted modifications. Equipment not purchased through Ericsson is also not covered. The Services shall not apply to any failure caused by modification of the Hardware or Software without the SELLER's written approval. Consumable parts, such as lamps, fuses, batteries etc. are excluded from this Service(s). 11. TERM AND TERMINATION This System Services Contract shall be effective upon the Date of Acceptance of the System in accordance with the Acquisition Agreement. This contract may be terminated at any time if the PURCHASER does not maintain the system at the latest available release level. The term of this Contract shall be automatically renewed for successive one (1) year terms unless terminated by either Party in writing not later than one hundred eighty (180) days prior to the expiration of the current term. 12. ANNEXES The Contract Documents including all Annexes are specified in Annex 1 hereto. IN WITNESS WHEREOF, the parties have executed the Agreement as of the date first above written. ERICSSON INC. Wireless Communications Tritel Inc. By: __________________________ By: ___________________________ Title: ______________________ Title: ________________________ Date: _______________________ Date: _________________________ System Services Contract (55) ANNEX 1 CONTRACT DOCUMENTS The Contract shall consist of the following documents, as amended from time to time as provided herein, a) The contract document b) The Annexes: Annex 1 Contract Documents Annex 2 Hardware and Software Annex 3a SW Maintenance Annex 3b Repair and Replacement Annex 4a Price SW Maintenance Annex 4b Price HW Maintenance c) Such documents as are incorporated by reference. System Services Contract (56) ANNEX 2 HARDWARE AND SOFTWARE 1. HARDWARE PARTS OF THE NETWORK ELEMENTS MSC Mobile Service Switching Center RBS Radio Base Station HLR Home Location Register SCP Service Control Point 2. SOFTWARE PARTS OF THE NETWORK ELEMENTS MSC Mobile Service Switching Center HLR Home Location Register OSS Operation and Support System MXE Message System FOG File Operations Gateway RBS Radio Base Station System Services Contract (57) ANNEX 3a SERVICE PRODUCT SPECIFICATION FOR SW MAINTENANCE 1. INTRODUCTION This document is a specification for the service product SW Maintenance. SW Maintenance is the service for maintaining the System Software supplied by the SELLER and specified in the Acquisition Agreement. 2. DEFINITIONS In addition to the definitions in the Contract document, the following expressions shall have the meaning hereby assigned to them unless the context would obviously require otherwise. "APPROVED CORRECTION", means a permanent and documented Software correction dedicated as such by the SELLER. "APPROVED CORRECTION FOR APPLICATION SYSTEM", means a package, consisting of several Approved Corrections. "CONSULTATION CALL-UP TIME", means the time between the PURCHASER's request for consultation support and when the SELLER contacts the PURCHASER. "CORRECTION NOTE FOR APPLICATION SYSTEM", means a set of updated Software and/or Hardware units and its documentation. It consists of corrections and may also include new functionality/feature. "DOCUMENTATION", means the current documentation for the System. "EMERGENCY CALL-UP TIME", means the time between the PURCHASER's request for Emergency Telephone Support and the SELLER contacting the PURCHASER, specified in Appendix 1. "EMERGENCY CALL-OUT TIME", means the time between the PURCHASER's request for Emergency On-Site Support and the SELLER's personnel leaving for the Site, specified in Appendix 1. "EMERGENCY SITUATION", means the situation described in Article 3.1.1. "EMERGENCY SUPPORT", means the support specified in Article 3.1. "EMERGENCY ON-SITE SUPPORT", means the support specified in Article 3.1.3. System Services Contract (58) "EXCHANGE", means the part of the System where the host processor APZ 211 or APZ 212 or equivalent resides. "NORMAL OPERATIONAL CONDITION", means that the System operates and performs in accordance with the specification in the Acquisition Agreement or is operating at a level acceptable to both Parties. "PROCEDURES MANUAL", means the manual referred to in Appendix 1 hereto. "SITE", means the actual location(s) where the System or Part of System is installed. "SOFTWARE UPGRADES", means enhancements to existing software as well as availability of new features and functionality. "SOFTWARE UPDATES", means corrections of the Software based on the SELLER's and users fault reports that are issued as Software Updates by the SELLER. A Software Update shall contain the appropriate load file, implementation instructions and user documentation. "TROUBLE REPORT", means the report issued by the PURCHASER and sent electronically or on diskette to the SELLER for the purpose of indicating a problem relating to the operation of the System. "TROUBLE REPORT HANDLING", means the service specified in Article 3.2. "TROUBLE REPORT ANSWER", means the SELLER's answer to the Trouble Report. 3. SW MAINTENANCE The following SW Maintenance is available to the PURCHASER for the network elements specified in Annex 2. SW Maintenance consists of the following four (4) service components, further specified below: i) Emergency Support ii) Trouble Report Handling iii) Consultation Support iv) Software Update 3.1 EMERGENCY SUPPORT The following Emergency Support is available to the PURCHASER in case of an Emergency Situation (defined below). The Emergency Support specification is divided into the following headings: i) Emergency Situation System Services Contract (59) ii) Emergency Telephone Support iii) Emergency On-Site Support iv) Completion of Emergency Support. 3.1.1 EMERGENCY SITUATION An Emergency Situation in the System is deemed to be at hand under the following circumstances: a) Complete Exchange/network element failure, i.e. an exchange or a dependent support system (operation and maintenance function) stops handling traffic and does not recover automatically b) Major disturbance, i.e. the traffic handling capacity is reduced by more than thirty percent (30%) in at least one Exchange/network element c) Charging function stops working or is seriously affected 3.1.2 EMERGENCY TELEPHONE SUPPORT In an Emergency Situation, the SELLER shall have a person with appropriate skills and system knowledge to call the PURCHASER within the Emergency Call-Up Time specified in Appendix 1 hereto. Such person shall provide telephone support by providing answers and recommendations, orally or by telefax, to solve the Emergency Situation with the aim of restoring the System to Normal Operational Condition. 3.1.3 EMERGENCY ON-SITE SUPPORT If the Emergency Situation is of such a complicated nature that it cannot be reasonably solved through telephone support, the PURCHASER may request that the SELLER provide Emergency On-Site Support by sending a person with appropriate skills and system knowledge to the location specified by the PURCHASER. The SELLER's personnel shall leave for the Site within the Emergency Call Out Time specified in Appendix 1 hereto. Such person shall provide the following Emergency On-Site Support: a) Analyze the Emergency Situation b) Provide the PURCHASER with appropriate answers and recommendations to solve the Emergency Situation with the aim of restoring the System to Normal Operational Condition System Services Contract (60) c) Assist and advice the PURCHASER in carrying out such recommendations upon PURCHASER's request. 3.1.4 COMPLETION OF EMERGENCY SUPPORT Emergency Support shall be considered completed when an agreed solution to the Emergency Situation has been reached or when the Emergency Situation no longer is at hand, or if the PURCHASER does not accept to follow the recommendations given by the SELLER. The SELLER shall provide, the PURCHASER with a written report on the Emergency Support supplied without undue delay. 3.2 TROUBLE REPORT HANDLING The following Trouble Report Handling is available to the PURCHASER in case of trouble in the System. The Trouble Report Handling specification is divided into the following two (2) headings: i) Trouble Report Classification ii) Trouble Report Analysis/Answering. 3.2.1 TROUBLE REPORT CLASSIFICATION Trouble Reports shall be classified as A, B or C by the PURCHASER according to the classifications below. A Trouble Report is automatically given priority B unless otherwise classified by the PURCHASER. The classifications A, B and C are dependent on the severity of the trouble and are defined below. Class A: Fault resulting in an Emergency Situation. Class B: i) System traffic handling capacity is reduced by less than thirty percent (30%) in at least one exchange/network element. ii) Errors in the Documentation causing handling errors. Class C: Minor errors in the Documentation. 3.2.2 TROUBLE REPORT ANALYSIS /ANSWERING The SELLER shall analyze Trouble Reports and provide Trouble Report Answers within the times stated in Appendix 1. The Trouble Report Answer will be provided to the PURCHASER in accordance with the routines and specifications stated in the Procedures Manual. System Services Contract (61) The SELLER shall provide status reports on Trouble Reports until a Trouble Report Answer is issued. 3.3 CONSULTATION SUPPORT The following Consultation Support for the System is available to the PURCHASER. Consultation Support consists of the following two (2) components further specified below: i) Telephone Consultation ii) Consultation Services at the SELLER's Location. 3.3.1 TELEPHONE CONSULTATION In case of a request for consultation, the SELLER, as requested by the PURCHASER, shall have a person with appropriate skills and System knowledge, or a specialist, call the PURCHASER within the applicable Call-Up Time specified in Appendix 1 hereto. Such person shall provide telephone support by providing answers and recommendations, orally, by telefax or electronic media, to questions from the PURCHASER. The aim of this support is to assist the PURCHASER's personnel in arriving at a reasonable understanding of the operation and maintenance of the System. The consultation will be limited to: o Assistance with interpretation of Ericsson documentation o Operational Instructions (OPI) that have been exhausted, and indicates "consult expert" o Faults that do not result in an alarm o Alarms that do not have an associated Job Procedure (JP) or OPI If a question cannot be answered immediately, the SELLER will inform the PURCHASER within forty eight (48) hours when the question will be answered. 3.3.2 CONSULTATION SERVICES AT THE SELLER'S LOCATION In the case of a request for Consultation at the SELLER's Location to handle a complex question concerning the System, the SELLER shall provide a person, as requested by the PURCHASER, with appropriate skills and system knowledge or a specialist, to answer questions and give recommendations at the SELLER's Location with the aim of assisting the PURCHASER's personnel in arriving at a reasonable understanding of the operation and maintenance of the System. System Services Contract (62) The time for consultation at the SELLER's Location shall be agreed upon on a case by case basis. 3.4 SOFTWARE UPDATE The following Software Update service is available to the PURCHASER. The Software Update service consists of the following two (2) service components further specified below: i) Specific Software Updates ii) General Software Updates 3.4.1 SPECIFIC SOFTWARE UPDATES When applicable, the SELLER shall provide the PURCHASER with Software Updates, within a reasonable period of time in relation to the technical implications of the case, resulting from Trouble Reports Answers received as part of the Trouble Report Handling service. 3.4.2 GENERAL SOFTWARE UPDATE The SELLER shall provide the PURCHASER with General Software Updates when available from the SELLER. General Software Updates may be one of two (2) types: a) Approved Correction for Application System b) Correction Note for Application System. 3.4.2.1 Software Updates are provided under the same software license terms and conditions as stated in the Acquisition Agreement. 3.4.2.2 Software Updates are delivered in an indivisible package that may contain other software programs (new functionality/features) in addition to the Software Update. The PURCHASER may not in any way use the other software programs unless the PURCHASER specifically requests and purchases a licence to use such other software programs under the same terms and conditions as stated in the Acquisition Agreement except price. 3.5 SOFTWARE CONFIGURATION MANAGEMENT Software configuration management can include the implementation of software upgrades/updates. 3.5.1 Implementation of Software upgrades/updates System Services Contract (63) SELLER implements software upgrades/updates and ensures that the installation is made correctly and in a timely manner. PURCHASER shall make the appropriate network nodes available at the earliest convenient moment, but no later than one month after the upgrade release, for such software upgrade/update. Should implementation not be made within one month due to network inaccessibility, then the SELLER shall not be liable for faults that could have been avoided by the upgrade/update. Implementation is made in all nodes of the purchasers network. 4. SW MAINTENANCE SERVICE REQUESTS AND PROCEDURES MANUAL In order for the SELLER to be able to provide qualified SW Maintenance service, the PURCHASER must provide the SELLER with all available data and information when requesting the service. The Procedures Manual describes activities related to the SW Maintenance service. SW Maintenance service requests by the PURCHASER shall be made in accordance with the Procedures Manual. A SW Maintenance service request by the PURCHASER which has not been made in accordance with the Procedures Manual will be rejected by the SELLER. In such a case, the PURCHASER must reissue and resubmit the request. The SELLER shall promptly acknowledge that the service request has been received from the PURCHASER. 5. PURCHASER'S OBLIGATIONS In order for the SELLER to be able to provide the SW Maintenance service to the PURCHASER, in addition to the General PURCHASER's Obligations stated in the Contract, the PURCHASER is obligated to provide at no cost to the SELLER: i) Be responsible for providing the following items to the SELLER including access to the System while undertaking Emergency On-Site Support: o Adequate I/O Devices/OSS terminals o The possibility to connect a portable PC via a modem to the System. o A free and unbarred telephone o A tele-facsimile machine o The latest version of the System Documentation o The latest version of the Documentation for the B and C modules of the Exchange. ii) Provide a representative of the PURCHASER to be present at the PURCHASER's Site at all times when services are being performed by the SELLER on Site. System Services Contract (64) iii) Implement Software Updates in the System within one (1) month from receipt thereof. iv) Follow the agreed procedures stated in the Procedures Manual. v) Purchase all memory and hardware required for system upgrades and updates. 6. APPENDIX The parameters for the SW Maintenance service are specified in Appendix 1 hereto. Service Product Specification SW Maintenance SPECIFICATION OF VARIABLES FOR SW MAINTENANCE EMERGENCY SUPPORT Emergency Support availability: 24 hours per day, 365 days per year. Call up (Emergency): 30 minutes. Call out: 8 hours. CONSULTATION SERVICE Consultation Service availability: Normal Working Hours. Call up (Consultation): 30 minutes. Call up by person with specialist competence: one hour. TROUBLE REPORT HANDLING Lead-time Trouble Report Answers: Class A Trouble Reports 6 weeks Lead-time Trouble Report Answers: Class B/C Trouble Reports 14 weeks System Services Contract (65) PROCEDURES MANUAL Associated Procedures Manual is customer specific System Services Contract (66) ANNEX 3b SERVICE PRODUCT SPECIFICATION FOR REPAIR & REPLACEMENT 1. INTRODUCTION This document is the specification of the service product Repair & Replacement. Repair & Replacement is the service for the supply of Replacement Units for certain faulty Hardware in the System within a specified time. 2. DEFINITIONS In addition to the definitions in the Contract, the following expressions shall have the meaning hereby assigned to them unless the context would obviously require otherwise. "BEYOND REPAIR" means a Faulty Unit is damaged or worn out to such an extent that repair is not technically possible or the cost of repair would exceed the price for a new Service Unit. "EPIDEMIC FAILURES" means a cyclical repeatedly failure. "FAULTY UNIT" means a Service Unit that does not fulfill the Specification. "LEAD TIME" means the time between the receipt of order and delivery as stated in Appendix 1 hereto. "PROCEDURES MANUAL" means the manual referred to in Appendix 1 hereto. "REPLACEMENT UNIT" means a fault free Service Unit with the same product code as a Faulty Unit. The revision state of the Replacement Unit may be of the same or higher state than the Faulty Unit regarding the numeric value. The character following the numeric value may be lower, i.e. the functionality of it shall always be the same or better as that of the Faulty Unit. The unit may be at SELLER's option new or a refabricated unit. "SERVICE UNITS" means PURCHASER's Hardware units (i.e., equipment) specified in the Procedures Manual. "SPECIFICATION" means the technical and functional specification of the Service Units which is specified in the Acquisition Agreement. 3. REPAIR & REPLACEMENT System Services Contract (67) Repair & Replacement is the service for the delivery of Replacement Units in exchange of Faulty Units, as further specified below. 4. DELIVERY OF REPLACEMENT UNITS SELLER shall after receipt of an order, from PURCHASER placed in accordance with the Procedures Manual, for each Replacement Unit category, deliver a Replacement Unit to the PURCHASER within the Lead Time stated in Appendix 1. Service Units are divided into two categories, category 1 and category 2 as stated in the Procedures Manual. Delivery terms for Replacement Units shall be in accordance with Appendix 1 hereto. Risk of loss and damage to the Faulty Unit and title thereto shall pass to SELLER when delivered in accordance with the delivery term stipulated in this Article 4. The accuracy for the Lead Time is 95% or more. If a Faulty Unit in the System suffers from Epidemic Failure, the agreed Lead Times does not apply. The Lead Time may in such case vary depending on SELLER's workshop capacity. In such case the maximum Lead Time shall not exceed six (6) months for either category of Service Units. 5. DELIVERY OF FAULTY UNITS Delivery terms for Faulty Units shall be in accordance with Appendix 1 hereto. Risk of loss and damage to the Faulty Unit and title thereto shall pass to SELLER when delivered in accordance with the delivery term stipulated in this Article 5. If a Faulty Unit, classified as category 2 is deemed by SELLER to be Beyond Repair, the PURCHASER shall within thirty (30) calendar days be informed thereof and the Faulty Unit shall be returned to PURCHASER at PURCHASER's risk and expense. In this case SELLER shall, if a Replacement Unit is available, offer PURCHASER such a unit at the same price as a spare part. 6. STATISTICAL INFORMATION SELLER undertakes to issue quarterly reports containing delivery performances and fault statistics regarding Service Units. 7. SERVICE REQUESTS AND PROCEDURES MANUAL In order for the SELLER to be able to provide the Repair & Replacement service, the PURCHASER must provide the SELLER with all available data and information when requesting the service. System Services Contract (68) Repair & Replacement service requests by the PURCHASER shall be made in accordance with the Procedures Manual. An order by the PURCHASER which has not been made in accordance with the Procedures Manual will be rejected by the SELLER. In such a case the PURCHASER must reissue and resubmit a new order. The Procedures Manual states the procedures to be followed by the PURCHASER and the SELLER in the performance of this service. It shall be regarded as a part of the Contract, and is stated in Appendix 1 hereto. The Procedures Manual covers the following areas: o Administrative procedures for ordering o Contact list o Address list o List of Service Units 8. PURCHASER'S OBLIGATIONS In order for the SELLER to be able to provide the Repair & Replacement service to the PURCHASER, in addition to the General PURCHASER's Obligations stated in the Contract, the PURCHASER is obligated to: i) Undertake to treat Faulty Units as if they were functional units and according to SELLER's standards to prevent additional damage to the Faulty Units. ii) Undertake to follow the procedures mutually agreed upon in the Procedures Manual. iii) Not make any modification or attempt to repair Service Units without SELLER's written approval. 9. APPENDIX The variables for the Repair & Replacement service are specified in Appendix 1 hereto. System Services Contract (69) APPENDIX 1 to Service Product Specification Repair & Replacement SPECIFICATION OF VARIABLES FOR REPAIR & REPLACEMENT 1. LEAD TIME Lead Time for Service Parts category 1: 30 calendar days. Lead Time for Service Parts category 2: 60 calendar days. 2. ORDERS RECEIVED For Service Units category 1, orders are considered received by SELLER when: Faulty Unit and correct documentation are in ERICSSON REPAIR CENTER's possession. For Service Parts category 2, orders are considered received by SELLER when: Faulty Unit and correct documentation are in ERICSSON REPAIR CENTER 's possession. 3. DELIVERY TERMS Each party shall bear the cost of shipping replacement and faulty units to the other party. 4. PROCEDURES MANUAL The Procedures Manual is created jointly by SELLER and PURCHASER. System Services Contract (70) ANNEX 4a PRICES FOR SW MAINTENANCE 1. SW MAINTENANCE FEE
- ------------------------------------------------------------------------------------------------------- SERVICE CATEGORY PRICE - ------------------------------------------------------------------------------------------------------- SOFTWARE MAINTENANCE (BASIC) BASIC (INCLUDES) 1) Fault specification, Isolation, and solution 2) Software Updates/Upgrades 3) Emergency Support 4) Telephone Consultation PLATFORM FEE (BASED ON NUMBER OF MSC/HLR) 1 MSC/HLR [CONFIDENTIAL TREATMENT REQUESTED] 2-4 MSC/HLR [CONFIDENTIAL TREATMENT REQUESTED] greater than 5 MSC/VLR [CONFIDENTIAL TREATMENT REQUESTED] SOFTWARE SUPPORT MSC (Based on # of RBS connected to MSC) 1-24 RBS [CONFIDENTIAL TREATMENT REQUESTED] 25-50 RBS [CONFIDENTIAL TREATMENT REQUESTED] greater than 51 RBS [CONFIDENTIAL TREATMENT REQUESTED] HLR [CONFIDENTIAL TREATMENT REQUESTED] MXE [CONFIDENTIAL TREATMENT REQUESTED] AP [CONFIDENTIAL TREATMENT REQUESTED] CDPD MDBS 882 [CONFIDENTIAL TREATMENT REQUESTED] CDPD MDBS 884 [CONFIDENTIAL TREATMENT REQUESTED] OPTIONAL FEATURES MSC [CONFIDENTIAL TREATMENT REQUESTED] OSS [CONFIDENTIAL TREATMENT REQUESTED] WIN [CONFIDENTIAL TREATMENT REQUESTED] - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- CDPD Backbone [CONFIDENTIAL TREATMENT REQUESTED] System Services Contract (71) SOFTWARE MAINTENANCE (ENHANCED) OPTION 1 (INCLUDES) 1) Consultation Service [CONFIDENTIAL TREATMENT not included in BASIC REQUESTED] Minimum: 12 hours on-site support Minimum: 1 hour telephone support OPTION 2 (INCLUDES) 1) Emergency On-Site Support [CONFIDENTIAL TREATMENT REQUESTED] Minimum: 12 hours on-site support SOFTWARE MANAGEMENT CONFIGURATION (ENHANCED) Software Updates Per System Basis Software Upgrades Per System Basis - -------------------------------------------------------------------------------------------------------
2. PRICE CALCULATION FOR ADDITIONAL NETWORK ELEMENTS The Additional Fee, for additional network elements added to the System, will be effective and charged from the adjacent month after acceptance. The charge is calculated for the rest of the year on a prorata basis for the remaining months. 3. PRICE REDUCTION DURING THE SOFTWARE WARRANTY PERIOD The Customer shall, during the Software warranty period under the Acquisition Agreement, pay no fee for the basic SW Maintenance Services. 4. PRICE ADJUSTMENT CLAUSE The prices stated above are subject to adjustment in accordance with the Acquisition Agreement. 5. INVOICING The charges will be invoiced on the date of Software warranty expiration under the Acquisition Agreement and thereafter monthly in advance during the terms of this Contract. Optional selections will be billed from the date of purchase. System Services Contract (72) ANNEX 4a PRICES FOR HW MAINTENANCE 1. HW MAINTENANCE FEE
- ----------------------------------------------------------------------------------------------------- SERVICE CATEGORY PRICE - ----------------------------------------------------------------------------------------------------- HARDWARE MAINTENANCE (BASIC) BASIC (INCLUDES) 1) Repair and Replacement RBS 882 Analog transceiver [CONFIDENTIAL TREATMENT REQUESTED] RBS 882 Digital transceiver [CONFIDENTIAL TREATMENT REQUESTED] RBS 882 Micro transceiver [CONFIDENTIAL TREATMENT REQUESTED] RBS 882 Digital Micro transceiver [CONFIDENTIAL TREATMENT REQUESTED] RBS 884 transceiver [CONFIDENTIAL TREATMENT REQUESTED] RBS 884 Micro transceiver [CONFIDENTIAL TREATMENT REQUESTED] RBS 884 Compact transceiver [CONFIDENTIAL TREATMENT REQUESTED] MSC with 1 - 16 STCs (Small Node) [CONFIDENTIAL TREATMENT REQUESTED] MSC with 17 - 34 STCs (Medium Node) [CONFIDENTIAL TREATMENT REQUESTED] MSC with more than 34 STCs (Large Node) [CONFIDENTIAL TREATMENT REQUESTED] HLR [CONFIDENTIAL TREATMENT REQUESTED] MXE [CONFIDENTIAL TREATMENT REQUESTED] CDPD MDBS 882 [CONFIDENTIAL TREATMENT REQUESTED] CDPD MDBS 884 [CONFIDENTIAL TREATMENT REQUESTED] Fixed Cellular MLT [CONFIDENTIAL TREATMENT REQUESTED] Fixed Cellular SLT 0-50,000 SLT [CONFIDENTIAL TREATMENT REQUESTED] Fixed Cellular SLT [CONFIDENTIAL TREATMENT REQUESTED] HARDWARE MAINTENANCE (ENHANCED) OPTIONAL Advanced Delivery Service 1) Repair and Per System Basis Replacement - -----------------------------------------------------------------------------------------------------
System Services Contract (73) 2. HW MAINTENANCE FEE (OPTIONAL) OPTIONAL HW MAINTENANCE SERVICE INCLUDES: Repair and replacement, advanced delivery service. 2-Day Top 100 Critical Parts List Price for Repair and Replacement, Advanced Deliver Service is as follows: $TBD 3. PRICE CALCULATION FOR ADDITIONAL NETWORK ELEMENTS The Additional Fee, for additional network elements added to the System, will be effective and charged from the adjacent month after acceptance. The charge is calculated for the rest of the year on a prorate basis for the remaining months. 4. PRICE REDUCTION DURING THE HARDWARE WARRANTY PERIOD The purchaser shall, during the Hardware warranty period under the Acquisition agreement , pay no fee for the H/W Maintenance Services. 5. PRICE ADJUSTMENT CLAUSE The prices stated above are subject to adjustment in accordance with the Acquisition Agreement. 6. INVOICING The charges will be invoiced on the date of Hardware warranty expiration under the Acquisition Agreement and, thereafter, monthly in advance during the terms of this Contract. System Services Contract (74) ATTACHMENT E ACQUISITION AGREEMENT #9152 DOCUMENTATION CMS 8800 PRODUCT INFORMATION DEFINITION INTRODUCTION The CMS 8800 library is designed to be user-friendly so that relevant documents will be at hand when and where they are needed. The library provides the information needed to operate, maintain, check and repair the system and its equipment in a proper and effective manner. The contents and arrangement of the library are intended to show the correct servicing of the system. The documentation is divided into modules covering areas such as software, hardware etc. The documents are written for operators, technicians and engineers who are experienced with similar equipment. The documentation should be combined with Ericsson training courses that incorporate the appropriate theoretical and practical applications. This library description gives a summary of the customer library covering the information needs for Ericsson's Cellular Mobile System CMS 8800. Please note that the library is under development and changes in library structure, contents and distribution media may take place in order to include new functions and to make the library easier to use. 13. LIBRARY STRUCTURE The CMS 8800 system library is divided into five parts, Mobile Services Switching Center (MSC) Library, Home Location Register (HLR) Library, Radio Base Station (RBS) Library, Operation and Support (OSS) Library, and External Vendor Libraries. Each library contains different kinds of documents with varied information. The grouping of documents into libraries, each forming an information package, makes the library adaptable to the information requirements of different users in an operating company. -------- CMS -------- ---------- --------- --------- --------- --------- Library Library Library Library Library MSC HLR RBS OSS EXT ---------- --------- --------- --------- --------- To facilitate searching for information in paper-bound libraries, it is more efficient to have the documents divided and grouped into modules and submodules, which are electronically stored libraries. In this description, however, it is used as an easier way to explain the ideas behind the structure of the libraries. All types of modules are not normally included in each one of the libraries. Below is a list of modules existing today: Module Designation B Operation and Maintenance C Office/Site Documents D Descriptions for Functional Products F Hardware Documents K Power Supply Documents (Radio Base Station) Modules and Submodules In paper-bound libraries, each module can be composed of one or more binders, depending on the amount and type of material covered by the particular module. Modules are composed of separate submodules related to specific topics. These submodules are listed numerically beginning with the module letter and 01. At the beginning of each of the submodules, there is an index or list detailing the subject matter covered. This index breaks down the submodule into particular units of information. The units of information contained in the submodules are in the form of numbered documents. Each module and the associated submodules deals with a specific type of information, such as Maintenance, Operations, and Engineering. DISTRIBUTION MEDIA MSC and HLR AXE libraries AXE libraries are distributed electronically on two different platforms: DOCVIEW is the document viewing program which compacts the data sufficiently for use on a PC hard disk. The entire AXE Operations and Maintenance Library can be stored in 16 Mb. The DocView program works as a companion to FIOL, the interface with the AXE. DocView and FIOL are used simultaneously with a split screen. DocView is easy to learn and fast to use. It is generally delivered on a CD ROM, but is not used as a CD ROM product. DocView is intended to be a tool for the experienced, or trained, user. KRSWIN CD ROM is the document viewing program with a powerful searching engine. Using Boolean operands (and, or, not), the user may search for terms while combining terms. For example, "ETC and STR" will locate all documents where both these terms are found. KRSWin is a windows product and is intended for use by the novice operator, or a switch engineer who needs to perform research in great detail. RBS library The 884 Users Guide are available on KRSWin CD ROM. The balance of the RBS information is distributed on paper. OSS library The distribution media is paper. External Vendors library The distribution media is paper. AXE (MSC AND HLR) OPERATION AND MAINTENANCE MANUAL The Operation & Maintenance Manuals are sometimes called the Job Procedures Library. The AXE operators may be asked to perform tasks on the AXE prior to training courses, or in an alarm/emergency situation. The job procedure is a special document type which is an easy-to-use, step-by-step, task-oriented, detailed explanation of how to carry out a particular task. This information can be used in a way which enhances in-service-performance goals for the end-user. Fewer mistakes are made and tasks are completed efficiently the first time. The Operation and Maintenance Manual is available on KRSWin CD ROM. Thus, the reader can search for familiar terms to learn the tasks on his own. The job procedure is written on two competence levels. For the experienced technician who knows the command and is familiar with the procedure, a detailed flow chart is given. This flow chart gives guidance and serves as a memory-aid for the experienced worker. For the novice technician, the flow chart is a detailed description of what actions should be taken and how the AXE will react to the activity. Complete examples of syntax are provided. Warnings are also noted. This level of detail provides the inexperienced technician with the information to do any task as well or better than an experienced colleague. The information given is related to a specific AXE application system; i.e., the contents are adapted to the equipment included and functions for the system involved. RADIO BASE STATION LIBRARY These instructions are intended for use by customers who will install and/or commission the base station. Included in this information is the Ericsson know-how regarding methods and procedures for installation and testing. 884 Users Guide This modern work guide is intended for use by end-user customers of all competence levels. The typical radio technician would need this information only when the new product is delivered. It can be used to learn the new functions of the product and the new routines associated with it. The 884 Users Guide includes these sections: o INTRODUCTION: This section describes the scope of the contents of the information within. o SYSTEM DESCRIPTION: This section contains descriptions of the functional structure, the hardware architecture, and the hardware and software interfaces for the base station. The manual also contains a basic description of the CMS 8800. o INSTALLATION: This section details activities required to install and commission the radio. It is written in job procedure format. o TEST AND VERIFICATION: This section contains information describing the procedures for making an installation test and how to perform a start of operation of the base station. It contains lists of recommended test instruments, and test instructions for hardware and function testing. The manual is a tool for the commissioning staff. o OPERATION & MAINTENANCE: This section describes the procedures required for normal operation and maintenance of the base station. The manual contains information for the administrative routines, shipping and storage, repair orders, handling of spare parts, inspection, and operation. The manual also contains information covering checking or "fault-finding" and repair. The manual is job-oriented in the same manner as the work-flow. o TROUBLESHOOTING: This section is an aid in controlling and troubleshooting equipment on site using a Personal Computer or data terminal connected to the Input/Output Interface Magazine. o GLOSSARY OF TERMS o ACRONYMS AND ABBREVIATIONS o SUPPORT INFORMATION o APPENDIX: This section includes hard-to-remember charts and tables, such as Fault Code Lists and Frequency Lists. OSS - OPERATION AND SUPPORT SYSTEM - LIBRARY The documentation for the OSS system is delivered in a customer library. The library contains information describing the functions, administrative routines, error handling, operational instructions, installation instructions, software customization, acronyms, valid range of value, etc. The presentation media is both paper modules consisting of one or more binders, and on-line presentation. The on-line information may be cross-reference-linked to other product information such as AXE or TMOS information. On-line OSS information will be accessible using the Help function. Introduction The main principle for compiling a customer library is simply that each library should contain the information needed to run the Operation and Support System at the site where it is to be placed. Module A: Introduction Manual The Introduction Manual contains a general description of the functions and the interfaces from the OSS to other systems. It also describes the other modules in the set and the procedure for trouble reporting. Module B: System Administration Manual The System Administration Manual contains information for system administration. It also contains instructions for software maintenance such as administrative routines, corrective maintenance procedure, error handling, advanced diagnostics, software reconfiguration, user interface customization, security and authority management, and license keys management. It describes recovery procedures for cases in which a link goes down, the OSS server fails, or the AXE begins a restart. The B module also describes the procedure to modify the system configuration, and to identify, correct and report failures and defects within the system. Module D: Reference Manual The Reference Manual provides an overview of the product which includes general system capacity and limitations. Module G: Installation Manual The Installation Manual contains all instructions required to install the OSS. It also describes the installation parameters, valid range of value, etc. Module H: Function Verification Manual (where applicable) The Function Verification Manual contains instructions to be used by novice operators. Module M: Programming Manual (where applicable) The Programming Manual contains information on the application interfaces needed for development or alteration of functions. Module N: Market Adaptations Manual (where applicable) The Market Adaptations Manual provides unique (site-specific) information specific to each customer's application systems. Module O: Operations Manual The Operations Manual contains illustrations of the windows and examples of OSS reports and how to analyze them. PRODUCT INFORMATION THEORY AND PROCESSES General Information This information mainly describes the AXE (MSC and HLR) documentation to show the principles, but the documentation for most of the other units included in CMS 8800 is structured and designed for use in a similar way. Architecture The system has modular architecture with top down design and function modules on five levels. (See figure below.) Therefore, each function block as well as each function unit has its own product identity. Each is handled individually throughout the life cycle of the product. That is, not only are the function blocks and function units designed, engineered, documented, and installed separately, they can also be operated, maintained, and updated individually. Modularity Modularity regulates system organization, hardware design, software design, and applications. The entire system is a set of specified functions, realized at the lowest level as function units to the highest level, the total system. The figure below shows the AXE modular architecture. ----------------------------------------------------------------------- System Product Level 1 ------------------- System Products Level 2 -------------------------- Sub system Level --------------------------------- Function Block Level ------------------------------------------ Function Unit Level Software Hardware ---------------------------------------------------- ----------------------------------------------------------------------- AXE Modular Architecture System A system is an organized collection of parts for a completely functioning product, such as a telephone system, a signaling system, or a cooling system. The AXE System Level refers to the entire AXE system and encompasses all subordinate modular levels. The APZ subsystem is responsible for controlling the telephony applications switch equipment. The APT subsystem is responsible for switching telephone calls in the AXE. EXAMPLE: AXE Telephone Exchange System (System Product Level 1) APZ Control System for AXE (System Product Level 2) APT Switching System for AXE (System Product Level 2) Subsystem A subsystem is a logically limited part of a system. The subsystem represents characteristics and well-defined main functions within the system. Both APZ and APT systems are divided into a number of subsystems. ANZ consists of subsystems supporting the control system; the ANT contains subsystems in support of telephony applications. Some subsystems contain only software, others contain both software and hardware. EXAMPLE: ANZ Central processing unit ANT Subscriber switching stage Function Block A function block is a logically limited part of a subsystem. It can be an independent product or a combination of hardware or software product(s) and functional unit(s). Each subsystem consists of individual Function Blocks. Each function block has an interface to all other function blocks, which is defined by discrete signals. Each function block is made up of software or hardware function units that define specific functions within individual function blocks. EXAMPLE: Data store Fault handling Input/Output device Function Unit A function unit is the smallest building block in the functional structure. Function units can be either hardware or software. The function units are used when a product in hardware or software must be divided into smaller functionally related parts. Magazines The hardware function unit of a function block usually contains several identical devices or circuits and some common equipment. These hardware devices are implemented on printed circuit boards. The boards are grouped together in board cages called magazines. Product code/Product identity A product is identified by a unique product code and its designation. The product code indicates the system's association with the product, its location in the product hierarchy, its function, and its relationship with other products. The figure below shows a simplified product code in AXE. AXE Level 1 ----------------- APZ APT Level 2 ------------------------- ANZ ANT Sub System -------------------------------- CNZ CNT Function Block --------------------------------------- CAA COA ROF BFD Function Unit --------------------------------------------- Simplified Product Code in AXE System level 1 has the product code AXE. System level 2 has product codes APZ for the control and APT for the switching system. All subsystems in APZ have a product code ANZ (ANT is used for APT). All function blocks in ANZ have a product code CNZ (CNT is used for ANT). Software units and function units have product codes CAA and COA, respectively. Magazines and printed boards have the product codes BFD and ROF, respectively. Documentation Principles The Ericsson document numbering system is built on a close relationship between the products and their associated documents. The system's hierarchy defines the products at different levels. From a documentation point of view, all products, from the top level (AXE, APT, APZ) to the bottom level (individual circuit board) are treated equally. The numbering system classifies and groups the products and documents according to their use, system association, and content. Predefined basic numbers and classes are registered in a database, and new items can be registered as required. An individual identity number consists of letters and digits combined according to the rules of the numbering system. An individual document number consists of two parts: a decimal class and a product number. These parts are made up of letters and digits, combined according to the rules of the document numbering system. The decimal class indicates the information content of the document. A decimal class consists of four or five numbers. A prefix can be attached to decimal class to indicate a difference between individual documents, without changing the meaning of the decimal class. A product number indicates the system level for which the document is written. A product number is made up of a combination of letters and numbers. The letters designate the system level, while the numbers identify the product. A product is identified by a unique product number and its designation. The product number indicates the system association of the product, its location in the product hierarchy, its implementation (for example, software and hardware), and its relationship with other products. Note that this is a description of Ericsson's document numbering system. That the document type is mentioned or described in this part of the library description does not imply that the document type is included in the CMS 8800 library. Document Structure The system hierarchy defines the products at different levels. All products from top level (AXE, APT, APZ ) to the bottom (individual circuit board) are treated equally from a documentation identification point of view. For each product category, a document structure shows the documentation required for the different phases the product goes through, such as design and production. The below figure shows the document structure for one function block. [GRAPHIC OMITTED] Document Structure for a Function block The document survey is an important document. All other documents belonging to a particular product are listed on the survey. (See next figure.) Note: Only those documents required for normal everyday activities are supplied to the customer. The remainder are internal proprietary documents. The volume of documentation is considerable for complex products. The amount of documentation that exists for a particular product is not apparent from the product code alone. The next figure shows all the information needed for the APT system products level. [GRAPHIC OMITTED] ATTACHMENT F ACQUISITION AGREEMENT # 9152 TRITEL INC. CMS 88 RESPONSIBILITY MATRIX TABLE OF CONTENTS
PLANNING....................................................................... 3 200 Initial Planning & Design. 210 Radio Network Design IMPLEMENTATION & TESTING OF RBS............................................................................ 5 300 Base Station Site Search (site acquisition) 310 Base Station Site Lease (site acquisition) 320 RBS Engineering 330 Base Station Site Civil Construction 340 Installation of Outdoor RBS Equipment 350 Installation of Indoor RBS Equipment 360 RBS Network Element Test 370 Engineering Antenna System IMPLEMENTATION & TESTING OF SWITCH (E.G. MSC, HLR).............................10 400 Switch Engineering 410 Data Transcript 420 Civil Construction & Site Acquisition for Switch Site 430 Switch Installation 440 Switch Network Element Testing IMPLEMENTATION & TESTING OF NETWORK MANAGEMENT SYSTEMS (NMS) (E.G. OSS, SMAS) & OTHER NETWORK ELEMENTS(E.G. MXE).........................14 500 Engineering of Seller's NMS Network Elements (e.g. OSS, SMAS) 510 Engineering of Seller's Other Network Elements (e.g. MXE) 520 Pre-Testing of Seller's NMS Network Elements (e.g. OSS, SMAS) 530 Installation of Seller's Other Network Elements (e.g. MXE) 540 Installation of Seller's NMS Network Elements (e.g. OSS, SMAS) 550 Testing of Seller's Other Network Elements (e.g. MXE) 88 IMPLEMENTATION & TESTING OF TRANSMISSION...................................................................15 600 Lease of Transmission & Data Communications Network 610 Transmission Engineering 620 Transmission Installation 630 Transmission Testing 640 Testing Data Communications Network INTEGRATION & ACCEPTANCE.....................................................................17 700 Integration of Seller's MSC, HLR, Network Elements & PSTN 710 Integration of Seller's NMS (e.g. OSS, SMAS) Network Elements 720 Integration of Seller's Other (e.g. MXE) Network Elements 730 Integration of Seller's RBS Network Elements 740 System Demonstration (for Network Elements delivered by Seller) 750 NMS Demonstration (for Network Elements delivered by Seller) 760 Initial Tuning 770 Commercial Acceptance 780 RF Optimization 790 Initial Configuration Acceptance
89 KEY The Responsibility Matrix states different areas of activities within the project and clarifies the division of responsibility between Purchaser and Seller. X = Purchaser's responsibility B = Included in Seller`s Basic Package for Engineering, Installation and Testing O = Optional available from Seller at additional charge O1 = Optional available from Seller at additional charge. Seller responsible for everything except Zoning, commercial power and Telco. O2 = Optional available from Seller at additional charge. Seller responsible for Civil Construction only.
- ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- PLANNING - ------------------------------------------------------------------------------------------------------------- 200. INITIAL PLANNING & DESIGN - ------------------------------------------------------------------------------------------------------------- 1. Prepare "Market Requirement Questionnaire": ERICSSON PROVIDE . - Plan and estimate overall number of basestations B TRITEL THE . - Grade of service B DOCUMENT . - Transmission routing, signaling, numbering, charging B . - Services, operations, and maintenance plans B ERICSSON BRINGS . - External interfaces defined B DT, ENG., . - Prepare radio network requirements document (only if B INSTALLATION Seller is providing RF Network plan) AND JR INVITES . - Develop reports from requirements document B THE RESOURCES TO . - Obtain tools (software/hardware to create reports) B KICKOFF - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- 2. Clarify requirements interrelated, if any, with other X working networks. 90 PURCHASER SELLER REMARKS TASK R - ------------------------------------------------------------------------------------------------------------- 3. Answer Market Requirement Questionnaire (data base). X - ------------------------------------------------------------------------------------------------------------- 4. Review responses from Market Requirement Questionnaire. B Recommend changes, or approve. - ------------------------------------------------------------------------------------------------------------- 5. Seller to supply "Exchange Requirement" data forms to B Purchaser. - ------------------------------------------------------------------------------------------------------------- 6. Answer Exchange Requirement data forms. X - ------------------------------------------------------------------------------------------------------------- 7. Review responses from Exchange Requirement data forms. B Recommend changes, or approve. - ------------------------------------------------------------------------------------------------------------- 8. Plan and estimate the Network Element(s) required to X meet market and exchange data criteria. - ------------------------------------------------------------------------------------------------------------- 9. Determine number of hours of reserve required for X emergency power (battery backup) for switch. - ------------------------------------------------------------------------------------------------------------- 10.Design emergency power based on item 200.9. Seller to B supply design requirements to Purchaser. - ------------------------------------------------------------------------------------------------------------- 11.Define a minimum portion of the Initial Configuration X B for Initial Tuning - ------------------------------------------------------------------------------------------------------------- 210. RADIO NETWORK DESIGN - ------------------------------------------------------------------------------------------------------------- 1. Prepare forecast of demand for service and location of demand: X . - Outline desired area of coverage via maps or software X . - Show demographic information of area to be covered X . - Define coverage areas that are designated "urban", "suburban", and "rural" X . - Designate estimated subscriber growth for coverage area X O . - Design RF cellplan to be used. - ------------------------------------------------------------------------------------------------------------- 2. Develop coverage objectives. Prepare coverage plan to meet objectives: . - Define building coverage penetration requirement for X O urban", "suburban", and "rural" . - State time restraints to provide coverage of above areas X and outline yearly marketing requirements through year 10. - ------------------------------------------------------------------------------------------------------------- 3. Prepare nominal cell plan using items 210.1 and 210.2. X O - ------------------------------------------------------------------------------------------------------------- 4. Provide search areas for cell sites as proposed by RF X Engineering to site acquisition responsible. - ------------------------------------------------------------------------------------------------------------- 5. Perform feasibility study for and ranking of possible site(s): X . - Preliminary zoning review X . - Preliminary site survey by RF Engineering X . - Preliminary site survey by construction company(s). - ------------------------------------------------------------------------------------------------------------- 6. Select best site. Purchaser to notify the acquisition X B REVIEW ROOFTOPS team. - ------------------------------------------------------------------------------------------------------------- 91 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 7. Identify, qualify and secure real estate for exchange X and radio base station sites. - ------------------------------------------------------------------------------------------------------------- 8. Perform radio microwave analysis. If necessary, clear X frequency band. Inform Seller of available frequencies in relation to time schedule. - ------------------------------------------------------------------------------------------------------------- 9. Determine frequency plan based on results of item 210.8. X - ------------------------------------------------------------------------------------------------------------- 10.Document and distribute radio base station dependent data. Identify the following cell site information: X O . - Number of voice channels X O . - Effective radiated power X O . - Antenna radiation center above ground level (AGL) X O . - Sector/omni antenna and orientations X O . - Down-tilt angle (if used) X O . - Frequency plan X O . - Frequency hopping sequence (if used) X O . - Site name, site code and number X O . - Provide map coordinates of base stations X O . - Create Cell Design Data (CDD) for each site - ------------------------------------------------------------------------------------------------------------- 11.Prepare FCC application of frequency use, adjacent X channel use, and obtain coordination approval (see ITEM300.2). - ------------------------------------------------------------------------------------------------------------- 12.Review network data sheets against equipment B capabilities (e.g. ERP not achievable). Negotiate and work-out discrepancies. - ------------------------------------------------------------------------------------------------------------- 13.Design and conduct cellplanning site survey e.g.: . - Position relative normal grid X O . - Space for antenna system including antenna separation X O . - Nearby obstacles X O . - Service area X O . - Measurements (if necessary) of path loss and time X O dispersion - ------------------------------------------------------------------------------------------------------------- . IMPLEMENTATION & TESTING OF RBS - ------------------------------------------------------------------------------------------------------------- 300. BASE STATION SITE SEARCH (SITE ACQUISITION) - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- 1. Provide to Purchaser site prerequisites specifications B (size, floor loading, ceiling height, etc.). - ------------------------------------------------------------------------------------------------------------- 2. Submit application to FCC and local authorities (see X item 210.11). - ------------------------------------------------------------------------------------------------------------- 92 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 3. Perform title search for selected sites and verify the X site is available for lease. - ------------------------------------------------------------------------------------------------------------- 4. Identify microwave circuit(s) and other interfering X objects that must be relocated. - ------------------------------------------------------------------------------------------------------------- 5. Provide information to Seller that a site is preliminary X B ERICSSON REVIEW identified. Possible inspection will be performed at WITH TRITEL FOR Seller's discretion CAPABILITY OF BEING BUILT - ------------------------------------------------------------------------------------------------------------- 310. BASE STATION SITE LEASE (SITE ACQUISITION) - ------------------------------------------------------------------------------------------------------------- 1. Perform negotiation with site owners. X - ------------------------------------------------------------------------------------------------------------- 2. Approve and conclude lease contract. X - ------------------------------------------------------------------------------------------------------------- 3. Complete site data file and provide to civil construction contractor: - Preliminary site plan X - Final title search results X - Lease/purchase documents X - FCC permits submitted and received X - ------------------------------------------------------------------------------------------------------------- 4. Complete site data file and provide to civil construction contractor: - RF Engineering data X - Building permits X - An engineering firm soil test if required X - ------------------------------------------------------------------------------------------------------------- 320. RBS ENGINEERING - ------------------------------------------------------------------------------------------------------------- 1. Perform joint site survey to determine layout for site, X B including antenna system. Parties to agree on layout. - ------------------------------------------------------------------------------------------------------------- 2. Prepare site prerequisites specifications for site B search (see item 300.1), and for civil construction (see item 330.2) - ------------------------------------------------------------------------------------------------------------- 3. Prepare detailed installation design based on item 320.1. B - ------------------------------------------------------------------------------------------------------------- 4. Approve detailed installation design. X - ------------------------------------------------------------------------------------------------------------- 5. Prepare as built drawings after installation. B - ------------------------------------------------------------------------------------------------------------- 330. BASE STATION SITE CIVIL CONSTRUCTION - ------------------------------------------------------------------------------------------------------------- 1. Hire Architecture & Engineering (A/E) firm. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 2. Give Seller's requirements to A/E firm e.g.; size and B weight of Seller's equipment, environmental requirements, demarcation points to be located close to basestations. - ------------------------------------------------------------------------------------------------------------- 93 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 3. Obtain topographic survey of property (if tower/monopole X O1 & O2 is to be constructed). - ------------------------------------------------------------------------------------------------------------- 4. A/E firm will prepare complete site drawings (A&E). Drawings to include but not limited to showing: . - Equipment locations and details X O1 & O2 . - Electrical panel location and details X O1 & O2 . - Telco demarcation point and details X O1 & O2 . - Antenna descriptions, locations and details X O1 & O2 . - Coax locations and details X O1 & O2 . - Concrete support pads/steel platform structures and X O1 & O2 details X . - Mounting devices (e.g.; threaded studs) if required for O1 & O2 the Seller's equipment X O1 & O2 . - Reinforcement of existing structures X O1 & O2 . - External alarms and details X B Ericsson to . - Grounding system and details X B provide grounding . - Lightning protection system and details X O1 & O2 spec. and - Warning lights on tower X O1 & O2 lightning - Special color on tower X O1 & O2 protection . - Tower/monopole/coax bridge details (for tower/monopole X sites, only) X O1 & O2 REQUIREMENTS. . - Fences and details(for tower/monopole sites, only) X O1 & O2 . - Access road and details (for tower/monopole sites, only) X O1 & O2 . - Core drilling X O1 & O2 . - Fire protection system X O1 & O2 . - Heating, ventilating, air conditioning systems X O1 & O2 . - Lighting systems - ------------------------------------------------------------------------------------------------------------- 5. Approve site drawings. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 6. Provide copy of A&E drawings to Seller (or to Purchaser). X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 7. Acknowledge receipt of approved A&E Drawings. B - ------------------------------------------------------------------------------------------------------------- 8. Prepare and issue request for quotation for new tower or X O1 & O2 monopole (if tower/monopole is to be constructed). - ------------------------------------------------------------------------------------------------------------- 9. Select vendor for new tower or monopole and place order X O1 & O2 (if tower/monopole is to be constructed). - ------------------------------------------------------------------------------------------------------------- 10.Obtain soils report (if tower/monopole is to be X O1 & O2 constructed). - ------------------------------------------------------------------------------------------------------------- 11.Design foundation for tower or monopole (if X O1 & O2 tower/monopole is to be constructed). - ------------------------------------------------------------------------------------------------------------- 94 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 12.Obtain structural analysis of existing tower or monopole X O1 & O2 with new equipment added (for existing tower/monopole sites only). - ------------------------------------------------------------------------------------------------------------- 13.Order antenna support structure. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 14.Issue A&E drawings to contractors for quotes. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 15.Select contractor(s) X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 16.Furnish antennas, feeders and jumpers. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 17.Provide warehouse for civil construction items (if X O1 & O2 required) - ------------------------------------------------------------------------------------------------------------- 18.Obtain building permit. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 19.Obtain zoning approval. X - ------------------------------------------------------------------------------------------------------------- 20.Order commercial power. X - ------------------------------------------------------------------------------------------------------------- 21.Order Telco. X - ------------------------------------------------------------------------------------------------------------- 22.Prepare construction schedule and list milestones such X O1 & O2 as "joint site inspection" date and "site ready for installation" date to Seller - ------------------------------------------------------------------------------------------------------------- 23.Prepare and distribute implementation schedule for B Seller's "Installation and Testing". - ------------------------------------------------------------------------------------------------------------- 24.Construct site in accordance with approved A&E drawings X O1 & O2 in item 330.4. Construct tower/monopole with foundations (for tower/monopole sites only). - ------------------------------------------------------------------------------------------------------------- 25.Provide security during construction. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 26.Provide Seller's (or Purchaser's) access to site during X O1 & O2 construction. - ------------------------------------------------------------------------------------------------------------- 27.Supervise site construction. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 28.For antenna systems: . - Perform Voltage Standing Wave Radio (VSWR ) and Time X O1 & O2 Domain Reflectometer (TDR) test for all lines and antennas. Check feeders are connected to right antennas. - ------------------------------------------------------------------------------------------------------------- 29.Clean up site. X B WHO EVER MADE THE MESS CLEANS IT UP - ------------------------------------------------------------------------------------------------------------- 30.Joint site inspection of civil construction X B - ------------------------------------------------------------------------------------------------------------- 31.Issue "Civil Site Acceptance Certificate". (X) B - ------------------------------------------------------------------------------------------------------------- 32.Turn site over to Seller's installation team. X - ------------------------------------------------------------------------------------------------------------- 33.Provide "As Built" drawings. X B - ------------------------------------------------------------------------------------------------------------- 34.Issue "Site Civil Exceptions List". X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 35.Resolve items on "Site Civil Exceptions List". X O1 & O2 95 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 36.Issue "Site Civil Exceptions List Certificate of (X) B Completion". - ------------------------------------------------------------------------------------------------------------- 340. INSTALLATION OF OUTDOOR RBS EQUIPMENT - ------------------------------------------------------------------------------------------------------------- 1. Provide telephone line or equivalent as back-up B (Cell Phones) communication link for technicians. - ------------------------------------------------------------------------------------------------------------- 2. Provide security during the installation phase (if X necessary) - ------------------------------------------------------------------------------------------------------------- 3. Provide transportation from Seller's storage B location/port/airport to site (coordinated by Seller). - ------------------------------------------------------------------------------------------------------------- 4. Provide crane or other necessary lifting equipment at B site (coordinated by Seller). - ------------------------------------------------------------------------------------------------------------- 4.1 PROVIDING CRANE FOR ROOFTOP INSTALLATIONS PRICE TO BE X B NEGOTIATED WITH PURCHASER, COORDINATION BY SELLER AND PURCHASER - ------------------------------------------------------------------------------------------------------------- 5. Provide police escort and permits required to use crane B and possible block traffic. - ------------------------------------------------------------------------------------------------------------- 6. Install and connect the RBS equipment with POWER & T1 & B WAVE GUIDE (2 PEOPLE AT SITE AND 1 PERSON AT MSC GENERALLY, DURATION 4 HOURS) - ------------------------------------------------------------------------------------------------------------- 7. During the implementation phase, provide and pay for X B RESPONSIBLE PARTY repair to roads, lawns, roofs, etc., caused by possible PAYS FOR REPAIRS damage or wear by crane and/or other lifting equipment and trucks. - ------------------------------------------------------------------------------------------------------------- 8. Provide DETAIL report showing for which sites B "installation" is complete. PROVIDE COMPLETED PUNCH LIST, - ------------------------------------------------------------------------------------------------------------- 350. INSTALLATION OF INDOOR RBS EQUIPMENT - ------------------------------------------------------------------------------------------------------------- 1. Provide telephone line or equivalent as back-up B communication link for technicians. - ------------------------------------------------------------------------------------------------------------- 2. Provide security during the installation phase (if X necessary) - ------------------------------------------------------------------------------------------------------------- 3. Provide transportation from Seller's storage B location/port/airport to site (coordinated by Seller). - ------------------------------------------------------------------------------------------------------------- 4. Provide crane or other necessary lifting equipment at B BUYER WILL BE site (coordinated by Seller). NOTIFIED OF ADDITIONAL CHARGES - ------------------------------------------------------------------------------------------------------------- 5. Provide police escort and permits required to use crane B and possible block traffic. 96 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 6. Install and connect RBS cabinet. B - ------------------------------------------------------------------------------------------------------------- 7. Connect AC power system, antenna system, and ground B system to the cabinet. Antenna jumpers to be labeled. AC power and ground system to be connected with pigtails. . AC power and grounding pigtails to be provided by Purchaser. X - ------------------------------------------------------------------------------------------------------------- 8. Install the transmission equipment (Demark to RBS) X B - ------------------------------------------------------------------------------------------------------------- 9. Connect the transmission facility to the transmission. B - ------------------------------------------------------------------------------------------------------------- 10.Connect alarms to External Alarm Control Unit (EACU). B - ------------------------------------------------------------------------------------------------------------- 11.During the implementation phase, provide and pay for X B RESPONSIBLE PARTY repair to roads, lawns, roofs, etc., caused by possible PAYS FOR REPAIRS damage or wear by crane and/or other lifting equipment and trucks. - ------------------------------------------------------------------------------------------------------------- 12.Provide report showing for which sites "installation" is B complete. - ------------------------------------------------------------------------------------------------------------- 360. RBS NETWORK ELEMENT TEST - ------------------------------------------------------------------------------------------------------------- 1. Perform test setup. B - ------------------------------------------------------------------------------------------------------------- 2. Perform main power test. B - ------------------------------------------------------------------------------------------------------------- 3. Perform internal alarm test B - ------------------------------------------------------------------------------------------------------------- 4. Perform external alarm test. B - ------------------------------------------------------------------------------------------------------------- 5. Perform battery backup test (if provided by Seller) B - ------------------------------------------------------------------------------------------------------------- 6. Load RBS software (unless already loaded from factory). B - ------------------------------------------------------------------------------------------------------------- 7. Provide test results from factory/warehouse B - ------------------------------------------------------------------------------------------------------------- 8. Perform test calls, 1 call per TRM, DTRM,and/or TRX. B - ------------------------------------------------------------------------------------------------------------- 9. Perform site specific inventory and status report of B inventory result. - ------------------------------------------------------------------------------------------------------------- 10.After above tests are satisfactorily completed, inform B Purchaser the network element is ready for acceptance - ------------------------------------------------------------------------------------------------------------- 11.Issue "Network Element Acceptance Certificate". X - ------------------------------------------------------------------------------------------------------------- 12.Provide report showing which sites are ready for RBS B integration testing. - ------------------------------------------------------------------------------------------------------------- 13.Issue "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 14.Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 15.Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 370. ENGINEERING ANTENNA SYSTEM - ------------------------------------------------------------------------------------------------------------- 1. Specify number of voice channels required at site over X O a specified planning period - ------------------------------------------------------------------------------------------------------------- 97 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 2. Specify omni/sector and angle, effective radiated X O power, and required height above ground. Specify maximum transmission line loss that is acceptable. Specify down-tilt angle (if used). Specify minimum vertical angle. Supply building drawing to Vendor. - ------------------------------------------------------------------------------------------------------------- 3. Specify location of equipment or RBS location in X O relation to antenna location. - ------------------------------------------------------------------------------------------------------------- 4. Calculate number of TRM, DTRM,and/or TRX units X O required over planning period. Consider signaling and control requirements. - ------------------------------------------------------------------------------------------------------------- 5. Based upon items 370.1 - 370.4 specify number and X O type of antennas required and general transmission line requirements. - ------------------------------------------------------------------------------------------------------------- 6. Review job for special requirements, e.g. fireproof X O cables in elevator shafts, etc. - ------------------------------------------------------------------------------------------------------------- 7. Visit site and prepare final specifications for X O antennas and transmission lines. Select vendor(s). - ------------------------------------------------------------------------------------------------------------- 8. Prepare drawings and instructions to riggers or X installers (as per section 330, civil contractor will install antenna system). - ------------------------------------------------------------------------------------------------------------- . IMPLEMENTATION & TESTING OF SWITCH (E.G. MSC, HLR) - ------------------------------------------------------------------------------------------------------------- 400 SWITCH ENGINEERING - ------------------------------------------------------------------------------------------------------------- 1. Dimension switching system. PROVIDE GROUNDING B REQUIREMENTS - ------------------------------------------------------------------------------------------------------------- 2. Project Manager creates a project file in ordering system. B - ------------------------------------------------------------------------------------------------------------- 98 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 3. Floor plan engineering: ERICSSON WILL . - Site visit by Plant Engineer. B DETERMINE . - Assist Purchaser in selecting best building available. X B SPECIFIC ISSUES . - When building is selected, provide input for X B AND determining floorplan layout. INCLUDE TRANSPORT B & EQUIPMENT . - Provide floorplan layout. X B LAYOUT DETAILS . - Determine site specific issues that will impact Plant (FOR DETAILS Engineering effort, according to a site survey check X B WHICH HAVE BEEN list. PROVIDED BY . - Approve floorplan. TRITEL) - ------------------------------------------------------------------------------------------------------------- 4. Specify engineering package for mechanics (such as floor B dependent items (FDI)). - ------------------------------------------------------------------------------------------------------------- 5. Production of C modules C01 and C02 documents, which B contain allocation documentation, cabling tables, and address and strapping information. - ------------------------------------------------------------------------------------------------------------- 6. The C modules are delivered to the installation crews. B - ------------------------------------------------------------------------------------------------------------- 7. "AS built" drawings are returned to Plant Engineering B for updating customer documentation. - ------------------------------------------------------------------------------------------------------------- 8. Provides finalized C modules to Purchaser as part of B exchange library. - ------------------------------------------------------------------------------------------------------------- 410. DATA TRANSCRIPT - ------------------------------------------------------------------------------------------------------------- 1. Exchange requirement document: . - Purchaser completes the exchange requirement forms and X returns them to Seller for review and recommended changes. B . - Review exchange requirement forms. At the discretion of Seller, a site visit may be required to work out details in clarifying the Exchange Requirements Document. - ------------------------------------------------------------------------------------------------------------- 2. Purchaser to provide cassette tape with professionally X recorded messages (if not using Ericsson standard messages) - ------------------------------------------------------------------------------------------------------------- 3. Hardware allocation of switch network elements. B Detailed dimensioning provided by switch engineering (see section 400). - ------------------------------------------------------------------------------------------------------------- 4. Output of Data Transcript (DT) files: . - Call routing, end of selection, call treatments, size B alterations, etc. 99 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 5. DT is delivered to network element testing department B for incorporation into the switch load. - ------------------------------------------------------------------------------------------------------------- 420. CIVIL CONSTRUCTION & SITE ACQUISITION FOR SWITCH SITE - ------------------------------------------------------------------------------------------------------------- 1. Hire Architecture & Engineering (A/E) firm. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 2. Provide Purchaser with MSC building fundamental OVERHEAD CABLING information: B WILL WORK WITH . - Switch floor plan layout and dimensions including power B NEW EQUIPMENT. and battery B UNDER . - Switch power consumption B FLOOR PREFERED. . - Data to determine overhead or under floor cabling B TRITEL WILL NEED preference X B BTU REQUIREMETNS. . - Equipment weight to determine floor loading of potential buildings . - Air Conditioning requirements . - Demarcation points to be located close to Purchaser's equipment - ------------------------------------------------------------------------------------------------------------- 3. Select building that meets requirements in item 420.2. X - ------------------------------------------------------------------------------------------------------------- 4. Negotiate with building owners and sign finalized X lease agreement. - ------------------------------------------------------------------------------------------------------------- 5. A/E firm will prepare complete site drawings. Drawings to include, but not limited to showing: X O1 & O2 . - Equipment locations and details X O1 & O2 . - Electrical panel location and details X O1 & O2 . - Telco demarcation point and details X O1 & O2 . - Coax locations and details X O1 & O2 . - Concrete support pads/steel platform structures and B details. If necessary: any mounting devices e.g.; threaded studs required for the Seller's equipment X O1 & O2 . - Reinforcement of existing structures X O1 & O2 . - External alarms and details X B . - Grounding system and details (ERICSSON WILL PROVIDE X GROUNDING REQUIREMENTS, SPECIFICATIONS AND GUIDELINES) X B . - Lightning protection system and details X O1 & O2 . - Core drilling X O1 & O2 . - Fire protection system X O1 & O2 . - Heating, ventilating, air conditioning systems O1 & O2 . - Lighting systems - ------------------------------------------------------------------------------------------------------------- 6. Approve site drawings. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 100 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 7. Provide copy of A&E drawings to Seller (or to Purchaser). X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 8. Acknowledge receipt of approved A&E drawings. B - ------------------------------------------------------------------------------------------------------------- 9. Issue A&E drawings to contractors for quotes. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 10.Select contractor(s) X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 11.Provide warehouse for civil construction items X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 12.Obtain building permit. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 13.Obtain zoning approval. X - ------------------------------------------------------------------------------------------------------------- 14.Order commercial power. X - ------------------------------------------------------------------------------------------------------------- 15.Order Telco. X - ------------------------------------------------------------------------------------------------------------- 16.Prepare construction schedule and list milestones such X O1 & O2 as "joint site inspection" date and "site ready for installation" date to Seller - ------------------------------------------------------------------------------------------------------------- 17.Prepare and distribute implementation schedule for B Seller's "installation and testing". - ------------------------------------------------------------------------------------------------------------- 18.Construct site in accordance with approved A&E drawings X O1 & O2 in item 420.5. - ------------------------------------------------------------------------------------------------------------- 19.Provide security during construction. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 20.Provide Seller's (or Purchaser's) access to site during X O1 & O2 construction. - ------------------------------------------------------------------------------------------------------------- 21.Supervise site construction. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 22.Test systems. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 23.Clean up site. It is essential that site is dustfree. X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 24.Joint site inspection of Purchaser's civil construction. X B - ------------------------------------------------------------------------------------------------------------- 25.Issue Civil Site Acceptance Certificate. (X) B - ------------------------------------------------------------------------------------------------------------- 26.Turn site over to Seller's installation team. X - ------------------------------------------------------------------------------------------------------------- 27.Issue "Site Civil Exceptions List". X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 28.Resolve items on "Site Civil Exceptions List". X O1 & O2 - ------------------------------------------------------------------------------------------------------------- 29.Issue Certificate for completion of "Site Civil (X) B Exceptions List". - ------------------------------------------------------------------------------------------------------------- 430. SWITCH INSTALLATION - ------------------------------------------------------------------------------------------------------------- 0. Provide Switch Schedule X - ------------------------------------------------------------------------------------------------------------- 1. Provide telephone line or equivalent as back-up B communication link for technicians. - ------------------------------------------------------------------------------------------------------------- 2. Provide security during the installation phase (if X B necessary) - ------------------------------------------------------------------------------------------------------------- 3. Provide transportation from Seller's storage B location/airport to site (coordinated by Seller). 101 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 4. Provide crane or other necessary lifting equipment at B site (coordinated by Seller). - ------------------------------------------------------------------------------------------------------------- 5. Provide police escort and permits required to use crane B and possible block traffic. - ------------------------------------------------------------------------------------------------------------- 6. Install switch according to C-module. B - ------------------------------------------------------------------------------------------------------------- 7. Install DC power plant including batteries per K-module. B - ------------------------------------------------------------------------------------------------------------- 8. Connect AC power system, transmission system and ground B system. - ------------------------------------------------------------------------------------------------------------- 9. During the implementation phase, provide and pay for X B Party responsible repair to roads, lawns, roofs, etc., caused by possible for damage pays damage or wear by crane and/or other lifting equipment and trucks. - ------------------------------------------------------------------------------------------------------------- 440. SWITCH NETWORK ELEMENT TESTING - ------------------------------------------------------------------------------------------------------------- 1. Provide access to building and worksites for Seller's X designated testing staff. - ------------------------------------------------------------------------------------------------------------- 2. Prepare a checklist of what has been installed and B what is left to be installed. ("C module" Check List, and Material Discrepancy Report). - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- 3. Software: . - Deliver software. B . - Load software. B . - Perform tests according to H-module. B - ------------------------------------------------------------------------------------------------------------- 4. Hand over access to accepted transmission system(s). X - ------------------------------------------------------------------------------------------------------------- 5. Inform Purchaser "Network Element Ready for Acceptance" B after above tests are satisfactorily completed. - ------------------------------------------------------------------------------------------------------------- 6. Issue "Network Element Acceptance Certificate". X - ------------------------------------------------------------------------------------------------------------- 7. Issue "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 8. Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 9. Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- . IMPLEMENTATION & TESTING OF NETWORK MANAGEMENT SYSTEMS (NMS) (E.G. OSS, SMAS) & OTHER NETWORK ELEMENTS (E.G. MXE) - ------------------------------------------------------------------------------------------------------------- 500. ENGINEERING OF SELLER'S NMS NETWORK ELEMENTS (E.G. OSS, SMAS) - ------------------------------------------------------------------------------------------------------------- 102 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 1. If NMS purchased, design and order Network Elements. B - ------------------------------------------------------------------------------------------------------------- 510. ENGINEERING OF SELLER'S OTHER NETWORK ELEMENTS (E.G. MXE) - ------------------------------------------------------------------------------------------------------------- 1. If other network element is purchased, design and order B network element. - ------------------------------------------------------------------------------------------------------------- 520. PRE-TESTING OF SELLER'S NMS NETWORK ELEMENTS (E.G. OSS, SMAS) - ------------------------------------------------------------------------------------------------------------- 1. If NMS purchased, supply hardware (NMS server). B - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- 2. Supply workstations to the respective sites. X O - ------------------------------------------------------------------------------------------------------------- 3. If NMS purchased, configure NMS server hardware. B - ------------------------------------------------------------------------------------------------------------- 4. If NMS purchased, install NMS platform on server driver. B - ------------------------------------------------------------------------------------------------------------- 5. If NMS purchased, install NMS application on server B hardware. - ------------------------------------------------------------------------------------------------------------- 6. If NMS purchased, pretest NMS system at Seller's B location. - ------------------------------------------------------------------------------------------------------------- 7. Configure workstations. X B - ------------------------------------------------------------------------------------------------------------- 8. If NMS purchased, inform Purchaser "Network Element B Ready for Acceptance" after above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 9. If NMS purchased, issue "Network Element Acceptance X Certificate". - ------------------------------------------------------------------------------------------------------------- 10. If NMS purchased, issue "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 11. If NMS purchased, resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 12.Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 530. INSTALLATION OF SELLER'S OTHER NETWORK ELEMENTS (E.G. MXE) - ------------------------------------------------------------------------------------------------------------- 1. If other network element purchased, provide B transportation from Seller's storage location/airport to site (coordinated by Seller). - ------------------------------------------------------------------------------------------------------------- 2. If other network element purchased, install system on B sites. - ------------------------------------------------------------------------------------------------------------- 540. INSTALLATION OF SELLER'S NMS NETWORK ELEMENTS (E.G. OSS, SMAS) - ------------------------------------------------------------------------------------------------------------- 103 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 1. If NMS purchased, provide transportation from Seller's B storage location in Dallas to site. - ------------------------------------------------------------------------------------------------------------- 2. If NMS purchased, provide access to building and X worksite for Seller's designated installation staff. - ------------------------------------------------------------------------------------------------------------- 3. If NMS purchased, install systems on sites. B - ------------------------------------------------------------------------------------------------------------- 550. TESTING OF SELLER'S OTHER NETWORK ELEMENTS (E.G. MXE) - ------------------------------------------------------------------------------------------------------------- 1. If other network element purchased, install software. B - ------------------------------------------------------------------------------------------------------------- 2. If other network element purchased, configure system. B - ------------------------------------------------------------------------------------------------------------- 3. If other network element purchased, test system. B - ------------------------------------------------------------------------------------------------------------- . IMPLEMENTATION & TESTING OF TRANSMISSION - ------------------------------------------------------------------------------------------------------------- 600. LEASE OF TRANSMISSION & DATA COMMUNICATIONS NETWORK - ------------------------------------------------------------------------------------------------------------- 1. Supply appropriate transmission leased lines facilities. X - ------------------------------------------------------------------------------------------------------------- 2. Provide data communication network between applicable X Network Elements e.g.; AXE, NMS, and other "Switching" elements. - ------------------------------------------------------------------------------------------------------------- 3. Provide local/wide area network for communication X between workstations and applicable Network Elements. - ------------------------------------------------------------------------------------------------------------- 610. TRANSMISSION ENGINEERING - ------------------------------------------------------------------------------------------------------------- 1. Perform transmission system analysis. X O - ------------------------------------------------------------------------------------------------------------- 2. Specification of transmission module for RBS grooming. X O - ------------------------------------------------------------------------------------------------------------- 3. Supply transmission interface requirements for network B elements supplied by Seller (i.e. DS3, DS1, fiber and others). - ------------------------------------------------------------------------------------------------------------- 4. Specify requirements for all transmission equipment X O indicating suggested vendors (i.e. Tellab MUX, ATT channel banks, ADC, CSU). - ------------------------------------------------------------------------------------------------------------- 5. Order appropriate transmission circuits and equipment. X O - ------------------------------------------------------------------------------------------------------------- 104 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 6. Engineer installation specifications for the following: . DXU: . - From DXU to DSX-1 panel, or point of interface - Seller X O will supply cable. . T1: . - From DSX to the NIU (Network Interface Unit) - Purchaser X B will provide cable. . - All B . SS7: --- . - From AXE S7ST position to NIU - Seller will provide B cable.(NEED TO KNOW 56K OR 64K . Timing: B ------ . - From AXE position to clock distribution panel - Seller will provide cable, GPS or Clock and distribution panel. B . MBLT, BT-4, S7BTC: . - From switch to DSX-1 is done by Seller. Seller will B provide termination assignments to Purchaser. X . - All transmission equipment and guidelines on how to install the equipment. - ------------------------------------------------------------------------------------------------------------- 7. Supply report to Seller with connectivity details of any X equipment to be connected to Seller's equipment.. - ------------------------------------------------------------------------------------------------------------- 8. Supply report to Seller with trunk and slot assignments. X - ------------------------------------------------------------------------------------------------------------- 9. Obtain telecom requirements for circuit termination. X Copy same to Seller including need for hardware mounting space and/or circuit wiring requirements. - ------------------------------------------------------------------------------------------------------------- 10.Define all demarcation points between transmission X O sub-systems including those by carrier provider(s). - ------------------------------------------------------------------------------------------------------------- 11.Furnish transmission rack(s) at demarcation points in X O item 610.10. - ------------------------------------------------------------------------------------------------------------- 12.Furnish equipment room/space for transmission including X carrier-provider line connections. Copy layout to Seller. - ------------------------------------------------------------------------------------------------------------- 13.Design floor and equipment layout for carrier-provider X O line connections. - ------------------------------------------------------------------------------------------------------------- 14.Perform network studies including: . - Border analysis. O - ------------------------------------------------------------------------------------------------------------- 15.Perform transport access engineering. X O - ------------------------------------------------------------------------------------------------------------- 620. TRANSMISSION INSTALLATION - ------------------------------------------------------------------------------------------------------------- 1. Install transmission equipment specified in section 610. X O - ------------------------------------------------------------------------------------------------------------- 105 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 2. Furnish power to incorporate battery and A/C and D/C X O power connection to equipment requirements for leased line. Purchaser will provide a main integrated ground bar for all transmission equipment. In addition, Purchaser (or Seller if contracted for transmission) will provide cables and hardware to connect power and ground from demarcation points (see article 610.10). - ------------------------------------------------------------------------------------------------------------- 3. As a part of transmission design, furnish and install X O cables, connectors, blocks and protectors (if required) from network equipment to carrier-provider demarcation points. - ------------------------------------------------------------------------------------------------------------- 630. TRANSMISSION TESTING - ------------------------------------------------------------------------------------------------------------- 1. Perform transmission testing of each subsystems installed in section 620. Testing shall include: . - Error bit rate X O . - Jitter & wander X O . - Synchronization X O . - Compliance to manufacturers specifications X O - ------------------------------------------------------------------------------------------------------------- 2. Perform transmission testing of the total combination of transmission subsystems / leased lines per each connection between network elements and / or PSTN. Testing shall include: . - Error bit rate X O . - Jitter & wander X O . - Synchronization X O - ------------------------------------------------------------------------------------------------------------- 3. Perform testing of: . - Echo cancellers B . - SS7 equipment X B - ------------------------------------------------------------------------------------------------------------- 640. TESTING DATA COMMUNICATIONS NETWORK - ------------------------------------------------------------------------------------------------------------- 1. Perform transmission testing of each leased subsystem. Testing shall include: . - Error bit rate X . - Jitter & wander X . - Synchronization X - ------------------------------------------------------------------------------------------------------------- 106 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 2. Perform transmission testing of the total combination of all leased subsystems per each connection between Network Elements. Testing shall include: . - Error bit rate X B . - Jitter & wander X B . - Synchronization X B - ------------------------------------------------------------------------------------------------------------- INTEGRATION & ACCEPTANCE - ------------------------------------------------------------------------------------------------------------- 700. INTEGRATION OF SELLER'S MSC, HLR, NETWORK ELEMENTS & PSTN - ------------------------------------------------------------------------------------------------------------- 1. Integration/testing to be performed according to the B "H" module for switch. Other Network Elements provided by Seller (e.g.; MXE) to be integrated/tested and functionality demonstrated according to manuals for these products. - ------------------------------------------------------------------------------------------------------------- 2. Inform Purchaser: "Network Element Integration Ready B for Acceptance" after above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 3. Issue Certificate for Network Element Integration X Acceptance - ------------------------------------------------------------------------------------------------------------- 4. Issue: "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 5. Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 6. Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 710. INTEGRATION OF SELLER'S NMS (E.G. OSS, SMAS) NETWORK ELEMENTS - ------------------------------------------------------------------------------------------------------------- 1. If NMS purchased, establish communication between NMS B and applicable Network Elements after successful completion of tests in section 640. - ------------------------------------------------------------------------------------------------------------- 2. If NMS purchased, configure Network Elements for file B transfer to NMS Network Elements. - ------------------------------------------------------------------------------------------------------------- 3. If NMS purchased, configure Network Elements for alarm B routing. - ------------------------------------------------------------------------------------------------------------- 4. If NMS purchased, provide maps for NMS applications. X O - ------------------------------------------------------------------------------------------------------------- 5. If NMS purchased, establish communications between NMS X server and workstations. - ------------------------------------------------------------------------------------------------------------- 6. If NMS purchased, inform Purchaser: "Network Element B Integration Ready for Acceptance" after above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 107 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 7. If NMS purchased, issue Certificate for Network Element X Integration Acceptance - ------------------------------------------------------------------------------------------------------------- 8. If NMS purchased, issue: "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 9. If purchased, resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 10.If purchased, issue "Exceptions List Resolution X Certificate". - ------------------------------------------------------------------------------------------------------------- 720. INTEGRATION OF SELLER'S OTHER (E.G. MXE) NETWORK ELEMENTS - ------------------------------------------------------------------------------------------------------------- 1. If other network element purchased, establish B communication between other network element and applicable network elements after successful completion of tests in section 640. - ------------------------------------------------------------------------------------------------------------- 2. If other network element purchased, configure network B elements for file transfer to other network elements. - ------------------------------------------------------------------------------------------------------------- 3. If other network element purchased, configure network B elements for alarm routing. - ------------------------------------------------------------------------------------------------------------- 4. If other network element purchased, inform Purchaser: B "Network Element Integration Ready for Acceptance" after above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 5. If other network element purchased, issue Certificate X for Network Element Integration Acceptance - ------------------------------------------------------------------------------------------------------------- 6. If other network element purchased, issue: "Exceptions B List Report" (ELR). - ------------------------------------------------------------------------------------------------------------- 7. If other network element purchased, resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 8. If other network element purchased, issue "Exceptions X List Resolution Certificate". - ------------------------------------------------------------------------------------------------------------- 730. INTEGRATION OF SELLER'S RBS NETWORK ELEMENTS - ------------------------------------------------------------------------------------------------------------- 1. Connect the RBS to the MSC. B - ------------------------------------------------------------------------------------------------------------- 2. Load frequency and other parameters into MSC prior to B Network Element acceptance. - ------------------------------------------------------------------------------------------------------------- 3. Load frequency and other parameters into MSC after B Network Element acceptance. - ------------------------------------------------------------------------------------------------------------- 108 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 4. Perform and document that the following steps are completed (see section 360): . - Visual installation check of cabinet, AC mains, and B antennas B . - Power test including: AC mains, each PSU, battery backup, power com loop B . - Cabinet fans are operational (see section 360) B . - External alarms are programmed and functional B . - Cell configuration matches channel allocation document B . - Channel number of TRM, DTRM,and/or TRX matches channel allocation document B . - MS call can be made on each time slot of each TRM, DTRM,and/or TRX, and note call voice quality B . - MS call on each sector and with each neighbor with the following pertinent combinations: A-B, B-C, C-A - ------------------------------------------------------------------------------------------------------------- 5. Perform full integration test of Non-Seller provided X B equipment. (ERICSSON WILL BE INVOLVED IN SYSTEM WIDE TESTING) - ------------------------------------------------------------------------------------------------------------- 6. Identify any RF or other cell site problems that will B affect subscriber quality, or ability for site to achieve acceptance. - ------------------------------------------------------------------------------------------------------------- 7. Provide report identifying all sites that have been B integrated and have passed all MS call test. - ------------------------------------------------------------------------------------------------------------- 8. Review test plans, agree to changes, and approve (see X B section 730). - ------------------------------------------------------------------------------------------------------------- 9. Perform all test. B - ------------------------------------------------------------------------------------------------------------- 10.Inform Purchaser per base station: "Integration Ready B for Acceptance" after above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 11.Issue Certificate for Integration Acceptance per X basestation. - ------------------------------------------------------------------------------------------------------------- 12.Issue: "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 13.Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 14.Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 740. SYSTEM DEMONSTRATION (FOR NETWORK ELEMENTS DELIVERED BY SELLER) - ------------------------------------------------------------------------------------------------------------- 1. The rules for system demonstration are described in the B contractual agreement. - ------------------------------------------------------------------------------------------------------------- 2. Review test object list. X - ------------------------------------------------------------------------------------------------------------- 3. Issue test instructions. B - ------------------------------------------------------------------------------------------------------------- 109 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 4. Review test instructions. X - ------------------------------------------------------------------------------------------------------------- 5. Perform system acceptance test in "H" module for AXE B Network Elements. - ------------------------------------------------------------------------------------------------------------- 6. Inform Purchaser: "System Ready for Acceptance" after B above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 7. Issue System Acceptance Certificate. X - ------------------------------------------------------------------------------------------------------------- 8. Issue: "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 9. Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 10.Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 750. NMS DEMONSTRATION (FOR NETWORK ELEMENTS DELIVERED BY SELLER) - ------------------------------------------------------------------------------------------------------------- 1. The rules for Demonstration are described in the B contractual agreement. - ------------------------------------------------------------------------------------------------------------- 2. Review test object list. X - ------------------------------------------------------------------------------------------------------------- 3. Issue test instructions. B - ------------------------------------------------------------------------------------------------------------- 4. Review test instructions. X - ------------------------------------------------------------------------------------------------------------- 5. Perform functionality testing of NMS Network Elements B according to test manuals. - ------------------------------------------------------------------------------------------------------------- 6. Inform Purchaser: "System Ready for Acceptance" after B above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 7. Issue System Acceptance Certificate. X - ------------------------------------------------------------------------------------------------------------- 8. Issue: "Exceptions List Report" (ELR). B - ------------------------------------------------------------------------------------------------------------- 9. Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 10. Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 760 INITIAL TUNING - ------------------------------------------------------------------------------------------------------------- 1. Initial Tuning will be performed on a Minimum Portion of B Initial Configuration and comprises: . - Verify CDD parameters. . - Verify site software and hardware. . - Set up MS call on each TRM, DTRM,and/or TRX and document voice quality. . - Handover to each sector and primary neighbor of each sector. - ------------------------------------------------------------------------------------------------------------- 770. COMMERCIAL ACCEPTANCE - ------------------------------------------------------------------------------------------------------------- 110 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 1. Network Elements will be added to the system until a B Minimum Portion of the Initial Configuration has been reached as agreed upon in the contractual agreement. Each new Network Element added after Commercial Acceptance will follow Network Element Acceptance procedure. - ------------------------------------------------------------------------------------------------------------- 2. Inform Purchaser: Commercial Acceptance stage is B reached - ------------------------------------------------------------------------------------------------------------- 3. Issue Commercial Acceptance Certificate. X - ------------------------------------------------------------------------------------------------------------- 4. Issue Exceptions List Report (ELR) B - ------------------------------------------------------------------------------------------------------------- 5. Resolve items on ELR. B - ------------------------------------------------------------------------------------------------------------- 6. Issue Exceptions List Resolution Certificate X - ------------------------------------------------------------------------------------------------------------- 780. RF OPTIMIZATION - ------------------------------------------------------------------------------------------------------------- 1. Review Channel Allocation Diagram (CAD) and compare X O the data against the site acceptance test results. - ------------------------------------------------------------------------------------------------------------- 2. Analyze traffic data produced by the network. X O - ------------------------------------------------------------------------------------------------------------- 3. Determine sites or areas where optimization is X O required. - ------------------------------------------------------------------------------------------------------------- 4. Determine what test are to be performed in field based X O on integration test data and traffic data. - ------------------------------------------------------------------------------------------------------------- 5. Joint agreement on drive routes for optimization test X O and number of hand off combinations required to perform test (only if Seller is responsible for optimization) - ------------------------------------------------------------------------------------------------------------- 6. RF team will be supplied with drivers and will X O continuously drive the designated routes until required data has been collected. - ------------------------------------------------------------------------------------------------------------- 7. Analyze raw data supplied by drive teams. X O - ------------------------------------------------------------------------------------------------------------- 8. Determine corrections to site parameters, or to site X O hardware (such as antenna's to be down or up tilted, or radiated power increased or decreased). - ------------------------------------------------------------------------------------------------------------- 9. Input DT changes, or make hardware alterations at a X O negotiated number of site(s). - ------------------------------------------------------------------------------------------------------------- 10.Report results to RF engineering. X O - ------------------------------------------------------------------------------------------------------------- 11.If there are still problems repeat items 780.1 - 780.9 X O during a negotiated time period. - ------------------------------------------------------------------------------------------------------------- 12.RF team will supply status reports as optimization X O progresses. - ------------------------------------------------------------------------------------------------------------- 13.Inform Purchaser: "Optimization Ready for Acceptance" X O after above tests are satisfactory completed. - ------------------------------------------------------------------------------------------------------------- 14.Issue Certificate for Optimization Accepted X - ------------------------------------------------------------------------------------------------------------- 111 - ------------------------------------------------------------------------------------------------------------- TASK PURCHASER SELLER REMARKS R - ------------------------------------------------------------------------------------------------------------- 15.Issue: "Exceptions List Report" (ELR). X O - ------------------------------------------------------------------------------------------------------------- 16.Resolve items on ELR. X O - ------------------------------------------------------------------------------------------------------------- 17.Issue "Exceptions List Resolution Certificate". X - ------------------------------------------------------------------------------------------------------------- 790. INITIAL CONFIGURATION ACCEPTANCE - ------------------------------------------------------------------------------------------------------------- 1. Inform Purchaser, initial configuration acceptance stage B is reached. This stage implies that all Acceptance Certificates are issued including Exceptions List Resolution Certificates. - ------------------------------------------------------------------------------------------------------------- 2. Issue Initial Configuration Acceptance Certificate. X - ------------------------------------------------------------------------------------------------------------- 3. RF initial Tuning load testing and calls on quality achieved, B - -------------------------------------------------------------------------------------------------------------
Rev. A 12/11/96 112 ATTACHMENT G ACQUISITION AGREEMENT #9152 Tritel Inc. PART I - AXE ENVIRONMENTAL CONDITIONS CONTENTS - -------- 1. General 2. Climatic State 3. Dust Filtering 4. Relative Humidity of Air 5. Corrosion 6. Air-Cooling 7. Floor Covering 8. Earthing 9. Sound Level 10. Vibrations 11. Radio Electric Disturbance 12. Over-Voltage Resistibility 13. Floor Load and Ceiling Height 113 1. GENERAL For all kinds of telephone exchange equipment, the environment of the equipment is important for its reliability and performance. This environment specification covers some of the most important requirements for rooms used for operation of Ericsson telephone exchange equipment. The aim of this specification is to ensure a good operating result and long service life for the equipment. 2. CLIMATIC STATE The climatic requirements for operation of telephone exchange equipment are specified in Figure 1. The temperature and humidity are to be measured 5.0 ft. (1.5 m) above the floor, and 1.3 ft. (0.4 m) from any heat-radiating surface and when the equipment dissipates normal operating power. [GRAPHIC OMITTED] Figure 1 TEMPERATURE AND HUMIDITY CURVE 1 Covers the requirements during normal service conditions. CURVE 2 Covers the limit for safe function. CURVE 3 Covers the limit for non-destruction. Environmental endurance requirements outside curve 1 are valid for 5% of the working life of the exchange and for 0.5% outside curve 2. 114 CLIMATE RANGES FOR I/O AVAILABLE IN AXE RECOMMENDED RANGE(1) PERMITTED RANGE(2) -------------------- ------------------ I/O UNIT T(F) RH(%) T( F) RH(%) T(F/H) - ---------------------------------------------------------------------------- Siemens/PT80 68-86 20-80 32-113 10-90 - Olivetti/ 68-86 20-80 41-104 20-95 - TC 485 Display HP/ 68-86 20-80 32-122 5-95 - 2640 B Magnetic Tape 68-86 40-65 Drive: 20-80 50 HP/7970 E-151 32-131 Tape: normal 41-113 Cartridge Tape 68-86 40-65 Drive: 20-80 50 Drive DRI/5000 50-104 Crtg: 41-113 Magnetic Tape 68-86 40-65 Drive: 20-80 50 Teac/MT 1000 50-104 Crtg: 41-114 - ----- 1 Range recommended by Ericsson. 2 Range according to I/O unit or tape equipment supplier. - -------------------------------------------------------------------------------- 3. DUST FILTERING 3.1 Rooms for Telephone Exchange Equipment (Except Magnetic Tape Units) The dust and powder content should normally not exceed 50 ug/m3. If the ventilation air contains dust or powder, it should be filtered so that this value will not be exceeded. The maximum permitted particle size in ventilated air is 10 microns. 3.2 Rooms for Magnetic Tape Units 115 The dust and powder content should not exceed 50 ug/m3. The air must be filtered so that the particle size in the ventilated air does not exceed 4 microns for 90% of the dust and powder content. 4. RELATIVE HUMIDITY OF AIR Advantages of high humidity: o reduction of static charge of dust particles, resulting in reduced adhesion to contact surfaces. o reduced electrical resistance in contacts yielding better conductivity in the oxidized outer layers of contacts. Disadvantages of high humidity: o corrosion of metal surfaces. o impairment of insulation resistance of cables. Taking these various factors into account, the air humidity should be as high as possible, but not so high as to cause corrosion or impaired insulation. Experience and tests have shown that the best results are obtained at a relative humidity of 50-60% but may vary between 10-90%. 5. CORROSION Humidity and temperature within the specified requirements will not cause corrosion. Sulphur dioxide (SO2) with concentration as high as 5 ppm at 68oF 1013 mBar may cause corrosion on metal parts only in combination with a relative humidity exceeding 60%. 6. AIR-COOLING The components integrated in AXE exchanges are placed very close to each other. This results in fairly concentrated heat. An air-conditioning plant is normally required for removal of this heat. Provided that the relative humidity requirement is met, exchange equipments work without being specially affected by temperatures between 32-79oF. Since regard must be paid to personnel requirements in general, the air temperature should be kept between 64o - 79oF. For calculation of the necessary capacity of an air-cooling plant, attention should be paid not only to the outside temperature conditions, but also to the sun through windows and walls and to the heat generated by the equipment. Rooms containing exchange equipment should be pressurized to prevent the entry of dust. The air-conditioning plant should provide all secure, continuous service to the telephone exchange, (e.g., by means of adequate redundancy). 116 7. FLOOR COVERING When selecting the floor covering, consideration shall be given to factors such as the frequency with which the units are moved across the floor, loading, appearance, cost, etc. Years of experience have shown that floor coverings such as vinyl are most suitable because of their elasticity and resistance to wear under high pressure. There are, however, many other materials that can be used to cover the floor or the top surfaces of the raised floor panels such as linoleum, or other laminated plastics. Polyvinylchloride (PVC) is not suitable since it is not anti-static and will emit corrosive gases in the event of fire. Carpet-covered panels should also be avoided because they are normally not anti-static. Modern types of semiconducting floor are, however, recommended but it is not a requirement for AXE. 8. EARTHING The building shall be provided with an earth (earth electrode); the resistance to earth should be 10 ohms or lower. The earthing shall be connected to an earth collector bar, located in close proximity to Mains Termination. The earthing can consist of: a. Earth plates buried close to Mains Termination to minimize the path to the earth collector bar. b. A wire buried around the building; the wire ends shall be terminated in the earth collector bar. c. Earthing in the foundation, in which case the contact between the concrete and the earth provides the earthing. Connection to the earth collector bar is effected over reinforcement bars of special irons in the concrete. This earthing is comparatively stable, and since the concrete is somewhat moist in the contact with the earth, it will give satisfactory conductance. Foundation earthings would be preferable in the AXE building concerned. 9. SOUND LEVEL The sound level in the switch room depends on the background noise caused by the air-conditioning system (optional) and the fans in the CP shelf sections, approximately 55 dB (A). The noise in the control room is mainly emanating from the typewriters, approximately 55-65 dB (A). 10. VIBRATIONS The AXE system is designed to operate safely at accelerations of 1 m/s2 within the frequency range 10 - 100 Hz. 117 During transport the equipment will withstand vibrations of 5 m/s2 in the range of 5 - 70 Hz during 500 h. Further within 1 - 5 Hz vibrations with an amplitude of + 10 mm and 10 shocks of 300 m/s2 each with a duration of 18 ms. An unpacked unit (e.g., during repair) will withstand three shocks at right angle towards a table surface in each of the most probable directions of fall during normal handling. Height of fall is 100 mm for units weighing less than 2 kg and 50 mm for units exceeding 2 kg. 118 11. RADIO ELECTRIC DISTURBANCE Disturbances produced by the exchange follow the recommendation of CISPR, i.e., o Within 150 - 500 kHz Max 10 mV o Within 0.5 - 30 MHz Max 5 mV Sensitivity of the exchange for received electromagnetic and magnetic fields: o The electric field must not exceed 1 V/m for the frequencies 0 - 1 GHz and 10 V/m for frequencies above 1 GHz. o The magnetic field must not exceed 10,000 A/m for frequencies below 1 kHz. 12. OVER-VOLTAGE RESISTIBILITY Equipment exposed to an over-voltage may be damaged due to the presence of too high voltage, current or power. The destruction limits are generally strongly dependent on the duration of the over-voltage. When specifying the over-voltage resistibility of an exchange, the different types of lines that may be connected must be considered. In some cases, these lines are equipped with over-voltage protectors (e.g., in the MDF). The over-voltage resistibility against lightning surges must be high enough to cover all surges below the upper static striking level for the protector used. For surges having a short rise time, this static limit may very well be exceeded before the protector strikes. In this case, the surge passing to the exchange equipment will be cut off after a few milliseconds, when the protector strikes. The peak voltage may, however, reach considerably higher values than in the first case. The exchange equipment is adequately provisioned for this situation. If no protectors are provided, the lines concerned are assumed to be of such a nature that the probability of encountering high over-voltages is sufficiently small. The exact probability level depends to a large extent on economic factors (e.g., maintenance costs, etc.) and must be considered by the operator concerned in order to determine whether over-voltage protectors should be provided or not. The exchange equipment must have the capability to withstand longitudinal as well as transverse over-voltages. Some components are exposed to both types while others are only exposed to transverse over-voltages. Transverse voltages arise if an over-voltage protector at one of the wires in a speech path strikes and the protector at the other wire does not strike. As the destruction limits for different devices with regard to over-voltages and currents may vary considerably, the actual limits for the complete exchange can be expected to be dependent on the actaul traffic case. The specification given must be interpreted as valid for the worst case. 12.1 Lightning Discharges The switching equipment is designed to withstand both the over-voltages, A and B, given below: A. Peak voltage 1,000 V Front time 10 us Time to half value 1,000 us 119 The voltage may be of longitudinal or transverse type, positive or negative with respect to earth. The voltage is defined as an e.m.f. of double exponential shape and having a source impedance of 100 ohms, resistive, or higher. B. Peak voltage 1,500 V Duration 2 us The voltage may have any shape, longitudinal or transverse, positive or negative with respect to earth. The voltage is defined as an e.m.f. having an impedance of at least 100 ohms resistive during the course of the pulse and may be zero ohms at the rear edge of the pulse. 13. FLOOR LOAD AND CEILING HEIGHT 13.1 Exchange Room o The exchange is built with a section height of 2,250 mm (~7 ft.). Required free ceiling height = 2,750 mm (~9 ft.). o Floor load 4.25 kPa (0.6 lb/sq.in.) (low structure) 13.2 Control Room o Required free ceiling height 2,400 mm (~8 ft.). o Floor load 3 kPa (0.5 lb/sq.in.). o Raised floor installation is not necessary. NOTE: In case of centralized operation, the control room may be excluded and the remaining I/O devices placed in the exchange hall. 13.3 DC-Power Supply Room o The power rack dimensions are width 2.952 ft. (900 mm), depth 1.968 ft. (600 mm) and height 7.216 ft. (2,200 mm). o The free height over the racks should be at least 3.28 ft. (1,000 mm) to provide space for the cable chute. o Floor load .9 lbs./sq. in. (7.5 kPa.) 13.4 Battery Room o Free ceiling height 8.856 ft. (2,700 mm.) o Floor load 1.45 lbs./sq. in. (10 kPa.) 120 PART II - RBS ENVIRONMENTAL CONDITIONS CONTENTS - -------- 1. General 2. Climatic State 3. Relative Humidity of Air 4. Corrosion 5. Air-Cooling 6. Floor Covering 7. Earthing ................................. 1. GENERAL This specification covers some of the most important requirements for rooms used for operation of Ericsson radio base station equipment. 2. CLIMATIC STATE The climatic requirements for operation of radio base station equipment are specified in Figure 1. The temperature and humidity are to be measured 5.0 ft. above the floor, and 1.0 ft. from any heat-radiating surface and when the equipment dissipates normal operating power. 3. RELATIVE HUMIDITY OF AIR Advantages of high humidity: o reduction of static charge of dust particles, resulting in reduced adhesion to contact surfaces. o reduced electrical resistance in contacts yielding better conductivity in the oxidized outer layers of contacts. Disadvantages of high humidity: o corrosion of metal surfaces. o impairment of insulation resistance of cables. Taking these various factors into account, the air humidity should be as high as possible, but not so high as to cause corrosion or impaired insulation. Experience and tests have shown that the best results are obtained at a relative humidity of 50-60% but may vary between 10-90%. 121 4. CORROSION Humidity and temperature within the specified requirements will not cause corrosion. Sulphur dioxide (SO2) with concentration as high as 5 ppm at 68oF 1013 mBar may cause corrosion on metal parts only in combination with a relative humidity exceeding 60%. 5. AIR-COOLING Under special climate conditions, air conditioning is recommended. The power supply must be then dimensioned accordingly. 6. FLOOR COVERING When selecting the floor covering, consideration shall be given to factors such as the frequency with which the units are moved across the floor, loading, appearance, cost, etc. Years of experience have shown that floor coverings such as vinyl are most suitable because of their elasticity and resistance to wear under high pressure. There are, however, many other materials that can be used to cover the floor or the top surfaces of the raised floor panels such as linoleum, or other laminated plastics. Polyvinylchloride (PVC) is not suitable since it is not anti-static and will emit corrosive gases in the event of fire. Carpet-covered panels should also be avoided because they are normally not anti-static. Modern types of semiconducting floor are, however, recommended but it is not a requirement for AXE. 7. EARTHING The building shall be provided with an earth (earth electrode); the resistance to earth should be 10 ohms or lower. The earthing shall be connected to an earth collector bar, located in close proximity to Mains Termination. The earthing can consist of: a. Earth plates buried close to Mains Termination to minimize the path to the earth collector bar. b. A wire buried around the building; the wire ends shall be terminated in the earth collector bar. c. Earthing in the foundation, in which case the contact between the concrete and the earth provides the earthing. Connection to the earth collector bar is effected over reinforcement bars of special irons in the concrete. This earthing is comparatively stable, and since the concrete is somewhat moist in the contact with the earth, it will give satisfactory conductance. Rev. 1995 122 FIGURE 1 ENVIRONMENTAL SPECIFICATION FOR CELL SITE EQUIPMENT [GRAPHIC OMITTED] 123 Curve 1 Normal operation. 95% of operating time. Curve 2 Requirements for safe operation. Curve 3 Requirements for non-destruction. (No operation) 124 ATTACHMENT H ACQUISITION AGREEMENT # 9152 Tritel Inc. Time Schedule (To Be Determined) 1 ATTACHMENT I ACQUISITION AGREEMENT # 9152 Tritel Inc. OSS SUPPORT AGREEMENT 1. Hardware Support 1.1 During the Warranty Period, any third-party hardware equipment purchased through SELLER for use in PURCHASER's OSS application shall be warranted free of charge. 1.2 At the completion of the Warranty Period, PURCHASER shall either purchase (i) an Extended Hardware Maintenance Agreement from SELLER, or (ii) post-warranty support from the third party providing the OSS hardware, and provide SELLER with proof of such post-warranty support. 1.3 The prices SELLER charges for Extended Hardware Maintenance support are set forth in Attachment A of the Acquisition Agreement. These prices are subject to change on an annual basis. 1.4 Should additional third-party hardware purchased through SELLER be added to the OSS system subsequent to the initial installation, the Extended Hardware Maintenance Agreement will be amended to include the new equipment. 2. Software Support 2.1 PURCHASER shall receive and be licensed to use all OSS Software Enhancements during the Warranty Period. "Software Enhancements" means modifications or improvements made to the System software, not including new software features, which improve performance or capacity of the software but which are not necessary to ensure that the software operates according to the original specification. 2.2 During the Warranty Period, SELLER will provide 24 hour telephone assistance, fault tracking reporting and resolution, and emergency software patches when required. 2.3 After expiration of the Warranty Period, PURCHASER may purchase the support services set forth in 2.1 and 2.2 at the prices set forth in Attachment A of the Acquisition Agreement. These prices are subject to change on an annual basis. 2 2.4 Upon request by PURCHASER, SELLER shall make available on-site technical assistance at SELLER's standard rate then in effect. 3. Limits on Support Services The parties agree that the limitations set forth in Article 13.4 of the Acquisition Agreement shall apply to the warranty and post-warranty support obligations of SELLER. In addition, SELLER may, without liability to PURCHASER, terminate, or suspend performance of provisions of the support services affected if in SELLER's reasonable judgment: (i) the System is not maintained to two revisions prior to the latest OSS Software Release level; or (ii) SELLER is not provided access to the System and to such information and facilities as SELLER may reasonably require in order to provide the Support Services. 4. Support Responsibilities of SELLER 4.1 SELLER may access OSS equipment and software for the purposes of providing support services under the following conditions: (i) SELLER shall notify PURCHASER in advance with a Work Order stating the purpose of the work. (ii) SELLER shall notify PURCHASER at least 48 hours in advance and in writing of changes to distributed network naming services configuration files (e.g. tables) and X.25 addresses. (iii) SELLER shall notify PURCHASER in writing with a Work Report within 48 hours after completing any modifications made to PURCHASER's files that involve the following: o changes to .cshrc,.login, network configuration tables and any file in the /etc directory o changes to root directory structure o changes to disk mounts o changes to the OSS Authority database o changes to the OSS X.25 control tables o changes to installed software provided by SELLER o addition and removal of OSS userids o changes to IOG11 or adjunct processor parameters o changes to Unix partitions o changes to Unix kernel (iv) SELLER shall notify the PURCHASER at least 24 hours in advance of any network operations PURCHASER needs to perform to fulfill the Work Order. 3 Network operations include but are not limited to: scheduling of network measurements and recordings, modifications to network configurations, and collection of network configuration printouts. 4.2 SELLER shall always use the same maintenance user identification with root privileges provided by the PURCHASER to perform the operations listed in 4.1(iii) above. 5. Support Responsibilities of PURCHASER 5.1 PURCHASER shall perform system management operations on systems provided by SELLER according to practices outlined in the documentation provided by SELLER or communicated in writing by SELLER from time-to-time. 5.2 PURCHASER shall notify SELLER of any of the following changes performed on systems provided by SELLER: o changes made to NIS tables (includes host names and TCP/IP addresses falling under files provided by SELLER) o changes made to files in /etc directory o changes to .cshrc, login of default userids provided by SELLER o changes to root directory structure o changes to disk mounts o changes to the OSS Authority Database for default userids o changes to the OSS Authority Database structure of authority o changes to the OSS X.25 control tables o changes to installed software provided by SELLER o removal of default userids provided by SELLER o changes to IOG11 or adjunct processor parameters o changes to Unix partitions on machines running systems provided by SELLER o changes to Unix kernel on machines running systems provided by SELLER o installation of additional software on Assets provided by SELLER o changes to passwords 5.3 PURCHASER shall provide to SELLER 24 hour access to the maintenance user identification. 5.4 PURCHASER shall enable remote modem access to SELLER on a 7 day/24 hour availability basis. 5.5 PURCHASER shall perform routine hardware preventative maintenance and cleaning; and, prior to requesting support from SELLER, PURCHASER shall comply with all published operating and troubleshooting procedures. If such 4 efforts are unsuccessful in eliminating the malfunction, PURCHASER shall promptly notify SELLER of the malfunction. 5.6 PURCHASER shall regularly back up data to the extent the OSS hardware and software permits. 5.7 PURCHASER shall provide SELLER with (i) reasonable and safe access to OSS systems; (ii) adequate working space and facilities at the Installation Address; (iii) access to and use of all facilities of PURCHASER necessary for SELLER or its representatives to provide support services; and (iv) cooperation in maintaining a site activity log. 5.8 PURCHASER will provide SELLER with updated system configuration documentation as requested by SELLER showing the location of all IOG-11, OSS server, OSS workstations, OSS printers, X.25 Data Communications Network (DCN) hardware, and other related equipment (both existing and future, where appropriate). This documentation should also include configuration and capacity of the LAN system as well as any appropriate non-OSS software operating on the LAN. 5.9 PURCHASER will ensure the continued availability of an operational LAN/WAN system that provides sufficient connections and capacity to support the proposed OSS configuration. PURCHASER will provide sufficient number of LIU-2 (or LIU-4) card connections for each X.25 link which is to be connected to the OSS network. 5.10 The examination, replacement, and handling of hardware components can be hazardous. All related support tasks are to be performed by qualified service personnel with the appropriate technical training and experience to recognize these hazards (e.g., electrostatic discharge) and observe all protection procedures and precautions. PURCHASER agrees to use qualified service personnel and to employ adequate safety precautions in the performance of its obligations hereunder. 5.11 PURCHASER is responsible for providing a sufficient number of professional system support staff for the purpose of furnishing system and user support. All related software support and system administration tasks are to be performed by qualified service personnel with the appropriate technical training and experience. Rev. 7/19/96 5 ATTACHMENT J ACQUISITION AGREEMENT # 9152 Tritel Inc. ACCEPTANCE TESTS SCOPE SELLER will perform Acceptance Tests to demonstrate that Equipment and Software installed by SELLER is ready for commercial service. Acceptance Tests are performed in the three areas below when Installation and other related services for Equipment and Software are purchased from SELLER: o RBS Tests o Switch Tests o RF Tests 1. RBS TESTS Cell Site Configurations will be installed and tested in accordance with applicable provisions of the most current version of SELLER's C-05 RBS Installation Manual, and the RBS Commissioning Guide. Acceptance will be performed in accordance with Section 3.2 of SELLER's Operations Policies & Procedures Manual. The following documentation will be provided for each Cell Site: o Inventory Statement o Test Data Forms o Cell Site Acceptance Certificate o Punch List Report (if needed) o Punch List Resolution Certificate (if needed) All sites are to be accepted prior to being placed into service. Punch list items are to be cleared within sixty (60) days after commercial service if possible. 2. SWITCH TESTS All Switch Test Procedures are performed in accordance with the instructions in the latest revision of AXE H-Modules. o H-INST1 - General Pre-Test Documents & Procedures o H-INST2 - Test of APZ Hardware o H-INST3 - Test of APT Hardware 6 o H-INST4 - Test of Exchange o H-DEMO1 - Final Demonstration Procedures The INST2, INST3 and INST4 Modules will be used to test and verify that the hardware and data translations are installed and working properly. Each Module contains a Test Result Report (check list) that will be reviewed by PURCHASER during the Demonstration phase. The DEMO1 Module contains all specific procedures that will be utilized to demonstrate and certify that the switch will work under operative conditions and is ready for commercial service. This Switch Acceptance Process will examine the following areas for all new switch installations, while some of these areas will be excluded for expansions. This will depend upon the scope of each expansion project. o APZ Demonstration Tests o Call Demonstration Tests o AXE Feature Profile Verification o Material Inventory Verification o Installation and Test Report Verification This process will then be followed by the signing of the following documents before the equipment is placed in commercial service. Non-revenue affecting items will be placed on the Punch List Report and scheduled for resolution after acceptance. o Switch Acceptance Certificate o Punch List Report (if applicable) o Punch List Resolution Certificate (if applicable) 3. RF TESTS AND POST-CUTOVER VERIFICATION 3.1 RF tests are conducted to verify that the system RF coverage is consistent with the established design of the system; that calls can be executed from a cellular telephone within areas where coverage has been predicted to be reliable; and that handoff occurs in accordance with system parameters in the areas of handoff boundaries. RF tests will be conducted in accordance with the latest revision of the RF Engineering Procedures: o ERU/E910861 for RF Call Tests o ERU/E910862 for Handoff Tests o ERU/E921196 for Border Tests (if applicable) Results consisting of data forms and handoff locations are forwarded to the customer as the tests are conducted, during the RF testing phase. The RF Acceptance Certificate will be presented to PURCHASER for signature prior to cutover to certify that 7 RF testing has been completed and the System (or System segment which is the subject of the testing) is ready to be placed in commercial service. 8 3.2 The combined coverage, call and handoff verification is conducted in a post-cutover environment to verify the conclusions of the pre-cutover RF Tests (i.e. that the system RF coverage is consistent with the established design of the system; that calls can still be executed from a cellular telephone within areas where coverage has been predicted to be reliable; and that handoff occurs in accordance with system parameters in the areas of handoff boundaries). SELLER will propose to PURCHASER, and the parties shall mutually agree on, the test routes to be driven prior to the test. The Combined Coverage, Call and Handoff verification is performed in accordance with the then current revision of Ericsson Engineering Practice, document ERU/E921179. Results will be forwarded to PURCHASER in the form of a standard report. This report will contain pertinent switch data, test procedure summary information and a map overlay showing specific problem areas along the agreed to test route. 3.3 As part of the acceptance testing immediately following Installation of a new MTSO Configuration in an existing System, SELLER will perform a drive test to verify that the newly defined border cells are operating properly and that the intersystem handoff function is working. SELLER and PURCHASER will mutually agree to a test route and mutually agree upon handoff combinations across the border The Interswitch Handoff Test will verify system performance by initiating calls on each border cell and tracing calls across interswitch handoff boundaries. Rev. 1995 9 #9152 12/29/1998 ATTACHMENT K TRITEL PCS MARKETS Bowling Green-Glasgow, Kentucky, Corbin, Kentucky, Lexington, Kentucky, Louisville, Kentucky, Madisonville, Kentucky, Owensboro, Kentucky, Somerset, Kentucky, Atlanta, Georgia, Chattanooga, Tennessee, Cleveland, Tennessee, Dalton, Georgia, La Grange, Georgia, Opelika-Auburn, Alabama, Rome, Georgia, Clarksville, Tennessee-Hopkinsville, Kentucky, Cookeville, Tennessee, Nashville, Tennessee, Columbus-Starkville, Mississippi, Greenville-Greenwood, Mississippi, Jackson, Mississippi, Meridian, Mississippi, Natchez, Mississippi, Tupelo-Corinth, Mississippi, Vicksburg, Mississippi, Memphis, Tennessee (Montgomery County, MS Only), Knoxville, Tennessee, Anniston, Alabama, Birmingham, Alabama, Decatur, Alabama, Dothan-Enterprise, Alabama, Florence, Alabama, Gadsden, Alabama, Huntsville, Alabama, Montgomery, Alabama, Selma, Alabama, Tuscaloosa, Alabama, Biloxi-Gulfport-Pascagoula, Mississippi, Hattiesburg, Mississippi, Laurel, Mississippi, McComb-Brookhaven, Mississippi, Mobile, Alabama, APPLICATION SYSTEM 123/124 CN-A1 APT FUNCTION LIST PAGE ---- 1............................................................SUBSCRIBER SERVICES .............................................................................15 2...........................................................ACOUSTIC INFORMATION .............................................................................15 3......................................................TRAFFIC CONTROL FUNCTIONS .............................................................................15 4.......................................................................CHARGING .............................................................................15 5...................................................................TRANSMISSION .............................................................................16 6............................................SUBSCRIBER LINE SIGNALING FUNCTIONS .............................................................................16 7...........................................................TRUNK LINE SIGNALING .............................................................................16 8..............................................................NETWORK FUNCTIONS .............................................................................16 9........................................................NETWORK SYNCHRONIZATION .............................................................................17 10....................................................MOBILE TELEPHONE FUNCTIONS .............................................................................17 11...................................................................SUPERVISION .............................................................................19 12...................................................TEST AND FAULT LOCALIZATION .............................................................................20 13................................................................ADMINISTRATION .............................................................................21 14..........................................................TRAFFIC MEASUREMENTS .............................................................................22 15....................................................................STATISTICS .............................................................................22 16............................................................NETWORK MANAGEMENT .............................................................................23 17.......................................HOME LOCATION REGISTER/SERVICE CONTROL .................................................................POINT (HLR/SCP) .............................................................................23 18.................................................................FRAUD CONTROL .............................................................................24 13 THE CONTENTS OF THIS DOCUMENT ARE SUBJECT TO REVISION WITHOUT NOTICE DUE TO CONTINUED PROGRESS IN METHODOLOGY, DESIGN, AND MANUFACTURING. ERICSSON SHALL HAVE NO LIABILITY FOR ANY ERROR OR DAMAGES OF ANY KIND RESULTING FROM THE USE OF THIS DOCUMENT. INTEGRITY is a trademark of Tandem Computers Incorporated. 14 14. SUBSCRIBER SERVICES Call Waiting Call to a Mobile Subscriber Equal Access for Mobile Subscriber Fixed Call Barring Interception Service Message Waiting Indication Mobile Telephone Calling Number Identification Origination Call Access to IN Services Priority Subscriber Code Control Service Calls 15. ACOUSTIC INFORMATION Acoustic Signals Acoustic Signals USA-L(BT4) Digital Announcement Services with Extended Features (AST-DR) Digital Announcements Services, with Extended Features (ASTV2) Digital Loss Pads Recorded Announcement Digital Speech Storage (AST-DP) Recorded Announcements Digital Speech Storage (AST-D4/D8) 16. TRAFFIC CONTROL FUNCTIONS Analysis of A-Subscriber Number \ Analysis of B-Subscriber Number Basic Call Setup Call Supervision and Release Connection of Echo Cancellers in PLMN End of Selection Analysis Handling of A-subscriber Number Multipurpose Destination Codes Own Area Code Routing Analysis Subscriber Categories Supervision of the Register Holding Time 17. CHARGING Call Record Formatter Call Record Fields for Cellular Mobile System Charging Analysis Charging Data Output to Adjunct Processor Charging Data Output to IOG Charging for Abnormal Call Release Event Charging Immediate Call Itemization Invocation of Immediate Call Itemization to CMS 8800 Mobile Charging in CMS 8800 15 Source Filtering Toll Ticketing 18. TRANSMISSION Basic Functions in a Digital Group Switch with a Maximum of 64K Multiple Positions Basic Functions in the Digital Group Switch with a Maximum of 64K Multiple Positions, Figures Group Switch Manager Looping of a 64-Kbps Channel Maintenance Functions for the 1544-Kbps Digital Path Termination Semi-permanent Connections, Administration Transmission Characteristics for a 1544 Kbps Digital Path Termination Transmission Characteristics for a 2048 Kbps Digital Path Transmission Fault Control Function for 24-Channel PCM 19. SUBSCRIBER LINE SIGNALING FUNCTIONS Functions at Interwork with PABX Keyset Code Reception Line Lockout Supervision of Analog Subscriber Lines Subscriber Dialing Supervision 20. TRUNK LINE SIGNALING Basic Register Signaling - USA Function Block FAUS Signaling Fault Supervision on Trunk Circuits and CS/CR Signaling System Dependent Conversion (SSC) Supplementary Service Interworking - Different Signaling Systems Supplementary Service Interworking - Restriction on Destination Basis Terminating Traffic from Interexchange Carriers Traditional Signaling (3/1914-ANS 331 20) (1914-ANS 535 06) Trunk Line Signaling, 1Bit, 24 Channel PCM - USA Trunk Side PBX Access (DID) 21. NETWORK FUNCTIONS Access to Voice Mail Services in VMSC/PEG Automatic Administration of HTR Destination List Automatic Congestion Control Automatic Number Identification Transfer Between Exchanges Automatic Number Identification Transfer to Automatic Call Distributor/PABX Automatic Roaming Using Global Title Addressing CCD Hardware Circuit Reservation Circuit Selection Methods Emergency Call Service Equal Access Carrier Analysis 16 Feature Group B and Feature Group D Access Handling of Abnormal Conditions IS-41 Intersystem Call Delivery Data Signaling IS-41 Private Information Handling Local Access to Automatic Visitors Location Areas MFJ Suppression of Busy Information MFJ-NACN: Inhibition of Redirection Request MTP Route Verification Test Multi-Exchange Paging Multi-Junctor User Functions SCCP Route Verification Test Signaling Protocols for 911 Services for PLMN Application Subscription Areas Unique Cell Location Information for Emergency Call, MRS Virtual System Area Configuration Voice Mail Retrieval for Mobile Subscribers 22. NETWORK SYNCHRONIZATION Network Synchronization Synchronization and Carrier Frequency Stabilization Timing of a Digital Exchange 23. MOBILE TELEPHONE FUNCTIONS Analog Control Channel Functions Analog Voice Channel Functions Autotuned Combiner, AMPS Avoid Disturbed Digital Traffic Channels Backup Channel Devices Base Station Related Blocking Control Best Server Selection Call from a Mobile Subscriber Call from, Call Access Call Record Fields for Cellular Mobile System Call to a Mobile Subscriber Call Tracing at Small Restart in MRS Call Tracing at Small Restarts Channel Supervision, Digital Clearing House Roamer Validation Digital Control Channel Functions Digital MS Power Regulation Digital Traffic Channel Control Directed Retry DTMF Handling Dynamic Allocation of Roamer Routing Number 17 Exchange-Base Station Interface (Describing MSC-BS Interface Options, Controlled by ERI) Frequency Stabilization for Analog Equipment Handoff Handoff Data Signaling Handoff Queues Hierarchical Cell Structure Idle Channel Supervision, Analog VC Incoming Two-Stage Selection to Visitor Interexchange Handoff Locating Locating of Digital Calls Mobile Management Information Coordination Mobile Station Presence Verification Mobile Telephone Activity Supervision Mobile Telephone Multiparty Services Mobile Telephone Overload Control Mobile Telephone Reverse Control Channel Separation Mobile Telephone Subscriber Activity Report Mobile Telephone Subscriber Class Translation Mobile Telephone Subscriber Service Handling Mobile Telephone Supervision of the Connection to the MS Mobile Telephone Time Supervision Mobile Telephone Charging Areas Mobile Telephony Co-Locatable HLR/MSC Mobile Telephony Parallel Announcement During Routing Mobile Telephony Per Call Activation/Deactivation of Calling Number Identification Restriction Mobile Telephony Serial Announcement Before Routing Mobile Terminated Point-to-Point SMS Mobile Terminated Short Message Services Delivery MS Presence Verification - Digital MSS Call Path Tracing for Mobile Subscribers Multiple Access Handling: Store and Compare Multiple Access Handling: Wait and Compare Operator-Controlled Paging Overlaid Cells Paging Paging Area Paging Peripheral Equipment Gateway and Voice Mail Signaling Program Loading of Base Station Device Processors Radio Performance RBS 884-1900 Radio Performance RBS 884 High Power Base Station Receiver Functions and Performance, AMPS Receiver Performance, Digital 18 Receiver Performance, RBS 882M Receiver Performance, RBS 884 Receiver Performance, RBS 884C Receiver Performance, RBS 884M Redirection of Call to Mobile Subscriber Registration Registration Updating Restricted Subscriber Handling Roamer Port Misuse Protection Routing of Call to Mobile Subscribers Second Phone Same Number Sequential Paging for Manual Roamers SW and HW Information System Access Handling System Access Threshold System Identification Data for Registration System Ordered Rescan Time Alignment Transmitter Performance, Digital Transmitter Performance, RBS 882M Transmitter Performance, RBS 884 Transmitter Performance, RBS 884C Transmitter Performance, RBS 884M Transmission Radio Interface, TRI. A BS Functional Specification Transmitter Functions and Performance, AMPS Visited Mobile Switching Center Routing Data Provision Automatic Roaming Visitor Register Handling Vocoder Selection Voice Channel Handling 24. SUPERVISION All Circuits Busy on Routes Blocking Supervision on Devices Destination %OFL Supervision and Observation Destination ASR Supervision and Observation Destination Blocking Digital Random Access Load Supervision Disturbance Supervision of Trunk Circuits Analog Code Senders and Analog Code Receivers Disturbance Supervision on Routes Logging Breaks in Semipermanent Connections Measurement of Network Performance Data on Destinations Measurement of Network Performance Data on Routes Mobile Telephone Control Channel Disturbance Supervision NM Counter Data Output 19 Preference Service Processor Load Control Reading of Network Performance Data Restriction of Accessible Outgoing Circuits Restriction on Direct and Alternative Routing Route %OFL Supervision and Observation Route ASR Supervision and Observation Seizure Quality Supervision Seizure Supervision of Trunk Circuits and IWU Devices Software File Congestion Supervision Supervision Temporary Alternate Routing Time Supervision and Disconnection of Long Held Calls 25. TEST AND FAULT LOCALIZATION Analysis Data Fault Handling Audit Function, Registration of Software Irregularities (ROSI) Call Path Tracing Code Answer According to Code 102 Code Answer According to Code 103 Command Controlled Operation of Echo Suppresser and Attenuation Pads Command-Controlled Access to Devices Command-Controlled Test Calls Connection Performance Test of Group Switch Connection to Test Telephone Continuous Monitoring Disconnection of Time Supervision Forlopp Handling in CMS 8800 Long Term Monitoring Maintenance of Digital Group Switch a Maximum of 64K Multiple Positions Maintenance of MJ Hardware Maintenance of Switching Network Terminal Manual Blocking and Deblocking of Devices and Subscriber Lines Manual Continuity Check for Common Channel Signaling Mobile Telephone Radio Disturbance Recording Monitoring of Subscriber Lines and Trunk Lines Operation of Relays in Devices Predetermining of Switching Path Progression Testing Reading of Device State Information Recording of Telephony Signals Remote Measurements, ATME Measurements Remote Measurements, ATME Recording Result Administration Remote Measurements, ATME Restest Administration Remote Measurements, ATME Responding 20 Remote Measurements, Bit Error Ratio and Transmission of Bit Patterns Remote Measurements, B-Number Translation Remote Measurements, Delayed Measurement Remote Measurements, Echo Return Loss Measurement Remote Measurements, Immediate Measurement Remote Measurements, Instrument Administration Remote Measurements, Level Measurement Remote Measurements, Noise Measurement Remote Measurements, Programmed Interwork with Test Lines Remote Measurements on Telephone Circuits Remote Measurements, Singing Return Loss Measurement Remote Measurements, Standard Adjustments of Instrument Data Remote Measurements, Timeable Controlled Measurement Remote Measurements, Transmission of Tones Signaling Course Recorder Supervision and Fault Handling Terminating Test Calls Test Functions for Base Station Related Equipment Test of Channel Devices Test Tone 26. ADMINISTRATION Administration of B-Number Analysis Data Administration of Call Path Tracing Administration of Digital Group Switch with up to 64K Multiple Positions Administration of End of Selection Analysis Data Administration of Exchange Data Administration of Exchange Data for Internal Number Series Administration of Meter Pulse Data Administration of Mobile Telephone Cells Administration of Mobile Telephone Channel Devices Administration of Mobile Telephone Cooperating Exchanges Administration of Mobile Telephone Service Area Administration of Response Programs Administration of Roamer Routing Interrogation Code Translations Administration of Routing Analysis Data Administration of Routing Switch Administration of Switching Network Terminal Data Administration of Time Supervision Analysis Data Administration of Visitor Register Channel Equipment Coordination and Administration Code Answer Equal Access Carrier Analysis Administration Equipment Position Manual Administration of HTR Destination List 21 Mobile Telephone Digit Analysis Route Data Administration Route Status Survey Subscriber Data, Administration Test Blocking Administration Test Position Administration Voice Path and Transmission Line Coordination and Administration 27. TRAFFIC MEASUREMENTS Counters in the Measurement Data Base for Charging Counters in the Measurement Data Base for GSS Set of Parts GS64K Counters in the Measurement Data Base for GSS Set of Parts NS Counters in the Measurement Data Base for GSS Set of Part SNT Counters in the Measurement Data Base for Mobile Subscribers Counters in the Measurement Data Base for the Announcement Service Terminal Counters in the Measurement Data Base for the Traffic and Event Measurement Counters in the Measurement Data Base for Traffic and Event Measurements in the CCS Subsystem Counters in the Measurement Data Base for Traffic Control Counters in the Measurement Data Base for APT General Operation and Maintenance Counters in the Measurement Data Base in Multi-Junctor Counters in the Measurement Data Base, General Concepts Data Recording per Call Measurement Data Base Measurement Object Group Handler Measurement Report File Output, Standard Format Measurement Report Generator Measurement Report Time Table Mobile Telephone Cell Traffic Recording Modified Measurement Report Generator Recording of Voice Channel Handling Statistics and Traffic Measurement STS Time Congestion Measurements on Routes Traffic Character Measurement on Routes Traffic Dispersion Measurements Traffic Measurements on Routes Traffic Measurements on Traffic Types 28. STATISTICS ADC Authentication Statistics Disturbance Statistics IS-41 Signaling Protocol Statistics Mobile Telephone Cell Traffic Statistics 22 MT Signaling Protocol Statistics Page Response Statistics Paging Parameter Statistics Radio-Related Call Release Information Radio Environment Statistics Service Quality Statistics Traffic Observation 29. NETWORK MANAGEMENT ANSI CCS Suppport for HLR Redundancy for CMS88 Control of Echo Canceller Loop for Mobile Subscribers Exchange Input Load Observation Exchange Input Load Supervision NM Actions Sequence Control Processor and Exchange Input Load Measurements Processor Load Observation Reading of Processor and Exchange Input Load Remote Subsystem Inaccessible Alarm Route Load Supervision and Observation SCCP Overhead Converter SS7 ISDN User Part Inter LATA SS7 ISDN User Part Intra LATA SS7 Message Transfer Part SS7 Signaling Connection Control Part (SCCP) SS7 Signaling Network Monitor SS7 Signaling Network Trouble Notification Traffic Restrictions on Route 30. HOME LOCATION REGISTER/SERVICE CONTROL POINT (HLR/SCP) HLR/SCP SS7 Functionality ANSI SS7 TCAP Platform SS7 TCAP Interface to HLR SS7 TCAP Load Management HLR/SCP HLR Subscriber Functionality HLR Administration of Peripheral Equipment HLR Alternative Location Coordination HLR Area Code Change Support HLR Authentication HLR Automatic Call Barring HLR C-Number Analysis HLR C-Number Provision HLR Call Barring Upon Fraudulent Activity Detection 23 HLR Equal Access Pre-subscription HLR Fraud Activity Detection HLR Location Analysis and Call Delivery HLR Location Updating HLR Message Waiting Indicator HLR Restoration Procedures HLR Routing Determination HLR Screening of Serial Number HLR Short Message Service HLR Subscriber Activity Handling HLR Subscriber Activity Report HLR Subscriber Class Characteristics HLR Subscriber Class Groups HLR Subscriber Data Administration HLR Subscriber Default Profile Administration HLR Subscriber Number Administration HLR Subscriber Services Calls HLR Support for Manual Roamers HLR Support for Mobile Autonomous Registration Subscribers HLR/SCP SCP Functionality HLR Intelligent Network (IN) Services for PCS Subscribers HLR triggers in HLR Service Script Interpreter (SSI) Service Script Virtual Directory Number SSI Basic Control Types SSI Basic Control Types 1 SSI Basic Control Types 2 SSI Extended Number Analysis SSI IS-41 SSI List Handling SSI Number Analysis SSI Reports SSI Statistics Counters SSI Traffic Simulation SSI Voice Prompting 31. FRAUD CONTROL ADC Authentication Procedure for Visiting Subscriber All Teardown Administration Fraudulent Activity Detection Fraudulent Call Prevention Screening of Serial Number 24 Serial Number Barring Tumbling ESN Barring 25 APPLICATION SYSTEM 123/124 CN-A1 APZ FUNCTION LIST PAGE 19. CONTROL SYSTEM FUNCTIONS..................................27 20. DATA COMMUNICATIONS FUNCTIONS.............................29 21. FILE FUNCTIONS............................................29 22. ALPHANUMERIC FUNCTIONS....................................30 23. ALARM FUNCTIONS...........................................30 26 32. CONTROL SYSTEM FUNCTIONS Adjunct Computer Subsystem APZ 212 20/2-42 Adjunct Processor Large Building Block - Tandem Integrity(TM) FT APZ 212 20/2-42 Administration of Central Processor Stores Administration of Function Codes Administration of Interference Protection Administration of Symbols for Central Software Units Administration of System Information Audit Functions Controller Cache Memory Handling Central Processor Test Functions, CPT Command Interface for the Database APZ 212 20/2-20 Control Signaling Link Counters in the Measurement Database for the Control System Counters in the Measurement Database for the Support Processor CP Repair Functions Database General Data Dictionary for Database APZ 212 20/2-20 Database Transaction Handling Debugger for RPD/EMRPD EMG Administration Functions EMG Diagnostics EMG EM Restart Dump Function EMG Fault Detection Functions EMG Recovery Functions EMG Repair Functions EMG Start Functions EMRPD Hardware Functions Executive System EMRP Executive System STC Executive System STR Forlopp Management Function Change and Software Handling in SP Function Change in Central Processor Function Change, Change of EM in EMG and Loadable RP Handling of Hardware Faults Handling of Software Faults Initial Loading Job Transfer Protocol Load Protection in RP2 Loadable Microprogram Loading Administration, Dynamic Store Allocation 27 Loading and Removal of Central Software Units Loading of EMRP, RP, and DP Logging of Exchange Build Level Changes MAS Support to Other Subsystems Metering Maintenance Statistic, APZ Operating System Functions for EMRPD Operation and Maintenance in SPS Output of Central Software Units Output of Regional Programs Output of Regional Programs, Backup Copy Function Overload Protection (OLP), EMRPD Processor Measurement Product Administration, System Check at Insertion of Program Program Change for Central Software Unit Program Correction in EMRP Program Correction in CP Program Store Consistency Check Program Test in EMRP Program Test in EMRP with Simulated Link Interrupt Protocol Signaling Link Protocol Signaling Link, Flowchart RP Administration Function RP Alarm Function RP Diagnostic Function RP Error Detecting Function RP Program Correction RP Recovery Function RP Repair Function RP Restart Dump Function RP Start Function RPD Hardware Function Size Alteration of Data Files Size Alteration of Store SP Exchange Data Administration SP Gateway Communication SP Restart Logging SP System Parameter Handling SP Trace System Stand Alone Function APZ 212 Supervision of Utilization in Files and Memories Support for Production and Installation System Backup Copy and Restart Log System Backup Copy in Main Store System Calendar System Limits 28 System States and System Events Test Variable Output Support Variable Output Service Function 33. DATA COMMUNICATIONS FUNCTIONS AXE I/O Address and Routing Analysis AXE I/O Closed User Group AXE I/O Data Communication Priority AXE I/O Data Communication Statistics AXE I/O Direct Call Facility AXE I/O HDLC (LAPB) Single Link Procedures AXE I/O Interface for Modems AXE I/O Interface for Packet Mode Terminal Access Through a Switched Telephone Network AXE I/O Interface for Terminals AXE I/O Network User Services and Facilities AXE I/O Permanent Virtual Circuit Facility AXE I/O Selection by Name Facility AXE I/O Subaddressing AXE I/O Transport Protocol AXE I/O V.25 BIS. Automatic Calling Facility AXE I/O X.25 Interface AXE I/O X.3 Pad Direct File Output Internet Transport Service APZ 211 11-318 Message Transfer Protocol, MTP Modem for 2400 BPS. Synchronous on Leased Lines Modem for 9600 BPS. Synchronous on Leased Lines V-Series Synchronous Data Transmission through a General Telephone Network Physical Layer X-Series Synchronous Data Transmission through a Public Data Network Physical Layer 34. FILE FUNCTIONS 3 1/2 inch Disk Storage Unit, Winchester, Micropolis, 2112s 1.05 GB SCSI-2 5 1/4 inch Disk Store Winchester, Micropolis 1558-15 5 1/4 inch Disk Storage Unit Winchester, Hitachi DK 511-8 5 1/4 inch Disk Storage Unit Winchester NEC D5652 5 1/4 inch Flexible Disk Unit TEAC FD-55GFV 5 1/4 inch Rewritable Optical Disk Drive RICOH R0-5060E Command Log in AXE Data Interchange Format on Flexible Disks File Control APZ 211 11-285 29 File Copying in FMS File Names in AXE File Process Utility in FMS APZ 211 11-234 File Recovery Function in FMS File Service Functions APZ 211 11-286 Hard Disk Function APZ 211 11-284 IBM Formatted Tape Labels in FMS Infinite Sequential Files Magnetic Tape Functions in FMS Magnetic Tape Unit Start/Stop TEAC MT-1000 MT Labels for FMS Search Function in FMS 35. ALPHANUMERIC FUNCTIONS Asynchronous Terminal Interface for IOG11 APZ 211 11-282 Authority Check of Operators at Logon and Execution AXE User Environment Command Input Hourly Status Report Load Regulation of Man Machine Communication Man-Machine Language AX Modem for 2400 BPS Synchronous and Asynchronous, Switched or Leased Lines Output of Alphanumerical Information on File PC in AXE Printer in AXE, Facit B3100 Special Version Printer in AXE Facit 4511 Printer in AXE Siemens PT88S Remote Operator Alarm Repeat Notifications for Single Troubles Routing of Printouts Search in Transaction Log Secure Dialback for Connection of Terminals Standby Utilities for Alphanumerical Output Transaction Log TW in AXE, Texas Silent 703 TW in AXE, Facit 4511 TW in AXE, Facit 4440 VDU in AXE, Facit 4440 VDU in AXE, Tandberg 2230S 36. ALARM FUNCTIONS Alarm and Attendance Signaling Towards OMC External Alarms 30 Operator Alarm Revised 8/14/97 31 ATTACHMENT M ACQUISITION AGREEMENT # 9152 Tritel Inc. Finance Term Sheet NYLIB1/611897/3/99320/00000/flynnb/September 3, 1999 - 7:38 09/07/99 Tritel Inc. Acquisition Agreement 9152 1 ATTACHMENT N ACQUISITION AGREEMENT # 9152 TRITEL INC. TABLE OF CONTENTS SECTION PAGE 1. NETWORK PLANNING AND EXPANSION 2 2. NETWORK PERFORMANCE EVALUATION 2 3. NETWORK OPERATION CONSULTING 2 4. NETWORK MANAGEMENT SYSTEM CONSULTING 3 5. BUSINESS OPERATION CONSULTING 3 6. CIVIL CONSTRUCTION 3 7. SITE ENGINEERING 4 8. EQUIPMENT INSTALLATION AND COMMISSIONING 4 9. NETWORK OPTIMIZATION 4 10. OPERATION AND MAINTENANCE MANAGEMENT 6 11. NETWORK MANAGEMENT SYSTEM ADMINISTRATION 6 12. REMOTE NETWORK MONITORING 6 13. SYSTEM SUPPORT ..................................................5 14. OPERATION AND MAINTENANCE ASSISTANCE ............................6 15. COMPETENCE DEVELOPMENT PROGRAM ..................................6 NYLIB1/611897/3/99320/00000/flynnb/September 3, 1999 - 7:38 09/07/99 Tritel Inc. Acquisition Agreement 9152 1 1. NETWORK PLANNING AND EXPANSION Ericsson's Network Planning and Expansion Service provides initial radio frequency (RF) design, network dimensioning, and expansion planning for wireless systems. This service can be provided with customer defined levels of Ericsson support. Ericsson provides personnel with an in-depth knowledge of cell, frequency, transmission, and network planning principles. Ericsson team members also have the expertise for performing border, trunk, and signaling network analysis as well as system capacity analysis. In an effort to better meet current and future customer demands, Ericsson engineers provide a plan which shows how, when, and where to configure the wireless network for optimal performance. 2. NETWORK performance evaluation Ericsson's Network Performance Evaluation (NPE) service provides an in-depth analysis of coverage, capacity, efficiency, reliability, and quality of the wireless network. In addition, NPE makes recommendations for improving the performance of the system. Ericsson's Network Performance Evaluation service evaluates the wireless system at various levels of network configurations and traffic patterns. This service is divided into several sections: An overall system performance analysis is performed regularly on the entire network and is intended to focus on subscriber issues related to service quality. The overall performance evaluation highlights any problems found and provides a list of the most problematic cells in each performance area. If required, a more detailed investigation can be performed for the most problematic cells using the detailed problem analysis. A performance evaluation can also be applied to specific nodes within the system to ensure that areas such as power, grounding, or data transcripts are in appropriate conditions. This evaluation becomes essential when planning extensive expansions, updates, and/or enhancements to the wireless system. 3. NETWORK OPERATION CONSULTING Ericsson's Network Operation Consulting service provides improvement recommendations for Operations and Maintenance processes and procedures The consulting service addresses the following areas: o Documentation of current AXE operations and maintenance processes, practices, and procedures o Alarm management, shift hand-over and escalation procedures o Power and synchronization areas o OMC establishment, staffing and security issues o Necessary methods and tools provisioning o O&M Organization Planning and emergency support handling o Subscriber feature related O&M training 2 o 4. NETWORK MANAGEMENT System CONSULTING Ericsson's Network Management System Consulting service provides recommendations for the effective design and implementation of Network Management Systems (NMS). o Analyzes requirements for the Network Management System, based on expected network usage. o Ericsson Network Management System Consultants focus on attaining high system performance standards and efficient cost control. 5. BUSINESS OPERATION CONSULTING Ericsson provides a consulting service which reviews business processes and procedures and provides ideas for improvement. Business Operation Consulting addresses areas such as subscriber administration, customer care, and billing administration. Additionally, this service identifies new business possibilities and opportunities. Ericsson's Business Operations Consulting service provides information on areas of business operation that are critical for revenue enhancing opportunities. Some of these areas include: o Customer care and subscriber administration procedures o Fraud prevention activities in the network o Issues related to churn --subscriber or employee 6. CIVIL CONSTRUCTION Ericsson's Civil Construction Service provides general contracting and management services for the construction and preparation of base station, switching center, Network Management Center and other construction needs. Ericsson coordinates all activities related to the civil construction of cell sites, switch rooms, and network management centers serving as the general contractor. The range of commitment encompasses areas such as: o Customer approved site plans o Site preparation and construction o Construction/project management o Provisioning and/or installation of equipment shelters o Tower and monopole erection o Electrical and telco installation o Antenna and feeder installation o Generator, environmental, and security installation 3 7. SITE ENGINEERING Erisccon's Site Engineering service provides site surveys, preparation, and specifications for the physical layout and dimensioning of switch, radio, OSS, and transmission equipment. This service is performed for new installations, expansion of existing equipment, as well as for multi-vendor equipment. Ericsson provides the customer with the requirements for site preparation, space, building structures, environmental controls, and efficient equipment layout. Ericsson also recommends optimal ways to implement an extension to an existing installation -- taking into account factors such as spare positions in existing cabinets, main distribution frames, digital distribution frames, and power frames. 8. EQUIPMENT INSTALLATION AND COMMISSIONING Erisccon provides a full range of installation services for Ericsson, as well as third party equipment. This service ensures fast, professional installation and commissioning work of switch, network, radio, OSS, transmission and other Ericsson modules. Ericsson manages the installation and commissioning of new equipment, re-allocation and re-installation of existing equipment, and the dismantling of obsolete equipment. There are three levels of service: o INSTALLATION AND COMMISSIONING o QUALITY ASSURANCE SUPERVISION o INSTALLATION AUDITS 9. NETWORK OPTIMIZATION Erisccon's Network Optimization Service implements improvements recommended by Ericsson's Network Performance Evaluation, RF engineering, and other performance improvement services. This service is designed to improve the performance and quality of the operators wireless network. Ericsson engineers translate optimization recommendations into system data inputs for implementation into the wireless network. The activities that are covered include: o Baseline drive testing, data acquisition, and modification prior to implementation of data changes o Translation of planning and evaluation information to system data MML formats and commands o Preparation, distribution and implementation of customized cell design data information and switch files 4 10. OPERATION AND MAINTENANCE MANAGEMENT Erisccon's Operation and Maintenance Management Service provides experienced Ericsson personnel for the day-to-day handling of O&M activities. This service provides a total turn-key solution to Ericsson wireless systems network O&M. Ericsson's Operation and Maintenance Management Service is a long-term commitment to the operator to manage their system operations. Ericsson places personnel on-site and worldwide to access the various tools and expertise available to ensure efficient O&M management. The Operation and Maintenance Management responsibilities range from the handling of field hardware to O&M of system processes. 11. NETWORK MANAGEMENT SYSTEM ADMINISTRATION Erisccon's Network Management System Administration Service provides the operator with an efficient solution for the operation and administration of their Network Management System. The Network Management System Administration service provides Ericsson system administration based on proven UNIX, database, and NMS application operations and maintenance procedures. System administration support is offered either locally or remotely. Remote administration is available either by way of a dedicated high-speed link to the Ericsson Network Management Center or through a modem connection. System administration duties requiring physical activities such as connecting printers and workstations or removing tapes from backup devices are provided via on-site support. 12. REMOTE NETWORK MONITORING Erisccon's Remote Network Monitoring Service provides Ericsson's expertise in site monitoring and alarm handling for base stations, switching centers, and other network modes. Utilizing Ericsson's Network Management System applications, engineers provide proven NMS solutions for network monitoring. Remote Network Monitoring is available via a dedicated high-speed link to the Ericsson Network Management Center. 13. SYSTEM SUPPORT Erisccon's System Support service includes consultation and 24 - hour emergency service, software maintenance and hardware maintenance. This service provides: o Provides assistance in resolution of operations and maintenance issues and trouble report handling. o 24-hour access to Emergency Support Team for rapid recovery of Network Elements. o Software Maintenance ensures Network Elements are kept current with all software updates. o Hardware Maintenance provides Return and Repair of Ericsson equipment. 5 14. OPERATION AND MAINTENANCE ASSISTANCE Erisccon's Operation and Maintenance Assistance service provides experienced Ericsson personnel to assist with the operations & maintenance of the network. Operation & Maintenance Assistance provides hands-on assistance or supervision by experienced O&M personnel. These personnel are placed at the switches, radio sites or Network Management Center's on a short or long term basis. Ericsson resources are available to assist with support and O&M issues as well as: o OSS administration o Preventive maintenance o Back-up procedures o Alarm handling o Trouble reporting 15. COMPETENCE DEVELOPMENT PROGRAM Erisccon's Competence Development program provides courses to develop in-house competence in operation and maintenance of wireless networks including: o Career related training paths and courses for O&M professionals. o Courses at Ericsson's international training centers, or on-site training available. o Provides an introduction to new features and network technologies. o Hands-on review and job task competency verification. Revised 10/22/96 ATTACHMENT O ACQUISITION AGREEMENT # 9152 Tritel Inc. Price Adjustment for Equipment and Software Other than Initial Configuration NYLIB1/611897/3/99320/00000/flynnb/September 3, 1999 - 7:38 Tritel Inc. Acquisition Agreement 9152 09/07/99 6 Prices shall be adjusted at the beginning of each calendar year, and the prices will be valid for orders received during the ensuing calendar year, pursuant to the following formulas: Equipment and Software ordered other than that covered by the Initial Configuration is subject to this price adjustment according to the following formula: P = PO x (0.15 + 0.85 x M/MO) Where P = The adjusted price. PO = Base price as stated. M = The Producer Price Index for all commodities published monthly by the Federal Bureau of Labor Statistics ("Index") valid for the month of September in the current year. MO = Same as M, but valid in September of the previous year. 8/1/95 7 ATTACHMENT P ACQUISITION AGREEMENT # 9152 Tritel Inc. Recipients of Purchaser's Notices 8 ATTACHMENT Q ACQUISITION AGREEMENT # 9152 Tritel Inc. ORDER CANCELLATION POLICY Listed below are specific charges to PURCHASER which represent reasonable non-recoverable costs actually incurred by Ericsson prior to or in connection with the cancellation of such an order, including if applicable, labor charges of Ericsson personnel, reasonable restocking charges, and shipping charges. RBS EQUIPMENT (SUPPLIER - ERICSSON) SITUATION CANCELLATION POLICY - ------------------------------------------------------------------------------- o Order is cancelled before shipment to requested customer site. 5 percent of order value o Order is cancelled after shipment to requested customer site but before shipment is installed. 15 percent of order value o Custom Orders (i.e., cable construction) cancelled before manufacturing has commenced on that portion of the order.* 5 percent of order value o Custom Order (i.e., cable construction) cancelled after manufacturing has commenced on that portion of the order. 100 percent of order value NOTE: On custom orders, for example, if 10 custom cables were ordered but manufacturing has commenced on only 3 cables, a 100% charge will be levied against 3 cables and a 5% charge will be levied against the remainder (7) of the order. SWITCH EQUIPMENT (SUPPLIER - ERICSSON) Switch equipment refers to any AXE switching equipment order with the exception of the ordering of an entire switch (i.e., Mini, 211, 212). 9 SITUATION CANCELLATION POLICY - -------------------------------------------------------------------------------- o Order is cancelled before ship- ment to requested customer site. 5 percent of order value o Order is cancelled after shipment to requested customer site but before shipment is installed. 15 percent of order value SOFTWARE FEATURES SITUATION CANCELLATION POLICY - -------------------------------------------------------------------------------- o Order is cancelled before application engineering (i.e., station parameters or data transcripting) has commenced. 5 percent of software order value o Order is cancelled after application engineering (i.e., station parameters or data transcripting) has commenced. 10 percent of software order value NOTE: All switch hardware associated with the software features is subject to the cancellation charge listed for Switch Equipment. DOMESTIC SUPPLIERS OTHER THAN ERICSSON SITUATION CANCELLATION POLICY - -------------------------------------------------------------------------------- o Ericsson orders materials from a domestic supplier and the material CAN be resold by the domestic sup- plier to Ericsson or another vendor. 25 percent of order value o Ericsson orders materials from a domestic supplier and the material CANNOT be resold by the domestic supplier to Ericsson or another vendor (i.e., specifically measured coax cable for an antenna run). 100 percent of order value Rev. 07/92 10 EX-10.27 28 SECURITIES PURCHASE AGREEMENT Exhibit 10.27 ================================================================================ SECURITIES PURCHASE AGREEMENT by and among AT&T WIRELESS PCS INC., TWR CELLULAR, INC., CASH EQUITY INVESTORS, MERCURY PCS, LLC, MERCURY PCS II, LLC, MANAGEMENT STOCKHOLDERS and TRITEL, INC. Dated as of May 20, 1998 SECURITIES PURCHASE AGREEMENT SECURITIES PURCHASE AGREEMENT, dated as of May 20, 1998, by and among AT&T Wireless PCS Inc., a Delaware corporation ("AT&T PCS"), TWR Cellular, Inc., a Maryland corporation ("TWR") the investors referred to on Schedule I (individually, an "Initial Cash Equity Investor" and, collectively, the "Initial Cash Equity Investors"), Mercury PCS, LLC, a Mississippi limited liability company ("Mercury I"), Mercury PCS II, LLC, a Mississippi limited liability company ("Mercury II"), the individuals listed on Schedule II (individually, a "Management Stockholder" and, collectively, the "Management Stockholders") and Tritel, Inc., a Delaware corporation (the "Company"). AT&T PCS, TWR, the Cash Equity Investors, Mercury I and Mercury II are sometimes referred to herein, individually, as a "Purchaser" and, collectively, as the "Purchasers." WHEREAS, AT&T PCS has been granted the PCS licenses described on Schedule III (the "AT&T PCS Licenses") and TWR holds the PCS licenses described on Schedule III (the "TWR Licenses"); WHEREAS, Mercury I and Mercury II have been granted the PCS licenses described on Schedule IV (the "Mercury Licenses") and Mercury I has, pursuant to the Central Alabama Agreement, agreed to acquire the PCS license described on Schedule V (the "Alabama License"); WHEREAS, the Management Stockholders organized the Company by the filing of a Certificate of Incorporation (the "Original Certificate"), and as of the date hereof the Management Stockholders are the record and beneficial owners of all of the issued and outstanding capital stock of the Company; WHEREAS, the Management Stockholders have extensive experience and expertise in the wireless telecommunications industry and have organized the Company in order to construct and operate a mobile wireless telecommunications system in the territory (the "Company Territory") described on Schedule VI; WHEREAS, each of the Purchasers wishes to acquire securities of the Company in consideration of contributions of cash and/or other property to the capital of the Company, and the Company wishes to accept such contributions and issue securities to each of the Purchasers, all on the terms and subject to the conditions herein set forth; and WHEREAS, the parties wish to amend and restate the Original Certificate in its entirety in order to reflect, among other things, the authorization of the securities being issued hereunder, and the parties wish to enter into certain agreements relating to the parties' rights and obligations in connection with the Company; NOW, THEREFORE, in consideration of the promises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, the parties agree as follows: ARTICLE I DEFINITIONS As used herein, the following terms have the following meanings (unless indicated otherwise, all Section and Article references are to Sections and Articles in this Agreement, and all Schedule and Exhibit references are to Schedules and Exhibits to this Agreement): "Additional Offering" has the meaning set forth in Section 6.13. "Additional Purchaser" has the meaning set forth in Section 6.13. "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. "Aggregate Commitment" means, with respect to each Cash Equity Investor, the amount set forth opposite its name on Schedule I under the heading "Aggregate Commitment." "Alabama License" has the meaning set forth in the second recital. "Alabama License Transfer" means the assignment by Central Alabama of the Alabama License pursuant to the terms of the Central Alabama Agreement. "Assumed Mercury Debt" has the meaning set forth in Section 2.8. "AT&T Contributed Licenses" has the meaning set forth in Section 2.1. "AT&T License Transfer" has the meaning set forth in Section 3.2(a). "AT&T Party" means AT&T PCS, TWR and each Affiliate of AT&T PCS that is a party to any of the Related Agreements. "AT&T PCS" has the meaning set forth in the preamble. "AT&T PCS Licenses" has the meaning set forth in the first recital. "AT&T Retained Licenses" has the meaning set forth in Section 2.1. "Bridge Loan Agreement" means the agreement between Mercury I and Lucent, dated as of October 31, 1997, to provide a credit facility having aggregate commitments of at 2 least $15 million, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Bridge Loan Documents" means the Bridge Loan Agreement and all agreements, instruments and documents executed and delivered pursuant thereto, as the same may from time to time be amended, modified or supplemented in accordance with the terms thereof. "Cash Equity Borrower" means Mercury I, Mercury II and each Cash Equity Investor that is a borrower under a Cash Equity Loan Agreement. "Cash Equity Loan Agreements" means the agreements among each Cash Equity Borrower, on the one hand, and the lenders referred to therein, on the other hand, to be dated as of the Closing Date, to provide loans to Cash Equity Borrowers in the aggregate amount of $75 million, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Cash Equity Loan Documents" means the Cash Equity Loan Agreements and all agreements, instruments and documents executed and delivered pursuant thereto, as the same may from time to time be amended, modified or supplemented in accordance with the terms thereof. "Cash Equity Investor" means an Initial Cash Equity Investor and, from and after the date it executes a counterpart of this Agreement in accordance with the terms of Section 6.13, any Additional Purchaser. "Cash Equity Investor Contributions" means the Aggregate Commitments, the Initial Capital Contributions and the Unfunded Commitments, in each case of the Cash Equity Investors. "Central Alabama" means Central Alabama Partnership, L.P. 132. "Central Alabama Agreement" means the Asset Purchase Agreement, dated as of March 4, 1998, among Mercury I, Central Alabama and the other parties named therein. "Central Alabama FCC Debt" has the meaning set forth in Section 2.8, as the same is reduced in accordance with Section 6.14. "Class C Common Stock" means the Class C Common Stock, par value $.01 per share, of the Company. "Class D Common Stock" means the Class D Common Stock, par value $.01 per share, of the Company. "Claim" has the meaning set forth in Section 8.6(a). 3 "Closing" has the meaning set forth in Section 3.1. "Closing Date" has the meaning set forth in Section 3.1. "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. "Committed Pre-Closing Construction" means construction of facilities in the Knoxville, Louisville and Nashville BTAs, including cell sites, radio base stations and other equipment which, when activated and connected to a switch, will provide PCS service that satisfies the build-out requirements for MTAs including such BTAs set forth in 47 CFR Section 24.203. "Common Stock" means, collectively, Voting Preference Stock, the Tracked Common Stock, the Voting Common Stock and the Non-Voting Common Stock. "Company" has the meaning set forth in the preamble. "Company Territory" has the meaning set forth in the fourth recital. "Confidential Information" means any and all information regarding the business, finances, operations, products, services and customers of the Person specified and its Affiliates, in written or oral form or in any other medium. "Consents" means all consents and approvals of Governmental Authorities or other third parties necessary to authorize, approve or permit the parties hereto to consummate the Transactions and for the Company to operate its business after the Closing Date as currently contemplated. "Contributed Mercury Assets" has the meaning set forth in Section 2.3. "Contributions" means, collectively, the AT&T Contributed Licenses, the Alabama License, the Mercury Licenses, the Contributed Mercury Assets and the Cash Equity Investor Contributions. "Credit Agreement" means the agreement among the Company, the lenders and the agents referred to therein, and any other parties who become lenders or agents thereunder, to be dated as of the Closing Date, to provide a credit facility having aggregate commitments of at 4 least $525 million, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Credit Documents" means the Credit Agreement and all agreements, instruments and documents executed and delivered pursuant thereto, as the same may from time to time be amended, modified or supplemented in accordance with the terms thereof. "Employees" has the meaning set forth in Section 6.11. "Employment Agreements" means the Employment Agreements between each Management Stockholder and an additional senior executive to be identified prior to the Closing, which additional senior executive shall be reasonably satisfactory to the Management Stockholders, AT&T and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors, on the one hand, and the Company, on the other hand, in substantially the form of Exhibit O, each to be dated as of the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder. "Escrowed Cash" has the meaning set forth in Section 8.9. "Escrow Holder" has the meaning set forth in Section 8.9. "Escrowed Shares" means (i) collectively, 14,426,885 and 3,834,995 shares of Series C Preferred Stock issued to Mercury I and Mercury II, respectively, pursuant to Section 2.5(b), and (ii) with respect to any Mercury Investor Indemnitor, any such shares that are thereafter distributed or transferred to such Mercury Investor Indemnitor, and in each case any securities into which such shares are converted or exchanged. "FCC" means the Federal Communications Commission or similar regulatory authority established in replacement thereof. "FCC Debt" means the indebtedness of Mercury I and Mercury II to the United States Department of the Treasury, in the aggregate principal amount of $73,348,800, together with accrued but unpaid interest thereon, incurred in connection with its acquisition of Mercury Licenses, as the same is reduced in accordance with Section 6.14. "FCC Law" means the Communications Act of 1934, as amended, including as amended by the Telecommunications Act of 1996, and the rules, regulations and policies promulgated thereunder. "Final Order" has the meaning set forth in Section 7.1(b). "Financing" has the meaning set forth in the SBIC Regulations. 5 "Florida Licenses" means the "Mercury Licenses," as such term is defined in the Option Agreement. "Governmental Authority" means a Federal, state or local court, legislature, governmental agency (including, without limitation, the United States Department of Justice), commission or regulatory or administrative authority or instrumentality. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. "Indemnified Party" has the meaning set forth in Section 8.6(a). "Indemnifying Party" has the meaning set forth in Section 8.6(a). "Initial Cash Contribution" means, with respect to each Cash Equity Investor, the amount set forth opposite its name on Schedule I under the heading "Initial Cash Contribution." "Initial Cash Equity Investor" has the meaning set forth in the preamble. "Law" means applicable common law and any statute, ordinance, code or other law, rule, permit, permit condition, regulation, order, decree, technical or other standard, requirement or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority. "License" means a license, permit, certificate of authority, waiver, approval, certificate of public convenience and necessity, registration or other authorization, consent or clearance to construct or operate a facility, including any emissions, discharges or releases therefrom, or to transact an activity or business, to construct a tower or to use an asset or process, in each case issued or granted by a Governmental Authority. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, right of first refusal or right of others therein, or encumbrance of any nature whatsoever in respect of such asset. "Losses" has the meaning set forth in Section 8.2. "Lucent" means Lucent Technologies, Inc. "Management Agreement" means the Management Agreement between the Company and Tritel Management, LLC, in substantially the form of Exhibit A, to be dated as of the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Management Stockholder" has the meaning set forth in the preamble. 6 "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 Company on a going concern basis, as determined in good faith by the Board of Directors, whose determination shall be conclusive; provided that, in determining such cash amount, the following shall be ignored: (x) any contract or legal limitation in respect of such shares, including transfer, voting and other rights, (y) the "minority interest" or "control" status of such shares, and (z) any illiquidity arising by contract in respect of such shares and any voting rights or control rights amongst the stockholders; provided, further, that at the request of holders of a majority of the Escrowed Shares originally issued, the determination of Market Price as of the final Reconciliation Date for purposes of Article VIII shall be made, at the Company's expense, by an investment banking firm of nationally recognized standing selected by the Company. "Material Adverse Effect" means a material adverse effect on the business, financial condition, assets, liabilities or results of operations or prospects of the Person specified. "Mercury I" has the meaning set forth in the preamble. "Mercury II" has the meaning set forth in the preamble. "Mercury License Transfer" has the meaning set forth in Section 3.2(c). "Mercury Licenses" has the meaning set forth in the second recital. "Mercury Investors" means the Persons that beneficially own, directly or indirectly, equity interests in Mercury I and/or Mercury II on the date hereof and that are set forth on Schedule VIII. "Mercury Investor Indemnitor" has the meaning set forth in Section 6.10(b). "NASDAQ" shall mean the National Association of Securities Dealers Automated Quotations System. "Network Membership License Agreement" means the Network Membership License Agreement between the Company and AT&T Corp., in substantially the form of Exhibit B, to be dated as of the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "New York Courts" has the meaning set forth in Section 10.6. 7 "Non-Voting Common Stock" means the Company's Class B Non-Voting Common Stock, par value $.01 per share. "Old Common Stock" has the meaning set forth in Section 5.5(b). "Old Mercury Expenses" means legal fees and related disbursements, fines, settlements and judgments, in each case documented in reasonable detail, payable by Mercury I or Mercury II in connection with the matters described on Schedule 4.7 or 5.3(a). "Old Mercury Note" means the promissory note, in the form set forth as Exhibit P, evidencing the advances made by the Company to Mercury I and Mercury II pursuant to Section 8.10. "Old Mercury Stockholders" means, collectively, Mercury I, Mercury II and the Mercury Investor Indemnitors, in each case in their capacity as holders of Escrowed Shares. "Option Agreement" means the Option Agreement, dated as of the Closing Date, between the Company and Mercury II, pursuant to which the Company has an option to acquire the Florida Licenses, in substantially the form of Exhibit N, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Original Certificate" has the meaning set forth in the fourth recital. "Percentage Share" means, with respect to any Old Mercury Stockholder, the percentage set forth opposite its name on Schedule VIII. "Permitted Expenditures" means expenditures of the nature and up to the amount set forth on Schedule 1.1.; provided, that such expenditures shall be for general working capital or assets, properties or rights that are necessary or advisable, in the good faith determination of the Company, in order to facilitate the construction of PCS systems in the geographic areas within the Company Territory. "Permitted Liens" means (i) Liens arising in favor of sellers or lessors for indebtedness and obligations incurred to purchase or lease fixed or capital assets, provided that such liens secure only the indebtedness and obligations created thereunder and are limited to the assets purchased or leased pursuant thereto and the proceeds thereof; (ii) mechanic's and workmen's liens; and (iii) statutory landlord liens. "Person" means an individual, corporation, partnership, limited liability company, association, joint stock company, Governmental Authority, business trust, unincorporated organization, or other legal entity. "POPs" means, with respect to any licensed area, the residents of such area based on the most recent publication by Equifax Marketing Decision Systems, Inc. 8 "Preferred Stock" means the shares of Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock being issued hereunder. "Purchaser" has the meaning set forth in the preamble. "Reconciliation Date" means the earliest to occur of (i) the fifth anniversary of the Closing Date, (ii) the date of consummation of any merger, combination or consolidation of the Company or any Subsidiary with or into any other entity (regardless of whether the Company or such Subsidiary is the surviving entity in any such transaction), if, after giving effect to such transaction, Cash Equity Investors beneficially own less than 33% of the Common Stock on a fully diluted basis, (iii) the date of consummation of any sale or disposition of all or substantially all of the Company's assets and (iv) the liquidation, dissolution or winding up of the Company; provided, that with respect to any Mercury Investor Indemnitor, the Reconciliation Date means the earlier to occur of (A) any of the foregoing or (B) any date after the second anniversary of the Closing Date on which (x) there shall have been a settlement or other final disposition in accordance with the applicable terms of Article VIII of all of the matters listed on Schedule 4.7 and 5.3(a) and all other matters in respect of which any Section 8.5 Indemnified Party has given timely notice of a Section 8.5 Loss and (y) such Mercury Investor Indemnitor has satisfied his or its Percentage Share of any Section 8.5 Losses in respect of which a Section 8.5 Notice has been given in accordance with the proviso to the last sentence of Section 8.5. "Regulatory Problem" means, with respect to any SBIC Holder providing Financing under this Agreement, any set of facts or circumstances wherein it has been asserted by any governmental regulatory agency (or any SBIC Holder reasonably believes in good faith that there is a substantial risk of such assertion) that such SBIC Holder and its Affiliates are not entitled to hold, or exercise any significant right with respect to, the Securities. "Related Agreements" means the Employment Agreements, Management Agreement, Network Membership License Agreement, Option Agreement, Resale Agreement, Roaming Agreement, Stockholders Agreement, the Old Mercury Note (and the pledge agreement and other documents referred to therein), and the consent of even date herewith of the members of each of Mercury I and Mercury II. "Representatives" has the meaning set forth in Section 6.2(a). "Resale Agreement" means the Resale Agreement between the Company and AT&T Wireless Services, Inc., or an Affiliate thereof, in substantially the form of Exhibit C, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Restated Bylaws" means the Amended and Restated Bylaws of the Company, in the form of Exhibit D, to be adopted as of the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Restated Certificate" means the Amended and Restated Certificate of Incorporation of the Company, in the form of Exhibit E, to be filed with the office of the 9 Secretary of State of the State of Delaware on the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Roaming Agreement" means the Intercarrier Roamer Service Agreement between the Company and AT&T Wireless Services, Inc., in substantially the form of Exhibit F, to be dated as of the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "SBA" has the meaning set forth in Section 6.6(b). "SBA Compliance Documents" has the meaning set forth in 7.3(c). "SBIC" means a small business investment company licensed under the SBIC Act. "SBIC Act" means the Small Business Investment Company Act of 1958, as amended. "SBIC Holder" means each Purchaser that is an SBIC. "SBIC Regulations" means the SBIC Act and the regulations issued thereunder as set forth in 13 CFR 107 and 121, as amended. "Section 8.2 Indemnified Party" has the meaning set forth in Section 8.2. "Section 8.3 Indemnified Party" has the meaning set forth in Section 8.3. "Section 8.4 Indemnified Party" has the meaning set forth in Section 8.4. "Section 8.5 Indemnified Party" has the meaning set forth in Section 8.5. "Section 8.5 Losses" has the meaning set forth in Section 8.5. "Securities" means the shares of Preferred Stock and Common Stock being issued hereunder, together with any shares of Preferred Stock or Common Stock issued upon conversion of or delivered in substitution or exchange for any of the foregoing. "Securities Act" means the Securities Act of 1933, as amended. "Series A Preferred Stock" has the meaning set forth in Section 2.5. "Series C Preferred Stock" has the meaning set forth in Section 2.5. "Series D Preferred Stock" has the meaning set forth in Section 2.5. 10 "Solvent" means, when used with respect to any Person, that at the time of determination: (a) the fair market value of its assets is in excess of the total amount of its liabilities (including, without limitation, contingent liabilities), (b) the present fair saleable value of its assets is greater than its probable liability for its existing debts as such debts become absolute and mature, (c) it is then able and expects to be able to pay its indebtedness (including without limitation, contingent indebtedness and other commitments) as they mature, and (d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. "Southern Farm" means Southern Farm Bureau Life Insurance Company. "Stockholders Agreement" means the Stockholders Agreement, by and among the Company, AT&T PCS, the Cash Equity Investors and the Management Stockholders, as stockholders, in substantially the form of Exhibit G, to be dated as of the Closing Date, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Subsidiary" shall mean, with respect to any Person, a corporation or other entity of which 50% or more of the voting power or the voting equity securities or equity interest is owned, directly or indirectly, by such Person. "Tracked Common Stock" means, collectively, the Class C Common Stock and the Class D Common Stock. "Transactions" means the transactions contemplated by this Agreement and the Related Agreements. "Transfer Taxes" has the meaning set forth in Section 3.3. "Transferred Employees" has the meaning set forth in Section 6.11. "TWR" has the meaning set forth in the preamble. "TWR Licenses" has the meaning set forth in the first recital. "Unfunded Commitment" has the meaning set forth in Section 2.2. "Voting Common Stock" means the Class A Voting Common Stock, par value $.01 per share, of the Company. "Voting Preference Stock" means the Voting Preference Stock, par value $.01 per share, of the Company. 11 ARTICLE II CONTRIBUTIONS; PURCHASE AND SALE OF SECURITIES; CERTAIN RESTRICTIONS ON TRANSFER 2.1 AT&T PCS and TWR Contributions. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained: (a) AT&T PCS and TWR (as applicable) shall partition and/or disaggregate each AT&T PCS License and TWR License to create, as more particularly described on Schedule 2.1, (i) Licenses (the "AT&T Contributed Licenses") providing in the aggregate the right to use 20 MHz of authorized frequencies within the geographic area covered by the AT&T Contributed Licenses, and (ii) Licenses (the "AT&T Retained Licenses") providing in the aggregate the right to use the balance of the authorized frequencies within such geographic area and the right to use the authorized frequencies outside of such geographic area (but within the geographic area covered by the AT&T PCS Licenses), and (b) at the Closing, AT&T PCS and TWR (as applicable) shall contribute the AT&T Contributed Licenses to the capital of the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company). 2.2 Cash Equity Investor Contributions. (a) Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained: (i) effective upon the Closing, each Cash Equity Investor hereby irrevocably commits, severally and not jointly, to contribute to the capital of the Company an amount equal to its Aggregate Commitment and (ii) at the Closing, each Cash Equity Investor shall contribute to the capital of the Company an amount equal to its Initial Cash Contribution and the Company shall accept such capital contribution. Each Cash Equity Investor shall contribute to the capital of the Company an additional amount equal to the excess of its Aggregate Commitment over its Initial Cash Contribution in the amounts and on the dates specified on Schedule I (or such earlier dates as may be established in accordance with the terms of the Stockholders Agreement); provided that, in all events, (i) the aggregate amount of the Initial Cash Contributions plus the additional capital contributions actually made by Cash Equity Investors during the period commencing on the date of formation of the Company and ending on December 31, 1998 shall be no less than the Company's "operating losses," determined in accordance with generally accepted accounting principles, for such period and (ii) the aggregate amount of the Initial Cash Contributions plus the additional capital contributions actually made by Cash Equity Investors during the period commencing on the date of formation of the Company and ending on December 31, 1999 shall be no less than the Company's "operating losses," determined in accordance with generally accepted accounting principles, for such period. The obligation of each Cash Equity Investor to make such additional cash contributions in respect of its Aggregate Commitment in accordance with this Section 2.2 and Section 3.10 of the Stockholders Agreement is sometimes referred to herein as the "Unfunded Commitment." Nothing herein (including without limitation, the proviso to Section 2.2 (a)) shall be construed to require any Cash Equity Investor to make contributions in an aggregate amount in excess of its Aggregate Commitment or later than the third anniversary of the Closing Date. 12 (b) Each Cash Equity Investor acknowledges and agrees that, if the Closing occurs, its obligation to make capital contributions to the Company after the Closing Date in respect of its Unfunded Commitment constitutes an irrevocable and unconditional obligation, and shall not be subject to counterclaim, set-off, deduction or defense, or to abatement, suspension, deferment, diminution or reduction for any reason whatsoever. By way of amplification, and not in limitation of the foregoing, each Cash Equity Investor further acknowledges and agrees to fulfill its obligations in respect of its Unfunded Commitment regardless of any claims it may have against any other Person (whether or not related to the Transactions) and regardless of the existence or non-existence of any facts or circumstances (whether or not such facts and circumstances existed on the date hereof or the Closing Date or were then known by it). 2.3 Mercury Contributions. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, each of Mercury I and Mercury II shall contribute to the capital of the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company) the contracts and other assets described on Schedule 2.3 (the "Contributed Mercury Assets") and the Mercury Licenses and (if the Central Alabama Agreement shall not have been assigned to the Company pursuant to Section 6.16) the Alabama License owned by it. 2.4 INTENTIONALLY OMITTED. 2.5 Purchase and Sale of Securities at Closing. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, in consideration of the Contributions, the Company shall issue, sell and deliver to the Purchasers the following securities: (a) to each of AT&T PCS and TWR, the number of shares set forth opposite its name on Schedule VII of the following: (i) the Company's Series A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred Stock"), the terms of which are set forth in the Restated Certificate; and (ii) the Company's Series D Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), the terms of which are set forth in the Restated Certificate; and (b) to each Cash Equity Investor, Mercury I and Mercury II, the number of shares set forth opposite its name on Schedule VII of the Company's Series C Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), the terms of which are set forth in the Restated Certificate. Schedule VII also sets forth the shares of Common Stock, Voting Preference Stock and Tracked Common Stock to be issued to the Management Stockholders pursuant to Section 3.2(e). 2.6 Restrictive Legends. Each certificate representing Securities (including Securities originally issued hereunder or delivered upon conversion of the Preferred Stock or Common Stock, or delivered in substitution or exchange for any of the foregoing) will bear a 13 legend reading substantially as follows until such Securities have been sold pursuant to an effective registration statement under the Securities Act, Rule 144 under the Securities Act, or an opinion of counsel reasonably satisfactory in form and substance to the Company and otherwise in full compliance with any other applicable restrictions on transfer, including those contained in this Agreement and the Stockholders Agreement: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE `ACT'), OR UNDER ANY STATE SECURITIES OR `BLUE SKY' LAWS. SAID SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNLESS AND UNTIL REGISTERED UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR `BLUE SKY' LAWS OR EXEMPTED THEREFROM UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES OR `BLUE SKY' LAWS." 2.7 Use of Proceeds. The Company shall use the net cash proceeds of its sale of Securities hereunder solely (i) for capital and other expenditures relating to the conduct of the Business (as defined in the Stockholders Agreement) by the Company and its Subsidiaries, (ii) to repay the indebtedness of each of Mercury I and Mercury II to the United States Department of the Treasury and the other Assumed Mercury Debt, in each case pursuant to the terms thereof, (iii) to pay fees and expenses incurred in connection with the Transactions, and (iv) to fund borrowings under the Old Mercury Note. 2.8 Assumption of Mercury Indebtedness. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, on and as of the Closing Date, the Company shall accept and assume the FCC Debt, the indebtedness to the United States Department of the Treasury incurred in connection with the acquisition of the Alabama License by Central Alabama (the "Central Alabama FCC Debt"), the indebtedness of Mercury I and Mercury II pursuant to the Bridge Loan Documents and the other indebtedness and liabilities described on Schedule 2.8 (collectively, the "Assumed Mercury Debt"). The outstanding principal amount of each item of Assumed Mercury Indebtedness, together with accrued and unpaid interest (if any), as of March 31, 1998 is set forth on Schedule 2.8. ARTICLE III CLOSING 3.1 Time and Place of Closing. Upon the terms and subject to the conditions hereof, the closing of the Transactions (the "Closing") shall take place at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York, at 10:00 a.m. local time on the twelfth 14 business day following the date of receipt of the last Consent required by subsections (a) through (c) of Section 7.1, or at such other place and/or time and/or on such other date as the parties may agree or as may be necessary to permit the fulfillment or waiver of the conditions set forth in Article VII (the "Closing Date"). 3.2 Closing Actions and Deliveries. Upon the terms and subject to the satisfaction or waiver by the appropriate parties, if applicable, of the conditions set forth in Article VII, to effect the purchase and sale of the Securities and consummate the other Transactions, the parties shall on the Closing Date take the following actions: (a) AT&T PCS Contributions. Each of AT&T PCS and TWR shall execute and deliver to the Company one or more instruments of assignment, substantially in the form of Exhibit M, sufficient to assign the AT&T Contributed Licenses to the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company) (such assignments being herein collectively referred to as the "AT&T License Transfer"). (b) Cash Equity Investor Contributions. Each Cash Equity Investor shall deliver to the Company by wire transfer of immediately available funds to the account designated by the Company on or prior to the Closing Date an amount equal to its Initial Cash Contribution, as set forth on Schedule I. (c) Mercury Contributions. Mercury I and Mercury II shall execute and deliver to the Company (or the applicable Subsidiary), (i) one or more instruments of assignment, substantially in the form of Exhibit M, sufficient to assign the Mercury Licenses and (if the Central Alabama Agreement shall not have been assigned to the Company pursuant to Section 6.16) the Alabama License to the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company) (such assignments being herein collectively referred to as the "Mercury License Transfer"), and (ii) an Assignment and Bill of Sale, in form reasonably acceptable to the Company, and such other good and sufficient instruments of conveyance, transfer and assignment as shall be necessary or appropriate to transfer to and vest in the Company (or the applicable Subsidiary) the Contributed Mercury Assets with warranties of title consistent with this Agreement. (d) Assumption and Reimbursement of Indebtedness. The Company shall (i) execute and deliver to each of Mercury I and Mercury II an instrument of assumption, in form and substance reasonably satisfactory to Mercury I and Mercury II, in respect of the indebtedness to be assumed by the Company pursuant to Section 2.8 and (ii) pay to each of Mercury I and Mercury II an amount equal to interest actually paid by such Person on such indebtedness through the Closing Date as evidenced by documentation reasonably satisfactory to the Company. (e) Management Stockholder Equity. At or prior to the Closing, each Management Stockholder shall exchange all of his or her Old Common Stock (which shall be surrendered to the Company for cancellation) for the shares of Voting Preference Stock, Voting Common Stock and Class C Common Stock set forth on Schedule VII, and a senior executive to 15 be identified prior to Closing shall subscribe for the shares of Voting Common Stock set forth on Schedule VII. (f) Delivery of Securities. The Company shall deliver: (i) to each of AT&T PCS and TWR, certificates, duly executed by authorized signatories of the Company, representing the shares of Series A Preferred Stock and Series D Preferred Stock to be issued to AT&T PCS and TWR in accordance with Section 2.5; (ii) to each Cash Equity Investor, and to each of Mercury I and Mercury II, certificates, duly executed by authorized signatories of the Company, representing the shares of Series C Preferred Stock to be issued to each of them in accordance with the terms of Section 2.5; and (iii) to each Management Stockholder, certificates, duly executed by authorized signatories of the Company, representing the shares of Common Stock to be issued to each of them in accordance with the terms of Section 3.2(e). (g) Restated Certificate. Duly authorized officers of the Company shall execute the Restated Certificate and cause it to be filed with the office of the Secretary of State of the State of Delaware. (h) Other Deliveries. The parties shall execute and deliver or cause to be executed and delivered all other documents, instruments, opinions and certificates contemplated by this Agreement or the Related Agreements to be delivered at the Closing or necessary and appropriate in order to consummate the Transactions contemplated to be consummated on the Closing Date. 3.3 Payment of Transfer Taxes. The Company shall pay or cause to be paid at the Closing or, if due thereafter, promptly when due, all gross receipts taxes, gains taxes (including, without limitation, real property gains tax or other similar taxes), transfer taxes, sales taxes, stamp taxes, and any other taxes, but excluding any Federal, State or local income taxes (collectively, "Transfer Taxes"), payable in connection with the transfer of the Contributions. ARTICLE IV REPRESENTATIONS OF ALL PARTIES Each of AT&T PCS and TWR (as to itself and each other AT&T Party), each other Purchaser (as to itself), each of Mercury I and Mercury II (severally as to itself), each Management Stockholder (severally as to himself, and jointly and severally as to the Company, Mercury I and Mercury II, except that the representations and warranties as to the Company set forth in (x) Section 4.5 are not being made by the Management Stockholders and (y) Sections 4.6 and 4.8 are being made by the Management Stockholders only as of the date hereof and not as of the Closing Date), and the Company (as to itself and each of its Subsidiaries), represents and warrants to each of the other parties that: 4.1 Organization and Standing. It is a corporation, limited liability company, general partnership or limited partnership, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to 16 own, lease and operate its properties and to carry on its business as now being conducted. It is duly qualified to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary other than any such jurisdiction in which the failure to be so qualified would not have a Material Adverse Effect on it or materially adversely affect the Transactions or its ability to perform its obligations under this Agreement and the Related Agreements. TWR is an indirect wholly owned Subsidiary of AT&T Corp. 4.2 Power and Authority. It has the requisite power and authority (or, in the case of the Management Stockholders, legal capacity) to execute, deliver and perform this Agreement, each of the Related Agreements to which it is a party and each other instrument, document, certificate and agreement required or contemplated to be executed, delivered and performed by it hereunder and thereunder to which it is or will be a party. 4.3 Due Authorization. The execution and delivery of this Agreement by it and the consummation of the Transactions by it, including without limitation the execution and delivery of the Related Agreements to which it is a party, have been duly and validly authorized by its Board of Directors (or equivalent body) and no other proceedings on its part which have not been taken (including, without limitation, approval of its stockholders, partners or members) are necessary to authorize this Agreement or to consummate the Transactions. 4.4 Enforceability. This Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation, and each of the Related Agreements to which it is a party shall be duly executed and delivered by it at (or prior to) the Closing and, upon such execution and delivery, shall constitute its valid and binding obligation, in each case enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. 4.5 No Breach. As of the Closing, after giving effect to the Transactions, it is not in breach of any obligation under this Agreement or any of the Related Agreements. 4.6 Consents; No Conflicts. Neither the execution, delivery and performance by it of this Agreement or the Related Agreements to which it is a party nor the consummation of the Transactions will (a) conflict with, or result in a breach or violation of, any provision of its organizational documents; (b) subject to obtaining the Consents set forth on Schedule 4.6, constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under (i) any Law or License or (ii) any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets; or (c) require any Consent (other than those set forth on Schedule 4.6) or the approval of its board of directors, general partner, stockholders or similar constituent bodies, as the case may be (other than any such approvals that have been obtained), except in each case, where such breach, violation, default, Lien, right, or the failure to obtain or give such 17 Consent would not have a Material Adverse Effect on it or materially adversely affect the Transactions or its ability to perform its obligations under the Related Agreements. To its knowledge, except as set forth on Schedule 4.6, there is no fact relating to it or its Affiliates that would be reasonably expected to prevent it from consummating the Transactions or performing its obligations under the Related Agreements or disqualify the Company from obtaining the Consents (including without limitation, FCC Consent) required in order to consummate the AT&T License Transfer and the Mercury License Transfer as provided for in this Agreement. 4.7 Litigation. Except as set forth on Schedule 4.7, there is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the Transactions to which it is a party or to fulfill its obligations under this Agreement or any of the Related Agreements to which it is a party, which seeks to prevent or challenge the Transactions, or which seeks to have an adverse effect on the Company or its wholly owned Subsidiaries. 4.8 FCC Compliance. It complies with all eligibility rules issued by the FCC to hold broadband PCS licenses, including without limitation, FCC rules on foreign ownership and the CMRS spectrum cap. The fact that it owns the interest in the Company contemplated by this Agreement and the Related Agreements will not cause the Company or its wholly owned Subsidiaries to be ineligible under FCC rules to hold PCS licenses in general or the licenses to be held by the Company's wholly owned Subsidiaries. 4.9 Brokers. Except for fees in the aggregate amount of $6,502,500 (as such amount may be increased up to $375,000 in connection with an Additional Offering) payable by the Company to the Persons set forth on Schedule 4.9, all of which will be paid by the Company concurrently with the Closing, it has not employed any broker, finder or investment banker or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the Transactions. ARTICLE V REPRESENTATIONS OF CERTAIN PARTIES 5.1 No Distribution, Etc. Each of the Purchasers and the Management Stockholders represents and warrants as to itself that: (a) No Distribution. It is acquiring the Securities to be purchased by it hereunder for the purpose of investment and not with a view to or for sale in connection with any distribution thereof (other than in compliance with the Securities Act and all applicable state securities laws). (b) Investor Acknowledgments. (i) It is an "accredited investor" as defined in Regulation D of the Securities Act. Its representatives have been provided an opportunity to ask questions of, and have received answers thereto from, the Company and its representatives 18 regarding the terms and conditions of its purchase of Securities, and the Company and its proposed business generally, and have obtained all additional information requested by it to verify the accuracy of all information furnished to it in connection with such purchase. (ii) It has such knowledge and experience in financial and business affairs that it is capable of evaluating the merits and risks of purchasing the Securities it is purchasing hereunder. (iii) It is not relying on and acknowledges that no representation is being made by any other Purchaser, the Company or any of its officers, employees, Affiliates, agents or representatives, or any Management Stockholder, except for representations and warranties expressly set forth in this Agreement and the Related Agreements, and, in particular, it is not relying on, and acknowledges that no representation is being made in respect of, (x) any projections, estimates or budgets delivered to or made available to them of future revenues, expenses or expenditures, or future results of operations and (y) any other information or documents delivered or made available to it or its representatives, except for representations and warranties expressly set forth in this Agreement and the Related Agreements. (iv) In deciding to invest in the Company, it has relied exclusively on the representations and warranties expressly set forth in this Agreement and the Related Agreements and the investigations made by itself and its representatives and its and such representatives' knowledge of the industry in which the Company proposes to operate. Based solely on such representations and warranties and such investigations and knowledge, it has determined that the Securities it is acquiring are a suitable investment for it. 5.2 AT&T PCS and TWR Licenses. (a) AT&T PCS represents and warrants that it is the authorized legal holder, free and clear of any Liens, of the AT&T PCS Licenses, evidence of which is attached to Schedule III. The AT&T PCS Licenses are, and on the Closing Date each of the AT&T PCS Licenses will be, valid and in full force and effect. Except for proceedings affecting the PCS or wireless communications services industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to the knowledge of AT&T PCS, threatened against AT&T PCS or against the AT&T PCS Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of the AT&T PCS Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ the AT&T Contributed Licenses in its business after the Closing Date. The AT&T PCS Licenses are not subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law. (b) TWR represents and warrants that it is the authorized legal holder, free and clear of any Liens, of the TWR Licenses, evidence of which is attached to Schedule III. The TWR Licenses are, and on the Closing Date each of the TWR Licenses will be, valid and in full force and effect. Except for proceedings affecting the PCS or wireless communications services 19 industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to the knowledge of TWR, threatened against TWR or against the TWR Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of the TWR Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ the AT&T Contributed Licenses in its business after the Closing Date. The TWR Licenses are not subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law. 5.3 Mercury Matters. Mercury I, Mercury II and the Management Stockholders represent and warrant, jointly and severally, that: (a) Mercury Licenses. Each of Mercury I and Mercury II is the authorized legal holder, free and clear of any Liens (other than Liens securing the FCC Debt or Liens in favor of Southern Farm and Lucent that will be released at or prior to Closing), of the Mercury Licenses set forth opposite its name on Schedule V, true and correct copies of which are attached thereto. The Mercury Licenses are, and on the Closing Date each of the Mercury Licenses will be, valid and in full force and effect. Except as set forth on Schedule 5.3(a) and for proceedings affecting the PCS or wireless communications services industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to its the knowledge, threatened against Mercury I, Mercury II or the Mercury Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of the Mercury Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ the Mercury Licenses in its business after the Closing Date or seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any Mercury License. The Mercury Licenses are not subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law. (b) Mercury Entities. Each item of Assumed Mercury Debt being assumed by the Company is a bona fide obligation of Mercury I or Mercury II and the amount set forth opposite each item on Schedule 2.8 is the outstanding amount of principal and accrued and unpaid interest thereon as of March 31, 1998. Each of Mercury I and Mercury II is Solvent after giving effect to the consummation of the Transactions, including the Mercury License Transfer. (c) Sources and Uses of Cash. The cash flow statements of each of Mercury I and Mercury II set forth on Schedule 5.3(c) accurately reflect the sources and uses of cash relating to the Mercury Licenses and the Contributed Mercury Assets. At least $14 million of cash equity contributions to Mercury I and/or Mercury II and the proceeds of all Assumed Mercury Debt has been applied to Permitted Expenditures. 20 (d) Title and Transferability. Mercury I or Mercury II, as applicable, has, and upon the delivery of the transfer documents pursuant to Section 3.2(c)(ii), the Company (or the applicable Subsidiary) will have, good and marketable title to, each of the Contributed Mercury Assets free and clear of any Liens (other than Liens in favor of Southern Farm and Lucent that will be released at or prior to Closing). Neither the execution, delivery and performance by Mercury I or Mercury II of this Agreement nor the contribution of the Contributed Mercury Assets or the assumption by the Company (or the applicable Subsidiary) of the Assumed Mercury Debt will (a) constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of the Contributed Mercury Assets or Assumed Mercury Debt; or (b) require any Consent (other than those set forth on Schedule 4.6) or the approval of its board of directors, general partner, stockholders or similar constituent bodies, as the case may be (other than any such approvals that have been obtained). The members of Mercury I that have executed and delivered the unanimous consent of members dated as of the date hereof, authorizing the consummation of the Transactions by Mercury I, are all of the members of Mercury I, and, except for the equity interests owned by such members, there are not on the date hereof nor will there be on or as of the Closing Date, before giving effect to the Transactions, any outstanding equity interests in Mercury I, or any existing options, warrants, calls, subscriptions, or other rights, or other agreements or commitments, obligating Mercury I to issue, transfer or sell any equity interests of Mercury I except for the Central Alabama Agreement. The members of Mercury II that have executed and delivered the unanimous consent of members dated as of the date hereof, authorizing the consummation of the Transactions by Mercury II, are all of the members of Mercury II, and, except for (i) the equity interests owned by such members, (ii) convertible debt held by Southern Farm, (iii) the transactions contemplated by Section 6.10, there are not on the date hereof nor will there be on or as of the Closing Date, before giving effect to the Transactions, any outstanding equity interests in Mercury II, or any existing options, warrants, calls, subscriptions, or other rights, or other agreements or commitments, obligating Mercury II to issue, transfer or sell any equity interests of Mercury II. (e) Litigation. Except as set forth on Schedule 4.7, there is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the transfer of the Contributed Mercury Assets, which seeks to prevent or challenge such transfer, or which seeks to have an adverse effect on the Contributed Mercury Assets. (f) Projections. All financial projections furnished to the Cash Equity Investors were based upon assumptions reasonably believed by Mercury I, Mercury II or the Management Stockholders, as applicable, to be reasonable and fair as of the date the projections were prepared in the context of history and current and reasonably foreseeable business conditions of the Company. There is no fact which Mercury I, Mercury II or the Management Stockholders, as applicable, has not disclosed to the Cash Equity Investors in writing and of which any of its 21 officers, directors or executive employees is aware (other than general economic conditions) and which has had or would reasonably be expected to have a material adverse effect upon the existing or expected financial condition, operating results, assets, businesses, customer or supplier relations, employee relations or prospects of the Company. 5.4 Capital Commitment. (i) Each Cash Equity Investor represents and warrants that it has, and will have on the Closing Date and on any subsequent date on which it is obligated to make a capital contribution, cash available to it in an amount sufficient to make its Cash Equity Investor Contributions in accordance with the terms of Section 2.2. (ii) Each Cash Equity Borrower represents and warrants as follows: (A) It intends to borrow pursuant to a Cash Equity Loan Agreement the amount set forth opposite its name on Schedule 5.4. (B) Prior to the Closing, it shall have delivered to each of the other parties a true and correct copy of the Cash Equity Loan Documents to which it is a party, together with all amendments and modifications thereto. Such documents (including the exhibits and schedules thereto) shall comprise a full and complete copy of all agreements between the parties thereto with respect to the subject matter thereof and transactions related thereto, and there shall be no agreements or understandings, oral or written, or side agreements not contained therein that relate to or modify the substance thereof. (C) As of the Closing Date, the Cash Equity Loan Documents to which it is a party shall have been duly authorized by all necessary corporate action on the part of such Cash Equity Borrower, shall have been validly executed and delivered by such Cash Equity Borrower and shall be the legal, valid and binding obligation of such Cash Equity Borrower, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. As of the Closing Date, the Cash Equity Loan Documents to which it is a party shall be in full force and effect as to such Cash Equity Borrower, none of the provisions thereof shall have been waived by any party thereto, and no "Default" or "Event of Default" (as such terms are defined in the Cash Equity Loan Agreements) shall have occurred and be continuing as to such Cash Equity Borrower. 1.5 Representations as to the Company. The Company and (except for the representations and warranties set forth in paragraphs (b)(ii), (c), (f)(ii)(B) and (h) below) the Management Stockholders represent and warrant, jointly and severally, and each Management Stockholder represents and warrants as to himself, severally and not jointly, that: (a) Newly Formed Company. The Company was organized on April 23, 1998, and, since its organization has at no time carried on any activities or incurred any liabilities or obligations other than in connection with its organization and with the consummation of the Transactions. 22 (b) Capitalization. (i) As of the date hereof and as of the Closing Date, before giving effect to the filing of the Restated Certificate, the authorized capital stock of the Company consists of 30 shares of common stock, par value $.01 per share ("Old Common Stock"), of which 30 shares are issued and outstanding, have been validly issued and are fully paid and non-assessable. As of the date hereof and as of the Closing Date, before giving effect to the Transactions, each of the Management Stockholders owns beneficially and of record ten shares of Old Common Stock, free and clear of any Liens. There are not on the date hereof nor will there be on or as of the Closing Date, before giving effect to the Transactions, any existing options, warrants, calls, subscriptions, or other rights, or other agreements or commitments, obligating the Company to issue, transfer or sell any shares of capital stock of the Company. (ii) As of the Closing Date, after giving effect to the filing of the Restated Certificate, the authorized capital stock of the Company will consist of 775,000 shares of Voting Common Stock, 775,000 shares of Non-Voting Common Stock, nine shares of Voting Preference Stock, 10,000 shares of Class C Common Stock, 30,000 shares of Class D Common Stock, 200,000 shares of Series A Preferred Stock, 275,000 shares of Series B Preferred Stock, 470,000 shares of Series C Preferred Stock, and 80,000 shares of Series D Preferred Stock. As of the Closing Date, after giving effect to the Transactions, there will be issued and outstanding the shares of Preferred Stock and Common Stock set forth on Schedule VII. The record and beneficial owners of such outstanding shares of Common Stock and Preferred Stock, as of the Closing Date, after giving effect to the Transactions, are set forth on Schedule VII. On the Closing Date, after giving effect to the Transactions, there will not be any existing options, warrants, calls, subscriptions, or other rights, or other agreements or commitments, obligating the Company to issue, transfer or sell any shares of capital stock of the Company, except pursuant to the conversion rights of the outstanding Preferred Stock and Common Stock and the restricted stock plan referred to in Section 6.10. (c) Securities. The shares of Preferred Stock and Common Stock being issued to the Purchasers hereunder, when issued and paid for pursuant to the terms of this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, and will be free of any Liens caused or created by the Company, except as set forth in the Stockholders Agreement and the Restated Certificate. The shares of Common Stock or Preferred Stock, as the case may be, issued upon conversion of the Preferred Stock and the Common Stock (other than the Voting Preference Stock), when issued pursuant to the terms thereof, will be validly issued, fully paid and nonassessable, and will be free of any Liens caused or created by the Company, except as set forth in the Stockholders Agreement and the Restated Certificate. (d) No Undisclosed Liabilities; Subsidiaries. As of the date hereof and as of the Closing Date, before giving effect to the Transactions, the Company has no indebtedness or liability of any nature whatsoever, absolute or contingent, liquidated or unliquidated, except indebtedness incurred on or after the date hereof under the Bridge Loan Agreement and liabilities incurred by the Company in the ordinary course of business in connection with Permitted Expenditures. The Company owns all of the outstanding shares of capital stock of each of its Subsidiaries, free and clear of any Liens, except Liens securing the FCC Debt and Liens granted 23 to the lenders pursuant to the Credit Documents and the Bridge Loan Documents. Prior to the Closing Date, the Company shall furnish to each of the Purchasers a complete list of its direct and indirect Subsidiaries indicating the jurisdictions in which each such Subsidiary is organized or qualified to conduct business. (e) Offering of Securities; Subsequent Offering. (i) None of the Company, any Management Stockholder or any Person acting on its behalf has offered the Securities or any similar equity securities of the Company for sale to, or solicited any offers to buy Securities or any similar equity securities of the Company from, any Person, other than the Purchasers and a limited number of other "accredited investors" (as defined in Rule 501(a) under the Securities Act). (ii) None of the Company, any Management Stockholder or any Person acting on its behalf will, directly or indirectly, take any action which might subject the offering, issuance or sale of the Securities to the registration and prospectus delivery requirements of Section 5 of the Securities Act. (iii) Assuming the accuracy of the representations and warranties of the Purchasers contained in Sections 5.1(a) and (b), each of the offering and sale of Securities under this Agreement to AT&T PCS, TWR, Mercury I, Mercury II and the Initial Cash Equity Investors and the offering and sale of Securities to the Additional Purchasers pursuant to the Additional Offering complies or will comply with all applicable requirements of Federal and state securities laws. The Additional Offering and the issuance and sale of shares of Series C Preferred Stock pursuant thereto are transactions exempt from the registration requirements of Section 5 of the Securities Act. (iv) The offering documents, certificates, statements and other materials furnished to any Additional Purchaser by or on behalf of the Company will not contain any untrue statement of a material fact or omit a material fact necessary in order to make the statements contained therein, in light of the circumstance under which they were made, not misleading. (f) Credit and Bridge Loan Documents; Cash Equity Loan Commitment. (i) (A) Prior to the date hereof, the Company has delivered to each of the Purchasers a true and correct copy of a commitment letter, dated May 20, 1998, from TD Securities (USA) Inc., relating to a proposed $525 million senior secured credit facility. Such commitment letter has been executed and delivered by the financial institutions referred to above and the Company, is in full force and effect and, as of the date hereof, such commitment letter has not been modified or withdrawn. Prior to the date hereof, the Company has delivered to each of the Purchasers a true and correct copy of the Bridge Loan Documents together with all amendments and modifications thereto. Such documents (including the exhibits and schedules thereto) shall comprise a full and complete copy of all agreements between the parties thereto with respect to the subject matter thereof and transactions related thereto, and there shall be no agreements or understandings, oral or written, or side agreements not contained therein that relate to or modify the substance thereof. 24 (B) As of the date hereof, the Bridge Loan Documents have been duly authorized by all necessary corporate action on the part of the Company, have been validly executed and delivered by the Company and are the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. As of the Closing Date, the Bridge Loan Documents are in full force and effect, none of the provisions thereof have been waived by any party thereto, and no "Default" or "Event of Default" (as such terms are defined in the Bridge Loan Agreement) shall have occurred and be continuing. (ii) (A) Prior to the Closing, the Company shall have delivered to each of the Purchasers a true and correct copy of each of the Credit Documents, together with all amendments and modifications thereto. Such documents (including the exhibits and schedules thereto) shall comprise a full and complete copy of all agreements between the parties thereto with respect to the subject matter thereof and transactions related thereto, and there shall be no agreements or understandings, oral or written, or side agreements not contained therein that relate to or modify the substance thereof. (B) As of the Closing Date, the Credit Documents shall have been duly authorized by all necessary corporate action on the part of the Company, shall have been validly executed and delivered by the Company and shall be the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. As of the Closing Date, the Credit Documents shall be in full force and effect, none of the provisions thereof shall have been waived by any party thereto, and no "Default" or "Event of Default" (as such terms are defined in the Credit Agreement) shall have occurred and be continuing. (iii) Prior to the date hereof, it has delivered to each of the other parties a true and correct copy of a commitment letter, dated May 1, 1998, from the lender(s) referred to therein, relating to a proposed $75 million loan to the Cash Equity Borrowers. Such commitment letter has been executed and delivered by such lender(s) and the Company, is in full force and effect and, as of the date hereof, has not been modified or withdrawn. (g) Minimum Build-Out Plan. The Company's Minimum Build-Out Plan in respect of the construction of a PCS system in the Company Territory is attached as Schedule 5.5(g). Completion of the Minimum Build-Out Plan in accordance with such Schedule will meet all applicable FCC requirements in respect of system build-out, including those set forth in 47 CFR ss. 24.203. (h) Small Business Matters. The Company, together with its "affiliates" (as that term is defined in Title 13, Code of Federal Regulations, Section 121.103), is a "Small Business" and a "Smaller Business", in each case within the meaning of the SBIC Act and the regulations 25 thereunder, including Title 13, Code of Federal Regulations, Sections 107.50, 107.700, 107.710 and 121.301(c). The information regarding the Company and its Affiliates set forth in the Small Business Administration Form 480, Form 652 and Parts A and B of Form 1031 delivered at the Closing is accurate and complete. Copies of such forms shall have been completed and executed by the Company and delivered to each Purchaser which is an SBIC at the Closing together with a written statement of the Company regarding its planned use of the proceeds from the sale of the Securities. Neither the Company nor any Subsidiary: (i) presently engages in, and none of them shall hereafter engage in, any activities, or (ii) shall use directly or indirectly the proceeds from the sale of the Securities for any purpose, which, in either case, a SBIC is prohibited from engaging in or providing funds for by the SBIC Act and the regulations thereunder (including Title 13, Code of Federal Regulations, Section 107.720). (i) Litigation. There is no judgment, decree, injunction, rule or order outstanding against the Company or any of its Subsidiaries which would limit in any material respect the ability of the Company or any of its Subsidiaries to operate their respective business in the manner currently contemplated. (j) FCC Compliance. The Management Stockholders, in aggregate, satisfy the financial requirements established by the FCC in 47 CFR ss. 24.720(b)(2) for a "very small business." ARTICLE VI COVENANTS 6.1 Consummation of Transactions. Each party shall use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable and consistent with applicable law to carry out all of their respective obligations under this Agreement and the Related Agreements and to consummate the Transactions, which efforts shall include, without limitation, the following: (a) The parties shall use all commercially reasonable efforts to cause the Closing to occur and the Transactions to be consummated in accordance with the terms hereof, and, without limiting the generality of the foregoing, to obtain all necessary Consents including, without limitation, the approval of this Agreement and the Transactions by all Governmental Authorities and agencies, including the FCC and any Consents necessary or advisable in the reasonable judgment of AT&T PCS in connection with franchise laws applicable to the execution, delivery and performance of this Agreement and the Related Agreements or the consummation of the Transactions, and to make all filings with and to give all notices to third parties which may be necessary or reasonably required in order for the parties to consummate the Transactions. (b) Each party shall furnish to the other parties all information concerning such party and its Affiliates reasonably required for inclusion in any application or filing to be made 26 by AT&T PCS, TWR or the Company or any other party in connection with the Transactions or otherwise to determine compliance with applicable FCC Rules. (c) Upon the request of any other party, each party shall forthwith execute and deliver, or cause to be executed and delivered, such further instruments of assignment, transfer, conveyance, endorsement, direction or authorization and other documents as may reasonably be requested by such party in order to effectuate the purposes of this Agreement and the Related Agreements. (d) Each party shall use all commercially reasonable efforts to modify the structure of the Transactions in such a manner that no franchise laws shall be applicable to the relationship between AT&T PCS or TWR (or their respective Affiliates) and the Company; provided that, no party shall be obligated to agree to any modification that adversely affects such party. The Company acknowledges that (i) the Company and AT&T PCS, TWR and their respective Affiliates do not intend to create a franchise or business opportunity relationship; (ii) the wireless telephones ("Telephones") if any, purchased by the Company from AT&T PCS and its Affiliates and minutes for mobile wireless radiotelephonic service ("Minutes") purchased by the Company under the terms of the Roaming Agreement are being sold at bona fide wholesale prices; (iii) the Company is not required by this Agreement or the Related Agreements or as a matter of practical necessity to purchase more than a reasonable quantity of Telephones or Minutes; and (iv) none of AT&T PCS, TWR or any of their respective Affiliates has made any representation to the Company that (A) the Company or its equity holders will earn, or are likely to earn, a gross or net profit, (B) AT&T PCS, TWR or any of their respective Affiliates has knowledge of the market that the Company will operate in or that the market demand will enable the Company to earn a profit, (C) there is a guaranteed market for the Company, or (D) AT&T PCS, TWR or any of their respective Affiliates will provide the Company with locations or assist the Company in finding locations for use or operation of its business. The Company has been informed at least seven days prior to the execution of this Agreement that AT&T PCS's and TWR's principal business address is, and AT&T PCS's and TWR's agent for service of process is, c/o AT&T Corp., 32 Avenue of the Americas, New York, New York 10013. Nothing in this Agreement shall be construed to require the parties to consummate the Closing if any regulatory approval would require that it (i) divest or hold separate any of its assets existing as of the date hereof other than as contemplated by this Agreement and the Related Agreements or (ii) otherwise take or commit to take any action that limits its freedom of action in any material respect with respect to any of its businesses, product lines or assets. 27 6.2 Confidentiality. (a) Each party shall, and shall cause each of its Affiliates, and its and their respective shareholders, members, managers, directors, officers, employees and agents (collectively, "Representatives") to, keep secret and retain in strictest confidence any and all Confidential Information relating to any other party that it receives in connection with the negotiation or performance of this Agreement, and shall not disclose such Confidential Information, and shall cause its Representatives not to disclose such Confidential Information, to anyone except the receiving party's Affiliates and Representatives and any other Person that agrees in writing to keep in confidence all Confidential Information in accordance with the terms of this Section 6.2. Until the Closing, each party agrees to use Confidential Information received from another party only (i) to evaluate its interest in pursuing the Transactions and (ii) to pursue such Transactions, but not for any other purpose. All Confidential Information furnished pursuant to this Agreement shall be returned promptly to the party to whom it belongs upon request by such party. Upon the Closing, the provisions of this Section 6.2 shall terminate and the obligations of the parties in respect of Confidential Information shall be governed by Section 7.12 of the Stockholders Agreement. (b) The obligations set forth in Section 6.2(a) shall be inoperative with respect to Confidential Information that (i) is or becomes generally available to the public other than as a result of disclosure by the receiving party or its Representatives, (ii) was available to the receiving party on a non-confidential basis prior to its disclosure to the receiving party, or (iii) becomes available to the receiving party on a non-confidential basis from a source other than the providing party or its agents, provided that such source is not known by the receiving party to be bound by a confidentiality agreement with the providing party or the providing party's agents. (c) To the fullest extent permitted by law, if a party or any of its Affiliates or Representatives breaches, or threatens to commit a breach of, this Section 6.2, the party whose Confidential Information shall be disclosed, or threatened to be disclosed, shall have the right and remedy to have this Section 6.2 specifically enforced by any court having jurisdiction, it being acknowledged and agreed that money damages will not provide an adequate remedy to such party. Nothing in this Section 6.2 shall be construed to limit the right of any party to collect money damages in the event of breach of this Section 6.2. (d) Anything else in this Agreement or the Related Agreements notwithstanding, each party shall have the right to disclose any information, including Confidential Information of the other party or such other party's Affiliates, in any filing with any regulatory agency, court or other authority or any disclosure to a trustee of public debt of a party to the extent that the disclosing party determines in good faith that it is required by Law, regulation or the terms of such debt to do so, provided that any such disclosure shall be as limited in scope as possible and shall be made only after giving the other party as much notice as practicable of such required disclosure and an opportunity to contest such disclosure if possible. 28 6.3 Retained Licenses. AT&T PCS, TWR and their respective Affiliates may use the AT&T Retained Licenses, and may market and sell to their customers or others any services that use such Licenses permitted under applicable Laws, in each case as it may determine, and may otherwise deal with and permit others to deal with the AT&T Retained Licenses, except from and after the Closing Date to the extent otherwise expressly agreed by any AT&T Party in any of the Related Agreements. 6.4 No Further Commitment. The Cash Equity Investors and the Management Stockholders have arranged for the Company to obtain financing under this Agreement and will use all reasonable efforts to arrange for financing under the Credit Agreement. It is anticipated that the Company, in consultation and cooperation with the Cash Equity Investors, will have responsibility for arranging for all of the additional debt and equity financing required by the Company. Further, the Management Stockholders, in their capacity as officers and employees of the Company, shall be responsible for conducting the day-to-day operations of the Company, all under the control and supervision of the Company's Board of Directors. In connection with the execution and delivery of this Agreement, each of the Purchasers is agreeing to acquire Securities of the Company and each of the Purchasers and certain of their respective Affiliates are agreeing to enter into the Related Agreements to which each of them is a party. The parties acknowledge and agree that, except to the extent expressly set forth in this Agreement and such Related Agreements, none of AT&T PCS, TWR or any of their respective Affiliates has any legal, contractual or other obligation to acquire debt or equity securities of the Company, provide or arrange for debt or equity financing required by the Company, provide services to or otherwise assist the Company in connection with the conduct of its business or in any other manner, refrain from exercising its rights under this Agreement and the Related Agreements (including, without limitation, the right to terminate the Network Membership License Agreement in accordance with its terms) or refrain from competing, directly or indirectly, with businesses conducted by the Company. Nothing herein shall be construed to relieve any Person of its express contractual obligations under this Agreement and the Related Agreements or from any common law obligation of good faith relating to its performance of such contractual obligations. 6.5 Use of Proceeds. The Company shall use the proceeds of the sale of Securities only for the purposes described in Section 2.7 and in the written statement referred to in Section 5.5(g). 6.6 SBIC Regulatory Provisions. (a) The Company shall notify each SBIC Holder as soon as practicable (and, in any event, not later than 15 days) prior to taking any action after which the number of record holders of the Company's voting stock would be increased from fewer than 50 to 50 or more, and the Company shall notify each SBIC Holder of any other action or occurrence after which the number of record holders of the Company's voting stock was increased (or would increase) from fewer than 50 to 50 or more, as soon as practicable after the Company becomes aware that such other action or occurrence has occurred or is proposed to occur. 29 (b) Within 75 days after the Closing, the Company shall deliver to each SBIC Holder a written statement certified by the Company's president or chief financial officer describing in reasonable detail the use of the proceeds of the sale of Securities hereunder by the Company and its Subsidiaries. In addition to any other rights granted hereunder, the Company shall grant each SBIC Holder and the United States Small Business Administration (the "SBA") access to the Company's records for the purpose of verifying the use of such proceeds to the extent required pursuant to SBIC Regulations. (c) Promptly after the end of each fiscal year (but in any event prior to February 28 of each year), the Company shall deliver to each SBIC Holder a written assessment of the economic impact of each SBIC Holder's investment in the Company, specifying the full-time equivalent jobs created or retained in connection with the investment, the impact of the investment on the revenues and profits of the business and on taxes paid by the business and its employees. (d) During the one-year period commencing on the Closing Date, the Company shall not engage in any activity which constitutes an ineligible business activity (within the meaning of the SBIC Regulations as in effect on the date hereof). 6.7 Regulatory Compliance Cooperation. In the event that any SBIC Holder reasonably determines that it has a Regulatory Problem, to the extent reasonably necessary, such SBIC Holder shall have the right to transfer its Securities (and any shares of Common Stock issued upon conversion thereof) to another Person without regard to any restrictions on transfer set forth in this Agreement or in Section 4.1(c) of the Stockholders Agreement and without complying with the provisions of Section 4.3 of the Stockholders Agreement, but subject to the other provisions of the Stockholders Agreement and federal and state securities law restrictions, and the Company shall take all such actions as are reasonably requested by such SBIC Holder in order to (i) effectuate and facilitate such transfer by such SBIC Holder of any Securities of the Company then held by such SBIC Holder to such Person, (ii) permit such SBIC Holder (or any of its Affiliates) to exchange all or any portion of voting Securities then held by it on a share-for-share basis for shares of a class of non-voting Securities of the Company, which non-voting Securities shall be identical in all respects to such voting Securities, except that such non-voting Securities (or Common Stock, as applicable) shall be non-voting and shall be convertible into voting Securities (or Common Stock, as applicable) on such terms as are requested by such SBIC Holder in light of regulatory considerations then prevailing, (iii) continue and preserve the respective allocation of the voting interests with respect to the Company arising out of the SBIC Holder's ownership of voting Securities and/or provided for in the Stockholders Agreement before the transfers and amendments referred to in this Section (including entering into such additional agreements as are reasonably requested by such SBIC Holder to permit any Person(s) designated by such SBIC Holder to exercise any voting power which is relinquished by such SBIC Holder) and (iv) amend this Agreement, the Restated Certificate, and any other related documents, agreements or instruments to effectuate and reflect the foregoing. The parties to this Agreement agree to vote their Securities in favor of such amendments and actions. 30 6.8 Certain Covenants. From and after the execution and delivery of this Agreement to and including the Closing Date, each of AT&T PCS and TWR (as to themselves and the AT&T Contributed Licenses), and Mercury I and Mercury II (as to themselves, and the Mercury Licenses and Florida Licenses owned by them and the Central Alabama Agreement) and each Management Stockholder (as to himself, Mercury I and Mercury II and the Mercury Licenses and Florida Licenses and the Central Alabama Agreement) shall: (a) Comply in all material respects with all applicable Laws, including all such Laws relating to the AT&T Contributed Licenses and the Mercury Licenses and Florida Licenses, as the case may be, or their use; (b) Use commercially reasonable efforts to maintain the AT&T Contributed Licenses and the Mercury Licenses and Florida Licenses, as the case may be, in full force and effect; (c) Not (i) sell, transfer, assign or dispose of, or offer to, or enter into any agreement, arrangement or understanding to, sell, transfer, assign or dispose of any of the AT&T Contributed Licenses or the Mercury Licenses and Florida Licenses, as the case may be, or any interest therein, or negotiate therefor, or (ii) create, incur or suffer to exist any Lien (except for Liens securing the FCC Debt, Liens in favor of Southern Farm and Lucent that will be released at or prior to Closing and Liens securing debt incurred pursuant to the Bridge Loan Agreement) of any nature whatsoever relating to any of the AT&T Contributed Licenses or the Mercury Licenses or Florida Licenses, as the case may be, or any interest therein. Without limiting the foregoing, none of AT&T PCS, TWR, Mercury I, Mercury II or the Management Stockholders shall, and the Management Stockholders shall cause Mercury I and Mercury II not to, incur any material obligation or liability, absolute or contingent, relating to or affecting the AT&T Contributed Licenses or the Mercury Licenses or Florida Licenses, as the case may be, or their use; (d) Give written notice to the other parties promptly upon the commencement of, or upon obtaining knowledge of any facts that would give rise to a threat of, any claim, action or proceeding commenced against or relating to (i) it, its properties or assets, including the AT&T Contributed Licenses or the Mercury Licenses or Florida Licenses, as the case may be, or their use, and which could have a Material Adverse Effect on it or materially adversely affect the Transactions, or (ii) the AT&T Contributed Licenses or the Mercury Licenses or Florida Licenses, as the case may be, or their use; (e) Promptly after obtaining knowledge of the occurrence of, or the impending or threatened occurrence of, any event which could cause or constitute a material breach of any of its warranties, representations, covenants or agreements contained in this Agreement, give notice in writing of such event, or occurrence or impending or threatened event or occurrence, to the other parties and use commercially reasonable efforts to prevent or to promptly remedy such breach; 31 (f) Cause the other parties to be advised promptly in writing of (i) any event, condition or state of facts known to it, which has had or could have a Material Adverse Effect on it, or materially adversely affect the AT&T Contributed Licenses or the Mercury Licenses or Florida Licenses, as the case may be, their use, or the Transactions (other than proceedings affecting the PCS or wireless communications services industry generally), or (ii) any claim, action or proceeding which seeks to enjoin the consummation of the Transactions; and (g) Not amend, modify or supplement, or waive any rights under or conditions to the Central Alabama Agreement, except pursuant to Section 6.16 or with the prior written consent of AT&T PCS and Cash Equity Investors representing 66-% of the Aggregate Commitment of all Cash Equity Investors. From and after the execution and delivery of this Agreement to and including the Closing Date, Tritel shall not engage or agree to engage in any of the transactions or actions referred to in Section 3.6(b) of the Stockholders Agreement, except pursuant to Section 6.13, to the extent necessary to consummate the Contributions or satisfy the conditions set forth in Article VII or with the prior written consent of AT&T PCS and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors. 6.9 Restricted Stock Plan. Prior to the Closing, the Company shall establish a restricted stock plan, in form and substance satisfactory to Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors, AT&T PCS and the Management Stockholders, which will provide, among other things, that (a) shares of Voting Common Stock issued thereunder will be subject to the vesting provisions and repurchase rights described in Section 7 of and Schedule III to the Employment Agreement, (b) all of the shares issued under the plan shall be allocated to Company employees on the Closing Date, (c) any shares that are repurchased by the Company under the terms of the plan shall be available for re-allocation to Company employees, and (d) any shares that are not re-allocated to Company employees on the fifth anniversary of the Closing Date shall be re-allocated to the Management Stockholders ratably in accordance with the number of shares of Voting Common Stock being issued to each of them hereunder. 6.10 Certain Mercury Transactions. (a) Prior to or concurrently with the Closing, Mercury I, Mercury II and their securityholders will consummate the transactions contemplated by the agreement, dated May 20, 1998, among such Persons, copies of which have been furnished to the parties hereto. (b) Prior to the Reconciliation Date, neither Mercury I nor Mercury II shall distribute or otherwise Transfer (as defined in the Stockholders Agreement) any Escrowed Shares or any other shares of Preferred Stock purchased hereunder (or shares of Common Stock issued upon conversion of the Preferred Stock) except: (I) a Transfer from one to the other; (II) in accordance with Section 8.9(f), or (III) to a Mercury Investor that (x) elects by written notice to Mercury I or Mercury II, as the case may be, copies of which notice shall be furnished to the other parties, to receive its Escrowed Shares and/or other shares and (y) executes and 32 delivers to the other parties thereto a counterpart to each of the Stockholders Agreement and the agreement among the Cash Equity Investors attached as Schedule X to the Stockholders Agreement. By delivering such notice and accepting any such Escrowed Shares or other shares, each Mercury Investor: (i) shall become a "Mercury Investor Indemnitor" hereunder, (ii) agrees and acknowledges that such Escrowed Shares continue to be subject to the provisions of this Agreement, (iii) makes (as to itself as of the date of such distribution or transfer) the representations set forth in Section 5.1, and (iv) agrees and acknowledges that it shall succeed to the rights of Mercury I and/or Mercury II, as applicable, hereunder, in respect of the shares distributed to it. (c) Mercury I shall not amend the commitment letter of the lender relating to the Cash Equity Loan Agreements without the prior written consent of each of the Cash Equity Borrowers party hereto. The Company and Mercury I shall use their best efforts to substantially comply with the terms of the Supply Agreement dated October 31, 1997, between Mercury and the lender under the Cash Equity Loan Agreements. 6.11 Certain Employees. (a) Effective immediately prior to the Closing, MSM, Inc. shall (i) terminate (x) the employment of all of its active employees other than those employees based in the cellular markets managed by MSM, Inc. on the date hereof (the "Employees"), and (y) all employment agreements and other employment arrangements with the Employees to which it is a party; and (ii) use all reasonable efforts to cause all of the Employees to make available their employment services to the Company and its Subsidiaries. Prior to the Closing, the Company shall (or shall cause one its Subsidiaries to) make offers of employment, effective as of the Closing Date and contingent upon the Closing, to all of the Employees on terms and conditions which shall be in the Company's exclusive discretion, except that such offers shall be at the same wage or salary levels as currently in effect at MSM, Inc. The Employees who accept such offers of employment effective as of the Closing Date shall be referred to herein as the "Transferred Employees." Effective upon the Closing, MSM, Inc. hereby irrevocably waives any and all confidentiality obligations relating to the Contributions being made by Mercury which any Employee has to MSM, Inc. or any of its Affiliates for the exclusive benefit of the Company and its Subsidiaries. (b) MSM, Inc. shall retain, and neither the Company nor any of its Subsidiaries shall assume, any liabilities or obligations of MSM, Inc. or any of its Affiliates relating to the Employees, any retired former Employees or any other employees of MSM, Inc. or any of their employee benefits. From and after the Closing, MSM, Inc. shall remain solely responsible for any and all benefit liabilities in respect of the Employees, including the Transferred Employees and their beneficiaries and dependents, relating to or arising in connection with or as a result of (i) the employment or the actual or constructive termination of employment of any such Employee by MSM, Inc. (including, without limitation, in connection with the consummation of the transactions contemplated by this Agreement), (ii) the participation in or accrual of benefits or compensation under, or the failure to participate in or to accrue compensation or benefits under, any "employee benefit plan," as defined in Section 3(3) of ERISA, or any other employee or retiree benefit or compensation plan, program, practice, policy or arrangement of MSM, Inc. 33 or (iii) accrued but unpaid salaries, wages, or other compensation or payroll items (including, without limitation, bonus, incentive and deferred compensation but excluding ordinary accrued vacation, sick day and personal day compensation, which shall be assumed by the Company). Without limiting the foregoing, MSM, Inc. shall remain solely responsible for any and all benefit liabilities to or in respect of the Transferred Employees or their beneficiaries or dependents relating to or arising in connection with any claims, whether such claims are asserted before, on or after the Closing Date, for life, disability, accidental death or dismemberment, supplemental unemployment compensation, medical, dental, hospitalization, other health or other welfare or fringe benefits or expense reimbursements which claims relate to or are based upon an occurrence on or before the Closing Date (including claims for continuing treatment in respect of any illness, accident, disability, condition or confinement which occurs or commences on or before the Closing Date). (c) The Management Stockholders shall cause MSM, Inc. to perform its obligations under this Section. 6.12 Pre-Closing Build-Out (a) Promptly following the date hereof the Company shall commence, and no later than 90 days after the date hereof the Company shall complete, the Committed Pre-Closing Construction. All assets, properties or rights acquired in order to complete the Committed Pre-Closing Construction shall be (i) necessary or advisable, in the good faith determination of the Company, in order to facilitate the construction of PCS systems in the applicable geographical area following the Closing and (ii) assignable to AT&T PCS or TWR or its designee(s), free and clear of Liens (other than Permitted Liens) and without penalty or cost to effect such assignment other than penalties or costs that individually or in the aggregate are not material in amount. (b) If this Agreement is terminated in accordance with the terms hereof prior to the Closing, if and to the extent requested by AT&T PCS or TWR, the Company shall assign to AT&T PCS or TWR or its designee(s), free and clear of all Liens (other than Permitted Liens), all of the Company's assets, properties and rights relating to the Committed Pre-Closing Construction. In consideration of such assignment, AT&T PCS, TWR or such designee shall reimburse the Company in cash for its out-of-pocket costs paid to third parties (not to exceed $5,000,000 in the aggregate), plus the Company's overhead expenses (not to exceed $500,000 in the aggregate), in each case incurred in connection with the Pre-Closing Construction. 6.13 Additional Cash Equity Investors. (a) The Company shall offer (the "Additional Offering") to issue and sell up to 10,000 shares of Series C Preferred Stock to up to fifteen additional accredited investors reasonably acceptable to AT&T PCS and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors. The Company shall use its best efforts to complete the Additional Offering no later than 60 days after the date hereof. The sale of Series C Preferred Stock pursuant to the Additional Offering shall be on the terms and subject to the 34 conditions of this Agreement applicable to the Cash Equity Investors, as the same are modified and supplemented by the terms of this Section 6.13. (b) Any offeree in the Additional Offering may commit to purchase no less than 2,500 shares of Series C Preferred Stock by executing a counterpart of this Agreement (together with any other materials the Company may require in connection with the Additional Offering) and delivering the same to the Company no later than the expiration date of the Additional Offering. Any offeree electing to purchase shares pursuant to the Additional Offering is sometimes referred to herein, individually, as an "Additional Purchaser" and, collectively, as the "Additional Purchasers". (c) Commitments to purchase shares of Series C Preferred Stock by Additional Purchasers shall not reduce or otherwise affect the Aggregate Commitment, Initial Cash Contribution and Unfunded Commitment of, and the number of shares of Series C Preferred Stock to be purchased by, the Initial Cash Equity Investors, except in connection with a reallocation among the Cash Equity Borrowers as contemplated by Schedule VII. (d) In the event that Additional Purchasers commit to purchase shares of Series C Preferred Stock, the Company shall furnish to the Purchasers, promptly (and in any event within five days) following the expiration date of the Subsequent Offering: (i) an amended form of Schedule I, reflecting the commitments of the Additional Purchasers and (ii) copies of all documents executed and delivered by the Additional Purchasers in connection with such Offering. From and after the date of such delivery, all references in this Agreement to Schedule I shall be deemed to refer to such amended form of Schedule I. (e) At the Closing, each Additional Purchaser shall contribute to the capital of the Company an amount equal to its Initial Cash Contribution and shall fulfill all other obligations applicable to Cash Equity Investors. (f) In the event that, after giving effect to the Additional Offering, the aggregate amount of the Aggregate Commitment of all Cash Equity Investors is less than $158 million, then, notwithstanding anything in this Agreement to the contrary, neither the Company nor its Subsidiaries shall expend any funds in connection with the construction or operation of a mobile communication system in the McComb, MS, Laurel, MS, Dothan-Enterprise, AL and Florence, AL BTAs, except (i) up to $2 million for the construction of a "highway build" in such territory, or (ii) with the prior written consent of each of AT&T PCS and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors. 6.14 Return of Spectrum. No later than two business days prior to the deadline to elect the "disaggregation option" referred to below, as the same may be extended by the FCC, Mercury I shall have elected, and caused Central Alabama to elect, the "disaggregation option" pursuant to the FCC's Order on Reconsideration of the Second Report and Order, FCC 98-46 (released March 24, 1998), with respect to the C-Block Mercury Licenses and the Alabama License, and, as a result thereof, the aggregate amount of the FCC Debt assumed by the 35 Company at the Closing pursuant to Section 2.8 shall be reduced by $33.365 million and the aggregate amount of the Central Alabama FCC Debt shall be reduced by $6.342 million. 6.15 Option Agreement. Upon the expiration of the six-month period commencing on the date hereof, (i) if the Closing shall not have occurred, the Option Agreement shall not be entered into at Closing and shall no longer be a Related Agreement hereunder and (ii) if the Closing shall have occurred, the Company shall terminate the Option Agreement (and, if applicable, the License Acquisition Agreement contemplated thereby), in each case if the Company shall have failed to obtain the written consent of AT&T PCS, which may be granted or withheld in its sole discretion. At the Closing, in the event that the Option Agreement is not executed, the Company will pay Mercury II an amount equal to interest on indebtedness to the United States Department of the Treasury attributable to the Florida Licenses accrued from the date hereof through the date that AT&T PCS notifies the Company that AT&T PCS does not consent to the execution of the Option Agreement (or, in the absence of such notice, 30 days after such consent is requested in writing by the Company). 6.16 Central Alabama Agreement. Mercury I shall use its best efforts to cause the Central Alabama Agreement to be amended, on substantially the terms set forth on Schedule 6.16, within 30 days after the date hereof pursuant to documentation in form and substance satisfactory to AT&T PCS and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors. Such amendment shall provide, among other things, that (i) Central Alabama and each of its partners (if any) to whom shares of Series C Preferred Stock are distributed on the Closing Date shall, on the Closing Date, and each partner of Central Alabama to whom shares of Series C Preferred Stock are distributed thereafter shall, on the date of such distribution, execute and deliver to the other parties thereto a counterpart to each of the Stockholders Agreement and the agreement among the Cash Equity Investors attached as Schedule X to the Stockholders Agreement and (ii) by accepting shares of Series C Preferred Stock, Central Alabama and each of its partners to whom shares of Series C Preferred Stock are distributed makes (as to itself as of the Closing Date or other date of distribution) the representations set forth in Section 5.1. At the request of the Company, Mercury I shall assign all of its right, title and interest in and to the Central Alabama Agreement to the Company pursuant to documentation in form and substance satisfactory to AT&T PCS and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment of all Cash Equity Investors. ARTICLE VII CLOSING CONDITIONS 7.1 Conditions to Obligations of All Parties. The obligation of each of the parties to consummate the Transactions contemplated to occur at the Closing shall be conditioned on the following, unless waived by each of the parties: (a) Any applicable waiting period under the HSR Act shall have expired or been terminated. 36 (b) The Consent of the FCC to each of the AT&T License Transfer, the Alabama License Transfer and the Mercury License Transfer shall have been obtained pursuant to a Final Order, free of any conditions materially adverse to the Company or any of the Purchasers. For the purposes of this paragraph, "Final Order" means an action or decision that has been granted by the FCC as to which (i) no request for a stay or similar request is pending, no stay is in effect, the action or decision has not been vacated, reversed, set aside, annulled or suspended and any deadline for filing such request that may be designated by statute or regulation has passed, (ii) no petition for rehearing or reconsideration or application for review is pending and the time for the filing of any such petition or application has passed, (iii) the FCC does not have the action or decision under reconsideration on its own motion and the time within which it may effect such reconsideration has passed and (iv) no appeal is pending including other administrative or judicial review, or in effect and any deadline for filing any such appeal that may be designated by statute or rule has passed; provided however that, the Consent of the FCC to the Mercury License Transfer shall be deemed to be a Final Order notwithstanding the pendency of any of the proceedings set forth on Schedules 4.7 or 5.3(a), or any appeals therefrom, so long as such proceedings or appeals would not be reasonably expected, individually or in the aggregate, to result in the revocation, non-renewal or suspension of, or an adverse effect on the ability of the Company to employ, the Mercury Licenses. (c) All Consents by any Governmental Authority (other than the Consents referred to in paragraphs (a) and (b) above) required to permit the consummation of the Transactions, the failure to obtain or make which would be reasonably expected to have a Material Adverse Effect on the Company or any of the Purchasers or to materially adversely affect the Transactions or its ability to perform its obligations under the Related Agreements shall have been obtained or made. (d) No preliminary or permanent injunction or other order, decree or ruling issued by a Governmental Authority, nor any statute, rule, regulation or executive order promulgated or enacted by any Governmental Authority, shall be in effect that would (i) impose material limitations on the ability of any party to consummate the Transactions or prohibit such consummation, or (ii) impair in any material respect the operation of the Company. 7.2 Conditions to Obligations of Each Party. The obligation of each party (the "receiving party") to consummate the Transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions by each of the other parties, unless waived by the receiving party: (a) The representations and warranties of each party other than the receiving party contained herein and in the Related Agreements shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time, except for inaccuracies in respect of the representations and warranties set forth in Section 4.7, Section 37 5.5(i), and the third sentence of each of Sections 5.2 and 5.3(a) (disregarding any qualifications as to materiality contained therein) that in the aggregate would not be reasonably expected to have a Material Adverse Effect on the Company or its ability to perform its obligations under the Related Agreements or to materially adversely affect the Transactions. (b) Each party other than the receiving party shall have performed in all material respects all agreements contained herein or in the Related Agreements required to be performed by it at or before the Closing. (c) An officer of each party other than the receiving party shall have delivered to the receiving party a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to the party delivering such certificate. (d) Each party other than the receiving party shall have furnished the receiving party with one or more opinions of counsel to the party furnishing the opinion(s), each dated the Closing Date, in substantially the forms of Exhibits H-1 through K-2, as applicable. (e) Each of the Related Agreements shall have been executed and delivered by the parties thereto (other than the receiving party) and shall be in full force and effect. (f) Each Cash Equity Investor (other than the receiving party) shall have executed and delivered to the Company a Pledge Agreement, substantially in the form of Exhibit L. (g) All corporate and other proceedings of each party other than the receiving party in connection with the AT&T License Transfer, the Mercury License Transfer and the other Transactions, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to the receiving party, and each party other than the receiving party shall have delivered to the receiving party such receipts, documents, instruments and certificates, in form and substance reasonably satisfactory to the receiving party, which the receiving party shall have reasonably requested. 7.3 Conditions to the Obligations of the Purchasers. The obligation of each Purchaser to consummate the Transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions, unless waived by each such Purchaser: (a) The terms, conditions and provisions of the Credit Documents shall be satisfactory to such Purchaser in all material respects, including without limitation provisions relating to principal amounts, rates of interest, terms of mandatory and permitted prepayments, prepayment charges (if any), fees and expenses, representations and warranties, affirmative and negative covenants, conditions to disbursements of loan funds, defaults and remedies therefor, and collateral, it being acknowledged that such terms, conditions and provisions shall be deemed to be satisfactory to such Purchaser if they are in the aggregate at least as favorable to the Company as the terms of the commitment letter referred to in Section 5.5(f). The disbursements of loan funds contemplated by the Credit Agreement to occur on the Closing Date shall be made 38 in accordance with the terms thereof concurrently with the Closing and such Purchaser shall have received such evidence thereof as it may request. (b) On the Closing Date, counsel to each Purchaser shall have received the legal fees and expenses required to be paid or reimbursed by the Company as provided in Section 10.4 for statements rendered on or prior to the Closing Date. (c) For each SBIC Holder, the Company shall have prepared the Size Status Declaration on Form 480, the Assurance of Compliance for Nondiscrimination on Form 652 and the Portfolio Financing Report on Form 1031 (Parts A and B) (collectively, the "SBA Compliance Documents"), the Company shall have duly executed and delivered the Forms 480 and 652 to each SBIC Holder, and all of the information set forth in the SBA Compliance Documents shall be true and correct in all respects. The Company shall have delivered a list, after giving effect to the transactions contemplated by this Agreement, of: (a) the name of each of the Company's directors, (b) the name and title of each of the Company's officers and (c) the name of each of the Company's stockholders and the number and class of shares held by each stockholder. (d) The closing of the Alabama License Transfer, and the other transactions contemplated in the Central Alabama Agreement, shall have been consummated in accordance with the terms of the Central Alabama Agreement, and such Purchaser shall have received such evidence thereof as it may request, and Mercury I's rights under the Central Alabama Agreement shall have been assigned to the Company pursuant to documentation satisfactory in form and substance to the Purchasers. ARTICLE VIII SURVIVAL AND INDEMNIFICATION 8.1 Survival. The representations and warranties made in this Agreement shall survive the Closing until the second anniversary thereof and shall thereupon expire together with any right to indemnification in respect thereof (except to the extent a written notice asserting a claim for breach of any such representation or warranty and describing such claim in reasonable detail shall have been given prior to such date to the party which made such representation or warranty). The covenants and agreements contained herein to be performed or complied with prior to the Closing shall expire at the Closing. The covenants and agreements contained in this Agreement to be performed or complied with after the Closing shall survive the Closing; provided that the right to indemnification pursuant to this Article VIII in respect of a breach of a representation or warranty shall expire on the second anniversary of the Closing (except to the extent written notice asserting a claim thereunder and describing such claim in reasonable detail shall have been given prior to such date to the party from whom such indemnification is sought). After the Closing, the sole and exclusive remedy of the parties for any breach or inaccuracy of any representation or warranty contained in this Agreement, or any other claim (whether or not 39 alleging a breach of this Agreement) that arises out of the facts and circumstances constituting such breach or inaccuracy, shall be the indemnity provided in this Article VIII. 8.2 Indemnification by Purchasers. Each Purchaser and each Mercury Investor Indemnitor, severally and not jointly, shall indemnify and hold harmless each other Purchaser, each other Mercury Investor Indemnitor, the Company, each Management Stockholder and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 8.2 Indemnified Party"), against any and all losses, damages, costs, expenses or liabilities, including any amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 8.2 Indemnified Party may be involved or with which he or it may be threatened (collectively, "Losses"), in each case that arises out of or results from (a) any representation or warranty of such indemnifying party contained in this Agreement or any Related Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by such indemnifying party or any of its Affiliates in the performance of their respective obligations under this Agreement and any Related Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 8.2 Indemnified Party or its Affiliates. 8.3 Indemnification by the Management Stockholders. Each Management Stockholder, severally and not jointly, shall indemnify and hold harmless each Purchaser and the Company and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 8.3 Indemnified Party"), against all Losses incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 8.3 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of such Management Stockholder contained in this Agreement or any Related Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by such Management Stockholder in the performance of his obligations under this Agreement and any Related Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 8.3 Indemnified Party or its Affiliates; provided that the aggregate liability of each Management Stockholder to indemnify Section 8.3 Indemnified Parties against Losses arising out of or resulting from (x) the untruth in any material respect of any representation or warranty as to the Company made by such Management Stockholder in this Agreement or any Related Agreement, (y) any material default by such Management Stockholder in the performance of his obligations under this Agreement or any Related Agreement, shall (except, in the case of clause (y), to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Management Stockholder) be limited to the shares of Common Stock of the Company then held by such Management Stockholder, and Section 8.3 Indemnified Parties seeking indemnification against any Management Stockholder for such Losses hereunder shall not have recourse to any other assets of such Management Stockholder. 40 8.4 Indemnification by the Company. The Company shall indemnify and hold harmless each of the Purchasers and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 8.4 Indemnified Party"), against all Losses incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 8.4 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of the Company contained in this Agreement or any Related Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by the Company or any of its Affiliates in the performance of their respective obligations under this Agreement and any Related Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 8.4 Indemnified Party or its Affiliates. 8.5 Indemnification by Mercury I, Mercury II, the Management Stockholders and the Mercury Investor Indemnitors. Mercury I, Mercury II and the Management Stockholders, jointly and severally, and each Mercury Investor Indemnitor, solely to the extent of its Percentage Share of any Section 8.5 Losses, shall indemnify and hold harmless AT&T PCS, TWR, the Cash Equity Investors and the Company, and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 8.5 Indemnified Party"), against any and all losses, damages, costs, expenses or liabilities, including any amounts paid in satisfaction of judgments, in compromise, as fines and penalties, any counsel fees incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 8.5 Indemnified Party may be involved or with which he or it may be threatened (collectively, "Section 8.5 Losses"), in each case that arises out of or results from (i) any representation or warranty of Mercury I and Mercury II contained in Articles IV and V being untrue in any material respect as of the date on which it was made or (ii) any of the matters referred to on Schedules 4.7 or 5.3(a), except to the extent (but only to the extent) any such Section 8.5 Losses arise out of or result from the gross negligence or willful misconduct of such Section 8.5 Indemnified Party or its Affiliates; provided that (x) the aggregate liability of each Management Stockholder to indemnify Section 8.5 Indemnified Parties against Section 8.5 Losses shall be limited to the shares of Common Stock of the Company then held by such Management Stockholder, and Section 8.5 Indemnified Parties seeking indemnification against any Management Stockholder for such Section 8.5 Losses hereunder shall not have recourse to any other assets of such Management Stockholder and (y) the aggregate liability of each Mercury Investor Indemnitor to indemnify Section 8.5 Indemnified Parties against Section 8.5 Losses shall be limited to his or its Escrowed Shares, and Section 8.5 Indemnified Parties seeking indemnification against any Mercury Investor Indemnitor for Section 8.5 Losses hereunder shall not have recourse to any other assets of such Mercury Investor Indemnitor. Notwithstanding anything herein to the contrary, no Section 8.5 Indemnified Party shall require any Mercury Investor Indemnitor to satisfy any Section 8.5 Losses earlier than the Reconciliation Date; provided that any Mercury Investor Indemnitor may satisfy its obligation in respect of any Section 8.5 Losses by making a cash payment to the applicable Section 8.5 Indemnified Party equal to its Percentage Share of such Section 8.5 Indemnified Loss, plus an amount equal to 41 interest thereon at the rate of 10% per annum, compounded annually, from the date a notice (the "Section 8.5 Notice") specifying the amount of such Section 8.5 Loss is given by the applicable Section 8.5 Indemnified Party to the Old Mercury Stockholders. 8.6 Procedures. (a) The terms of this Section 8.6 shall apply to any claim (a "Claim") for indemnification under the terms of Sections 8.2, 8.3, 8.4 or 8.5. The Section 8.2 Indemnified Party, Section 8.3 Indemnified Party, Section 8.4 Indemnified Party or Section 8.5 Indemnified Party (each, an "Indemnified Party"), as the case may be, shall give prompt written notice of such Claim to the indemnifying party (the "Indemnifying Party") under the applicable Section, which party may assume the defense thereof, provided that any delay or failure to so notify the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is materially prejudiced by reason of such delay or failure. The Indemnified Party shall have the right to approve any counsel selected by the Indemnifying Party and to approve the terms of any proposed settlement, such approval not to be unreasonably delayed or withheld (unless such settlement provides only, as to the Indemnified Party, the payment of money damages actually paid by the Indemnifying Party and a complete release of the Indemnified Party in respect of the claim in question). Notwithstanding any of the foregoing to the contrary, the provisions of this Article VIII shall not be construed so as to provide for the indemnification of any Indemnified Party for any liability to the extent (but only to the extent) that such indemnification would be in violation of applicable law or that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Article VIII to the fullest extent permitted by law. (b) In the event that the Indemnifying Party undertakes the defense of any Claim, the Indemnifying Party will keep the Indemnified Party advised as to all material developments in connection with such Claim, including, but not limited to, promptly furnishing the Indemnified Party with copies of all material documents filed or served in connection therewith. (c) In the event that the Indemnifying Party fails to assume the defense of any Claim within ten business days after receiving written notice thereof, the Indemnified Party shall have the right, subject to the Indemnifying Party's right to assume the defense pursuant to the provisions of this Article VIII, to undertake the defense, compromise or settlement of such Claim for the account of the Indemnifying Party. Unless and until the Indemnifying Party assumes the defense of any Claim, the Indemnifying Party shall advance to the Indemnified Party any of its reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any such action or proceeding. Each Indemnified Party shall agree in writing prior to any such advancement that, in the event he or it receives any such advance, such Indemnified Party shall reimburse the Indemnifying Party for such fees, costs and expenses to the extent that it shall be determined that he or it was not entitled to indemnification under this Article VIII. (d) In no event shall an Indemnifying Party be required to pay in connection with any Claim for more than one firm of counsel (and local counsel) for each of the following groups 42 of Indemnified Parties: (i) AT&T PCS, TWR, their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; (ii) the Cash Equity Investors, their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; (iii) Mercury I and Mercury II, their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; (iv) the Company, their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; and (v) the Management Stockholders and/or the legal representatives of any of them. 8.7 Registration Rights. Notwithstanding anything to the contrary in this Article VIII, the indemnification and contribution provisions set forth in Sections 5(e) and 5(f) of the Stockholders Agreement shall govern any claim made with respect to the registration statements filed pursuant to Section 5 of the Stockholders Agreement or sales made thereunder. 8.8 Limit on Indemnity. So long as the Company does not conduct any business or engage in any activities other than those described in the first sentence of the definition of "Business" (as such term is defined in the Stockholders Agreement), each party waives its right to indemnification under this Article VIII (or any other right to assert any claim) for any claim arising solely from any inaccuracy in the Company's representations and warranties set forth in the last sentence of Section 5.5(h) or the violation by the Company of the covenant set forth in Section 6.6(d) to the extent such Section relates to ineligible or prohibited activities of SBICs. 8.9 Escrow and Reconciliation. (a) The certificates representing all of the Escrowed Shares shall be held in escrow by the Secretary of the Company as escrow holder (the "Escrow Holder"), together with related stock powers executed in blank by the record owners thereof. The Escrow Holder shall also hold in escrow the cash proceeds ("Escrowed Cash") from sales of Escrowed Shares permitted by paragraph (f) below. The Escrow Holder shall not permit the transfer of such shares on the books of the Company except in accordance with this Agreement and the Stockholders Agreement, provided that the Escrow Holder shall be entitled to rely upon written directions of the Board of Directors of the Company. The Escrow Holder shall have no personal liability for any act or omission hereunder while acting in good faith in the exercise of his own judgment. The Company agrees to indemnify and hold Escrow Holder free and harmless from and against any and all losses, costs, damages, liabilities or expenses, including counsel fees to which Escrow Holder may be put or which he may incur by reason of or in connection with the escrow arrangement hereunder. (b) On or promptly following the Reconciliation Date, the Escrow Holder shall distribute the Escrowed Shares and Escrowed Cash then beneficially owned by each of the Old Mercury Stockholders as follows (subject to the terms of paragraph (g) below): (i) first, to the Company, an amount of Escrowed Cash of such Old Mercury Stockholder equal to such Old Mercury Stockholder's Percentage Share of the outstanding 43 principal amount of the Old Mercury Note, plus accrued and unpaid interest thereon and, if necessary, a number of Escrowed Shares of such Old Mercury Stockholder having an aggregate Market Price equal to the balance of such Old Mercury Stockholder's Percentage Share of the outstanding principal amount of the Old Mercury Note, plus accrued and unpaid interest thereon; (ii) second, to the Company and each other Section 8.5 Indemnified Party (pro rata in proportion to their respective Section 8.5 Losses), an amount of Escrowed Cash of such Old Mercury Stockholder equal to such Old Mercury Stockholder's Percentage Share of the Section 8.5 Losses, plus an amount equal to interest thereon at the rate of 10% per annum, compounded annually, from the date of the applicable Section 8.5 Notice through the Reconciliation Date, and, if necessary, a number of Escrowed Shares of such Old Mercury Stockholder having an aggregate Market Price equal to the balance of such Old Mercury Investor's Percentage Share of the Section 8.5 Losses, plus an amount equal to interest thereon at the rate of 10% per annum, compounded annually, from the date of the applicable Section 8.5 Notice through the Reconciliation Date; provided that no Escrowed Shares or Escrowed Cash of any Old Mercury Stockholder shall be distributed pursuant to this clause (ii) of Section 8.9(b) with respect to any Section 8.5 Loss, if such Old Mercury Stockholder shall have theretofore satisfied its obligation in respect of such Section 8.5 Loss in accordance with the proviso to the last sentence of Section 8.5; and (iii) third, to such Old Mercury Stockholder, the balance of his or its Escrowed Shares and Escrowed Cash. The distribution of the Escrowed Shares contemplated in this Section 8.9(b) shall be deferred to the extent necessary to determine the Market Price of the Escrowed Shares. (c) Promptly following the Reconciliation Date, the Escrow Holder shall (i) if no Escrowed Shares are distributable pursuant to paragraph (i) or (ii) of Section 8.9(b), deliver the certificates representing the Escrowed Shares to the Old Mercury Stockholders, and (ii) if any Escrowed Shares are distributable pursuant to paragraphs (i) or (ii) of Section 8.9(b), (x) cancel the certificates held by the Escrow Holder representing Escrowed Shares, (y) cause new certificates to be issued representing the number of Escrowed Shares distributable to the Company or any other Section 8.5 Indemnified Party pursuant to paragraphs (i) and (ii) of Section 8.9(b), which certificates the Escrow Holder shall deliver to the Company or such other Section 8.5 Indemnified Party (as applicable), and (y) cause new certificates to be issued representing the balance of the Escrowed Shares, which certificates shall be distributed to such Old Mercury Stockholder. (d) Subject to the terms hereof, each Old Mercury Stockholder shall have all the rights of a stockholder with respect to the Escrowed Shares while they are held in escrow, including, without limitation, the right to vote the Escrowed Shares and receive any cash dividends declared thereon. If, from time to time, there is (i) any stock dividend, stock split or other change in the Escrowed Shares or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, all new, substituted or additional securities to which 44 such Old Mercury Stockholder is entitled by reason of his ownership of the Escrowed Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as "Escrowed Shares" for purposes of this Agreement. (e) Legends. The share certificates evidencing the Escrowed Shares shall be endorsed with the following legend (in addition to any legend required to be placed thereon by Section 2.6, applicable federal or state securities laws or the Stockholders Agreement). "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE SECURITIES PURCHASE AGREEMENT DATED AS OF MAY 20, 1998, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, WHICH PROVIDES, AMONG OTHER THINGS, FOR RESTRICTIONS ON TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE." (f) Until the Reconciliation Date, no Mercury Investor Indemnitor shall Transfer (as such term is defined in the Stockholders Agreement) any of his or its Escrowed Shares; provided that, subject to the restrictions on transfer contained in the Stockholders Agreement, after the IPO Date (as defined in the Stockholders Agreement) and notwithstanding the provisions of Section 6.10(b), any Old Mercury Stockholder may sell any or all of his Escrowed Shares for cash at the Market Price so long as the gross cash proceeds thereof are deposited with the Escrow Holder, who shall at the request of such Old Mercury Stockholder invest such funds in Treasury obligations or other cash equivalents that mature not later than the fifth anniversary of the date hereof, to be held in escrow by the Escrow Holder, and not to be released, except in accordance with the foregoing provisions. (g) Notwithstanding anything herein to the contrary, 100% of the obligations of all Old Mercury Stockholders to be satisfied by distributions of Escrowed Cash and/or Escrowed Shares pursuant to Section 8.9(b)(i) or (ii) shall be satisfied, on the Reconciliation Date (as defined in clauses (i) through (iv) of the definition thereof, without regard to the proviso to such definition), first, out of any Escrowed Cash, and second, out of any Escrowed Shares held by Mercury II, until all of such Escrowed Cash and Escrowed Shares shall have been distributed. 8.10 Advances. The Company hereby irrevocably and unconditionally commits, from time to time, upon ten business days' notice from Mercury I or Mercury II, to make advances to Mercury I and Mercury II against Old Mercury Expenses payable by Mercury I and Mercury II, which advances shall be evidenced by the Old Mercury Note. 45 ARTICLE IX TERMINATION 9.1 Termination. This Agreement may be terminated, and the transactions contemplated hereby abandoned, without further obligation of any party (except as set forth herein), at any time prior to the Closing Date: (a) by mutual written consent of the parties; (b) by any party by written notice to the other parties, if the Closing shall not have occurred on or before the date that is nine months after the date hereof, provided that the party electing to exercise such right is not otherwise in breach of its obligations under this Agreement; or (c) by any party by written notice to the other parties, if the consummation of the Transactions shall be prohibited by a final, non-appealable order, decree or injunction of a court of competent jurisdiction. 9.2 Effect of Termination. (a) In the event of a termination of this Agreement, no party hereto shall have any liability or further obligation to any other party to this Agreement, except as set forth in paragraph (b) below, and except that nothing herein will relieve any party from liability for any breach by such party of this Agreement. (b) In the event of a termination of this Agreement pursuant to Section 9.1, all provisions of this Agreement shall terminate, except Sections 6.2 and 6.12(b) and Articles VIII and X. (c) Whether or not the Closing occurs, except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the Transactions shall be paid by the party incurring such expenses. ARTICLE X MISCELLANEOUS PROVISIONS 10.1 Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement of each of the parties. 10.2 Waiver of Compliance; Consents. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits 46 consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirement for a waiver of compliance as set forth in this Section 10.2. 10.3 Notices. All notices or other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, or by registered or certified mail (return receipt requested), postage prepaid, with an acknowledgment of receipt signed by the addressee or an authorized representative thereof, addressed as follows (or to such other address for a party as shall be specified by like notice; provided that notice of a change of address shall be effective only upon receipt thereof): If to AT&T PCS or TWR: c/o AT&T Wireless Services, Inc. 5000 Carillon Point Kirkland, Washington 98033 Attention: William W. Hague Facsimile: (206) 828-8451 47 With a copy to: AT&T Corp. 295 North Maple Avenue Basking Ridge, New Jersey 07920 Attention: Corporate Secretary Facsimile: (908) 953-4657 Friedman Kaplan & Seiler LLP 875 Third Avenue, 8th Floor New York, New York 10022 Attention: Daniel M. Taitz Facsimile: (212) 355-6401 Rubin Baum Levin Constant & Friedman 30 Rockefeller Plaza New York, New York 10112 Attention: Gregg S. Lerner Facsimile: (212) 698-7825 If to a Cash Equity Investor, to its address set forth on Schedule I. With a copy to: Mayer, Brown & Platt 1675 Broadway New York, New York 10019 Attention: Mark S. Wojciechowski Facsimile: (212) 262-1910 If to Mercury I or Mercury II, to: 1410 Livingston Lane Jackson, MS 39213-8003 Attention: William M. Mounger, II Facsimile: (601) 362-2664 With a copy to: Young, Williams, Henderson & Fuselier, P.A. 2000 Deposit Guaranty Plaza Jackson, MS 39201 Attention: James H. Neeld, IV Facsimile: (601) 355-6136 48 If to a Management Stockholder, to him in care of the Company. If to the Company: 1410 Livingston Lane Jackson, MS 39213-8003 Attention: William M. Mounger, II Facsimile: (601) 362-2664 With a copy to each other party sent to the addresses set forth in this Section 10.3. 10.4 Expenses. The Company agrees, in the event the Transactions are consummated, to pay, and save the Purchasers harmless against, the reasonable fees and disbursements of counsel to each of the Purchasers in connection with the preparation, negotiation, execution and delivery of this Agreement, the Related Agreements, the Credit Documents, the instruments and documents executed pursuant hereto or thereto or in connection herewith or therewith, and the consummation of the Transactions. 10.5 Parties in Interest; Assignment. This Agreement is binding upon and is solely for the benefit of the parties hereto (and, in the case of the Section 6.10(b), the Mercury Investor Indemnitors) and their respective permitted successors, legal representatives and permitted assigns. None of AT&T PCS, TWR, the Company, any Cash Equity Investor, Mercury I, Mercury II or any Management Stockholder may assign its rights and obligations hereunder without the prior written consent of each of the other parties; provided, that: (a) the Company shall have the right to assign its rights under this Agreement to the lenders (the "Lenders") named in the Credit Agreement, as security pursuant to the terms of the Credit Documents, it being understood that as a result of any such assignment to the Lenders, after an event of default under the Credit Agreement and the expiration of any applicable grace and cure periods thereunder, the Lenders shall have the right, on behalf of the Company, to enforce the obligation of each Cash Equity Investor to make capital contributions to the Company in the amounts and on the dates specified on Schedule I (or such earlier dates as may be established in accordance with the terms of the Stockholders Agreement) and that, in connection with any such assignment to the Lenders, the Lenders shall not assume any obligations of the Company hereunder; (b) AT&T PCS and TWR shall have the right to assign to AT&T Corp., or to one or more direct or indirect wholly owned Subsidiaries of AT&T Corp., any and all rights and obligations of AT&T PCS or TWR, as the case may be, under this Agreement, provided, that such assignee shall have assumed in writing all the obligations of AT&T PCS or TWR, as the case may be, hereunder and no such assignment shall relieve AT&T PCS of its obligations hereunder; and (c) any Cash Equity Investor may assign its rights and obligations hereunder with the prior written consent of AT&T PCS, such consent not to be unreasonably withheld, and any 49 Cash Equity Investor may assign its rights and obligations hereunder to any Affiliate, provided, that such assignee shall have assumed in writing all the obligations of such Cash Equity Investor hereunder and no such assignment shall relieve such Cash Equity Investor of its obligations hereunder. 10.6 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the conflicts of law principles thereof. The parties hereto hereby irrevocably and unconditionally consent to submit to the non-exclusive jurisdiction of the courts of the State Of New York and of the United States of America located in the County of New York, New York (the "New York Courts") for any litigation arising out of or relating to this Agreement and the Transactions, waive any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 10.7 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 10.8 Interpretation. The article and section headings contained in this Agreement are for convenience of reference only, are not part of the agreement of the parties and shall not affect in any way the meaning or interpretation of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the antecedent Person or Person may require. 10.9 Entire Agreement. This Agreement and the Related Agreements, including the exhibits and schedules hereto and thereto and the certificates and instruments delivered pursuant to the terms of this Agreement and the Related Agreements, embody the entire agreement and understanding of the parties hereto in respect of the Transactions. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein or the Related Agreements. This Agreement and the Related Agreements supersede all prior agreements and understandings between the parties with respect to such Transactions. 10.10 Publicity. So long as this Agreement is in effect, the parties agree to consult with each other in issuing any press release or otherwise making any public statement with respect to the Transactions, and no party shall issue any press release or make any such public statement prior to such consultation, except as may be required by Law. No press release or other public statement by the parties hereto shall disclose any of the financial terms of the Transactions without the prior consent of the other parties, and no party shall issue any press release or make any other public statement regarding the Transactions prior to the Closing without the prior consent of the other parties, in each case except as may be required by Law. A breach of the provisions of this Section 10.10 by a party shall not give rise to any right to terminate this Agreement. 50 10.11 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any New York Courts. 10.12 Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. 10.13 Authorized Agent of AT&T PCS. AT&T PCS hereby authorizes Wireless PCS, Inc. as its agent, with full power to execute, in the name of and on behalf of AT&T PCS, the Related Agreements to which AT&T PCS is a party and any and all other documents that AT&T PCS is required to execute and deliver in connection with the Closing, and to give and receive all notices, requests, consents, amendments, demands and other communications to or from AT&T PCS hereunder or thereunder. Each party hereto (other than AT&T PCS) shall be entitled to rely on the full power and authority of Wireless PCS, Inc. to act on behalf of AT&T PCS in accordance with this Section 10.13. Nothing contained in this Section 10.13 shall relieve AT&T PCS from complying with its obligations under this Agreement or any of the Related Agreements to which it is a party. * * * 51 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. TRITEL, INC. By: -------------------------------------- Name: William M. Mounger, II Title: President AT&T WIRELESS PCS INC. By: -------------------------------------- Name: William W. Hague Title: Senior Vice President TWR CELLULAR, INC. By: -------------------------------------- Name: William W. Hague Title: Senior Vice President S-1 Cash Equity Investors: TORONTO DOMINION INVESTMENTS, INC. By: Name: Martha L. Gariepy Title: Vice President ENTERGY WIRELESS COMPANY By: -------------------------------------- Name: William D. Bandt Title: President and Chief Executive Officer GENERAL ELECTRIC CAPITAL CORPORATION By: -------------------------------------- Name: Molly Fergusson Title: Managing Director S-2 WASHINGTON NATIONAL INSURANCE COMPANY By: -------------------------------------- Name: Rollin M. Dick Title: Executive Vice President and Chief Financial Officer UNITED PRESIDENTIAL LIFE INSURANCE COMPANY By: -------------------------------------- Name: Rollin M. Dick Title: Executive Vice President and Chief Financial Officer S-3 DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP BY: DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC, AS ITS GENERAL PARTNER By: -------------------------------------- Name: Alexander P. Coleman Title: Authorized Signatory S-4 TRIUNE PCS, LLC BY: TRIUNE CAPITAL, LP, AS GENERAL PARTNER BY: TRIUNE INC., AS GENERAL PARTNER By: -------------------------------------- Name: Kevin Shepherd Title: President S-5 DC INVESTMENT PARTNERS EXCHANGE FUND, L.P. BY: __________________, ITS GENERAL PARTNER By: -------------------------------------- Name: Title: FCA VENTURE PARTNERS I, L.P. BY: __________________, ITS GENERAL PARTNER By: -------------------------------------- Name: Title: CLAYTON ASSOCIATES, LLC BY: __________________, ITS MANAGING MEMBER By: -------------------------------------- Name: Title: S-6 MERCURY PCS, LLC BY: MSM, INC., ITS MANAGER By: -------------------------------------- Name: William M. Mounger, II Title: President MERCURY PCS II, LLC BY: MSM, INC., ITS MANAGER By: -------------------------------------- Name: William M. Mounger, II Title: President ----------------------------------------- Management Stockholders: ----------------------------------------- William M. Mounger, II --------------------------------- E.B. Martin, Jr. ----------------------------------------- Jerry M. Sullivan, Jr. S-7 TRILLIUM PCS, LLC By: -------------------------------------- Name: William M. Mounger, II Title: Manager S-8 THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.) By: -------------------------------------- Name: Title: S-9 SCHEDULE I CASH EQUITY INVESTORS ---------------------
SECOND AGGREGATE INITIAL CASH FUNDING CASH EQUITY INVESTORS COMMITMENT CONTRIBUTION 9/30/99 --------------------- ---------- ------------ ------- Washington National Insurance Company $25,000,000 $16,666,667 $8,333,333 United Presidential Life Insurance Company 25,000,000 16,666,667 8,333,333 Trillium PCS, LLC 2,284,341 1,522,894 761,447 Dresdner Kleinwort Benson Private Equity Partners LP 34,265,111 22,843,407 11,421,704 Entergy Wireless Corporation 20,000,000 13,333,333 6,666,667 Triune, Inc. 18,274,726 12,183,150 6,091,576 Toronto Dominion Investments, Inc. 5,000,000 3,333,333 1,666,667 General Electric Capital Corporation 2,500,000 1,666,667 833,333 DC Investment Partners Exchange Fund, LP 1,142,170 761,447 380,723 FCA Venture Partners I, LP 571,085 380,723 190,362 Clayton Associates, LLC 114,217 76,145 38,072 Mercury PCS II, LLC 3,811,154 3,811,154 -0- Mercury PCS, LLC 14,337,196 14,337,196 -0- --------------- --------------- -------------- TOTAL $152,300,000 $107,582,783 $44,717,217
SCHEDULE II MANAGEMENT STOCKHOLDERS ----------------------- William M. Mounger II 2.83% E.B. Martin, Jr. 2.83% Jerry M. Sullivan, Jr. 2.83% TBD 1.50% SCHEDULE III [SEE ATTACHED] SCHEDULE IV MERCURY PCS I LICENSES ---------------------- - -------------------------------------------------------------------------------- MARKET NUMBER FREQUENCY BLOCK LICENSE DESCRIPTION - -------------------------------------------------------------------------------- 017 C Anniston, AL - -------------------------------------------------------------------------------- 044 C Birmingham, AL - -------------------------------------------------------------------------------- 108 C Decatur, AL - -------------------------------------------------------------------------------- 158 C Gadsden, AL - -------------------------------------------------------------------------------- 198 C Huntsville, AL - -------------------------------------------------------------------------------- 450 C Tuscaloosa, AL - -------------------------------------------------------------------------------- MERCURY PCS II LICENSES ----------------------- - -------------------------------------------------------------------------------- MARKET NUMBER FREQUENCY BLOCK LICENSE DESCRIPTION - -------------------------------------------------------------------------------- 042 F Biloxi, MS - -------------------------------------------------------------------------------- 415 F Selma, AL - -------------------------------------------------------------------------------- 115 F Dothan-Enterprise, AL - -------------------------------------------------------------------------------- 146 F Florence, AL - -------------------------------------------------------------------------------- 186 F Hattiesburg, MS - -------------------------------------------------------------------------------- 246 E Laurel, MS - -------------------------------------------------------------------------------- 269 F McComb, MS - -------------------------------------------------------------------------------- 302 F Mobile, AL - -------------------------------------------------------------------------------- 305 F Montgomery, AL - -------------------------------------------------------------------------------- 263 F Louisville, KY - -------------------------------------------------------------------------------- 052 F Bowling Green, KY - -------------------------------------------------------------------------------- License certificates for the following licenses issued to Mercury II have not yet been received by Mercury II due to clerical errors in FCC debt documentation furnished by the FCC which is being corrected by FCC administrative personnel in cooperation with Mercury II's FCC counsel: BTA# Name ---- ---- 115 Dothan-Enterprise, AL 269 McComb, MS SCHEDULE V ALABAMA LICENSE --------------- - -------------------------------------------------------------------------------- MARKET NUMBER FREQUENCY BLOCK LICENSE DESCRIPTION - -------------------------------------------------------------------------------- 305 C Montgomery, AL - -------------------------------------------------------------------------------- SCHEDULE VI COMPANY TERRITORY* ------------------ I. From Atlanta MTA BTA Market Designator ---------------- --------------------- Carroll County, GA ** Haralson County, GA ** Opelika-Auburn, AL 334 Chattanooga, TN 076 Cleveland, TN 085 Dalton, GA 102 LaGrange, GA 237 Rome, GA 384 II. From Knoxville MTA ------------------ Knoxville, TN 232 III. From Louisville-Lexington-Evansville MTA ---------------------------------------- Louisville, KY 263 Lexington, KY 252 Bowling Green-Glasgow, KY 052 Owensboro, KY 338 Corbin, KY 098 Somerset, KY 423 Madisonville, KY 273 IV. From Memphis-Jackson MTA ------------------------ Montgomery County, MS *** Jackson, MS 210 Tupelo-Corinth, MS 449 Greenville-Greenwood, MS 175 Meridian, MS 292 Columbus-Starkville, MS 094 Natchez, MS 315 Vicksburg, MS 455 - -------------------- * The Company Territory is more particularly described in the FCC applications filed in connection with the transfer of FCC PCS Licenses to the Company. ** Carrol County and Haralson County are both located within the Atlanta BTA (B024). *** Montgomery County is located within the Memphis BTA (B290). V. From Nashville MTA ------------------ Nashville, TN 314 Clarksville, TN-Hopkinsville, KY 083 Cookeville, TN 096 VI. From Birmingham MTA ------------------- Anniston, AL 017 Birmingham, AL 044 Decatur, AL 108 Dothan-Enterprise, AL 115 Florence, AL 146 Gladsden, AL 158 Huntsville, AL 198 Montgomery, AL 305 Selma, AL 415 Tuscaloosa, AL 450 VII. From New Orleans MTA -------------------- Biloxi-Gulfport-Pascagoula, MS 042 Hattiesburg, MS 186 Laurel, MS 246 McComb-Brookhaven, MS 269 Mobile, AL 302 SCHEDULE VII SECURITIES TO BE ISSUED ----------------------- [See Attached] SCHEDULE VIII Mercury Investors Percentage Share - ----------------- ---------------- Southern Farm Bureau Life Insurance Company 58.740986% M3, LLC 10.855584% McCarty Communications, LLC 7.795751% DC Investment Partners Exchange Fund, L.P. 1.948938% FCA Venture Partners I, L.P. 0.974469% Clayton Associates, LLC 0.194894% Mercury PCS, Investors, LLC 19.489378% 100% SCHEDULE 1.1 PERMITTED EXPENDITURES ---------------------- SIX MONTH OPERATING BUDGET BEGINNING MAY 1, 19981 Civil Construction & Materials $4,250,000 Site Acquisition 3,475,000 RF Engineering 4,400,000 Plant Operating Expense 5,700,000 Sales & Marketing 2,200,000 General & Administrative 5,600,000 License Note Interest 2,875,000 ----------- TOTAL $28,500,000 GENERAL & ADMINISTRATIVE DETAIL ------------------------------- Billing Vendor Start-Up Costs $1,400,000 Accounting and Other Software Costs 1,200,000 Computers/Office Equipment 750,000 Employee Salaries and Overhead 1,654,333 G&A Travel 300,000 G&A Legal/Accounting 300,000 ----------- $5,604,333 - --------------- * Figures recited herein are subject to overages of up to 25%. SCHEDULE 2.1 DESCRIPTION OF AT&T CONTRIBUTED AND RETAINED LICENSES --------------------------------- [See attached] SCHEDULE 2.3 CONTRIBUTED MERCURY ASSETS -------------------------- Contributed Mercury Assets shall mean all right, title and interest to all the properties and assets related to the contributed licenses of every kind (tangible and intangible) belonging to, owned or otherwise held by Mercury I and Mercury II (except for those licenses owned by Mercury II which are being retained and intercompany loans between Mercury I and Mercury II), including, but not limited to: (a) all tangible personal property; (b) all accounts, notes and other receivables; (c) cash and cash equivalents; (d) all leases, subleases and rights thereunder; (e) all agreements, contracts, security interests; (f) approvals, permits, licenses, orders and similar right obtained from governmental agencies which are assignable; (g) books, records, specifications, promotional materials, studies and reports; and (h) intangibles. SCHEDULE 2.8 ASSUMED MERCURY DEBT AS OF MARCH 31, 1998* --------------------- Lucent bridge loan 5,000,000.00 FCC debt on C Block 63,890,000.00** FCC debt on F Block 9,458,000.00 Accrued interest on FCC debt 6,713,000.00 Accrued interest on N/P to Lucent 183,000.00 Central Alabama FCC debt 12,144,000.00** The Company will also assume all trade liabilities, payroll related liabilities and other obligations incurred in the normal course of the business. - -------------- * The liabilities assumed at Closing will be adjusted to reflect actual liability balances outstanding on that date. ** This reflects 100% of the C Block debt. This amount will be reduced per FCC regulations when part of the spectrum is returned. SCHEDULE 4.6 MERCURY CONSENTS ---------------- The execution, delivery and performance of the Agreement will or may require the following consents, approvals and reviews: 1. The Federal Communications Commission. Matters which could prevent Mercury from consummating the transactions contemplated by this Agreement include: A. Amarillo Celltelco and High Plains Wireless L.P. v. William M. Mounger, II, E.B. Martin, Jr., Jerry Sullivan, Jr., Mercury Southern, LLC and Mercury PCS II, LLC; No. 83, 268-A in the 47th District Court in and for Potter County, Texas. B. Applications for Review filed by High Plains Wireless, L.P.: In re Application of Mercury PCS II, LLC for Facilities in the Broadband Personal Communications Services in the D, E and F Blocks, Federal Communications Commission File Numbers 00114CWL97, et al. C. United States Department of Justice, Antitrust Division, Washington, D.C.; Mercury PCS II, LLC, Civil Investigative Demand No. 16337. COMPANY CONSENTS The execution, delivery and performance of the Agreement will or may require the following consents, approvals and reviews: 1. The Federal Communications Commission. SCHEDULE 4.7 LITIGATION ---------- See Items 1(A-C) under "Mercury Consents" on Schedule 4.6. SCHEDULE 4.9 BROKER'S FEES ------------- Amsterdam Pacific LLC $ 2,375,000 TD Securities (USA) Inc. $ 3,507,500 Paul Bowden $ 120,000 Conseco Private Capital Group, Inc. $ 500,000 ------------ $ 6,502,500 SCHEDULE 5.3(A) PROCEEDINGS AFFECTING MERCURY LICENSES -------------------------------------- See Items 1(A-C) under "Mercury Consents" on Schedule 4.6. SCHEDULE 5.3(C) MERCURY I AND MERCURY II CASH FLOW STATEMENTS -------------------- Mercury PCS and Mercury PCS II ----------------- Sources of cash: Equity $ 14,400,000.00 ----------------- Lucent loan $ 5,000,000.00 Net Sources: $ 19,400,000.00 Uses of Cash: FCC deposits $ 12,137,000.00 C Block interest $ 1,400,000.00 Deferred financing costs $ 1,137,000.00 Litigation Costs $ 950,000.00 Other operating costs $ 3,102,000.00 ----------------- Net uses: $ 18,726,000.00 Cash as of March 31, 1998 $ 674,000.00 ================= SCHEDULE 5.4 CASH EQUITY LOANS ----------------- $ AMOUNT OF CASH CASH EQUITY INVESTORS EQUITY LOAN - --------------------- ----------- Washington National Insurance Company United $12,500, 000 Presidential Life Insurance Company 12,500,000 Trillium PCS, LLC 1,284,341 Dresdner Kleinwort Benson Private Equity Partners LP 19,265,111 Triune PCS, Inc. 10,274,726 Mercury PCS, LLC 14,337,197 Mercury PCS II, LLC 3,811,154 DC Investment Partners Exchange Fund, LP 642,170 FCA Venture Partners I, LP 321,085 Clayton Associates LLC 64,217 SCHEDULE 5.5(G) MINIMUM BUILDOUT PLAN --------------------- BUILDOUT SCHEDULE-YEAR 1 ------------------------ ATLANTA MTA - ----------- Cities: Chattanooga, Tennessee Cleveland, Tennessee Dalton, Georgia Interstates/State Highways: Portion of I-75 South from Chattanooga Portion of I-75 North from Chattanooga Portion of I-24 West from Chattanooga Portion of I-59 South from Chattanooga BIRMINGHAM MTA - -------------- Cities: Huntsville, Alabama Decatur, Alabama Interstates/State Highways: Portion of I-65 South from Decatur Portion of I-65 North from Decatur MEMPHIS/JACKSON MTA - ------------------- Cities: Jackson, Mississippi Vicksburg, Mississippi Interstates/State Highways: Portion of I-20 West from Jackson Portion of I-20 East from Jackson Portion of I-55 South from Jackson Portion of I-55 North from Jackson Portion of Highway 49 South from Jackson BUILDOUT SCHEDULE - YEAR 1, CONTINUED ------------------------------------- KNOXVILLE MTA - ------------- Cities: Knoxville, Tennessee Interstates/State Highways: Portion of I-40 West from Knoxville Portion of I-40 East from Knoxville Portion of I-75 North from Knoxville NASHVILLE MTA - ------------- Cities: Nashville, Tennessee Interstates/State Highways: Portion of I-40 East from Nashville, Portion of I-40 West from Nashville Portion of I-24 East from Nashville Portion of I-24 West from Nashville Portion of I-65 North from Nashville Portion of I-65 South from Nashville The buildout of the above referenced cities, interstates and state highways represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 2,954,700 pops within the license area. The estimated pops recited hereinabove for the buildout during year 1 represents 21.7% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 2 -------------------------- BIRMINGHAM MTA - -------------- Cities: Birmingham, Alabama Montgomery, Alabama Tuscaloosa, Alabama Anniston, Alabama Interstates/State Highways: Portion of I-20 East from Birmingham Portion of I-20 West from Birmingham Portion of Highway 280 East from Birmingham Portion of I-59 North from Birmingham Portion of I-65 South from Montgomery Portion of I-65 North from Montgomery Portion of Highway 231 South from Montgomery Portion of Highway 80 West from Montgomery Portion of I-20 East from Tuscaloosa Portion of I-20 West from Tuscaloosa Portion of I-20 East from Anniston Portion of I-20 West from Anniston LOUISVILLE MTA - -------------- Cities: Louisville, Kentucky Lexington, Kentucky Interstates/State Highways: Portion of I-64 East from Louisville Portion of I-64 West from Louisville Portion of I-65 South from Louisville Portion of I-65 North from Louisville Portion of I-71 North from Louisville Portion of I-75 North from Lexington Portion of I-75 South from Lexington Portion of I-64 East from Lexington Portion of I-64 West from Lexington BUILDOUT SCHEDULE - YEAR 2, CONTINUED ------------------------------------- MEMPHIS/JACKSON MTA - ------------------- Cities: Hattiesburg, Mississippi Meridian, Mississippi Tupelo, Mississippi Interstates/State Highways: Portion of Highway 49 North from Hattiesburg Portion of Highway 49 South from Hattiesburg Portion of Highway 98 East from Hattiesburg Portion of I-59 South from Hattiesburg Portion of I-59 North from Hattiesburg Portion of I-20 East from Meridian Portion of I-20 West from Meridian Portion of I-59 South from Meridian NASHVILLE MTA - ------------- Cities: Clarksville, Tennessee Hopkinsville, Kentucky Interstates/State Highways: Portion of I-24 East from Clarksville Portion of I-24 West from Clarksville NEW ORLEANS MTA - --------------- Cities: Mobile, Alabama Interstates/State Highways: Portion of I-65 North from Mobile Portion of I-10 East from Mobile Portion of I-10 West from Mobile Portion of Highway 98 West from Mobile BUILDOUT SCHEDULE - YEAR 2, CONTINUED ------------------------------------- The buildout of the above referenced cities, interstates and state highways represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 3,882,900 pops within the license area. The estimated pops recited hereinabove for the buildout during year 2 represents 28.6% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1 and 2 will constitute an estimated aggregate total of 6,837,600 pops within the license area at the completion of the year 2 buildout or 50.3% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 3 -------------------------- BIRMINGHAM MTA - -------------- Cities: Gadsden, Alabama Dothan, Alabama Florence, Alabama Interstates/State Highways: Portion of I-59 North from Gadsden Portion of I-59 South from Gadsden Portion of Highway 231 North from Dothan LOUISVILLE MTA - -------------- Cities: Owensboro, Kentucky Bowling Green, Kentucky Glasgow, Kentucky Madisonville, Kentucky Corbin, Kentucky Interstates/State Highways: Portion of Audubon Parkway West from Owensboro Portion of Western Kentucky Parkway East from Madisonville Portion of Pennyrile Parkway North from Madisonville Portion of Pennyrile Parkway South from Madisonville Portion of I-65 North from Elizabethtown Portion of I-65 South from Elizabethtown Portion of I-75 North from Corbin Portion of I-75 South from Corbin NASHVILLE MTA - ------------- Cities: Cookeville, Tennessee Columbia, Tennessee Interstates/State Highways: Portion of I-40 East from Cookeville Portion of I-40 West from Cookeville Portion of I-65 North from Columbia Portion of I-65 South from Columbia BUILDOUT SCHEDULE - YEAR 3, CONTINUED ------------------------------------- MEMPHIS/JACKSON MTA - ------------------- Cities: Columbus, Mississippi Starkville, Mississippi Greenville, Mississippi Greenwood, Mississippi Interstates/State Highways: Portion of Highway 82 East from Columbus Portion of Highway 82 West from Columbus Portion of Highway 82 East from Starkville NEW ORLEANS MTA - --------------- Cities: Gulfport, Mississippi Biloxi, Mississippi Pascagoula, Mississippi Brookhaven, Mississippi McComb, Mississippi Laurel, Mississippi Interstates/State Highways: Portion of Highway 49 North from Gulfport Portion of I-10 West from Gulfport Portion of I-10 East from Gulfport Portion of I-10 West from Biloxi Portion of I-10 East from Biloxi Portion of I-10 West from Pascagoula Portion of I-10 East from Pascagoula Portion of I-55 North from Brookhaven Portion of I-55 South from Brookhaven Portion of I-55 North from McComb Portion of I-55 South from McComb Portion of I-59 North from Laurel Portion of I-59 South from Laurel BUILDOUT SCHEDULE - YEAR 3, CONTINUED ------------------------------------- The buildout of the above referenced cities, interstates and state highways represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 1,484,700 pops within the license area. The estimated pops recited hereinabove for the buildout during year 3 represents 10.9% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1, 2 and 3 will constitute an estimated aggregate total of 8,322,300 pops within the license area at the completion of the year 3 buildout or 61.2% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 4 -------------------------- Cities: Corinth, Mississippi Natchez, Mississippi Rome, Georgia Selma, Alabama Demopilis, Alabama Opelika, Alabama Auburn, Alabama LaGrange, Georgia Interstates/State Highways: Additional portions of all interstates and highways listed under years 1 and 2 buildout. The buildout of the above referenced cities, interstates and state highways, and expansion of existing cities listed in the buildout for years 1 through 3, represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 1,196,670 pops within the license area. The estimated pops recited hereinabove for the buildout during year 4 represents 8.8% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1, 2, 3 and 4 will constitute an estimated aggregate total of 9,518,970 pops within the license area at the completion of the year 4 buildout or 70.0% of the estimated total pops contained under the terms of this agreement. BUILDOUT SCHEDULE - YEAR 5 -------------------------- Cities: The buildout for year 5 will encompass expansion of all cities, where applicable, launched in the buildout for years 1 through 4. Interstates/State Highways: Additional portions of all interstates and highways listed under year 3 buildout. The buildout of the above referenced cities, interstates and state highways, and expansion of existing cities listed in the buildout for years 1 through 4, represents the deployment of a wireless service network which will be capable of providing a radio frequency signal level sufficient to adequately service an estimated 1,359,853 pops within the license area. The estimated pops recited hereinabove for the buildout during year 5 represents 10% of the estimated total pops contained under the terms of this agreement. The estimated pops recited herein for the buildout for years 1, 2, 3, 4 and 5 will constitute an estimated aggregate total of 10,878,823 pops within the license area at the completion of the year 4 buildout or 80.0% of the estimated total pops contained under the terms of this agreement. SCHEDULE 6.16 CENTRAL ALABAMA AGREEMENT AMENDMENT TERMS ----------------------------------------- Terms not otherwise defined herein shall have the meanings ascribed to them in the Central Alabama Agreement. The amendment to the Central Alabama Agreement to be executed shall effect the following: FIXED PURCHASE PRICE The Purchase Price for the Purchased Assets shall be fixed at $3,014,450, of which $2,601,950 shall be paid in the form of the issuance of equity of Mercury I (or Series C Preferred Stock of the Company, if applicable) and the $412,500 Cash Premium shall be paid in cash. The Purchase Price is based on Central Alabama's paid in capital as of May 15, 1998 (adjusted to reflect agreed modifications as shown on the detail attached hereto). To the extent that Central Alabama's paid in capital (with the same modifications referred to above) exceeds $2,601,950 as of the Closing Date (as defined in the Central Alabama Agreement), Mercury I or the Company, as applicable, shall pay a cash purchase price adjustment to Central Alabama equal to any excess. However, no increase in Central Alabama's paid in capital shall be taken into account unless the Purchaser shall have approved the contribution of additional equity or any other transaction which would affect the level of Central Alabama's paid in capital. To the extent that Central Alabama's paid in capital (with the same modifications referred to above) is less than $2,601,950 as of the Closing Date (as defined in the Central Alabama Agreement), the Cash Premium portion of the Purchase Price shall be reduced by an amount equal to the difference. If the difference exceeds the Cash Premium, the amount of equity of Mercury I (or Series C Preferred Stock of the Company, if applicable) to be issued to Central Alabama shall be reduced accordingly. C-BLOCK SPECTRUM DISAGGREGATION Central Alabama shall commit to elect the "disaggregation option" pursuant to the FCC's Order on Reconsideration of the Second Report and Order, FCC 98-46 (released March 24, 1998), with respect to its C-Block BTA B305 Montgomery, Alabama license no later than two business days prior to the deadline established by the FCC to make such election. This shall be an unconditional commitment and Mercury I and the Company shall be held harmless from any claims or expense arising from or relating to this election. RESALE The rights granted to the Partners to resell PCS services of Mercury I or the Company, as applicable, shall be modified to: (i) be limited to the specific geographic areas designated for each partner as listed on the attachment hereto; (ii) delete the "most favored nation" terms provision; (iii) limit the right to resell to the current Partners and prohibit the assignment of the right to resell; and (iv) provide that as to each Partner, the right to resell shall terminate on any change of control of each Partner. Further, the right shall terminate in the event any such right is deemed to conflict with the exclusivity provisions of the Stockholders' Agreement. EXECUTION OF STOCKHOLDERS' AGREEMENT Central Alabama and each of its partners (if any) to whom shares of Series C Preferred Stock or other securities of the Company are distributed on the Closing Date shall, on the Closing Date, and each partner of Central Alabama to whom shares of Series C Preferred Stock or other securities of the Company are distributed thereafter shall, on the date of such distribution, execute and deliver to the other parties thereto a counterpart to each of the Stockholders' Agreement and the agreement among the Cash Equity Investors attached as Schedule X to the Stockholders' Agreement. Central Alabama and each of its partners to whom shares of Series C Preferred Stock or other securities of the Company are distributed makes (as to itself as of the Closing Date or other date of distribution) the representations set forth in Section 5.1 of the Stockholders' Agreement. CONTRACTS The lease of office space and the Executive Employment Agreement dated October 1, 1996, between Central Alabama and James E. Campbell shall not form a part of the Purchased Assets and neither Mercury I nor the Company shall assume any liabilities thereunder. ASSIGNMENT At the request of the Company, Mercury I shall be permitted to assign all of its right, title and interest in and to the Central Alabama Agreement to the Company, either prior to or following the Closing, in form and substance satisfactory to the Company, AT&T PCS and the Cash Equity Investors. TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE I DEFINITIONS ARTICLE II CONTRIBUTIONS; PURCHASE AND SALE OF SECURITIES; CERTAIN RESTRICTIONS ON TRANSFER 2.1 AT&T PCS and TWR Contributions............................................11 2.2 Cash Equity Investor Contributions........................................12 2.3 Mercury Contributions.....................................................13 2.4 INTENTIONALLY OMITTED.....................................................13 2.5 Purchase and Sale of Securities at Closing................................13 2.6 Restrictive Legends.......................................................13 2.7 Use of Proceeds...........................................................14 2.8 Assumption of Mercury Indebtedness........................................14 ARTICLE III CLOSING 3.1 Time and Place of Closing.................................................14 3.2 Closing Actions and Deliveries............................................14 3.3 Payment of Transfer Taxes.................................................16 ARTICLE IV REPRESENTATIONS OF ALL PARTIES 4.1 Organization and Standing.................................................16 4.2 Power and Authority.......................................................16 4.3 Due Authorization.........................................................17 4.4 Enforceability............................................................17 4.5 No Breach.................................................................17 4.6 Consents; No Conflicts....................................................17 4.7 Litigation................................................................17 4.8 FCC Compliance............................................................18 4.9 Brokers...................................................................18 ARTICLE V REPRESENTATIONS OF CERTAIN PARTIES i 5.1 No Distribution, Etc......................................................18 5.2 AT&T PCS and TWR Licenses.................................................19 5.3 Mercury Matters...........................................................19 5.4 Capital Commitment........................................................21 5.5 Representations as to the Company.........................................22 ARTICLE VI COVENANTS 6.1 Consummation of Transactions..............................................26 6.2 Confidentiality...........................................................28 6.3 Retained Licenses.........................................................28 6.4 No Further Commitment.....................................................29 6.5 Use of Proceeds...........................................................29 6.6 SBIC Regulatory Provisions................................................29 6.7 Regulatory Compliance Cooperation.........................................30 6.8 Certain Covenants.........................................................30 6.9 Restricted Stock Plan.....................................................32 6.10 Certain Mercury Transactions.............................................32 6.11 Certain Employees........................................................33 6.12 Pre-Closing Build-Out....................................................34 6.13 Additional Cash Equity Investors.........................................34 6.14 Return of Spectrum.......................................................35 6.15 Option Agreement.........................................................35 6.16 Central Alabama Agreement................................................36 ARTICLE VII CLOSING CONDITIONS 7.1 Conditions to Obligations of All Parties..................................36 7.2 Conditions to Obligations of Each Party...................................37 7.3 Conditions to the Obligations of the Purchasers...........................38 ARTICLE VIII SURVIVAL AND INDEMNIFICATION 8.1 Survival..................................................................39 8.2 Indemnification by Purchasers.............................................39 8.3 Indemnification by the Management Stockholders............................40 8.4 Indemnification by the Company............................................40 8.5 Indemnification by Mercury I, Mercury II, the Management Stockholders and the Mercury Investor Indemnitors.........................40 8.5 Percentage Share of any Section 8.........................................41 ii 8.6 Procedures................................................................41 8.7 Registration Rights.......................................................42 8.8 Limit on Indemnity........................................................42 8.9 Escrow and Reconciliation.................................................43 8.10 Advances.................................................................45 ARTICLE IX TERMINATION 9.1 Termination...............................................................45 9.2 Effect of Termination.....................................................45 ARTICLE X MISCELLANEOUS PROVISIONS 10.1 Amendment and Modification...............................................46 10.2 Waiver of Compliance; Consents...........................................46 10.3 Notices..................................................................46 10.4 Expenses.................................................................48 10.5 Parties in Interest; Assignment..........................................48 10.6 Applicable Law...........................................................49 10.7 Counterparts.............................................................49 10.8 Interpretation...........................................................49 10.9 Entire Agreement.........................................................49 10.10 Publicity...............................................................49 10.11 Specific Performance....................................................49 10.12 Remedies Cumulative.....................................................50 10.13 Authorized Agent of AT&T PCS............................................50 SCHEDULES Schedule I -- Cash Equity Investors and Commitments Schedule II -- Management Stockholders Schedule III -- AT&T PCS and TWR Licenses Schedule IV -- Mercury Licenses Schedule V -- Alabama License Schedule VI -- Company Territory Schedule VII -- Securities Issued at Closing Schedule VIII -- Mercury Investors and Percentage Shares iii Schedule 1.1 -- Permitted Expenditures Schedule 2.1 -- Description of AT&T PCS Contributed and Retained Licenses Schedule 2.3 -- Contributed Mercury Assets Schedule 2.8 -- Assumed Mercury Debt Schedule 4.6 -- Consents Schedule 4.7 -- Litigation Schedule 4.9 -- Broker's Fees Schedule 5.3(a) -- Proceedings Affecting Mercury Licenses Schedule 5.3(c) -- Mercury I and Mercury II Cash Flow Statements Schedule 5.4 -- Cash Equity Loans Schedule 5.5(g) -- Minimum Build-Out Plan Schedule 6.16 -- Terms of Central Alabama Agreement Amendment EXHIBITS Exhibit A -- Form of Management Agreement Exhibit B -- Form of Network Membership License Agreement Exhibit C -- Form of Resale Agreement Exhibit D -- Form of Restated Bylaws Exhibit E -- Form of Restated Certificate Exhibit F -- Form of Roaming Agreement Exhibit G -- Form of Stockholders Agreement Exhibit H-1 -- Form of Opinion of Counsel to AT&T PCS Exhibit H-2 -- Form of Opinion of FCC Counsel to AT&T PCS Exhibit I -- Form of Opinion of Counsel to Cash Equity Investors Exhibit J-1 -- Form of Opinion of Counsel to Mercury Entities Exhibit J-2 -- Form of Opinion of FCC Counsel to Mercury Entities Exhibit K-1 -- Form of Opinion of Counsel to Company and Management Stockholders Exhibit K-2 -- Form of Opinion of FCC Counsel to Company and Management Stockholders Exhibit L -- Form of Pledge Agreement Exhibit M -- Form of Assignment Exhibit N -- Form of Option Agreement Exhibit O -- Form of Employment Agreement Exhibit P -- Form of Old Mercury Note EX-10.28 29 CLOSING AGREEMENT Exhibit 10.28 CLOSING AGREEMENT THIS CLOSING AGREEMENT (this "Agreement") is made as of January 7, 1999, by and among AT&T Wireless PCS, Inc., a Delaware corporation ("AT&T PCS"), TWR Cellular, Inc., a Maryland corporation ("TWR"), the cash equity investors listed on the signature pages hereto (the "Cash Equity Investors"), Airwave Communications, LLC (f/k/a Mercury PCS, LLC), a Mississippi limited liability company ("Mercury I"), Digital PCS, LLC (f/k/a Mercury PCS II, LLC), a Mississippi limited liability company ("Mercury II"), the management stockholders listed on the signature pages hereto (the "Management Stockholders"), certain members of Mercury I listed on the signature pages hereto (the "Mercury Investor Indemnitors") and Tritel, Inc., a Delaware corporation (the "Company"). Background. AT&T PCS, TRW, the Cash Equity Investors, the Management Stockholders (other than William Arnett), and the Company are parties to that certain Securities Purchase Agreement dated as of May 20, 1998 (the "Securities Purchase Agreement"). Closing of the transactions contemplated by the Securities Purchase Agreement is occurring as of the date hereof. In accordance with Section 6.10(b) of the Securities Purchase Agreement, the Mercury Investor Indemnitors have elected to receive a distribution of the Escrowed Shares. In connection therewith, the parties desire to set forth their understandings regarding certain matters set forth herein. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Securities Purchase Agreement. NOW, THEREFORE, in consideration of the foregoing Background, the mutual promises and agreements made herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound hereby, agree as follows: 1. Additional Purchasers. Pursuant to the Additional Offering, The Manufacturers' Life Insurance Company (U.S.A.) agreed to invest an aggregate amount of $10,000,000 and Triune PCS, LLC increased its commitment to invest to $24,139,040. DC Investment Partners Exchange Fund LP and FCA Venture Partners I, LP assigned their rights and interest as Cash Equity Investors in the Securities Purchase Agreement to FCA Venture Partners II, LP, which has assumed all of their obligations thereunder as Cash Equity Investors. 2. Name Changes. On June 22, 1998, Mercury PCS, LLC and Mercury PCS II, LLC (signatories to the Securities Purchase Agreement) changed their names to "Airwave Communications, LLC" and "Digital PCS, LLC", respectively. 3. Legal Structure. Pursuant to Section 5.5(d) of the Securities Purchase Agreement, the Company hereby provides notice of the following matters. Attached hereto as Exhibit I is a legal structure chart that depicts the ownership of the Company's Subsidiaries. AirCom PCS, Inc. and QuinCom, Inc. have been formed under the laws of the State of Alabama. All of the other Subsidiaries have been formed under the laws of the State of Delaware. The Company has been qualified to conduct business in the State of Mississippi. Tritel Communications, Inc. ("Tritel Communications") has been qualified to conduct business in the States of Alabama, Kentucky, Mississippi and Tennessee. Tritel Finance, Inc. has been qualified to conduct business in the States of Alabama, Kentucky, Mississippi and Tennessee. Tritel Holding Corp. has been qualified to do business in Mississippi. 4. Updating of Schedules. The following Schedules to the Securities Purchase Agreement are replaced and updated as of the date hereof as set forth in the corresponding Schedules listed below and attached hereto: Schedule I Cash Equity Investors and Commitments Schedule IV Mercury Licenses (Supplemented, not replaced) Schedule V Alabama Licenses (Supplemented, not replaced) Schedule VII Securities Issued at Closing Schedule 1.1 Permitted Expenditures Schedule 2.8 Assumed Mercury Debt Schedule 4.7 Litigation Schedule 5.3(a) Proceedings Affecting Mercury Licenses Schedule 5.4 Cash Equity Loans 5. Certain Definitional Changes. The following definitions shall supersede and replace the definitions of such terms (or shall add new defined terms) that are contained in Article I of the Securities Purchase Agreement: "Bridge Loan Agreement" means (i) from May 20, 1998 until December 14, 1998, the agreement between Mercury I and Lucent, dated as of October 31, 1997, to provide a credit facility having aggregate commitments of at least $15 million, as the same may have been amended, modified or supplemented in accordance with the terms thereof, and (ii) beginning December 15, 1998, the agreement between Mercury I and Ericsson, dated as of December 15, 1998, to provide a credit facility having an aggregate commitment of up to $28.5 million, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Credit Agreement" means the agreement among Tritel Holding Corp., a Delaware corporation that is a wholly-owned Subsidiary of the Company, the lenders and agents referred to therein, and any other parties who become lenders or agents thereunder, dated as of the Closing Date, to provide a credit facility having aggregate commitments of at least $550 million, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Ericsson" means Ericsson Inc. "Old Mercury Expenses" means (i) legal fees and related disbursements, fines, settlements and judgments in each case documented in reasonable detail, payable by Mercury I or II in connection with the matters described on Schedule 4.7 or 5.3(a) which, as of the Closing Date, totals $20,284.02, and (ii) interest accrued and paid on Mercury II's indebtedness to the United States Department of the 2 Treasury with respect to the Florida Licenses which, as of the Closing Date, totals $333,276.78. 6. Resale Agreement. For purposes of Section 7.2(f) of the Securities Purchase Agreement only, the term "Related Agreements" shall exclude the Resale Agreement, which shall not be executed on the date hereof, but rather shall be executed and delivered in accordance with the provisions contained in Section 8.11 of the Stockholders' Agreement. 7. Employment of Executives. The Employment Agreements with each of the Management Stockholders have been entered into by Tritel Communications, a wholly owned indirect Subsidiary of the Company, as the employer of the Management Stockholders. 8. Company Operations. It is contemplated that the operations of the Company shall be conducted through wholly owned direct or indirect Subsidiaries. However, certain documents executed, or to be executed, in connection with the Closing (including, without limitation, the Stockholders' Agreement, the Network Membership License Agreement, the Roaming Agreement and the Resale Agreement) provide that the Company shall enter into agreements or conduct the Company's operations. Notwithstanding the foregoing, the parties acknowledge and consent that one or more of the Company's Subsidiaries have entered, or may enter, into such agreements or conduct such operations. The parties hereto consent to such Subsidiaries entering into such agreements or conducting such operations on the condition that (i) such Subsidiaries shall at all times be direct or indirect wholly-owned Subsidiaries of the Company, and (ii) the Company shall cause such wholly-owned Subsidiaries to perform the obligations and conduct such operations of the Company or such wholly-owned Subsidiaries, as the case may be, required to be performed or conducted by the Company or such wholly-owned Subsidiaries, as the case may be, under such agreements. 9. Consents to Pre-Closing Activities. The following transactions or actions have been previously authorized by the board of directors of the Company with the oral consent of authorized representatives of AT&T PCS, TWR and Cash Equity Investors representing 66-2/3% of the Aggregate Commitment. AT&T PCS and the Cash Equity Investors hereby ratify and confirm their consent to the following transactions or actions taken by the Company (or any of its Subsidiaries) which, pursuant to Section 6.8 of the Securities Purchase Agreement, required the consent of AT&T PCS and Cash Equity Investors: (a) the execution of RF engineering services contract with Galaxie Personal Communications Services, Inc. d/b/a Galaxy Engineering Services; (b) the employment and compensation of employees in accordance with resolutions adopted at the June 17, 1998, meeting of the directors of the Company and reflected in the minutes thereof; (c) the execution of site acquisition services contract with SpectraSite Communications, Inc.; (d) the lease of headquarters and possible switch space at the 111 Capitol Building; 3 (e) the execution of a program and construction management services agreement with Bechtel; and (f) the execution of lease of office space at River Oaks Office Plaza, Flowood, Mississippi, for customer service, billing and other purposes. 10. Return of Spectrum. In accordance with the provisions of Section 6.14 of the Securities Purchase Agreement, Mercury I and Central Alabama elected the "disaggregation option" pursuant to the FCC's Order on Reconsideration of the Second Report and Order, FCC 98-46 (released March 24, 1998) with respect to the C-Block Mercury Licenses and the Alabama Licenses. 11. Option Agreement. Notwithstanding the provisions of Section 6.15 of the Securities Purchase Agreement, the Option Agreement is being entered into simultaneously herewith. 12. Restated By-Laws. The form of Restated By-Laws attached as Exhibit D to the Securities Purchase Agreement is amended, replaced and superseded in its entirety by Exhibit A to the Stockholders Agreement executed simultaneously herewith. 13. Capitalization. The authorized capital stock of the Company as of the date hereof is reflected in the Restated Certificate of Incorporation of the Company in the form attached as Exhibit B to the Stockholders Agreement executed simultaneously herewith rather than as set forth in Section 5.5(b)(ii) of the Securities Purchase Agreement. Exhibit E to the Securities Purchase Agreement is amended, replaced and superseded in its entirety by Exhibit B to the Stockholders Agreement executed simultaneously herewith. 14. Central Alabama. Mercury I has assigned all of its right, title and interest in and to the Central Alabama Agreement to the Company and the Alabama Licenses shall be transferred directly to AirCom PCS, Inc., an indirect Subsidiary of the Company. The Central Alabama Agreement was previously amended by Mercury I in accordance with the requirements of Section 6.16 of the Securities Purchase Agreement. 15. Collateral Agency Agreement. Each party hereto, other than the Company, that is a Mercury Indemnified Party, as defined in the Collateral Agency Agreement attached hereto as Exhibit II: (a) appoints the Company as its agent to execute, deliver and perform on its behalf such Collateral Agency Agreement in the form of such exhibit and pursuant thereto to appoint the collateral agent named therein as its agent to hold any collateral specified therein and (b) acknowledges that it shall be bound by such agreement, when so executed, as if it were a party thereto. This Section 15 shall inure to the benefit of the Company and each other party to such Collateral Agency Agreement. 4 16. Certain Mercury Transactions. The second sentence of Section 6.10(c) of the Securities Purchase Agreement is deleted in its entirety. 17. Mercury Investor Indemnitors. By executing this Agreement, each Mercury Investor party hereto hereby elects to give written notice to Mercury I and Mercury II that it elects to receive its Escrowed Shares and, effective upon the transfer of ownership of such Escrowed Shares to a Mercury Investor Indemnitor, such Mercury Investor Indemnitor joins in the execution of (i) the Stockholders Agreement of even date herewith, and (ii) that certain Investors Stockholders' Agreement by and among the Company, the Cash Equity Investors (which, for purposes of such agreement, includes Mercury I and Mercury II) and AT&T PCS of even date herewith, all in accordance with Section 6.10(b) of the Securities Purchase Agreement. 18. License Transfers. In accordance with its rights under Sections 2.1 and 2.3 of the Securities Purchase Agreement, the Company hereby directs the assignors thereof to transfer each license to the Company's indirect Subsidiary designated below: Subsidiary Call Sign Market No. Freq. Block - -------------------------------------------------------------------------------- AirCom PCS, Inc. KNLF457 B305 C AirCom PCS, Inc. KNLF604 B017 C AirCom PCS, Inc. KNLF605 B044 C AirCom PCS, Inc. KNLF606 B108 C AirCom PCS, Inc. KNLF607 B158 C AirCom PCS, Inc. KNLF608 B198 C AirCom PCS, Inc. KNLF609 B450 C ClearCall, Inc. KNLF287 B232 A ClearWave, Inc. KNLF256 B290 B ClearWave, Inc. KNLF256 B210 B ClearWave, Inc. KNLF256 B449 B ClearWave, Inc. KNLF256 B175 B ClearWave, Inc. KNLF256 B292 B ClearWave, Inc. KNLF256 B094 B ClearWave, Inc. KNLF256 B315 B ClearWave, Inc. KNLF256 B455 B DigiCall, Inc. KNLG908 B042 F DigiCall, Inc. KNLG918 B186 F DigiCall, Inc. KNLG922 B246 E DigiCall, Inc. KNLG925 B269 F DigiCom, Inc. KNLG923 B263 F DigiCom, Inc. KNLG909 B052 F DigiNet PCS, Inc. KNLF286 B314 B DigiNet PCS, Inc. KNLF286 B083 B DigiNet PCS, Inc. KNLF286 B096 B Global PCS, Inc. KNLF251 B263 A Global PCS, Inc. KNLF251 B252 A Global PCS, Inc. KNLF251 B052 A Global PCS, Inc. KNLF251 B338 A 5 Global PCS, Inc. KNLF251 B098 A Global PCS, Inc. KNLF251 B423 A Global PCS, Inc. KNLF251 B273 A NexCom, Inc. KNLF221 B076 A NexCom, Inc. KNLF221 B334 A NexCom, Inc. KNLF221 B384 A NexCom, Inc. KNLF221 B102 A NexCom, Inc. KNLF221 B085 A NexCom, Inc. KNLF221 B237 A QuinCom, Inc. KNLG933 B415 F QuinCom, Inc. KNLG912 B115 F QuinCom, Inc. KNLG914 B146 F QuinCom, Inc. KNLG927 B302 F QuinCom, Inc. KNLG928 B305 F The above license transfers are intended to be treated in the following manner for federal income tax purposes: (a) Each assignor thereof transferred their license to the Company in exchange for securities of the Company pursuant to Section 351 of the Internal Revenue Code of 1986, as amended (the "Code"); (b) The Company transferred each of the above listed licenses to Tritel Holding Corp. solely in constructive exchange for securities of Tritel Holding Corp. under Section 351 of the Code. (c) Tritel Holding Corp. transferred the licenses listed below to either Tritel A/B Holding Corp. or Tritel C/F Holding Corp., as applicable, as designated below, solely in constructive exchange for securities of Tritel A/B Holding Corp. or Tritel C/F Holding Corp., as applicable, under Section 351 of the Code. Tritel A/B Holding Corp. ----------------------------------- Call Sign Market No. Freq. Block - -------------------------------------------------------------------------------- KNLF287 B232 A KNLF256 B290 B KNLF256 B210 B KNLF256 B449 B KNLF256 B175 B KNLF256 B292 B KNLF256 B094 B KNLF256 B315 B KNLF256 B455 B KNLF286 B314 B 6 KNLF286 B083 B KNLF286 B096 B KNLF251 B263 A KNLF251 B252 A KNLF251 B052 A KNLF251 B338 A KNLF251 B098 A KNLF251 B423 A KNLF251 B273 A KNLF221 B076 A KNLF221 B334 A KNLF221 B384 A KNLF221 B102 A KNLF221 B085 A KNLF221 B237 A Tritel C/F Holding Corp. --------------------------------- Call Sign Market No. Freq. Block - -------------------------------------------------------------------------------- KNLF457 B305 C KNLF604 B017 C KNLF605 B044 C KNLF606 B108 C KNLF607 B158 C KNLF608 B198 C KNLF609 B450 C KNLG908 B042 F KNLG918 B186 F KNLG922 B246 E KNLG925 B269 F KNLG923 B263 F KNLG909 B052 F KNLG933 B415 F KNLG912 B115 F KNLG914 B146 F KNLG927 B302 F KNLG928 B305 F (d) Tritel A/B Holding Corp. transferred the licenses designated as being transferred to it under subparagraph (b) above to the following Subsidiaries as designated below, solely in constructive exchange for securities of such Subsidiary under Section 351 of the Code. 7 Tritel A/B Holding Corp. --------------------------------------------- Subsidiary Call Sign Market No. Freq. Block - -------------------------------------------------------------------------------- ClearCall, Inc. KNLF287 B232 A ClearWave, Inc. KNLF256 B290 B ClearWave, Inc. KNLF256 B210 B ClearWave, Inc. KNLF256 B449 B ClearWave, Inc. KNLF256 B175 B ClearWave, Inc. KNLF256 B292 B ClearWave, Inc. KNLF256 B094 B ClearWave, Inc. KNLF256 B315 B ClearWave, Inc. KNLF256 B455 B DigiNet PCS, Inc. KNLF286 B314 B DigiNet PCS, Inc. KNLF286 B083 B DigiNet PCS, Inc. KNLF286 B096 B Global PCS, Inc. KNLF251 B263 A Global PCS, Inc. KNLF251 B252 A Global PCS, Inc. KNLF251 B052 A Global PCS, Inc. KNLF251 B338 A Global PCS, Inc. KNLF251 B098 A Global PCS, Inc. KNLF251 B423 A Global PCS, Inc. KNLF251 B273 A NexCom, Inc. KNLF221 B076 A NexCom, Inc. KNLF221 B334 A NexCom, Inc. KNLF221 B384 A NexCom, Inc. KNLF221 B102 A NexCom, Inc. KNLF221 B085 A NexCom, Inc. KNLF221 B237 A (e) Tritel C/F Holding Corp. transferred the licenses designated as being transferred to it under subparagraph (b) above to the following Subsidiaries as designated below, solely in constructive exchange for securities of such Subsidiary under Section 351 of the Code. Tritel C/F Holding Corp. --------------------------------------------- Subsidiary Call Sign Market No. Freq. Block - -------------------------------------------------------------------------------- AirCom PCS, Inc. KNLF457 B305 C AirCom PCS, Inc. KNLF604 B017 C AirCom PCS, Inc. KNLF605 B044 C AirCom PCS, Inc. KNLF606 B108 C AirCom PCS, Inc. KNLF607 B158 C AirCom PCS, Inc. KNLF608 B198 C 8 AirCom PCS, Inc. KNLF609 B450 C DigiCall, Inc. KNLG908 B042 F DigiCall, Inc. KNLG918 B186 F DigiCall, Inc. KNLG922 B246 E DigiCall, Inc. KNLG925 B269 F DigiCom, Inc. KNLG923 B263 F DigiCom, Inc. KNLG909 B052 F QuinCom, Inc. KNLG933 B415 F QuinCom, Inc. KNLG912 B115 F QuinCom, Inc. KNLG914 B146 F QuinCom, Inc. KNLG927 B302 F QuinCom, Inc. KNLG928 B305 F 19. Company Stock Option Plans. The board of directors of the Company has adopted the Tritel, Inc. 1999 Stock Option Plan and the Tritel, Inc. 1999 Stock Option Plan for Nonemployee Directors in the forms attached as Exhibits III and IV, respectively. All parties hereto, as shareholders of the Company, hereby approve the adoption of such plans. 20. Consent to Assignment of Rights. The Parties hereto consent to the assignment by the Company to Toronto Dominion (Texas), Inc., as Administrative Agent for itself and on behalf of the Lenders named in the Loan Agreement, dated as of January 7, 1999, among Tritel Holding Corp., the Company, the Lenders named therein and Toronto Dominion (Texas), Inc. ("Toronto Dominion") pursuant to the Assignment of Rights, dated as of January 7, 1999, among the Company and Toronto Dominion (the "Assignment") of the Assigned Provisions (as defined in the Assignment). Each Cash Equity Investor and other stockholder of the Company agrees to be bound by all of the terms of the Assignment as if each such party was a Stockholder named therein and a party thereto. 21. APPP. The Company agrees to execute a counterpart of the Affiliate Phone Purchase Program Agreement substantially in the form attached as Exhibit V with such changes therein as AT&T shall reasonably require. 22. Ericsson Supply Agreement. AT&T PCS and each Cash Equity Investor party hereto consent to the Company's execution of that certain Acquisition Agreement among Ericsson Inc., Tritel Communications and Tritel Finance, Inc. effective December 30, 1998, (conditioned upon the approval of the boards of directors of Tritel Communications and Tritel Finance, Inc.). 23. Central Alabama Partnership Joinder. Upon the transfer of ownership of Series C Preferred Stock of the Company to Central Alabama Partnership, L.P. 132 ("CAP"), CAP shall be joined as a party to the Stockholders Agreement and the Investors's Stockholders Agreement, and shall be treated under such agreements as a Cash Equity Investor for all purposes thereunder. 24. Ericsson Loans. Pursuant to the Investor Loan Agreements and the Ericsson Commitment Letter, the parties hereto who are borrowers under the Investor Loan Agreements consent to the funding of the aggregate amount of $75,000,000 representing the loan amounts to 9 be funded under such Investor Loan Agreements directly to the Company on behalf of such borrowers. 25. Miscellaneous. The provisions of this Agreement modify the provisions of the Securities Purchase Agreement and any other document executed in connection therewith; and it is intended that such modifications constitute written amendments to the Securities Purchase Agreement or those documents, as applicable. Except for the modifications and other agreements stated above, all other terms and conditions, including as to governing law, of the Securities Purchase Agreement shall remain the same and continue in full force and effect and shall constitute the legally valid and binding obligations of the parties hereto enforceable in accordance with their terms. [SIGNATURES CONTAINED ON NEXT PAGE] 10 IN WITNESS WHEREOF, each of the parties has executed or consent this Agreement to be executed by its duly authorized officers as of the date first written above. AT&T WIRELESS PCS INC. By: -------------------------------------- Name: Title: TWR CELLULAR, INC. By: -------------------------------------- Name: Title: TRITEL, INC. By: -------------------------------------- Name: Title: 11 CASH EQUITY INVESTORS: TORONTO DOMINION INVESTMENTS, INC. By: -------------------------------------- Name: Martha L. Gariepy Title: Vice President ENTERGY WIRELESS COMPANY By: -------------------------------------- Name: Gary Fuqua Title: President and Chief Executive Officer GENERAL ELECTRIC CAPITAL CORPORATION By: -------------------------------------- Name: Molly Fergusson Title: Managing Director 12 WASHINGTON NATIONAL INSURANCE COMPANY By: -------------------------------------- Name: Title: UNITED PRESIDENTIAL LIFE INSURANCE COMPANY By: -------------------------------------- Name: Title: 13 DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP BY: DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC, AS ITS GENERAL PARTNER By: -------------------------------------- Name: Alexander P. Coleman Title: Authorized Signatory 14 TRIUNE PCS, LLC, A DELAWARE LIMITED LIABILITY COMPANY BY: OAK TREE, LLC, A DELAWARE LIMITED LIABILITY COMPANY TITLE: MANAGER BY: TRIUNE INC., A DELAWARE CORPORATION TITLE: MANAGER By: -------------------------------------- Name: Kevin Shepherd Title: President 15 FCA VENTURE PARTNERS II, L.P. BY: CLAYTON-DC VENTURE CAPITAL GROUP, LLC, ITS GENERAL PARTNER By: -------------------------------------- Name: D. Robert Crants, III Title: Manager CLAYTON ASSOCIATES, LLC BY: , ------------------------------------- ITS MANAGING MEMBER By: -------------------------------------- Name: Title: 16 AIRWAVE COMMUNICATIONS, LLC (F/K/A MERCURY PCS, LLC) By: MSM, Inc., its Manager By: ---------------------------------- Name: E.B. Martin, Jr. Title: Vice President DIGITAL PCS, LLC (F/K/A MERCURY PCS II, LLC) By: MSM, Inc., its Manager By: ---------------------------------- Name: E.B. Martin, Jr. Title: Vice President 17 THE MANUFACTURERS' LIFE INSURANCE COMPANY (U.S.A.) By: -------------------------------------- Name: Title: 18 TRILLIUM PCS, LLC By: -------------------------------------- Name: William M. Mounger, II Title: Manager 19 MERCURY INVESTOR INDEMNITORS: SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY By: -------------------------------------- Name: Title: M3, LLC By: -------------------------------------- Name: Title: MCCARTY COMMUNICATIONS, LLC By: -------------------------------------- Name: Title: MERCURY PCS INVESTORS, LLC By: -------------------------------------- Name: Title: 20 DC INVESTMENT PARTNERS EXCHANGE FUND, L.P. BY: DC INVESTMENT PARTNERS, LLC, ITS GENERAL PARTNER By: ---------------------------------- Name: D. Robert Crants, III Title: Manager FCA VENTURE PARTNERS I, L.P. BY: DC INVESTMENT PARTNERS, LLC, ITS GENERAL PARTNER By: ---------------------------------- Name: D. Robert Crants, III Title: Manager CLAYTON ASSOCIATES, LLC BY: , ------------------------------------- ITS MANAGING MEMBER By: -------------------------------------- Name: Title: 21 MANAGEMENT STOCKHOLDERS: ----------------------------------------- William M. Mounger, II ----------------------------------------- E.B. Martin, Jr. ----------------------------------------- Jerry M. Sullivan, Jr. 22 EXHIBIT I Legal Structure Chart --------------------- TRITEL CORPORATE STRUCTURE
--------------------------- TRITEL, INC. Delaware Corp. --------------------------- | --------------------------- TRITEL HOLDING CORP. Delaware Corp. --------------------------- | ----------------------------------------------------------------------------------------------- | | | | - --------------------------- --------------------------- --------------------------- --------------------------- TRITEL A/B HOLDING CORP. TRITEL C/F HOLDING CORP. TRITEL COMMUNICATIONS, INC. TRITEL FINANCE, INC. Delaware Corp. Delaware Corp. Delaware Corp. Delaware Corp. - --------------------------- --------------------------- --------------------------- --------------------------- | | - --------------------------- --------------------------- NEXCOM, INC. AIRCOM PCS, INC. Delaware Corp. Delaware Corp. - --------------------------- --------------------------- | | - --------------------------- --------------------------- CLEARCALL, INC. QUINCOM, INC. Delaware Corp. Delaware Corp. - --------------------------- --------------------------- | | - --------------------------- --------------------------- GLOBAL PCS, INC. DIGICOM, INC. Delaware Corp. Delaware Corp. - --------------------------- --------------------------- | | - --------------------------- --------------------------- CLEARWAVE, INC. DIGICALL, INC. Delaware Corp. Delaware Corp. - --------------------------- --------------------------- | - --------------------------- DIGINET PCS, INC. Delaware Corp. - ---------------------------
23 EXHIBIT II COLLATERAL AGENCY AGREEMENT See attached. 24 EXHIBIT III TRITEL, INC. 1999 STOCK OPTION PLAN See attached. 25 EXHIBIT IV TRITEL, INC. 1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS See attached. 26 EXHIBIT V AFFILIATE PHONE PURCHASE PROGRAM AGREEMENT See attached. 27 Schedule I CASH EQUITY INVESTORS AND COMMITMENTS
AGGREGATE INITIAL CASH SECOND CASH EQUITY INVESTORS COMMITMENT CONTRIBUTION FUNDING 9/30/99 --------------------- ---------- ------------ --------------- Washington National Insurance Company $25,000,000 $16,666,667 $8,333,333 United Presidential Life Insurance Company 25,000,000 16,666,667 8,333,333 Trillium PCS, LLC 2,000,000 1,333,333 666,667 Dresdner Kleinwort Benson Private Equity Partners LP 30,000,000 20,000,000 10,000,000 Entergy Wireless Corporation 20,000,000 13,333,333 6,666,667 Triune, Inc. 24,139,040 16,092,694 8,046,346 Toronto Dominion Investments, Inc. 5,000,000 3,333,333 1,666,667 General Electric Capital Corporation 2,500,000 1,666,667 833,333 The Manufacturers' Life Insurance Company (U.S.A.) 10,000,000 6,666,667 3,333,333 FCA Venture Partners II, LP 5,500,000 3,666,667 1,833,333 Clayton Associates, LLC 100,000 66,667 33,333 Digital PCS, LLC 2,976,401 2,976,401 -0- - --------------------------------------------------------------------------------------------------- Airwave Communications, LLC 11,163,079 11,163,079 -0- ----------- ----------- ---------- TOTAL 163,369,520 113,623,175 49,746,345
28 Schedule IV MERCURY LICENSES - -------------------------------------------------------------------------------- MARKET NUMBER FREQUENCY BLOCK LICENSE DESCRIPTION - -------------------------------------------------------------------------------- 017 C Anniston, AL - -------------------------------------------------------------------------------- 044 C Birmingham, AL - -------------------------------------------------------------------------------- 108 C Decatur, AL - -------------------------------------------------------------------------------- 158 C Gadsden, AL - -------------------------------------------------------------------------------- 198 C Huntsville, AL - -------------------------------------------------------------------------------- 450 C Tuscaloosa, AL - -------------------------------------------------------------------------------- MERCURY PCS II LICENSES - -------------------------------------------------------------------------------- MARKET NUMBER FREQUENCY BLOCK LICENSE DESCRIPTION - -------------------------------------------------------------------------------- 042 F Biloxi, MS - -------------------------------------------------------------------------------- 415 F Selma, AL - -------------------------------------------------------------------------------- 115 F Dothan-Enterprise, AL - -------------------------------------------------------------------------------- 146 F Florence, AL - -------------------------------------------------------------------------------- 186 F Hattiesburg, MS - -------------------------------------------------------------------------------- 246 E Laurel, MS - -------------------------------------------------------------------------------- 269 F McComb, MS - -------------------------------------------------------------------------------- 302 F Mobile, AL - -------------------------------------------------------------------------------- 305 F Montgomery, AL - -------------------------------------------------------------------------------- 263 F Louisville, KY - -------------------------------------------------------------------------------- 052 F Bowling Green, KY - -------------------------------------------------------------------------------- 29 Schedule V ALABAMA LICENSES - -------------------------------------------------------------------------------- MARKET NUMBER FREQUENCY BLOCK LICENSE DESCRIPTION - -------------------------------------------------------------------------------- 305 C Montgomery, AL - -------------------------------------------------------------------------------- 30 Schedule VII SECURITIES ISSUED AT CLOSING See attached. 31 Schedule 1.1 PERMITTED EXPENDITURES MAY 1, 1998 - NOVEMBER 30, 1998 (REFLECTS AMOUNTS ACTUALLY SPENT) Site Acquisition $ 703,000 Plant Operating Expense 1,191,000 Sales & Marketing 313,000 General & Administrative 5,054,000 License Note Interest 2,707,000 ------------- TOTAL $ 9,968,000 GENERAL & ADMINISTRATIVE DETAIL Billing/ Accounting/ Computers/ Other Software Costs $ 1,034,000 Office Equipment/ Furniture/ Leasehold Improvements 778,000 Rent, Utilities, & Misc Office Expense 175,000 Filing Fees 136,000 Employee Salaries and Related Expenses 1,888,000 G&A Travel 148,000 G&A Legal/Accounting/Consulting 895,000 ------------- TOTAL $ 5,054,000 ============= 32 Schedule 2.8 ASSUMED MERCURY DEBT Ericsson Inc. debt 22,100,000.00 FCC debt on C Block 31,945,000.00 FCC debt on F Block 9,458,000.00 Accrued interest on FCC debt 1,320,000.00 Accrued interest on N/P to Ericsson Inc. 87,000.00 Note Payable to Airwave Communications, LLC 12,069,000.00 including interest by Digital PCS, LLC The Company will also receive a Note Receivable Airwave Communications, LLC holds from Digital PCS, LLC for $12,069,000. There is no net effect to the Company. The Company will also assume up to $10,000,000 of trade liabilities, payroll related liabilities and other current liabilities incurred in the ordinary course of the business, an estimate of which, as of November 30, 1998, is set forth on Annex I of this Schedule 2.8. 33 ANNEX I TO SCHEDULE 2.8 Assumed Mercury obligations Estimated as of November 30, 1998 Vendor Amount ------ ------ Galaxy $3,686,000 WFI 2,077,000 Spectrasite 681,000 Global Mobility 56,000 Geotrans Wireless 369,000 Bechtel 844,000 Ikon 201,000 Legal Fees 187,100 Payroll 584,100 Cell/Switch site leases 73,200 Lease options 28,000 Office furniture & equipment 42,600 Equipment rentals 12,100 Office supplies 32,500 Telephone 55,400 Temp services 8,900 Recruiting & relocation 22,700 Office rent & utilities 45,900 Temporary living 12,400 Travel, meals & lodging expense 54,100 Accounting services 16,700 Professional services 99,000 Other 34,900 ---------------------- $9,223,600 ====================== 34 Schedule 4.7 LITIGATION See Items 1(A-C) under "Mercury Consents" on Schedule 4.6 Also: Edwin Welsh v. Mercury PCS, LLC, Mercury PCS II, LLC, MSM, Inc., Mercury Wireless Management, Inc., William M. Mounger, II, Jerry Sullivan, and E. B. Martin, Chancery Court of the First Judicial District of Hinds County, Mississippi, Cause No. G97-561013. The plaintiff, who had been an employee of Mercury Communications Company prior to the FCC's C-Block PCS auction, filed the above complaint individually and derivatively "as a beneficial shareholder" of Mercury Wireless Management, Inc. ("MWM"). 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. The plaintiff also seeks an order requiring that the 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 interests" of Messrs. Mounger, Sullivan and Martin. 35 Schedule 5.3(a) PROCEEDINGS AFFECTING MERCURY LICENSES See Items 1(A-C) under "Mercury Consents" on Schedule 4.6. See also Item 1 under "Litigation" on Schedule 4.7, as amended herein. 36 Schedule 5.4 CASH EQUITY LOANS $ AMOUNT OF CASH EQUITY CASH EQUITY INVESTORS LOAN --------------------- ---- Washington National Insurance Company United $12,500,000 United Presidential Life Insurance Company 12,500,000 Trillium PCS, LLC 1,000,000 Dresdner Kleinwort Benson Private Equity Partners LP 15,000,000 Triune PCS, Inc. 12,069,520 Airwave Communications LLC 11,163,079 Digital PCS, LLC 2,967,401 FCA Venture Partners II, LP 2,750,000 Clayton Associates LLC 50,000 The Manufacturers Life Insurance Company (U.S.A.) 5,000,000 37 EX-10.35 30 CONSENT TO EXERCISE OF OPTION EXHIBIT 10.35 CONSENT TO EXERCISE OF OPTION HERETOFORE, Tritel, Inc., a Delaware corporation (the "Company"), entered into an Option Agreement with Digital PCS, LLC ("Digital") pursuant to which, inter alia, the Company acquired the sole, exclusive and irrevocable right to acquire all, but not less than all, of the Mercury Licenses (the "Option") owned by Digital. The Mercury Licenses are described and defined in Exhibit "1" hereto; and WHEREAS, by its terms, the Option expires as of May 20, 1999, unless sooner exercised by the Company, and the Company desires to exercise the Option but Section 7.13 of the Stockholders Agreement among AT&T Wireless PCS Inc., TWR Cellular, Inc., Cash Equity Investors, Management Stockholders, and Tritel, Inc. dated as of January 7, 1999 (the "Stockholders Agreement") requires the approval of at least one of the Series A Preferred Directors in order for the Company to exercise the Option, such Series A directors being elected by AT&T under the circumstances stated in the Stockholders Agreement; and WHEREAS, AT&T has indicated its willingness to give its agreement for the Company to exercise the Option subject to an amendment to the Stockholders Agreement, which Amendment would provide that Section 7.13 thereof be amended to read as follows: Section 7.13 Option Licenses. (a) Notwithstanding any other provision of this Stockholders Agreement, except with the prior written consent of AT&T PCS, the PCS Territory shall not include the geographic area covered by the PCS Licenses (the "Option Licenses") acquired by the Company pursuant to the Option Agreement. By way of amplification and not limitation of the foregoing, the Company and the Stockholders acknowledge and agree that, unless and until such consent of AT&T PCS is hereafter obtained, the term "Company Communications Services" shall not include any mobile wireless telecommunications services or any other telecommunications services provided using the Option Licenses, and the term "Business" shall not include owning, constructing or operating systems to provide Company Communications Services (or any other telecommunications systems) on frequencies licensed to the Company for Commercial Mobile Radio Services pursuant to the Option Licenses. (b) The Company further agrees that, except with the prior written consent of AT&T PCS, it shall not (and it shall not permit its Subsidiaries to) construct any telecommunications systems with respect to the Option Licenses or take any other actions in respect of, or incur or pay any costs or expenses relating to, the Option Licenses or the territory covered by the Option Licenses (the "Option Territory"), except that the Company and its Subsidiaries may: (i) perform its obligations under and consummate the transactions contemplated in the Option Agreement and the License Purchase Agreement annexed thereto; (ii) take actions reasonably required to maintain ownership of the Option Licenses (other than any applicable FCC build-out requirements relating to the Option Territory), including paying when due interest on and principal of the existing indebtedness to the U.S. Department of Treasury related to the Option Licenses; and (iii) if it determines to do so in the future, dispose of the Option Licenses, and, in the case of (i), (ii) and (iii), pay any reasonable out-of-pocket costs related thereto; and WHEREAS, AT&T, TWR, the Undersigned Management Shareholders, and the Company believe that it will not be possible to consummate the amendment of the Stockholders Agreement within the time within which the Company must exercise the Option. NOW, THEREFORE, it is agreed: 1. Subject to the terms and conditions of this Consent, AT&T and TWR hereby consent to the exercise by the Company of the Option. 2. The Company hereby agrees to grant to an entity designated by AT&T an exclusive and irrevocable option to acquire the Mercury Licenses, pursuant to Option Agreements in the forms attached hereto as Exhibit "2". 3. The Company and the undersigned Management Shareholders agree to exert their best efforts to cause Section 7.13 of the Stockholders Agreement to be amended as hereinbefore provided, and until the Company and AT&T complete the documentation required to evidence such amendments, the Company and the undersigned Management Shareholders will not take any action inconsistent with such amendments. IN WITNESS WHEREOF, the Company, TWR, AT&T and the undersigned Management Shareholders have executed this Consent effective as of the 20th day of May, 1999. TRITEL, INC. 2 By: --------------------------------- AT&T WIRELESS PCS, INC. By: --------------------------------- TWR CELLULAR, INC. By: --------------------------------- ------------------------------------ William M. Mounger, II ------------------------------------ E. B. Martin, Jr. 3 EXHIBIT 1 Aggregate Amount BTA# Name Payable to FCC FCC Debt ---- ---- -------------- -------- 154 ........... Ft. Walton, FL $ 1,683,582 340 ........... Panama City, FL 1,915,592 343 ........... Pensacola, FL 4,166,832 439 ........... Tallahassee, FL 4,808,342 159 ........... Gainesville, FL 1,104,092 58 ........... Brunswick, GA 699,090 467 ........... Waycross, GA 387,099 454 ........... Valdosta, GA 472,734 EXHIBIT 2 OPTION AGREEMENT OPTION AGREEMENT, dated as of May __, 1999, between TRITEL, INC., a Delaware Corporation (the "Company"), and _______________________, a Delaware limited liability company ("Optionee"). Capitalized terms used herein without definition shall have the meanings assigned thereto in the License Purchase Agreement referred to below. Unless otherwise indicated, all references to Sections refer to Sections of this Agreement. WHEREAS, the Company, Digital PCS, LLC (f/k/a Mercury PCS II, LLC), a Mississippi limited liability company, William M. Mounger II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr., are parties to an Option Agreement (the "January Option Agreement"), dated as of January 7, 1999, pursuant to which the Company has an option to acquire the PCS Licenses referred to on Schedule I thereto, and the Company wishes to exercise such option; WHEREAS, pursuant to the terms of the Company's Stockholders Agreement, dated as of January 7, 1999, among the parties hereto and the other stockholders of the Company referred to therein, the Company is required to obtain the consent of AT&T Wireless PCS Inc., a Delaware corporation ("AT&T"), and TWR Cellular, Inc., a Maryland corporation and an affiliate of AT&T ("TWR"), to the Company's exercise of such option, and the Company wishes to obtain such consent; WHEREAS, AT&T and TWR wish to grant such consent pursuant to a Consent, dated the date hereof, provided, among other things, that the Company enter into this Agreement, and the Company wishes to enter into this Agreement; WHEREAS, after giving effect to the acquisition contemplated in the January Option Agreement, the Company (or a subsidiary thereof) will be the holder of PCS Licenses specified on Schedule I hereto (the "Tritel Licenses"); and WHEREAS, the Company desires to grant to Optionee, and Optionee desires to obtain, an option to purchase the Tritel Licenses on the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises, covenants and other agreements contained herein, the parties hereby agree as follows: 1. Grant of Option. Subject to the terms and conditions set forth herein, the Company hereby grants to Optionee (or its designee) the sole, exclusive and irrevocable right (herein referred to as the "Option") to acquire all of the Tritel Licenses pursuant to the terms and conditions set forth in the License Purchase Agreement attached hereto as Exhibit "A" (the "License Purchase Agreement"). In furtherance thereof, an authorized signatory of the Company has duly executed the attached License Purchase Agreement. 2. Consideration for Option. In consideration for the Option, Optionee agrees to pay when due all interest payable to the U. S. Department of Treasury in respect of the Tritel Licenses that becomes due and payable prior to the expiration or earlier termination by Optionee of this Option, and, if the Option is exercised, thereafter during the period ending on the closing under or earlier termination of the License Purchase Agreement in accordance with its terms. 3. Exercise of Option. Optionee (or its designee) may exercise the Option at any time on or prior to November 20, 1999, by delivering written notice to the Company to such effect together with the License Purchase Agreement duly executed by an authorized officer of Optionee (or the designee thereof that is specified in the exercise notice as the acquiring party thereto) and dated as of the date of such exercise. For the purpose of determining the purchase price payable pursuant to the License Purchase Agreement, set forth on Schedule I hereto, opposite each Tritel License, is the aggregate amount payable to the FCC in respect of such Tritel License and the FCC Debt payable to the U. S. Department of Treasury in respect thereof as of the date hereof. Optionee may terminate this Option at any time effective upon written notice to Tritel. At any time prior to November 20, 1999, effective upon written notice to Tritel, Optionee may extend the exercisability of this Option to April 20, 2000, provided that, if this Option is so extended, Optionee may not exercise this Option unless it concurrently exercises the Option between Optionee and Tritel, dated as of the date hereof, relating to the following licenses: BTA #340 (Panama City, FL); BTA #439 (Tallahassee, FL); BTA #159 (Gainesville, FL); BTA #58 (Brunswick, GA); BTA #467 (Waycross, GA); BTA #454 (Valdosta, GA). 4. Representations and Warranties of Parties. (a) The Company, as to itself and each of its subsidiaries that acquires any right, title or interest in or to the Tritel Licenses, and Optionee, as to itself, represent and warrant to each other that: (i) Organization and Standing. It is a corporation, limited liability company, general partnership or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. It is duly qualified to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary other than any such jurisdiction in which the failure to be so qualified would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby or its ability to perform its obligations under this Agreement. (ii) Power and Authority. It has the requisite power and authority to execute, deliver and perform this Agreement and, in the case of the Company, the License Purchase Agreement, and each other instrument, document, certificate and agreement required or 2 contemplated to be executed, delivered and performed by it hereunder and thereunder to which it is or will be a party. (iii) Due Authorization. The execution and delivery by it of this Agreement (and, in the case of the Company, the License Purchase Agreement), and the consummation of the transactions contemplated hereby (and, in the case of the Company, thereby) have been duly and validly authorized by its Board of Directors (or equivalent body, as applicable) and no other proceedings on its part which have not been taken (including, without limitation, approval of its stockholders, partners or members) are necessary to authorize this Agreement (and, in the case of the Company, the License Purchase Agreement) or to consummate the transactions contemplated hereby (and, in the case of the Company, thereby). (iv) Enforceability. This Agreement (and, in the case of the Company, the License Purchase Agreement) have been duly executed and delivered by it and constitutes its valid and binding obligation enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. (v) No Breach. After giving effect to the transactions contemplated hereby, it is not in breach of any obligation under this Agreement. (vi) Consents; No Conflicts. Neither the execution, delivery and performance by it of this Agreement (or, in the case of the Company, the License Purchase Agreement) nor the consummation of the transactions contemplated hereby (or, in the case of the Company, thereby) will (a) conflict with, or result in a breach or violation of, any provision of its organizational documents, as applicable; (b) subject to obtaining the Consents set forth on Schedule 4(a)(vi), constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under (i) any Law or License or (ii) any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets; or (c) require any Consent (other than those set forth on Schedule 4(a)(vi)) or the approval of its board of directors, general partner, members, stockholders or similar constituent bodies, as applicable (other than approvals which have been obtained), except in each case, where such breach, violation, default, Lien, right, or the failure to obtain or give such Consent would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby. (vii) Litigation. Except as set forth on Schedule 4(a)(vii), there is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the transactions contemplated hereby or to fulfill its obligations under this Agreement, which seeks to prevent or challenge the transactions 3 contemplated hereby, or which seeks to have an adverse effect on the Company or its wholly owned Subsidiaries. (viii) Brokers. It has not employed any broker, finder or investment banker or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated hereby. (b) Additional Representation and Warranty with respect to the Company and the Tritel Licenses. The Company represents and warrants to Optionee that: (i) after giving effect to its acquisition of the Tritel Licenses pursuant to the License Purchase Agreement annexed to the January Option Agreement, (x) the Company will be the authorized legal holder, free and clear of any Liens (other than Liens securing the FCC Debt, the principal amount of which as of the date hereof is set forth on Schedule I), of the Tritel Licenses set forth on Schedule I, (y) the Tritel Licenses will be valid and in full force and effect, and (z) the Tritel Licenses will not be subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law; (ii) it complies with all eligibility rules issued by the FCC to hold broadband PCS licenses, including without limitation the Tritel Licenses, the FCC rules on foreign ownership and the CMRS spectrum cap; (iii) the amounts set forth on Schedule I are accurate as of the date hereof; and (iv) except as set forth on Schedule 4(b) and for proceedings affecting the PCS or wireless communications services industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to the Company's knowledge, threatened against the Company or the Tritel Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of the Tritel Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ the Tritel Licenses in its business after the date of its acquisition thereof or seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any Tritel License. 5. Covenants. (a) Each party shall use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable and consistent with applicable law to carry out all of its respective obligations under this Agreement and to consummate the transactions contemplated hereby. (b) Each party covenants and agrees to comply with Sections 5.2 and 5.3 of the License Purchase Agreement which is hereby incorporated by reference herein with the same effect as if such provisions were set forth herein in full; provided, that solely for purposes of this Section 5(b), each reference to "Closing" or "Closing Date" in Sections 5.2(a) and 5.3 of the License Purchase Agreement shall be deemed to mean November 20, 1999. 4 6. FCC Approval. Notwithstanding anything contained in this Agreement to the contrary, no transaction or action contemplated herein shall be consummated and no interests or rights shall be transferred or exchanged prior to receiving FCC approval with respect thereto to the extent such approval is necessary. 7. Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement of each of the parties. 8. Waiver of Compliance; Consents. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. 9. Notices. All notices or other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, or by registered or certified mail (return receipt requested), postage prepaid, with an acknowledgment of receipt signed by the addressee or an authorized representative thereof, addressed as follows (or to such other address for a party as shall be specified by like notice; provided that notice of a change of address shall be effective only upon receipt thereof): If to Optionee: If the to Company: Tritel, Inc. Attention: E. B. Martin, Jr. 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Fax No.: (601) 914-8282 10. Parties in Interest; Assignment. This Agreement is binding upon and is solely for the benefit of the parties hereto and their respective permitted successors, legal representatives and permitted assigns. 11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the conflicts of law principles thereof. The parties hereto hereby irrevocably and unconditionally consent to submit to the nonexclusive jurisdiction of the courts of the State of New York and of the United States of America located in the County of New York, New York (the "New York Courts") for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby, 5 waive any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 13. Interpretation. The article and section headings contained in this Agreement are for convenience of reference only, are not part of the agreement of the parties and shall not affect in any way the meaning or interpretation of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the antecedent Person or Person may require. 14. Entire Agreement. This Agreement, including the exhibits and schedules hereto and the certificates and instruments delivered pursuant to the terms of this Agreement, embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated hereby. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to the transactions contemplated hereby. 15. Publicity. So long as this Agreement is in effect, the parties agree to consult with each other in issuing any press release or otherwise making any public statement with respect to the transactions contemplated hereby, and no party shall issue any press release or make any such public statement prior to such consultation, except as may be required by Law. No press release or other public statement by the parties hereto shall disclose any of the financial terms of the transactions without the prior consent of the other parties, except as may be required by Law. A breach of the provisions of this Section 15 by a party shall not give rise to any right to terminate this Agreement. 16. Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any New York Courts. 17. Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. 6 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. TRITEL, INC. By: -------------------------------------- Name: Title: ------------------------------ By: -------------------------------------- Name: Title: 7 SCHEDULE 4(a)(vi) TRITEL CONSENTS The execution, delivery and performance of the Agreement will or may require the following consents, approvals and reviews: 1. The Federal Communications Commission. OPTIONEE CONSENTS The execution, delivery and performance of the Agreement will or may require the following consents, approvals and reviews: 1. The Federal Communications Commission. SCHEDULE 4(a)(vii) A. Applications for Review filed by High Plains Wireless, L.P.: In re Application of Mercury PCS II, LLC for Facilities in the Broadband Personal Communications Services in the D, E and F Blocks, Federal Communications Commission File Numbers 00114CWL97, et al. B. Edwin Welsh v. Mercury PCS, LLC, Mercury PCS II, LLC, MSM, Inc., Mercury Wireless Management, Inc., William M. Mounger, II, Jerry Sullivan, and E.B. Martin, Chancery Court of the First Judicial District of Hinds County, Mississippi, Cause No. G97-56103. SCHEDULE I TRITEL PCS LICENSES License certificates for the following licenses issued to the Company (or a subsidiary thereof) are pending approval of the transfer contemplated in the January Option Agreement Aggregate Amount BTA# Name Payable to FCC FCC Debt ---- ---- -------------- -------- 340 ........... Panama City, FL $ 1,915,592 439 ........... Tallahassee, FL 4,808,342 159 ........... Gainesville, FL 1,104,092 58 ........... Brunswick, GA 699,090 467 ........... Waycross, GA 387,099 454 ........... Valdosta, GA 472,734 Exhibit A - -------------------------------------------------------------------------------- LICENSE ACQUISITION AGREEMENT between TRITEL, INC. and ---------------------- Dated as of ________, 1999 - -------------------------------------------------------------------------------- LICENSE ACQUISITION AGREEMENT LICENSE ACQUISITION AGREEMENT, dated as of ______________, 1999, between TRITEL, INC., a Delaware corporation ("Tritel") and _______________________, a ______________ [to be specified by Optionee in the option exercise notice] (the "Company"). WHEREAS, Tritel or a wholly owned subsidiary thereof holds the PCS licenses described on Schedule I (the "Purchased Licenses"); and WHEREAS, Tritel and AT&T Wireless PCS Inc., a Delaware corporation ("AT&T") have entered into an Agreement dated as of May __, 1999 (the "Option Agreement"), pursuant to which Tritel has granted to the Company an Option (as such term is defined in the Option Agreement) to purchase the Purchased Licenses; and WHEREAS, pursuant to the Option Agreement, the Company has exercised its Option to purchase (or designated a Person to purchase) the Purchased Licenses on the terms and subject to the conditions herein set forth; NOW, THEREFORE, in consideration of the promises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, the parties agree as follows: ARTICLE I DEFINITIONS As used herein, the following terms have the following meanings (unless indicated otherwise, all Section and Article references are to Sections and Articles in this Agreement, and all Schedule and Exhibit references are to Schedules and Exhibits to this Agreement): "Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with that Person. For purposes of this definition, "control" (including the terms "controlling" and "controlled") means the power to direct or cause the direction of the management and policies of a Person, directly or indirectly, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. "Claim" has the meaning set forth in Section 7.5. "Closing" has the meaning set forth in Section 3.1. "Closing Date" has the meaning set forth in Section 3.1. "Company" has the meaning set forth in the preamble. "Confidential Information" means any and all information regarding the business, finances, operations, products, services and customers of the Person specified and its Affiliates, in written or oral form or in any other medium. "Consents" means all consents and approvals of Governmental Authorities or other third parties necessary to authorize, approve or permit the parties hereto to consummate the transactions contemplated hereby and for the Company to operate its business after the Closing Date as currently contemplated. "FCC" means the Federal Communications Commission or similar regulatory authority established in replacement thereof. "FCC Debt" means the indebtedness of Tritel or a wholly owned subsidiary thereof to the United States Department of the Treasury, in the aggregate principal amount as of the date hereof set forth on Schedule 2.2, incurred in connection with its acquisition of the Purchased Licenses. "FCC Law" means the Communications Act of 1934, as amended, including as amended by the Telecommunications Act of 1996, and the rules, regulations and policies promulgated thereunder. "Final Order" has the meaning set forth in Section 6.1(b). "Governmental Authority" means a Federal, state or local court, legislature, governmental agency (including, without limitation, the United States Department of Justice), commission or regulatory or administrative authority or instrumentality. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. "Indemnified Party" has the meaning set forth in Section 7.4. "Indemnifying Party" has the meaning set forth in Section 7.4. "Law" means applicable common law and any statute, ordinance, code or other law, rule, permit, permit condition, regulation, order, decree, technical or other standard, 2 requirement or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority. "License" means a license, permit, certificate of authority, waiver, approval, certificate of public convenience and necessity, registration or other authorization, consent or clearance to construct or operate a facility, including any emissions, discharges or releases therefrom, or to transact an activity or business, to construct a tower or to use an asset or process, in each case issued or granted by a Governmental Authority. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, right of first refusal or right of others therein, or encumbrance of any nature whatsoever in respect of such asset. "Losses" has the meaning set forth in Section 7.2. "Material Adverse Effect" means a material adverse effect on the business, financial condition, assets, liabilities or results of operations or prospects of the Person specified. "New York Courts" has the meaning set forth in Section 9.5. "Option Agreement" has the meaning set forth in the second recital. "Person" means an individual, corporation, partnership, limited liability company, association, joint stock company, Governmental Authority, business trust, unincorporated organization, or other legal entity. "Representatives" has the meaning set forth in Section 5.2(a). "Section 7.2 Indemnified Party" has the meaning set forth in Section 7.2. "Section 7.3 Indemnified Party" has the meaning set forth in Section 7.3. "Securities Act" means the Securities Act of 1933, as amended. "Solvent" means, when used with respect to any Person, that at the time of determination: (a) the fair market value of its assets is in excess of the total amount of its liabilities (including, without limitation, contingent liabilities), (b) the present fair saleable value of its assets is greater than its probable liability for its existing debts as such debts become absolute and mature, (c) it is then able and expects to be able to pay its indebtedness (including without limitation, contingent indebtedness and other commitments) as they mature, and (d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. 3 "Subsidiary" shall mean, with respect to any Person, a corporation or other entity of which 50% or more of the voting power or the voting equity securities or equity interest is owned, directly or indirectly, by such Person. "Tritel" has the meaning set forth in the preamble. "Purchased Licenses" has the meaning set forth in the first recital. "Purchased License Transfer" has the meaning set forth in Section 3.2(a). ARTICLE II PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION; CERTAIN RESTRICTIONS ON TRANSFER 2.1 Purchase and Sale of Licenses. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, Tritel shall sell, transfer, assign, convey and deliver to the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company), free and clear of all Liens (other than Liens of the United States Department of the Treasury securing certain indebtedness to be assumed by the Company pursuant to Section 2.3), and the Company agrees to purchase, acquire and accept from Tritel, the Purchased Licenses. 2.2 Payment of Consideration. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, the Company agrees to pay to Tritel in consideration for the Purchased Licenses, the amount equal to 110% of the sum of (i) the aggregate amount payable to the FCC in respect of each Purchased License, as set forth on Schedule 2.2 hereto, minus (ii) the Assumed Tritel Debt, plus (iii) the aggregate amount of interest actually paid, including suspended interest, prior to the Closing Date in respect of the Assumed Tritel Debt (the "Purchase Price"). The Purchase Price shall be payable by wire transfer of immediately available funds to an account designated by Tritel by written notice given to the Company at least two Business Days prior to the Closing Date. 2.3 Assumption of Indebtedness. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, on and as of the Closing Date, the Company shall accept and assume the indebtedness of Tritel to the United States Department of the Treasury incurred in connection with the acquisition of the Purchased Licenses by Tritel (collectively, the "Assumed Tritel Debt"). The outstanding 4 principal amount of each item of Assumed Tritel Indebtedness, together with accrued and unpaid interest (if any), as of the date hereof is set forth on Schedule 2.2. ARTICLE III CLOSING 3.1 Time and Place of Closing. Upon the terms and subject to the conditions hereof, the closing of the transactions contemplated hereby (the "Closing") shall take place at the offices of Friedman Kaplan & Seiler LLP, 875 Third Avenue, New York, New York 10022 on the fifth business day following the date of receipt of the last Consent required by subsections (a) through (c) of Section 6.1, or at such other place and/or time and/or on such other date as the parties may agree or as may be necessary to permit the fulfillment or waiver of the conditions set forth in Article VII (the "Closing Date"). 3.2 Closing Actions and Deliveries. Upon the terms and subject to the satisfaction or waiver by the appropriate party, if applicable, of the conditions set forth in Article VII, to effect the purchase and sale of the Purchased Licenses, the parties shall on the Closing Date take the following actions: (a) Assignment of Licenses and Assets. Tritel shall execute and deliver to the Company (or the applicable Subsidiary), one or more instruments of assignment, substantially in the form of Exhibit A, sufficient to assign the Purchased Licenses to the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company) (such assignments being herein collectively referred to as the "Purchased License Transfer"). (b) Payment of Purchase Price. The Company shall pay the Purchase Price of the Purchased Licenses to Tritel in accordance with Section 2.2. (c) Assumption and Reimbursement of Indebtedness. The Company shall (i) execute and deliver to Tritel an instrument of assumption, in form and substance reasonably satisfactory to Tritel, in respect of the indebtedness to the United States Department of the Treasury to be assumed by the Company pursuant to Section 2.3, less any amount of interest paid by the Company in respect of such indebtedness under the Option Agreement, and (ii) pay to Tritel an amount equal to (x) interest actually paid by Tritel on such indebtedness to the United States Department of the Treasury through the Closing Date as evidenced by documentation reasonably satisfactory to the Company, and (y) the principal amount of the other indebtedness described on Schedule 2.2 and constituting Assumed Tritel Indebtedness. 5 (d) Other Deliveries. The parties shall execute and deliver or cause to be executed and delivered all other documents, instruments, opinions and certificates contemplated by this Agreement to be delivered at the Closing or necessary and appropriate in order to consummate the transactions contemplated hereby on the Closing Date. 3.3 Payment of Transfer Taxes. The Company shall pay or cause to be paid at the Closing or, if due thereafter, promptly when due, all gross receipts taxes, gains taxes (including, without limitation, real property gains tax or other similar taxes), transfer taxes, sales taxes, stamp taxes, and any other taxes, but excluding any Federal, State or local income taxes payable in connection with the transfer of the Purchased Licenses. ARTICLE IV REPRESENTATIONS AND WARRANTIES Tritel (as to itself) and the Company (as to itself and each of its Subsidiaries) represents and warrants to each other that: 4.1 Organization and Standing. It is a corporation, limited liability company, general partnership or limited partnership, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. It is duly qualified to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary other than any such jurisdiction in which the failure to be so qualified would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby or its ability to perform its obligations under this Agreement. 4.2 Power and Authority. It has the requisite power and authority to execute, deliver and perform this Agreement and each other instrument, document, certificate and agreement required or contemplated to be executed, delivered and performed by it hereunder and thereunder to which it is or will be a party. 4.3 Due Authorization. The execution and delivery of this Agreement by it and the consummation of the transactions contemplated hereby have been duly and validly authorized by its Board of Directors (or equivalent body) and no other proceedings on its part which have not been taken (including, without limitation, approval of its stockholders, partners or members) are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. 6 4.4 Enforceability. This Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. 4.5 No Breach. After giving effect to the transactions contemplated hereby, it is not in breach of any obligation under this Agreement. 4.6 Consents; No Conflicts. Neither the execution, delivery and performance by it of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or violation of, any provision of its organizational documents; (b) subject to obtaining the Consents set forth on Schedule 4.6, constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under (i) any Law or License or (ii) any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets; or (C) require any Consent (other than those set forth on Schedule 4.6) or the approval of its board of directors, general partner, stockholders or similar constituent bodies, as the case may be (which approvals have been obtained), except in each case, where such breach, violation, default, Lien, right, or the failure to obtain or give such Consent would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby. To its knowledge, except as set forth on Schedule 4.6, there is no fact relating to it or its Affiliates that would be reasonably expected to prevent it from consummating the transactions contemplated hereby or disqualify the Company from obtaining the Consents (including without limitation, FCC Consent) required in order to consummate the Purchased License Transfer. 4.7 Litigation. Except as set forth on Schedule 4.7, there is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the transactions contemplated hereby or to fulfill its obligations under this Agreement, which seeks to prevent or challenge the transactions contemplated hereby, or which seeks to have an adverse effect on the Company or its wholly owned Subsidiaries. 4.8 FCC Compliance. It complies with all eligibility rules issued by the FCC to hold broadband PCS licenses, including without limitation the Purchased Licenses, the FCC rules on foreign ownership and the CMRS spectrum cap. 7 4.9 Brokers. The Company has not employed any broker, finder or investment banker or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated hereby. 4.10 Tritel represents and warrants, to the Company that: (1) Purchased Licenses. Tritel is the authorized legal holder, free and clear of any Liens (other than Liens securing the FCC Debt), of the Purchased Licenses set forth on Schedule I, true and correct copies of which are attached thereto. The Purchased Licenses are, and on the Closing Date will be, valid and in full force and effect. Except as set forth on Schedule 4.10 and for proceedings affecting the PCS or wireless communications services industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to its knowledge, threatened against Tritel or the Purchased Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of the Purchased Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ the Purchased Licenses in its business after the Closing Date or seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the use of any Purchased License. The Purchased Licenses are not subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law. (2) Tritel Debt; Solvency. Each item of Assumed Tritel Debt being assumed by the Company is a bona fide obligation of Tritel and the amount set forth opposite each item on Schedule 2.2 is the outstanding amount of principal thereof as of the date hereof. Tritel is Solvent after giving effect to the consummation of the transactions contemplated hereby. (3) Transferability. Neither the execution, delivery and performance by Tritel of this Agreement nor the assumption by the Company (or the applicable Subsidiary) of the Assumed Tritel Debt will (a) constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of the Assumed Tritel Debt; or (b) require any Consent (other than those set forth on Schedule 4.6) or the approval of its board of directors, general partner, stockholders or similar constituent bodies, as the case may be (which approvals have been obtained). 8 ARTICLE V COVENANTS 5.1 Consummation of Transactions. Each party shall use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable and consistent with applicable law to carry out all of their respective obligations under this Agreement to consummate the transactions contemplated hereby, which efforts shall include, without limitation, the following: (a) The parties shall use all commercially reasonable efforts to cause the Closing to occur and the transactions contemplated hereby to be consummated in accordance with the terms hereof, and, without limiting the generality of the foregoing, to obtain all necessary Consents including, without limitation, the approval of this Agreement and the transactions contemplated hereby by all Governmental Authorities and agencies, including the FCC, and make all filings with and to give all notices to third parties which may be necessary or reasonably required in order for the parties to consummate the transactions contemplated hereby; provided that Tritel shall not make any filings with the FCC regarding the Purchased Licenses without the prior review and approval of the Company. (b) Each party shall furnish to the other parties all information concerning such party and its Affiliates reasonably required for inclusion in any application or filing to be made by Tritel or the Company or any other party in connection with the transactions contemplated hereby or otherwise to determine compliance with applicable FCC Rules. 5.2 Confidentiality. (a) Each party shall, and shall cause each of its Affiliates, and its and their respective shareholders, members, managers, directors, officers, employees and agents (collectively, "Representatives") to, keep secret and retain in strictest confidence any and all Confidential Information relating to any other party that it receives in connection with the negotiation or performance of this Agreement, and shall not disclose such Confidential Information, and shall cause its Representatives not to disclose such Confidential Information, to anyone except the receiving party's Affiliates and Representatives and any other Person that agrees in writing to keep in confidence all Confidential Information in accordance with the terms of this Section 5.2. Until the Closing, each party agrees to use Confidential Information received from another party only (i) to evaluate its interest in pursuing the transactions contemplated hereby and (ii) to pursue such transactions contemplated hereby, but not for any other purpose. All Confidential Information furnished pursuant to this Agreement shall be returned promptly to the party to whom it belongs upon request by such party. 9 (b) The obligations set forth in Section 5.2(a) shall be inoperative with respect to Confidential Information that (i) is or becomes generally available to the public other than as a result of disclosure by the receiving party or its Representatives, (ii) was available to the receiving party on a non-confidential basis prior to its disclosure to the receiving party, or (iii) becomes available to the receiving party on a non-confidential basis from a source other than the providing party or its agents, provided that such source is not known by the receiving party to be bound by a confidentiality agreement with the providing party or the providing party's agents. (c) To the fullest extent permitted by law, if a party or any of its Affiliates or Representatives breaches, or threatens to commit a breach of, this Section 5.2, the party whose Confidential Information shall be disclosed, or threatened to be disclosed, shall have the right and remedy to have this Section 5.2 specifically enforced by any court having jurisdiction, it being acknowledged and agreed that money damages will not provide an adequate remedy to such party. Nothing in this Section 5.2 shall be construed to limit the right of any party to collect money damages in the event of breach of this Section 5.2. (d) Anything else in this Agreement notwithstanding, each party shall have the right to disclose any information, including Confidential Information of the other party or such other party's Affiliates, in any filing with any regulatory agency, court or other authority or any disclosure to a trustee of public debt of a party to the extent that the disclosing party determines in good faith that it is required by Law, regulation or the terms of such debt to do so, provided that any such disclosure shall be as limited in scope as possible and shall be made only after giving the other party as much notice as practicable of such required disclosure and an opportunity to contest such disclosure if possible. 5.3 Certain Covenants. From and after the execution and delivery of this Agreement to and including the Closing Date, Tritel shall: (a) Comply in all material respects with all applicable Laws, including all such Laws relating to the Purchased Licenses or their use; (b) Use commercially reasonable efforts to maintain the Purchased Licenses in full force and effect; (c) Not (i) sell, transfer, assign or dispose of, or offer to, or enter into any agreement, arrangement or understanding to, sell, transfer, assign or dispose of any of the Purchased Licenses or any interest therein, or negotiate therefor, or (ii) create, incur or suffer to exist any Lien of any nature whatsoever relating to any of the Purchased Licenses or any interest therein (other than Liens securing the FCC Debt to be assumed by the Company pursuant to Section 2.3). Without limiting the foregoing, Tritel shall not incur any material obligation or liability, absolute or contingent, relating to or affecting the Purchased Licenses or their use; 10 (d) Give written notice to the Company promptly upon the commencement of, or upon obtaining knowledge of any facts that would give rise to a threat of, any claim, action or proceeding commenced against or relating to (i) it, its properties or assets, including the Purchased Licenses or their use, and which could have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby, or (ii) the Purchased Licenses or their use; (e) Promptly after obtaining knowledge of the occurrence of, or the impending or threatened occurrence of, any event which could cause or constitute a material breach of any of its warranties, representations, covenants or agreements contained in this Agreement, give notice in writing of such event, or occurrence or impending or threatened event or occurrence, to the other parties and use commercially reasonable efforts to prevent or to promptly remedy such breach; and (f) Cause the other parties to be advised promptly in writing of (i) any event, condition or state of facts known to it, which has had or could have a Material Adverse Effect on it, or materially adversely affect the Purchased Licenses or their use or the transactions contemplated hereby (other than proceedings affecting the PCS or wireless communications services industry generally), or (ii) any claim, action or proceeding which seeks to enjoin the consummation of the transactions contemplated hereby. ARTICLE VI CLOSING CONDITIONS 6.1 Conditions to Obligations of All Parties. The obligation of each of the parties to consummate the transactions contemplated hereby to occur at the Closing shall be conditioned on the following, unless waived by each of the parties: (a) Any applicable waiting period under the HSR Act shall have expired or been terminated. (b) The Consent of the FCC to the Purchased License Transfer shall have been obtained pursuant to a Final Order, free of any conditions materially adverse to the Company or Tritel, other than those applicable to the PCS or wireless communications services industry generally. For the purposes of this paragraph, "Final Order" means an action or decision that has been granted by the FCC as to which (i) no request for a stay or similar request is pending, no stay is in effect, the action or decision has not been vacated, reversed, set aside, annulled or suspended and any deadline for filing such request that may be designated by statute or regulation has passed, (ii) no petition for rehearing or reconsideration or application for review is 11 pending and the time for the filing of any such petition or application has passed, (iii) the FCC does not have the action or decision under reconsideration on its own motion and the time within which it may effect such reconsideration has passed and (iv) no appeal is pending including other administrative or judicial review, or in effect and any deadline for filing any such appeal that may be designated by statute or rule has passed. (c) All Consents by any Governmental Authority (other than the Consents referred to in paragraphs (a) and (b) above) required to permit the consummation of the transactions contemplated hereby, the failure to obtain or make which would be reasonably expected to have a Material Adverse Effect on the Company or Tritel or to materially adversely affect the transactions contemplated hereby or its ability to perform its obligations under this Agreement shall have been obtained or made. (d) No preliminary or permanent injunction or other order, decree or ruling issued by a Governmental Authority, nor any statute, rule, regulation or executive order promulgated or enacted by any Governmental Authority, shall be in effect that would (i) impose material limitations on the ability of any party to consummate the transactions contemplated hereby or prohibit such consummation, or (ii) impair in any material respect the operation of the Company. 6.2 Conditions to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions by each of the other parties, unless waived by the Company: (a) The representations and warranties of Tritel contained herein shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time, except for inaccuracies in respect of the representations and warranties set forth in Section 4.7 and the third sentence of Section 4.10 (disregarding any qualifications as to materiality contained therein) that in the aggregate would not be reasonably expected to have a Material Adverse Effect on Tritel or its ability to perform its obligations under this Agreement or to materially adversely affect the transactions contemplated hereby. (b) Tritel shall have performed in all material respects all agreements contained herein required to be performed by it at or before the Closing. 12 (c) An officer of Tritel shall have delivered to the Company a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to Tritel. (d) Tritel shall have furnished the Company with opinions of counsel, each dated the Closing Date, in substantially the forms of Exhibits B and C. (e) All corporate and other proceedings of Tritel in connection with the Purchased License Transfer and the other transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to the Company, and Tritel shall have delivered to the Company such receipts, documents, instruments and certificates, in form and substance reasonably satisfactory to the Company, which the Company shall have reasonably requested. 6.3 Conditions to the Obligations of Tritel. The obligation of Tritel to consummate the transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions, unless waived by Tritel: (a) The representations and warranties of the Company contained herein shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time, except for inaccuracies in respect of the representations and warranties set forth in Section 5.3 (disregarding any qualifications as to materiality contained therein) that in the aggregate would not be reasonably expected to have a Material Adverse Effect on the Company or its ability to perform its obligations under this Agreement or to materially adversely affect the transactions contemplated hereby. (b) The Company shall have performed in all material respects all agreements contained herein required to be performed by it at or before the Closing. (c) An officer of the Company shall have delivered to Tritel a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to the Company. (d) The Company shall have furnished Tritel with an opinion of counsel, dated the Closing Date, in substantially the form of Exhibit D. 13 (e) All corporate and other proceedings of the Company in connection with the Purchased License Transfer and the other transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to Tritel, and the Company shall have delivered to Tritel such receipts, documents, instruments and certificates, in form and substance reasonably satisfactory to Tritel, which Tritel shall have reasonably requested. ARTICLE VII SURVIVAL AND INDEMNIFICATION 7.1 Survival. The representations and warranties made in this Agreement shall survive the Closing until the second anniversary thereof and shall thereupon expire together with any right to indemnification in respect thereof (except to the extent a written notice asserting a claim for breach of any such representation or warranty and describing such claim in reasonable detail shall have been given prior to such date to the party which made such representation or warranty). The covenants and agreements contained herein to be performed or complied with prior to the Closing shall expire at the Closing. The covenants and agreements contained in this Agreement to be performed or complied with after the Closing shall survive the Closing; provided that the right to indemnification pursuant to this Article VII in respect of a breach of a representation or warranty shall expire on the second anniversary of the Closing (except to the extent written notice asserting a claim thereunder and describing such claim in reasonable detail shall have been given prior to such date to the party from whom such indemnification is sought). After the Closing, the sole and exclusive remedy of the parties for any breach or inaccuracy of any representation or warranty contained in this Agreement, or any other claim (whether or not alleging a breach of this Agreement) that arises out of the facts and circumstances constituting such breach or inaccuracy, shall be the indemnity provided in this Article VII. 7.2 Indemnification by Tritel. Tritel shall indemnify and hold harmless the Company and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.2 Indemnified Party"), against all liabilities and expenses (including amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees) (collectively, "Losses") incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.2 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) (i) any representation or warranty of such indemnifying party contained in this Agreement (except, any of the matters referred to on Schedule 4.7 or 4.10(e)), or (b) any material default by such indemnifying party or any of its Affiliates in the performance of their respective obligations under this Agreement, except to the 14 extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.2 Indemnified Party or its Affiliates. 7.3 Indemnification by the Company. The Company shall indemnify and hold harmless Tritel and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.3 Indemnified Party"), against all Losses incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.3 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of the Company contained in this Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by the Company or any of its Affiliates in the performance of their respective obligations under this Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.3 Indemnified Party or its Affiliates. 7.4 Procedures. (a) The terms of this Section 7.4 shall apply to any claim (a "Claim") for indemnification under the terms of Sections 7.2 or 7.3. The Section 7.2 Indemnified Party or Section 7.3 Indemnified Party Indemnified Party (each, an "Indemnified Party"), as the case may be, shall give prompt written notice of such Claim to the indemnifying party (the "Indemnifying Party") under the applicable Section, which party may assume the defense thereof, provided that any delay or failure to so notify the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is materially prejudiced by reason of such delay or failure. The Indemnified Party shall have the right to approve any counsel selected by the Indemnifying Party and to approve the terms of any proposed settlement, such approval not to be unreasonably delayed or withheld (unless such settlement provides only, as to the Indemnified Party, the payment of money damages actually paid by the Indemnifying Party and a complete release of the Indemnified Party in respect of the claim in question). Notwithstanding any of the foregoing to the contrary, the provisions of this Article VIII shall not be construed so as to provide for the indemnification of any Indemnified Party for any liability to the extent (but only to the extent) that such indemnification would be in violation of applicable law or that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Article VII to the fullest extent permitted by law. (b) In the event that the Indemnifying Party undertakes the defense of any Claim, the Indemnifying Party will keep the Indemnified Party advised as to all material developments in connection with such Claim, including, but not limited to, promptly furnishing the Indemnified Party with copies of all material documents filed or served in connection therewith. 15 (c) In the event that the Indemnifying Party fails to assume the defense of any Claim within ten business days after receiving written notice thereof, the Indemnified Party shall have the right, subject to the Indemnifying Party's right to assume the defense pursuant to the provisions of this Article VII, to undertake the defense, compromise or settlement of such Claim for the account of the Indemnifying Party. Unless and until the Indemnified Party assumes the defense of any Claim, the Indemnifying Party shall advance to the Indemnified Party any of its reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any such action or proceeding. Each Indemnified Party shall agree in writing prior to any such advancement that, in the event he or it receives any such advance, such Indemnified Party shall reimburse the Indemnifying Party for such fees, costs and expenses to the extent that it shall be determined that he or it was not entitled to indemnification under this Article VII. (d) In no event shall an Indemnifying Party be required to pay in connection with any Claim for more than one firm of counsel (and local counsel) for each of the following groups of Indemnified Parties: (i) Tritel, its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; and (ii) the Company and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal represen tatives of any of them. ARTICLE VIII TERMINATION 8.1 Termination. This Agreement may be terminated, and the transactions contemplated hereby abandoned, without further obligation of any party, except as set forth herein, at any time prior to the Closing Date: (a) by mutual written consent of the parties; (b) by any party by written notice to the other parties, if the Closing shall not have occurred on or before the date that is two years after the date hereof, provided that the party electing to exercise such right is not otherwise in breach of its obligations under this Agreement;] or (c) by any party by written notice to the other parties, if the consummation of the transactions contemplated hereby shall be prohibited by a final, non-appealable order, decree or injunction of a court of competent jurisdiction. 8.2 Effect of Termination. (a) In the event of a termination of this Agreement, no party hereto shall have any liability or further obligation to any other party to this Agreement, 16 except as set forth in paragraph (b) below, and except that nothing herein will relieve any party from liability for any breach by such party of this Agreement. (a) In the event of a termination of this Agreement pursuant to Section 8.1, all provisions of this Agreement shall terminate, except Section 5.2 and Articles VII and IX. (b) Whether or not the Closing occurs, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses. ARTICLE IX MISCELLANEOUS PROVISIONS 9.1 Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement of each of the parties. 9.2 Waiver of Compliance; Consents. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirement for a waiver of compliance as set forth in this Section 10.2. 9.3 Notices. All notices or other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, or by registered or certified mail (return receipt requested), postage prepaid, with an acknowledgment of receipt signed by the addressee or an authorized representative thereof, addressed as follows (or to such other address for a party as shall be specified by like notice; provided that notice of a change of address shall be effective only upon receipt thereof): If to Tritel: Tritel, Inc. Attention: E. B. Martin, Jr. 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Fax No.: (601) 914-8282 17 With a copy to: James H. Neeld, IV Tritel, Inc. 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 If to the Company: With a copy to: 9.4 Parties in Interest; Assignment. This Agreement is binding upon and is solely for the benefit of the parties hereto and their respective permitted successors, legal representatives and permitted assigns. 9.5 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the conflicts of law principles thereof. The parties hereto hereby irrevocably and unconditionally consent to submit to the non-exclusive jurisdiction of the courts of the State of New York and of the United States of America located in the County of New York, New York (the "New York Courts") for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby, waive any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. 9.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 9.7 Interpretation. The article and section headings contained in this Agreement are for convenience of reference only, are not part of the agreement of the parties and shall not affect in any way the meaning or interpretation of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the antecedent Person or Person may require. 18 9.8 Entire Agreement. This Agreement, including the exhibits and schedules hereto and the certificates and instruments delivered pursuant to the terms of this Agreement, embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated hereby. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such transactions contemplated hereby. 9.9 Publicity. So long as this Agreement is in effect, the parties agree to consult with each other in issuing any press release or otherwise making any public statement with respect to the transactions contemplated hereby, and no party shall issue any press release or make any such public statement prior to such consultation, except as may be required by Law. No press release or other public statement by the parties hereto shall disclose any of the financial terms of the transactions contemplated hereby without the prior consent of the other parties, except as may be required by Law. A breach of the provisions of this Section 9.9 by a party shall not give rise to any right to terminate this Agreement. 9.10 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any New York Courts. 9.11 Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. 19 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. ------------------------------------ By: --------------------------------- Name: Title: TRITEL, INC. By: --------------------------------- Name: Title: 20 EX-10.36 31 LICENSE PURCHASE AGREEMENT Exhibit 10.36 - -------------------------------------------------------------------------------- LICENSE PURCHASE AGREEMENT between DIGITAL PCS, LLC and TRITEL, INC. Dated as of May 20, 1999 - -------------------------------------------------------------------------------- ARTICLE I DEFINITIONS ARTICLE II PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION; CERTAIN RESTRICTIONS ON TRANSFER 2.1 Purchase and Sale of Mercury Licenses and Other Mercury Assets ........5 2.2 Consideration for Mercury Licenses.....................................5 2.3 Consideration for Other Mercury Assets.................................5 2.4 Payment of Certain Expenses............................................6 2.5 Restrictive Legends....................................................6 ARTICLE III CLOSING 3.1 Time and Place of Closing..............................................6 3.2 Closing Actions and Deliveries.........................................6 3.3 Payment of Transfer Taxes..............................................7 ARTICLE IV REPRESENTATIONS AND WARRANTIES 4.1 Organization and Standing..............................................7 4.2 Power and Authority....................................................8 4.3 Due Authorization......................................................8 4.4 Enforceability.........................................................8 4.5 No Breach..............................................................8 4.6 Consents; No Conflicts.................................................8 4.7 Litigation.............................................................9 4.8 FCC Compliance.........................................................9 4.9 Brokers................................................................9 4.10 ................................................................9 ARTICLE V COVENANTS 5.1 Consummation of Transactions..........................................11 5.2 Confidentiality.......................................................12 5.3 Certain Covenants.....................................................13 5.4 Certain Mercury Transactions..........................................13 ARTICLE VI CLOSING CONDITIONS 6.1 Conditions to Obligations of All Parties..............................14 6.2 Conditions to Obligations of the Company..............................15 6.3 Conditions to the Obligations of Mercury..............................16 ARTICLE VII SURVIVAL AND INDEMNIFICATION 7.1 Survival..............................................................17 7.2 Indemnification by Mercury and Mercury Investor Indemnitors...........17 7.3 Indemnification by the Managers.......................................18 7.4 Indemnification by the Company........................................18 7.5 Procedures............................................................19 7.6 Escrow and Reconciliation.............................................20 ARTICLE VIII -ii- TERMINATION 8.1 Termination...........................................................22 8.2 Effect of Termination.................................................22 ARTICLE IX MISCELLANEOUS PROVISIONS 9.1 Amendment and Modification............................................23 9.2 Waiver of Compliance; Consents........................................23 9.3 Notices...............................................................23 9.4 Parties in Interest; Assignment.......................................24 9.5 Applicable Law........................................................24 9.6 Counterparts..........................................................24 9.7 Interpretation........................................................24 9.8 Entire Agreement......................................................24 9.9 Publicity.............................................................25 9.10 Specific Performance..................................................25 9.11 Remedies Cumulative...................................................25 SCHEDULES - --------- Schedule I -- Mercury Licenses Schedule II -- Mercury Investors Schedule 1.1 -- Permitted Expenditures Schedule 2.1 -- Mercury Assets Schedule 2.3 -- Other Mercury Debt Schedule 4.6 -- Mercury Consents; Company Consents Schedule 4.7 -- Mercury Litigation Schedule 4.10 (a) -- Mercury FCC Proceedings Schedule 4.10 (c) -- Cash Flow Statements Schedule 4.10 (e) -- Litigation Affecting Other Mercury Assets EXHIBITS - -------- -iii- Exhibit A -- Form of Opinion of Counsel to Mercury Exhibit B -- Form of Opinion of FCC Counsel to Mercury Exhibit C -- Form of Opinion of Counsel to Company Exhibit D -- Form of Assignment -iv- LICENSE PURCHASE AGREEMENT LICENSE PURCHASE AGREEMENT, dated as of May 20, 1999, between DIGITAL PCS, LLC (f/k/a Mercury PCS II, LLC), a Mississippi limited liability company ("Mercury"), William M. Mounger, II, E.B. Martin, Jr. and Jerry M. Sullivan, Jr. (individually a "Manager" and collectively the "Managers"), and TRITEL, INC., a Delaware corporation (the "Company"). WHEREAS, Mercury has been granted the PCS licenses described on Schedule I (the "Mercury Licenses"); and WHEREAS, Mercury and the Company have entered into an Agreement dated as of January 7, 1999 (the "Option Agreement"), pursuant to which Mercury has granted to the Company an Option (as such term is defined in the Option Agreement) to purchase the Mercury Licenses; and WHEREAS, pursuant to the Option Agreement, the Company has exercised its Option to purchase the Mercury Licenses on the terms and subject to the conditions herein set forth; NOW, THEREFORE, in consideration of the promises and the mutual representations, warranties, covenants, conditions and agreements hereinafter set forth, the parties agree as follows: ARTICLE I DEFINITIONS As used herein, the following terms have the following meanings (unless indicated otherwise, all Section and Article references are to Sections and Articles in this Agreement, and all Schedule and Exhibit references are to Schedules and Exhibits to this Agreement): "Affiliate" means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with that Person. For purposes of this definition, "control" (including the terms "controlling" and "controlled") means the power to direct or cause the direction of the management and policies of a Person, directly or indirectly, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise. "Claim" has the meaning set forth in Section 7.5. "Closing" has the meaning set forth in Section 3.1. -1- "Closing Date" has the meaning set forth in Section 3.1. "Common Stock" has the meaning set forth in the Securities Purchase Agreement. "Company" has the meaning set forth in the preamble. "Confidential Information" means any and all information regarding the business, finances, operations, products, services and customers of the Person specified and its Affiliates, in written or oral form or in any other medium. "Consents" means all consents and approvals of Governmental Authorities or other third parties necessary to authorize, approve or permit the parties hereto to consummate the transactions contemplated hereby and for the Company to operate its business after the Closing Date as currently contemplated. "Escrowed Shares" has the meaning set forth in Section 7.6. "FCC" means the Federal Communications Commission or similar regulatory authority established in replacement thereof. "FCC Debt" means the indebtedness of Mercury to the United States Department of the Treasury, in the aggregate principal amount of $12,189,890.40, incurred in connection with its acquisition of Mercury Licenses. "FCC Law" means the Communications Act of 1934, as amended, including as amended by the Telecommunications Act of 1996, and the rules, regulations and policies promulgated thereunder. "Final Order" has the meaning set forth in Section 6.1(b). "Governmental Authority" means a Federal, state or local court, legislature, governmental agency (including, without limitation, the United States Department of Justice), commission or regulatory or administrative authority or instrumentality. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. "Indemnified Party" has the meaning set forth in Section 7.5. "Indemnifying Party" has the meaning set forth in Section 7.5. "Law" means applicable common law and any statute, ordinance, code or other law, rule, permit, permit condition, regulation, order, decree, technical or other standard, -2- requirement or procedure enacted, adopted, promulgated, applied or followed by any Governmental Authority. "License" means a license, permit, certificate of authority, waiver, approval, certificate of public convenience and necessity, registration or other authorization, consent or clearance to construct or operate a facility, including any emissions, discharges or releases therefrom, or to transact an activity or business, to construct a tower or to use an asset or process, in each case issued or granted by a Governmental Authority. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest, right of first refusal or right of others therein, or encumbrance of any nature whatsoever in respect of such asset. "Losses" means losses, damages, costs, expenses or liabilities, including any amounts paid in satisfaction of judgments, in compromise, as fines and penalties, and as counsel fees incurred by a Person in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any such Person may be involved or with which such Person may be threatened. "Managers" has the meaning set forth in the preamble. "Material Adverse Effect" means a material adverse effect on the business, financial condition, assets, liabilities or results of operations or prospects of the Person specified. "Mercury" has the meaning set forth in the preamble. "Mercury Investors" means the Persons that beneficially own, directly or indirectly, equity interests in Mercury on the date hereof and that are set forth on Schedule II. "Mercury License Transfer" has the meaning set forth in Section 3.2(a). "Mercury Licenses" has the meaning set forth in the first recital. "New York Courts" has the meaning set forth in Section 9.5. "Old Mercury Stockholders" has the meaning set forth in the Securities Purchase Agreement. "Option Agreement" has the meaning set forth in the second recital. "Other Mercury Assets" has the meaning set forth in Section 2.1. "Other Mercury Debt" has the meaning set forth in Section 2.3. -3- "Percentage Share" means a fraction the numerator of which is the number of shares of Series C Preferred Stock distributed to any Person pursuant to Section 5.4 hereunder and the denominator of which is the total number of shares of Series C Preferred Stock issued hereunder. "Permitted Expenditures" means expenditures relating to the Mercury Licenses in an amount to be agreed by the Company, in its sole discretion. "Person" means an individual, corporation, partnership, limited liability company, association, joint stock company, Governmental Authority, business trust, unincorporated organization, or other legal entity. "Purchase Price" has the meaning set forth in Section 2.2. "Reconciliation Date" has the meaning set forth in the Securities Purchase Agreement. "Representatives" has the meaning set forth in Section 5.2(a). "Section 7.2 Indemnified Party" has the meaning set forth in Section 7.2. "Section 7.2 Indemnifying Party" has the meaning set forth in Section 7.2. "Section 7.2 Losses" has the meaning set forth in Section 7.2. "Section 7.3 Indemnified Party" has the meaning set forth in Section 7.3. "Section 7.3 Indemnifying Party" has the meaning set forth in Section 7.3. "Section 7.4 Indemnified Party" has the meaning set forth in Section 7.4. "Section 7.4 Indemnifying Party" has the meaning set forth in Section 7.4. "Securities Act" means the Securities Act of 1933, as amended. "Securities Purchase Agreement" means the Securities Purchase Agreement, dated as of May 20, 1998, by and among the Company, AT&T Wireless PCS Inc., TWR Cellular Inc., Mercury, Mercury PCS LLC, the Cash Equity Investors identified therein, and the Managers identified therein, as the same may be amended, modified or supplemented in accordance with the terms thereof. "Series C Preferred Stock" has the meaning set forth in Section 2.2. -4- "Solvent" means, when used with respect to any Person, that at the time of determination: (a) the fair market value of its assets is in excess of the total amount of its liabilities (including, without limitation, contingent liabilities), (b) the present fair saleable value of its assets is greater than its probable liability for its existing debts as such debts become absolute and mature, (c) it is then able and expects to be able to pay its indebtedness (including without limitation, contingent indebtedness and other commitments) as they mature, and (d) it has capital sufficient to carry on its business as conducted and as proposed to be conducted. "Subsidiary" shall mean, with respect to any Person, a corporation or other entity of which 50% or more of the voting power or the voting equity securities or equity interest is owned, directly or indirectly, by such Person. ARTICLE II PURCHASE AND SALE OF LICENSES; PAYMENT OF CONSIDERATION; CERTAIN RESTRICTIONS ON TRANSFER 2.1 Purchase and Sale of Mercury Licenses and Other Mercury Assets. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, Mercury shall sell, transfer, assign, convey and deliver to the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company), free and clear of all Liens (other than Liens of the United States Department of the Treasury securing FCC Debt), and the Company agrees to purchase, acquire and accept from Mercury, the Mercury Licenses and the assets described on Schedule 2.1 (the "Other Mercury Assets"). 2.2 Consideration for Mercury Licenses. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, at the Closing, the Company agrees (I) to pay to Mercury in consideration for the Mercury Licenses, that number of shares of Series C Preferred Stock, par value $.01 per share (the "Series C Preferred Stock") as shall be equal to (x) the aggregate amount paid by Mercury to the FCC in respect of the Mercury Licenses (including any interest paid by Mercury on FCC Debt through the Closing Date but excluding the principal amount of, and accrued interest on, the FCC Debt outstanding on the Closing Date), divided by (y) One Thousand ($1,000) Dollars (the "Purchase Price"), and (II) to assume the FCC Debt. 2.3 Consideration for Other Mercury Assets. Upon the terms and subject to the conditions hereof and in reliance upon the representations, warranties and agreements herein contained, on and as of the Closing Date, the Company shall pay to Mercury, in consideration for the Other Mercury Assets, an amount equal to the principal amount of indebtedness incurred by Mercury to fund the cost of Permitted Expenditures together with all interest paid or accrued thereon (collectively, the "Other Mercury Debt"). The outstanding principal amount of each item of Other Mercury Debt, as of the date hereof is set forth on Schedule 2.3. -5- 2.4 Payment of Certain Expenses. At the Closing (if any) the Company shall reimburse Mercury, against delivery of customary invoices in reasonable detail, for its legal fees and related expenses incurred in connection with the preparation and filing of applications on Form 490 with the FCC necessary to effect the Mercury License Transfer, provided, that the Company's reimbursement obligation shall be limited to fees and expenses incurred through the date of filing of the last of such applications. 2.5 Restrictive Legends. Each certificate representing shares of the Series C Preferred Stock (including the shares originally delivered hereunder or delivered upon conversion of the Series C Preferred Stock, or delivered in substitution or exchange for any of the foregoing) will bear a legend reading substantially as follows until such Securities have been sold pursuant to an effective registration statement under the Securities Act, Rule 144 under the Securities Act, or an opinion of counsel reasonably satisfactory in form and substance to the Company and otherwise in full compliance with any other applicable restrictions on transfer, including those contained in this Agreement and the Stockholders Agreement (as defined in the Securities Purchase Agreement): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR UNDER ANY STATE SECURITIES OR 'BLUE SKY' LAWS. SAID SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNLESS AND UNTIL REGISTERED UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER AND ALL APPLICABLE STATE SECURITIES OR 'BLUE SKY' LAWS OR EXEMPTED THEREFROM UNDER THE ACT AND ALL APPLICABLE STATE SECURITIES OR 'BLUE SKY' LAWS." ARTICLE III CLOSING 3.1 Time and Place of Closing. Upon the terms and subject to the conditions hereof, the closing of the transactions contemplated hereby (the "Closing") shall take place at the offices of Rubin Baum Levin Constant & Friedman, 30 Rockefeller Plaza, New York, New York 10112 at 10:00 a.m. on the twelfth business day following the date of receipt of the last Consent required by subsections (a) through (c) of Section 6.1, or at such other place and/or time and/or on such other date as the parties may agree or as may be necessary to permit the fulfillment or waiver of the conditions set forth in Article VI (the "Closing Date"). 3.2 Closing Actions and Deliveries. Upon the terms and subject to the satisfaction or waiver by the appropriate party, if applicable, of the conditions set forth in Article -6- VI, to effect the purchase and sale of the Mercury Licenses and the Other Mercury Assets, the parties shall on the Closing Date take the following actions: (a) Assignment of Licenses and Assets. Mercury shall, and each Manager shall cause Mercury to, execute and deliver to the Company (or the applicable Subsidiary), (i) one or more instruments of assignment, substantially in the form of Exhibit D, sufficient to assign the Mercury Licenses to the Company (or one or more wholly owned Subsidiaries of the Company designated by the Company) (such assignments being herein collectively referred to as the "Mercury License Transfer"), and (ii) an Assignment and Bill of Sale, in form reasonably acceptable to the Company, and such other good and sufficient instruments of conveyance, transfer and assignment as shall be necessary or appropriate to transfer to and vest in the Company (or the applicable Subsidiary) the Other Mercury Assets with warranties of title consistent with this Agreement. (b) Payment of Purchase Price. The Company shall pay the Purchase Price of the Mercury Licenses to Mercury in accordance with Section 2.2. (c) Assumption and Reimbursement of Indebtedness. The Company shall execute and deliver to Mercury an instrument of assumption, in form and substance reasonably satisfactory to Mercury, in respect of the FCC Debt and shall pay, or reimburse Mercury in respect of, the Other Mercury Debt. (d) Other Deliveries. The parties shall execute and deliver or cause to be executed and delivered all other documents, instruments, opinions and certificates contemplated by this Agreement to be delivered at the Closing or necessary and appropriate in order to consummate the transactions contemplated hereby on the Closing Date. 3.3 Payment of Transfer Taxes. The Company shall pay or cause to be paid at the Closing or, if due thereafter, promptly when due, all gross receipts taxes, gains taxes (including, without limitation, real property gains tax or other similar taxes), transfer taxes, sales taxes, stamp taxes, and any other taxes, but excluding any Federal, State or local income taxes payable in connection with the transfer of the Mercury Licenses. ARTICLE IV REPRESENTATIONS AND WARRANTIES -7- Mercury (as to itself), each Manager (severally as to itself and jointly and severally as to Mercury), and the Company (as to itself and each of its Subsidiaries), represents and warrants to each of the other parties that: 4.1 Organization and Standing. It is a corporation, limited liability company, general partnership or limited partnership, as applicable, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has the requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. It is duly qualified to do business in each jurisdiction where the character of its properties owned or held under lease or the nature of its activities makes such qualification necessary other than any such jurisdiction in which the failure to be so qualified would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby or its ability to perform its obligations under this Agreement. 4.2 Power and Authority. It has the requisite power and authority (or, in the case of the Managers, capacity) to execute, deliver and perform this Agreement and each other instrument, document, certificate and agreement required or contemplated to be executed, delivered and performed by it hereunder and thereunder to which it is or will be a party. 4.3 Due Authorization. The execution and delivery of this Agreement by it and the consummation of the transactions contemplated hereby have been duly and validly authorized by its Board of Directors (or equivalent body, as applicable) and no other proceedings on its part which have not been taken (including, without limitation, approval of its stockholders, partners or members) are necessary to authorize this Agreement or to consummate the transactions contemplated hereby. 4.4 Enforceability. This Agreement has been duly executed and delivered by it and constitutes its valid and binding obligation enforceable against it in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting or relating to enforcement of creditors' rights generally and may be subject to general principles of equity. 4.5 No Breach. After giving effect to the transactions contemplated hereby, it is not in breach of any obligation under this Agreement. 4.6 Consents; No Conflicts. Neither the execution, delivery and performance by it of this Agreement nor the consummation of the transactions contemplated hereby will (a) conflict with, or result in a breach or violation of, any provision of its organizational documents; (b) subject to obtaining the Consents set forth on Schedule 4.6, constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under (i) any Law or License or (ii) any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of its assets; or (c) require any Consent (other than those set forth on Schedule 4.6) or the approval of its board of -8- directors, members, general partner, stockholders or similar constituent bodies, as applicable (other than approvals that have been obtained), except in each case, where such breach, violation, default, Lien, right, or the failure to obtain or give such Consent would not have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby. To its knowledge, except as set forth on Schedule 4.6, there is no fact relating to it or its Affiliates that would be reasonably expected to prevent it from consummating the transactions contemplated hereby or disqualify the Company from obtaining the Consents (including without limitation, FCC Consent) required in order to consummate the Mercury License Transfer. 4.7 Litigation. Except as set forth on Schedule 4.7, there is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the transactions contemplated hereby or to fulfill its obligations under this Agreement, which seeks to prevent or challenge the transactions contemplated hereby, or which seeks to have an adverse effect on the Company or its wholly owned Subsidiaries. 4.8 FCC Compliance. It complies with all eligibility rules issued by the FCC to hold broadband PCS licenses, including without limitation, FCC rules on foreign ownership and the CMRS spectrum cap. 4.9 Brokers. The Company has not employed any broker, finder or investment banker or incurred any liability for any brokerage fees, commissions or finder's fees in connection with the transactions contemplated hereby. 4.10 Mercury and each Manager, jointly and severally, represent and warrant that: (a) Mercury Licenses. Mercury is the authorized legal holder, free and clear of any Liens (other than Liens securing the FCC Debt, Liens securing indebtedness to the Company and Liens securing indebtedness of Mercury to Airwave Communications, LLC that will be released on the Closing Date), of the Mercury Licenses set forth on Schedule I, true and correct copies of which are attached thereto. The Mercury Licenses are, and on the Closing Date will be, valid and in full force and effect. Except as set forth on Schedule 4.10(a) and for proceedings affecting the PCS or wireless communications services industry generally, including investigations by governmental agencies of bidding practices of bidders in the FCC auctions of PCS spectrum, there is not pending, nor to its knowledge, threatened against Mercury or the Mercury Licenses, any application, action (including court action), petition, objection or other pleading, or any proceeding with the FCC which questions or contests the validity of, or seeks the revocation, non-renewal or suspension of, any of the Mercury Licenses, which seeks the imposition of any modification or amendment with respect thereto, or which adversely affects the ability of the Company to employ the Mercury Licenses in its business after the Closing Date or seeks the payment of a fine, sanction, penalty, damages or contribution in connection with the -9- use of any Mercury License. The Mercury Licenses are not subject to any conditions other than those appearing on the face of the Licenses themselves and those imposed by FCC Law. (b) Mercury Debt; Solvency. The FCC Debt and each item of Other Mercury Debt being paid or assumed by the Company is, and on the Closing Date will be, a bona fide obligation of Mercury and the amount set forth opposite each item on Schedule 2.3 is the outstanding amount of principal thereon as of ________, 1999. Mercury is Solvent after giving effect to the consummation of the transactions contemplated hereby, including the Mercury License Transfer. (c) Proceeds of Debt. The cash flow statements of Mercury set forth on Schedule 4.10(c) accurately reflect the sources and uses of cash relating to the Mercury Licenses and Other Mercury Assets. The proceeds of all Other Mercury Debt have been applied to Permitted Expenditures. The Other Mercury Assets constitute all assets or rights purchased with the proceeds of Permitted Expenditures. (d) Title and Transferability. Mercury has, and upon the delivery of the transfer documents pursuant to Section 3.2(a)(ii) the Company (or the applicable Subsidiary) will have, good and marketable title to, each of the Other Mercury Assets free and clear of any Liens (other than Liens securing indebtedness to the Company and Liens securing indebtedness of Mercury to Airwave Communications, LLC that will be released on the Closing Date). Neither the execution, delivery and performance by Mercury of this Agreement nor the purchase of the Other Mercury Assets or the assumption by the Company (or the applicable Subsidiary) of the Other Mercury Debt will (a) constitute, with or without the giving of notice or passage of time or both, a breach, violation or default, create a Lien, or give rise to any right of termination, modification, cancellation, prepayment or acceleration, under any note, bond, mortgage, indenture, lease, agreement or other instrument, in each case which is applicable to or binding upon it or any of the Other Mercury Assets or Other Mercury Debt; or (b) require any Consent (other than those set forth on Schedule 4.6) or the approval of its board of directors, general partner, members, stockholders or similar constituent bodies, as the case may be (other than approvals that have been obtained). (e) Litigation. Except as set forth on Schedule 4.10(e), there is no action (including court action), proceeding or investigation pending or, to its knowledge, threatened against it or any of its properties or assets that would be reasonably expected to have an adverse effect on its ability to consummate the transfer of the Other Mercury Assets, which seeks to prevent or challenge such transfer, or which seeks to have an adverse effect on the Other Mercury Assets. (f) No Distribution. Mercury is acquiring the shares of Series C Preferred Stock to be acquired by it hereunder for the purpose of investment and not with a view to or for sale in connection with any distribution thereof (other than in compliance with the Securities Act and all applicable state securities laws). -10- (g) Investor Acknowledgments. (a) Mercury is an "accredited investor" as defined in Regulation D of the Securities Act. Its representatives have been provided an opportunity to ask questions of, and have received answers thereto from, the Company and its representatives regarding the terms and conditions of its acquisition of shares of Series C Preferred Stock, and the Company and its proposed business generally, and have obtained all additional information requested by it to verify the accuracy of all information furnished to it in connection with such purchase. (h) Mercury has such knowledge and experience in financial and business affairs that it is capable of evaluating the merits and risks of acquiring the shares of Series C Preferred Stock it is acquiring hereunder. (i) Mercury is not relying on and acknowledges that no representation is being made by the Company or any of its officers, employees, Affiliates, agents or representatives, except for representations and warranties expressly set forth in this Agreement and, in particular, it is not relying on, and acknowledges that no representation is being made in respect of, (x) any projections, estimates or budgets delivered to or made available to them of future revenues, expenses or expenditures, or future results of operations and (y) any other information or documents delivered or made available to it or its representatives, except for representations and warranties expressly set forth in this Agreement. (j) In deciding to invest in the Company, Mercury has relied exclusively on the representations and warranties expressly set forth in this Agreement, investigations made by itself and its representatives and its and such representatives' knowledge of the industry in which the Company proposes to operate. Based solely on such representations and warranties and such investigations and knowledge, it has determined that shares of Series C Preferred Stock it is acquiring are a suitable investment for it. ARTICLE V COVENANTS 5.1 Consummation of Transactions. Each party shall use all commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable and consistent with applicable law to carry out all of their respective obligations under this Agreement to consummate the transactions contemplated hereby, which efforts shall include, without limitation, the following: (a) The parties shall use all commercially reasonable efforts to cause the Closing to occur and the transactions contemplated hereby to be consummated in accordance with the terms hereof, and, without limiting the generality of the foregoing, to obtain all necessary Consents including, without limitation, the approval of this Agreement and the transactions contemplated hereby by all Governmental Authorities and agencies, including the -11- FCC, and make all filings with and to give all notices to third parties which may be necessary or reasonably required in order for the parties to consummate the transactions contemplated hereby; provided that Mercury shall not make any filings with the FCC regarding the Mercury Licenses without the prior review and approval of the Company. (b) Each party shall furnish to the other parties all information concerning such party and its Affiliates reasonably required for inclusion in any application or filing to be made by Mercury or the Company or any other party in connection with the transactions contemplated hereby or otherwise to determine compliance with applicable FCC Rules. 5.2 Confidentiality. (a) Each party shall, and shall cause each of its Affiliates, and its and their respective shareholders, members, managers, directors, officers, employees and agents (collectively, "Representatives") to, keep secret and retain in strictest confidence any and all Confidential Information relating to any other party that it receives in connection with the negotiation or performance of this Agreement, and shall not disclose such Confidential Information, and shall cause its Representatives not to disclose such Confidential Information, to anyone except the receiving party's Affiliates and Representatives and any other Person that agrees in writing to keep in confidence all Confidential Information in accordance with the terms of this Section 5.2. Until the Closing, each party agrees to use Confidential Information received from another party only (i) to evaluate its interest in pursuing the transactions contemplated hereby and (ii) to pursue such transactions contemplated hereby, but not for any other purpose. All Confidential Information furnished pursuant to this Agreement shall be returned promptly to the party to whom it belongs upon request by such party. (b) The obligations set forth in Section 5.2(a) shall be inoperative with respect to Confidential Information that (i) is or becomes generally available to the public other than as a result of disclosure by the receiving party or its Representatives, (ii) was available to the receiving party on a non-confidential basis prior to its disclosure to the receiving party, or (iii) becomes available to the receiving party on a non-confidential basis from a source other than the providing party or its agents, provided that such source is not known by the receiving party to be bound by a confidentiality agreement with the providing party or the providing party's agents. (c) To the fullest extent permitted by law, if a party or any of its Affiliates or Representatives breaches, or threatens to commit a breach of, this Section 5.2, the party whose Confidential Information shall be disclosed, or threatened to be disclosed, shall have the right and remedy to have this Section 5.2 specifically enforced by any court having jurisdiction, it being acknowledged and agreed that money damages will not provide an adequate remedy to such party. Nothing in this Section 5.2 shall be construed to limit the right of any party to collect money damages in the event of breach of this Section 5.2. -12- (d) Anything else in this Agreement notwithstanding, each party shall have the right to disclose any information, including Confidential Information of the other party or such other party's Affiliates, in any filing with any regulatory agency, court or other authority or any disclosure to a trustee of public debt of a party to the extent that the disclosing party determines in good faith that it is required by Law, regulation or the terms of such debt to do so, provided that any such disclosure shall be as limited in scope as possible and shall be made only after giving the other party as much notice as practicable of such required disclosure and an opportunity to contest such disclosure if possible. 5.3 Certain Covenants. From and after the execution and delivery of this Agreement to and including the Closing Date, Mercury shall and each of the Managers shall cause Mercury to: (a) Comply in all material respects with all applicable Laws, including all such Laws relating to the Mercury Licenses or Other Mercury Assets or their use; (b) Use commercially reasonable efforts to maintain the Mercury Licenses in full force and effect; (c) Not (i) sell, transfer, assign or dispose of, or offer to, or enter into any agreement, arrangement or understanding to, sell, transfer, assign or dispose of any of the Mercury Licenses or Other Mercury Assets or any interest therein, or negotiate therefor, or (ii) create, incur or suffer to exist any Lien of any nature whatsoever relating to any of the Mercury Licenses or Other Mercury Assets or any interest therein (other than Liens securing the FCC Debt to be assumed by the Company pursuant to Section 2.3). Without limiting the foregoing, Mercury shall not incur any material obligation or liability, absolute or contingent, relating to or affecting the Mercury Licenses or Other Mercury Assets or their use; (d) Give written notice to the Company promptly upon the commencement of, or upon obtaining knowledge of any facts that would give rise to a threat of, any claim, action or proceeding commenced against or relating to (i) it, its properties or assets, including the Mercury Licenses or Other Mercury Assets or their use, and which could have a Material Adverse Effect on it or materially adversely affect the transactions contemplated hereby, or (ii) the Mercury Licenses or Other Mercury Assets or their use; (e) Promptly after obtaining knowledge of the occurrence of, or the impending or threatened occurrence of, any event which could cause or constitute a material breach of any of its warranties, representations, covenants or agreements contained in this Agreement, give notice in writing of such event, or occurrence or impending or threatened event or occurrence, to the other parties and use commercially reasonable efforts to prevent or to promptly remedy such breach; and (f) Cause the other parties to be advised promptly in writing of (i) any event, condition or state of facts known to it, which has had or could have a Material Adverse -13- Effect on it, or materially adversely affect the Mercury Licenses or Other Mercury Assets or their use or the transactions contemplated hereby (other than proceedings affecting the PCS or wireless communications services industry generally), or (ii) any claim, action or proceeding which seeks to enjoin the con summation of the transactions contemplated hereby. 5.4 Certain Mercury Transactions. Prior to the Reconciliation Date, (as defined in the Securities Purchase Agreement) Mercury shall not distribute or otherwise Transfer (as defined in the Stockholders Agreement) any"Escrowed Shares" issued to it hereunder (or shares of Common Stock issued upon conversion of the Series C Preferred Stock) except: (I) a Transfer from Mercury to Airwave Communications, LLC, (II) in accordance with Section 7.6(f), or (III) to a Mercury Investor that (x) elects by written notice to Mercury, as the case may be, copies of which notice shall be furnished to the other parties, to receive its Escrowed Shares and/or other shares and (y) executes and delivers to the other parties thereto a counterpart to each of the Stockholders Agreement and the agreement among the Cash Equity Investors (as defined in the Securities Purchase Agreement) attached as Schedule X to the Stockholders Agreement. By delivering such notice and accepting any such Escrowed Shares or other shares, each Mercury Investor: (i) shall become a "Mercury Investor Indemnitor" hereunder, (ii) agrees and acknowledges that such Escrowed Shares continue to be subject to the provisions of this Agreement, (iii) makes (as to itself as of the date of such distribution or transfer) the representations set forth in Section 5.1 of the Securities Purchase Agreement, and (iv) agrees and acknowledges that it shall succeed to the rights of Mercury, as applicable, hereunder, in respect of the shares distributed to it. ARTICLE VI CLOSING CONDITIONS 6.1 Conditions to Obligations of All Parties. The obligation of each of the parties to consummate the transactions contemplated hereby to occur at the Closing shall be conditioned on the following, unless waived by each of the parties: (a) Any applicable waiting period under the HSR Act shall have expired or been terminated. (b) The Consent of the FCC to the Mercury License Transfer shall have been obtained pursuant to a Final Order, free of any conditions materially adverse to the Company or Mercury, other than those applicable to the PCS or wireless communications services industry generally. For the purposes of this paragraph, "Final Order" means an action or decision that has been granted by the FCC as to which (i) no request for a stay or similar request is pending, no stay is in effect, the action or decision has not been vacated, reversed, set aside, annulled or suspended and any deadline for filing such request that may be designated by statute or regulation has passed, (ii) no petition for rehearing or reconsideration or application for review is pending and the time for the filing of any such petition or application has passed, (iii) the FCC -14- does not have the action or decision under reconsideration on its own motion and the time within which it may effect such reconsideration has passed and (iv) no appeal is pending including other administrative or judicial review, or in effect and any deadline for filing any such appeal that may be designated by statute or rule has passed; provided, however, that the Consent of the FCC to the transactions contemplated hereby shall be deemed to be a Final Order notwithstanding the pendency of any of the proceedings set forth in Schedule 4.7 or 4.10(a), or any appeals therefrom, so long as such proceedings or appeals would not be reasonably expected, individually or in the aggregate, to result in the revocation, non-renewal or suspension of, or an adverse affect on the ability of the Company to employ, the Mercury Licenses. (c) All Consents by any Governmental Authority (other than the Consents referred to in paragraphs (a) and (b) above) required to permit the consummation of the transactions contemplated hereby, the failure to obtain or make which would be reasonably expected to have a Material Adverse Effect on the Company or Mercury or to materially adversely affect the transactions contemplated hereby or its ability to perform its obligations under this Agreement shall have been obtained or made. (d) No preliminary or permanent injunction or other order, decree or ruling issued by a Governmental Authority, nor any statute, rule, regulation or executive order promulgated or enacted by any Governmental Authority, shall be in effect that would (i) impose material limitations on the ability of any party to consummate the transactions contemplated hereby or prohibit such consummation, or (ii) impair in any material respect the operation of the Company. 6.2 Conditions to Obligations of the Company. The obligation of the Company to consummate the transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions by each of the other parties, unless waived by the Company: (a) The representations and warranties of Mercury contained herein shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time, except for inaccuracies in respect of the representations and warranties set forth in Section 4.7 and the third sentence of Section 4.10(a) (disregarding any qualifications as to materiality contained therein) that in the aggregate would not be reasonably expected to have a Material Adverse Effect on Mercury or its ability to perform its obligations under this Agreement or to materially adversely affect the transactions contemplated hereby. (b) Mercury shall have performed in all material respects all agreements contained herein required to be performed by it at or before the Closing. -15- (c) Each Manager and an officer of Mercury shall have delivered to the Company a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to Mercury. (d) Mercury shall have furnished the Company with opinions of counsel, each dated the Closing Date, in substantially the forms of Exhibits A and B. (e) All member and other proceedings of Mercury in connection with the Mercury License Transfer and the other transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to the Company, and Mercury shall have delivered to the Company such receipts, documents, instruments and certificates, in form and substance reasonably satisfactory to the Company, which the Company shall have reasonably requested. 6.3 Conditions to the Obligations of Mercury. The obligation of Mercury to consummate the transactions contemplated to occur at the Closing shall be further conditioned upon the satisfaction or fulfillment, at or prior to the Closing, of the following conditions, unless waived by Mercury: (a) The representations and warranties of the Company contained herein shall be true and correct in all material respects (except for representations and warranties that are qualified as to materiality, which shall be true and correct), in each case when made and at and as of the Closing (except for representations and warranties made as of a specified date, which shall be true and correct as of such date) with the same force and effect as though made at and as of such time, except for inaccuracies in respect of the representations and warranties set forth in Section 4.7 (disregarding any qualifications as to materiality contained therein) that in the aggregate would not be reasonably expected to have a Material Adverse Effect on the Company or its ability to perform its obligations under this Agreement or to materially adversely affect the transactions contemplated hereby. (b) The Company shall have performed in all material respects all agreements contained herein required to be performed by it at or before the Closing. (c) An officer of the Company shall have delivered to Mercury a certificate, dated the Closing Date, certifying as to the fulfillment of the conditions set forth in paragraphs (a) and (b) above as to the Company. (d) The Company shall have furnished Mercury with an opinion of counsel, dated the Closing Date, in substantially the form of Exhibit C. (e) All corporate and other proceedings of the Company in connection with the Mercury License Transfer and the other transactions contemplated hereby, and all documents and instruments incident thereto, shall be reasonably satisfactory in form and substance to Mercury, and the Company shall have delivered to Mercury such receipts, -16- documents, instruments and certificates, in form and substance reasonably satisfactory to Mercury, which Mercury shall have reasonably requested. ARTICLE VII SURVIVAL AND INDEMNIFICATION 7.1 Survival. The representations and warranties made in this Agreement shall survive the Closing until the second anniversary thereof and shall thereupon expire together with any right to indemnification in respect thereof (except to the extent a written notice asserting a claim for breach of any such representation or warranty and describing such claim in reasonable detail shall have been given prior to such date to the party which made such representation or warranty). The covenants and agreements contained herein to be performed or complied with prior to the Closing shall expire at the Closing. The covenants and agreements contained in this Agreement to be performed or complied with after the Closing shall survive the Closing; provided that the right to indemnification pursuant to this Article VII in respect of a breach of a representation or warranty shall expire on the second anniversary of the Closing (except to the extent written notice asserting a claim thereunder and describing such claim in reasonable detail shall have been given prior to such date to the party from whom such indemnification is sought). After the Closing, the sole and exclusive remedy of the parties for any breach or inaccuracy of any representation or warranty contained in this Agreement, or any other claim (whether or not alleging a breach of this Agreement) that arises out of the facts and circumstances constituting such breach or inaccuracy, shall be the indemnity provided in this Article VII. 7.2 Indemnification by Mercury and Mercury Investor Indemnitors. Mercury, and the Managers, jointly and severally, and each Mercury Investor Indemnitor, solely to the extent of its Percentage Share of any Section 7.2 Losses, shall indemnify and hold harmless the Company and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.2 Indemnified Party"), against any and all losses, damages, costs, expenses or liabilities, including any amounts paid in satisfaction of judgments, in compromise, as fines and penalties, any counsel fees incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.2 Indemnified Party may be involved or with which he or it may be threatened (collectively, "Section 7.2 Losses"), in each case that arises out of or results from (i) any representation or warranty of Mercury contained in Article IV being untrue in any material respect as of the date on which it was made or (ii) any of the matters referred to on Schedules 4.7 or 4.10(a), except to the extent (but only to the extent) any such Section 7.2 Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.2 Indemnified Party or its Affiliates; provided that (x) the aggregate liability of each Manager to indemnify Section 7.2 Indemnified Parties against Section 7.2 Losses shall be limited to the shares of Common Stock of the Company then held by such Manager and Section 7.2 Indemnified Parties seeking indemnification against any Manager for such Section 7.2 Losses -17- hereunder shall not have recourse to any other assets of such Manager and (y) the aggregate liability of each Mercury Investor Indemnitor to indemnify Section 7.2 Indemnified Parties against Section 7.2 Losses shall be limited to his or its Escrowed Shares, and Section 7.2 Indemnified Parties seeking indemnification against any Mercury Investor Indemnitor for Section 7.2 Losses hereunder shall not have recourse to any other assets of such Mercury Investor Indemnitor. Notwithstanding anything herein to the contrary, no Section 7.2 Indemnified Party shall require any Mercury Investor Indemnitor to satisfy any Section 7.2 Losses earlier than the Reconciliation Date; provided that any Mercury Investor Indemnitor may satisfy its obligation in respect of any Section 7.2 Losses by making a cash payment to the applicable Section 7.2 Indemnified Party equal to its Percentage Share of such Section 7.2 Indemnified Loss, plus an amount equal to interest thereon at the rate of 10% per annum, compounded annually, from the date a notice (the "Section 7.2 Notice") specifying the amount of such Section 7.2 Loss is given by the applicable Section 7.2 Indemnified Party to the Old Mercury Stockholders. 7.3 Indemnification by the Managers. Each Manager, severally and not jointly, shall indemnify and hold harmless Mercury and the Company and its Subsidiaries and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.3 Indemnified Party"), against all Losses incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.3 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of such Manager contained in this Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by such Manager in the performance of his obligations under this Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.3 Indemnified Party or its Affiliates; provided that the aggregate liability of each Manager to indemnify Section 7.3 Indemnified Parties against Losses arising out of or resulting from (x) the untruth in any material respect of any representation or warranty as to the Company made by such Manager in this Agreement, (y) any material default by such Manager in the performance of his obligations under this Agreement, shall (except, in the case of clause (y), to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Manager) be limited to the shares of Series C Preferred Stock and Common Stock of the Company then held by such Manager, and Section 7.3 Indemnified Parties seeking indemnification against any Manager for such Losses hereunder shall not have recourse to any other assets of such Manager. 7.4 Indemnification by the Company. The Company shall indemnify and hold harmless each of the Managers, Mercury and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them (each, a "Section 7.4 Indemnified Party"), against all Losses incurred by him or it in connection with the investigation, defense, or disposition of any action, suit or other proceeding in which any Section 7.4 Indemnified Party may be involved or with which he or it may be threatened that arises out of or results from (a) any representation or warranty of the Company contained in this -18- Agreement being untrue in any material respect as of the date on which it was made or (b) any material default by the Company or any of its Affiliates in the performance of their respective obligations under this Agreement, except to the extent (but only to the extent) any such Losses arise out of or result from the gross negligence or willful misconduct of such Section 7.4 Indemnified Party or its Affiliates. 7.5 Procedures. (a) The terms of this Section 7.5 shall apply to any claim (a "Claim") for indemnification under the terms of Sections 7.2, 7.3 or 7.4. The Section 7.2 Indemnified Party, Section 7.3 Indemnified Party or Section 7.4 Indemnified Party (each, an "Indemnified Party"), as the case may be, shall give prompt written notice of such Claim to the indemnifying party (the "Indemnifying Party") under the applicable Section, which party may assume the defense thereof, provided that any delay or failure to so notify the Indemnifying Party shall relieve the Indemnifying Party of its obligations hereunder only to the extent, if at all, that it is materially prejudiced by reason of such delay or failure. The Indemnified Party shall have the right to approve any counsel selected by the Indemnifying Party and to approve the terms of any proposed settlement, such approval not to be unreasonably delayed or withheld (unless such settlement provides only, as to the Indemnified Party, the payment of money damages actually paid by the Indemnifying Party and a complete release of the Indemnified Party in respect of the claim in question). Notwithstanding any of the foregoing to the contrary, the provisions of this Article VII shall not be construed so as to provide for the indemnification of any Indemnified Party for any liability to the extent (but only to the extent) that such indemnification would be in violation of applicable law or that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Article VII to the fullest extent permitted by law. (b) In the event that the Indemnifying Party undertakes the defense of any Claim, the Indemnifying Party will keep the Indemnified Party advised as to all material developments in connection with such Claim, including, but not limited to, promptly furnishing the Indemnified Party with copies of all material documents filed or served in connection therewith. (c) In the event that the Indemnifying Party fails to assume the defense of any Claim within ten business days after receiving written notice thereof, the Indemnified Party shall have the right, subject to the Indemnifying Party's right to assume the defense pursuant to the provisions of this Article VII, to undertake the defense, compromise or settlement of such Claim for the account of the Indemnifying Party. Unless and until the Indemnifying Party assumes the defense of any Claim, the Indemnifying Party shall advance to the Indemnified Party any of its reasonable attorneys' fees and other costs and expenses incurred in connection with the defense of any such action or proceeding. Each Indemnified Party shall agree in writing prior to any such advancement that, in the event he or it receives any such advance, such Indemnified Party shall reimburse the Indemnifying Party for such fees, costs and expenses to -19- the extent that it shall be determined that he or it was not entitled to indemnification under this Article VII. (d) In no event shall an Indemnifying Party be required to pay in connection with any Claim for more than one firm of counsel (and local counsel) for each of the following groups of Indemnified Parties: (i) Mercury and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them; (ii) the Managers and their respective Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them and (iii) the Company and its Affiliates, and the shareholders, members, managers, officers, employees, agents and/or the legal representatives of any of them. 7.6 Escrow and Reconciliation. (a) The certificates for the shares of Series C Preferred Stock representing the Purchase Price (collectively, the "Escrowed Shares") shall be held in escrow by the Secretary of the Company as escrow holder (the "Escrow Holder"), together with related stock powers executed in blank by the record owners thereof. The Escrow Holder shall also hold in escrow the cash proceeds ("Escrowed Cash") from sales of Escrowed Shares permitted by paragraph (f) below. The Escrow Holder shall not permit the transfer of such shares on the books of the Company except in accordance with this Agreement and the Stockholders Agreement, provided that the Escrow Holder shall be entitled to rely upon written directions of the Board of Directors of the Company. The Escrow Holder shall have no personal liability for any act or omission hereunder while acting in good faith in the exercise of his own judgment. The Company agrees to indemnify and hold Escrow Holder free and harmless from and against any and all losses, costs, damages, liabilities or expenses, including counsel fees to which Escrow Holder may be put or which he may incur by reason of or in connection with the escrow arrangement hereunder. (b) On or promptly following the Reconciliation Date, the Escrow Holder shall distribute the Escrowed Shares to the Old Mercury Stockholders as follows (subject to the terms of paragraph (g) below): (i) first, to the Company and each other Section 7.2 Indemnified Party (pro rata in proportion to their respective Losses), an amount of Escrowed Cash of such Old Mercury Stockholder equal to such Old Mercury Stockholder's Percentage Share of the Losses, plus an amount equal to interest thereon at the rate of 10% per annum, compounded annually, from the date of the applicable Section 7.2 Notice through the Reconciliation Date, and, if necessary, a number of Escrowed Shares of such Old Mercury Stockholder having an aggregate Market Price (as defined in the Securities Purchase Agreement) equal to the balance of such Old Mercury Investor's Percentage Share of the Losses, plus an amount equal to interest thereon at the rate of 10% per annum, compounded annually, from the date of the applicable Section 7.2 Notice through the Reconciliation Date; provided that no Escrowed Shares or Escrowed Cash of any Old Mercury Stockholder shall be distributed -20- pursuant to this clause (i) of Section 7.6(b) with respect to any Loss, if such Old Mercury Stockholder shall have theretofore satisfied its obligation in respect of such Loss in accordance with the proviso to the last sentence of Section 7.2; and (ii) second, to such Old Mercury Stockholder, the balance of his or its Escrowed Shares and Escrowed Cash. The distribution of the Escrowed Shares contemplated in this Section 7.6(b) shall be deferred to the extent necessary to determine the Market Price of the Escrowed Shares. (c) Promptly following the Reconciliation Date, the Escrow Holder shall (i) if no Escrowed Shares are distributable pursuant to paragraph (i) of Section 7.6(b), deliver the certificates representing the Escrowed Shares to the Old Mercury Stockholders, and (ii) if any Escrowed Shares are distributable pursuant to paragraphs (i) of Section 7.6(b), (x) cancel the certificates held by the Escrow Holder representing Escrowed Shares, (y) cause new certificates to be issued representing the number of Escrowed Shares distributable to the Company or any other Section 7.2 Indemnified Party pursuant to paragraphs (i) and (ii) of Section 7.6(b), which certificates the Escrow Holder shall deliver to the Company or such other Section 7.2 Indemnified Party (as applicable), and (y) cause new certificates to be issued representing the balance of the Escrowed Shares, which certificates shall be distributed to such Old Mercury Stockholder. (d) Subject to the terms hereof, each Old Mercury Stockholder shall have all the rights of a stockholder with respect to the Escrowed Shares while they are held in escrow, including, without limitation, the right to vote the Escrowed Shares and receive any cash dividends declared thereon. If, from time to time, there is (i) any stock dividend, stock split or other change in the Escrowed Shares or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, all new, substituted or additional securities to which such Old Mercury Stockholder is entitled by reason of his ownership of the Escrowed Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as "Escrowed Shares" for purposes of this Agreement. (e) Legends. The share certificates evidencing the Escrowed Shares shall be endorsed with the following legend (in addition to any legend required to be placed thereon by the Securities Purchase Agreement, applicable federal or state securities laws or the Stockholders Agreement). "THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE LICENSE PURCHASE AGREEMENT DATED AS OF MAY 20, 1999, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, WHICH PROVIDES, AMONG OTHER THINGS, FOR RESTRICTIONS ON TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE." -21- (f) Until the Reconciliation Date, no Mercury Investor Indemnitor shall Transfer (as such term is defined in the Stockholders Agreement) any of his or its Escrowed Shares; provided that, subject to the restrictions on transfer contained in the Stockholders Agreement, after the IPO Date (as defined in the Stockholders Agreement) and notwithstanding the provisions of Section 5.4, any Old Mercury Stockholder may sell any or all of his Escrowed Shares for cash at the Market Price so long as the gross cash proceeds thereof are deposited with the Escrow Holder, who shall at the request of such Old Mercury Stockholder invest such funds in Treasury obligations or other cash equivalents that mature not later than the fifth anniversary of the date hereof, to be held in escrow by the Escrow Holder, and not to be released, except in accordance with the foregoing provisions. (g) Notwithstanding anything herein to the contrary, 100% of the obligations of all Old Mercury Stockholders to be satisfied by distributions of Escrowed Cash and/or Escrowed Shares pursuant to Section 7.6(b)(i) shall be satisfied, on the Reconciliation Date (as defined in clauses (i) through (iv) of the definition thereof, without regard to the proviso to such definition), first, out of any Escrowed Cash, and second, out of any Escrowed Shares held by Mercury, until all of such Escrowed Cash and Escrowed Shares shall have been distributed. ARTICLE VIII TERMINATION 8.1 Termination. This Agreement may be terminated, and the transactions contemplated hereby abandoned, without further obligation of any party, except as set forth herein, at any time prior to the Closing Date: (a) by mutual written consent of the parties; (b) by any party by written notice to the other parties, if the Closing shall not have occurred on or before the date that is two years after the date hereof, provided that the party electing to exercise such right is not otherwise in breach of its obligations under this Agreement; (c) by any party by written notice to the other parties, if the consummation of the transactions contemplated hereby shall be prohibited by a final, non-appealable order, decree or injunction of a court of competent jurisdiction; or (d) by the Company in the event of the Company has terminated the Securities Purchase Agreement pursuant to Section 6.15 thereof. 8.2 Effect of Termination. (a) In the event of a termination of this Agreement, no party hereto shall have any liability or further obligation to any other party to this Agreement, -22- except as set forth in paragraph (b) below, and except that nothing herein will relieve any party from liability for any breach by such party of this Agreement: (a) In the event of a termination of this Agreement pursuant to Section 8.1, all provisions of this Agreement shall terminate, except Section 5.2 and Articles VII and IX. (b) Whether or not the Closing occurs, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses; provided, however, that in the event of a termination of this Agreement pursuant to Section 8.1(d), the Company shall pay to Mercury an amount equal to the interest that shall have accrued on indebtedness to the United States Department of the Treasury attributable to the Mercury Licenses during the period commencing on the date of execution of the Securities Purchase Agreement through the date of termination by the Company. The Company shall reimburse Mercury promptly after the termination of this Agreement in respect of all or any portion of such interest actually paid by Mercury to the United States Department of the Treasury. In the event that all or any portion of such interest shall not have been so paid as of such date of termination, the Company shall pay such interest to Mercury on the date that such interest shall be due and payable to the United States Department of the Treasury. ARTICLE IX MISCELLANEOUS PROVISIONS 9.1 Amendment and Modification. This Agreement may be amended, modified or supplemented only by written agreement of each of the parties. 9.2 Waiver of Compliance; Consents. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party or parties entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirement for a waiver of compliance as set forth in this Section 9.2. 9.3 Notices. All notices or other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by facsimile transmission, or by registered or certified mail (return receipt requested), postage prepaid, with an acknowledgment of receipt signed by the addressee or an authorized representative thereof, addressed as follows (or to such other address for a party as shall be specified by like notice; provide that notice of a change of address shall be effective only upon receipt thereof): -23- If to Mercury: 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Fax #601-914-8282 With a copy to: Wes Daughdrill, Esquire Young, Williams, Henderson & Fuselier, P.A. Post Office Box 23059 Jackson, Mississippi 39225-3059 Fax #601-355-6136 If to the Company: 1080 River Oaks Drive, Suite B-100 Jackson, Mississippi 39208 Fax #601-914-8282 With a copy to: Wes Daughdrill, Esquire Young, Williams, Henderson & Fuselier, P.A. Post Office Box 23059 Jackson, Mississippi 39225-3059 Fax #601-355-6136 With a copy to each other party to the Securities Purchase Agreement sent to the addresses set forth in Section 10.3 thereof. 9.4 Parties in Interest; Assignment. This Agreement is binding upon and is solely for the benefit of the parties hereto and their respective permitted successors, legal representatives and permitted assigns. 9.5 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to the conflicts of law principles thereof. The parties hereto hereby irrevocably and unconditionally consent to submit to the non-exclusive jurisdiction of the courts of the State of New York and of the United States of America located in the County of New York, New York (the "New York Courts") for any litigation arising out of or relating to this Agreement and the transactions contemplated hereby, waive any objection to the laying of venue of any such litigation in the New York Courts and agrees not to plead or claim in any New York Court that such litigation brought therein has been brought in an inconvenient forum. -24- 9.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 9.7 Interpretation. The article and section headings contained in this Agreement are for convenience of reference only, are not part of the agreement of the parties and shall not affect in any way the meaning or interpretation of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the antecedent Person or Person may require. 9.8 Entire Agreement. This Agreement, including the exhibits and schedules hereto and the certificates and instruments delivered pursuant to the terms of this Agreement, embody the entire agreement and understanding of the parties hereto in respect of the transactions contemplated hereby. There are no restrictions, promises, representations, warranties, covenants or undertakings, other than those expressly set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such transactions contemplated hereby. 9.9 Publicity. So long as this Agreement is in effect, the parties agree to consult with each other in issuing any press release or otherwise making any public statement with respect to the transactions contemplated hereby, and no party shall issue any press release or make any such public statement prior to such consultation, except as may be required by Law. No press release or other public statement by the parties hereto shall disclose any of the financial terms of the transactions contemplated hereby without the prior consent of the other parties, except as may be required by Law. A breach of the provisions of this Section 9.9 by a party shall not give rise to any right to terminate this Agreement. 9.10 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any New York Courts. 9.11 Remedies Cumulative. All rights, powers and remedies provided under this Agreement or otherwise available in respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other such right, power or remedy by such party. -25- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. TRITEL, INC. By: -------------------------------------- Name: Title: DIGITAL PCS, LLC (f/k/a Mercury PCS II, LLC) By: -------------------------------------- Name: Title: ----------------------------------------- William M. Mounger, II ----------------------------------------- E.B. Martin, Jr. ----------------------------------------- Jerry M. Sullivan, Jr. -26- SCHEDULE I MERCURY LICENSES - -------------------------------------------------------------------------------- Market Number Frequency Block License Description - -------------------------------------------------------------------------------- 154 F Ft. Walton, FL - -------------------------------------------------------------------------------- 159 F Gainesville, FL - -------------------------------------------------------------------------------- 340 F Panama City, FL - -------------------------------------------------------------------------------- 343 F Pensacola, FL - -------------------------------------------------------------------------------- 439 F Tallahassee, FL - -------------------------------------------------------------------------------- 58 F Brunswick, GA - -------------------------------------------------------------------------------- 454 F Valdosta, GA - -------------------------------------------------------------------------------- 467 F Waycross, GA - -------------------------------------------------------------------------------- SCHEDULE II MERCURY INVESTORS Southern Farm Bureau Life Insurance Company M3, LLC McCarty Communications, LLC DC Investment Partners Exchange Fund, L.P. FCA Venture Partners I, L.P. Clayton Associates, LLC Mercury PCS Investors, LLC William M. Mounger, II Jerry M. Sullivan, Jr. E.B. Martin, Jr. SCHEDULE 1.1 PERMITTED EXPENDITURES SCHEDULE 2.1 MERCURY ASSETS SCHEDULE 2.3 OTHER MERCURY DEBT SCHEDULE 4.6 MERCURY CONSENTS The execution, delivery and performance of the Agreement will or may require the following consents, approvals and reviews: 1. The Federal Communications Commission. Matters which could prevent Mercury from consummating the transactions contemplated by this Agreement include: A. Applications for Review filed by High Plains Wireless, L.P.: In re Application of Mercury PCS II, LLC for Facilities in the Broadband Personal Communications Services in the D, E and F Blocks, Federal Communications Commission File Numbers 00114CWL97, et al. B. Edwin Welsh v. Mercury PCS, LLC, Mercury PCS II, LLC, MSM, Inc., Mercury Wireless Management, Inc., William M. Mounger, II, Jerry Sullivan, and E.B. Martin, Chancery Court of the First Judicial District of Hinds County, Mississippi, Cause No. G97-56103. COMPANY CONSENTS The execution, delivery and performance of the Agreement will or may require the following consents, approvals and reviews: 1. The Federal Communications Commission. SCHEDULE 4.7 MERCURY LITIGATION See Items 1(A-B) under "Mercury Consents" on Schedule 4.6. SCHEDULE 4.10(a) MERCURY FCC PROCEEDINGS See Items 1(A-B) under "Mercury Consents" on Schedule 4.6. SCHEDULE 4.10(c) CASH FLOW STATEMENTS SCHEDULE 4.10(e) LITIGATION AFFECTING OTHER MERCURY ASSETS EX-12 32 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Tritel, Inc. and Predecessor Companies Computation of Ratio of Earnings to Fixed Charges (In Thousands of Dollars)
Period from Six inception Months Ended to Years ended December 31, June 30, December 31, --------------------------- ------------------ 1995 1996 1997 1998 1998 1999 ------------ -------- ------- ------- ------- -------- Earnings: Pretax income (loss) from continuing operations $(120) $(1,461) $(3,154) $(8,331) $(1,733) $(18,274) Fixed charges, net of capitalized interest - - 1 833 5 7,840 ----- ------- ------- ------- ------- -------- Earnings (120) (1,461) (3,153) (7,498) (1,728) (10,434) ===== ======= ======= ======= ======= ======== Fixed charges Interest expense and financing cost - - - 722 - 7,334 Capitalized interest and discount 20 3,358 7,214 10,519 4,621 10,540 Interest factor on rental expense - - 1 111 5 506 ----- ------- ------- ------- ------- -------- Fixed charges 20 3,358 7,215 11,352 4,626 18,380 ===== ======= ======= ======= ======= ======== Deficiency of earnings to fixed charges $ 140 $ 4,819 $10,368 $18,850 $ 6,354 $ 28,814 ===== ======= ======= ======= ======= ========
EX-23.2 33 CONSENT OF KPMG Exhibit 23.2 INDEPENDENT AUDITORS' CONSENT The Board of Directors Tritel, Inc.: We consent to the use of our report dated February 16, 1999 related to the consolidated financial statements of Tritel, Inc. and Predecessor Companies as of December 31, 1997 and 1998 and 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 included herein and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG Peat Marwick LLP Jackson, Mississippi September 7, 1999 EX-25.1 34 FORM T-1 ======================================================================== FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) TRITEL PCS, INC. (Exact name of obligor as specified in its charter) Delaware 64-0896438 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) TRITEL, INC (Exact name of obligor as specified in its charter) Delaware 64-0896417 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) TRITEL COMMUNIATIONS, INC. (Exact name of obligor as specified in its charter) Delaware 64-0896042 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) TRITEL FINANCE, INC. (Exact name of obligor as specified in its charter) Delaware 64-0896439 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 111 E. Capital Street, Suite 500 Jackson, Mississippi 39201 (Address of principal executive offices) (Zip code) ------------- 12.75% Senior Subordinated Discount Notes due 2009 (Title of the indenture securities) ======================================================================== 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT. - -------------------------------------------------------------------------------- Name Address - -------------------------------------------------------------------------------- Superintendent of Banks of the State of 2 Rector Street, New York, New York N.Y. 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(D). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 7th day of September, 1999. THE BANK OF NEW YORK By: /s/ MICHAEL CULHANE -------------------------------- Name: MICHAEL CULHANE Title: VICE PRESIDENT - ------------------------------------------------------------------------------ Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 1999, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. ASSETS Dollar Amounts In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin . $ 5,597,807 Interest-bearing balances .......................... 4,075,775 Securities: Held-to-maturity securities ........................ 785,167 Available-for-sale securities ...................... 4,159,891 Federal funds sold and Securities purchased under agreements to resell ................................ 2,476,963 Loans and lease financing receivables: Loans and leases, net of unearned income ............................................ 38,028,772 LESS: Allowance for loan and lease losses ...................................... 568,617 LESS: Allocated transfer risk reserve .......................................... 16,352 Loans and leases, net of unearned income, allowance and reserve ...................................... 37,443,803 Trading Assets ........................................ 1,563,671 Premises and fixed assets (including capitalized leases) ............................................. 683,587 Other real estate owned ............................... 10,995 Investments in unconsolidated subsidiaries and associated companies ................................ 184,661 Customers' liability to this bank on acceptances outstanding ......................................... 812,015 Intangible assets ..................................... 1,135,572 Other assets .......................................... 5,607,019 Total assets .......................................... $64,536,926 LIABILITIES Deposits: In domestic offices ................................ $26,488,980 Noninterest-bearing ................................ 10,626,811 Interest-bearing ................................... 15,862,169 In foreign offices, Edge and Agreement subsidiaries, and IBFs ........................... 20,655,414 Noninterest-bearing ................................ 156,471 Interest-bearing ................................... 20,498,943 Federal funds purchased and Securities sold under agreements to repurchase ........................... 3,729,439 Demand notes issued to the U.S. Treasury .............. 257,860 Trading liabilities ................................... 1,987,450 Other borrowed money: With remaining maturity of one year or less ........ 496,235 With remaining maturity of more than one year through three years .............................. 465 With remaining maturity of more than three years ... 31,080 Bank's liability on acceptances executed and outstanding ......................................... 822,455 Subordinated notes and debentures ..................... 1,308,000 Other liabilities ..................................... 2,846,649 Total liabilities ..................................... 58,624,027 EQUITY CAPITAL Common stock .......................................... 1,135,284 Surplus ............................................... 815,314 Undivided profits and capital reserves ................ 4,001,767 Net unrealized holding gains (losses) on available-for-sale securities ....................... (7,956) Cumulative foreign currency translation adjustments (31,510) ----------- Total equity capital .................................. 5,912,899 ----------- Total liabilities and equity capital .................. $64,536,926 =========== I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Reyni Alan R. Griffith Directors Gerald L. Hassell EX-27 35 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE TRITEL, INC. AND PREDECESSOR COMPANIES FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0001088383 TRITEL, INC. YEAR 6-MOS DEC-31-1998 DEC-31-1999 DEC-31-1998 JUN-30-1999 846 390,305 0 0 0 0 0 0 0 0 1,806 395,732 13,923 61,468 (107) (782) 89,012 697,045 32,911 7,345 51,599 445,086 0 69,109 0 160,008 0 0 (1,983) (31,914) 89,021 697,045 0 0 0 0 0 0 0 0 7,686 16,272 0 0 722 0 (8,331) (18,274) 0 (6,036) (8,331) (12,238) 0 0 (2,414) 0 0 0 (10,745) (12,238) 0 0 0 0
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