<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report:
September 10, 1996
------------------
OMNIPOINT CORPORATION
---------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-27442 04-2969720
---------------- --------------- -------------------
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
2000 North 14th Street, Suite 500
Arlington, VA 22201
-------------------
(Address of principal executive offices) (Zip Code)
(703) 522-7778
-------------------------------
(Registrant's telephone number)
<PAGE>
Item 5. Other Events.
------------
On August 27, 1996 (the "Closing Date"), Omnipoint Corporation (the
"Company") completed the private placement of $250,000,000 of the Company's 11-
5/8% Senior Notes due 2006 (the "Notes") under Rule 144A of the Securities Act
of 1933, as amended (the "Act"). The Notes have not been registered under the
Act and may not be offered or sold in the United States absent registration or
an applicable exemption from the registration requirements thereunder.
The Notes were issued under an indenture (the "Indenture"), dated as of
August 27, 1996 between the Company and Marine Midland Bank as trustee under the
Indenture. Capitalized terms not otherwise defined herein are defined in the
Indenture.
The Company has received net proceeds from the sale of the Notes of
approximately $241.1 million, after deducting the discount to the initial
purchasers of the Notes and estimated offering expenses. As described more
fully below, approximately $53.3 million, which will be sufficient to pay two
years' interest on the Notes, has been used to fund an Escrow Account for the
benefit of the holders of the Notes.
The Notes are senior unsecured obligations of the Company ranking pari
passu in right of payment with all existing and future senior indebtedness of
the Company and ranking senior to all existing and future subordinated
indebtedness of the Company. The Notes will mature on August 15, 2006.
Interest on the Notes will be payable semi-annually in arrears on February 15
and August 15 of each year, commencing February 15, 1997. Except in certain
circumstances, the Notes will not be redeemable at the option of the Company
prior to August 15, 2001. Thereafter, the Company may redeem the Notes, in
whole or in part, at the redemption prices set forth in the Indenture, plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption. In addition, at any time prior to August 15, 1999, the Company may
redeem up to one-third of the Notes originally outstanding at a redemption price
of 111.625% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of redemption, with the net proceeds
of one or more Public Equity Offerings or sales of certain capital stock of the
Company to one or more Strategic Equity Investors; provided that after any such
redemption at least two-thirds of the aggregate principal amount of the Notes
originally outstanding remains outstanding. Upon the occurrence of a Change of
Control, the Company will be required to offer to repurchase the outstanding
Notes at a price equal to 101% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase.
The holders of the Notes are entitled to certain registration rights,
pursuant to a Registration Rights Agreement which provides that the Company
will, at its cost, (i) within 45 days after the Closing Date, file a
registration statement (the "Exchange Offer Registration Statement") with the
Commission with respect to a registered offer to exchange the Notes for the
Company's Senior Notes due 2006 (the "New Notes"), which will have terms
substantially identical in all material respects to the Notes (except that such
New Notes will not contain terms
2
<PAGE>
with respect to transfer restrictions) and (ii) use its best efforts to cause
such Exchange Offer Registration Statement to be declared effective under the
Act within 90 days after the Closing Date.
If for any reason the exchange offer as described above is not consummated
within 135 days of the Closing Date, the Company is obligated to (a) file a
shelf registration statement covering resales of the Notes (a "Shelf
Registration Statement"), (b) use its best efforts to cause such Shelf
Registration Statement to be declared effective under the Act as promptly as
practicable after the filing of such Registration Statement, and (c) use its
best efforts to keep effective such Shelf Registration Statement until the
earlier of 36 months following the Closing Date and such time as all of the
Notes have been sold thereunder, or otherwise cease to be a Transfer Restricted
Security (as defined in the Registration Rights Agreement).
If neither of the registration statements described above is filed and
declared effective within the prescribed time periods or any other Registration
Defaults (as defined in the Registration Rights Agreement) may occur, the
Company will pay Liquidated Damages to each holder of the Notes, with respect to
the first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $.05 per week per $1,000 principal
amount of the Notes held by such holder and with respect to each subsequent 90-
day period, an additional $.05 per week per $1,000 principal amount of Notes
until all Registration Defaults have been cured, up to a maximum of liquidated
damages of $.50 per week per $1,000 principal amount of Notes (regardless of
whether one or more than one Registration Default is outstanding).
The Indenture contains certain covenants which, among other things,
restrict the ability of the Company and any of its Restricted Subsidiaries to
incur additional indebtedness, pay dividends or make distributions of the
Company's capital stock or make certain other restricted payments, create liens,
enter into transactions with stockholders and affiliates, sell assets, or
consolidate, merge or sell all or substantially all of their assets.
A portion of the net proceeds from the offering sufficient to pay two
years' interest on the Notes, approximately $53.3 million, has been used to fund
an Escrow Account for the benefit of the holders of the Notes. Funds may be
disbursed from the Escrow Account to reimburse the Company for interest payments
the Company makes on the Notes, and, in certain circumstances, upon the
retirement of the Notes. The balance of the net proceeds will be used for
working capital and general corporate purposes, including payment for licenses
awarded, if any, through participation in the D, E and F Block auctions being
conducted by the Federal Communications Commission. Pending such uses, the net
proceeds of the Offering will be invested in investment-grade, interest-bearing
securities.
3
<PAGE>
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits (numbered in accordance with Item 601 of the Regulation S-K).
<TABLE>
<CAPTION>
Exhibit No. Description Page No.
----------- ------------ --------
<S> <C> <C>
4.1 Indenture by and between the Company
and Marine Midland Bank, as trustee,
dated August 27, 1996.
4.2 Registration Rights Agreement by and
among the Company, Donaldson, Lufkin &
Jenrette Securities Corporation and
Goldman, Sachs & Co., dated August 27,
1996.
4.3 Form of Note.
10.1 Purchase Agreement by and among the
Company, Donaldson, Lufkin & Jenrette
Securities Corporation and Goldman,
Sachs & Co., dated August 22, 1996.
10.2 Escrow Agreement by and among the
Company, The Chase Manhattan Bank and
Marine Midland Bank, dated August 27,
1996.
99.1 Press Release, dated August 22, 1996.
</TABLE>
4
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: September 10, 1996 OMNIPOINT CORPORATION
By: _________________________
Bradley E. Sparks
Chief Financial Officer
5
<PAGE>
OMNIPOINT CORPORATION
FORM 8-K
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Pages
- ----------- ----------- --------------
<S> <C> <C>
4.1 Indenture by and between the
Company and Marine Midland Bank,
as trustee, dated August 27, 1996.
4.2 Registration Rights Agreement by
and among the Company, Donaldson,
Lufkin & Jenrette Securities
Corporation and Goldman, Sachs
Co., dated August 27, 1996.
4.3 Form of Note.
10.1 Purchase Agreement by and among
the Company, Donaldson, Lufkin &
Jenrette Securities Corporation
and Goldman, Sachs & Co., dated
August 22, 1996.
10.2 Escrow Agreement by and among the
Company, The Chase Manhattan Bank
and Marine Midland Bank, dated
August 27, 1996.
99.1 Press Release, dated August 22,
1996.
</TABLE>
6
<PAGE>
--------------------------------------
OMNIPOINT CORPORATION,
as Issuer
and
MARINE MIDLAND BANK,
as Trustee
_______________
INDENTURE
Dated as of August 27, 1996
_______________
11 5/8% Senior Notes due 2006
--------------------------------------
<PAGE>
CROSS-REFERENCE TABLE
---------------------
<TABLE>
<CAPTION>
TIA SECTIONS INDENTURE SECTIONS
- ------------ ------------------
<S> <C>
(S) 310(a)(1) ........................... 7.9
(a)(2) ........................... 7.9
(b) .............................. 7.2; 7.7
(S) 311(a) .............................. 7.2
(b) .............................. 7.2
(S) 312(a) .............................. 2.3
(b) .............................. 10.2
(c) .............................. 10.2
(S) 313(a) .............................. 7.5
(c) .............................. 7.4; 7.5; 10.2
(d) .............................. 7.5
(S) 314(a) .............................. 4.18; 7.4; 10.2
(a)(4) ........................... 4.17; 10.2
(c)(1) ........................... 10.3
(c)(2) ........................... 10.3
(e) .............................. 4.17; 10.4
(S) 315(a) .............................. 7.1
(b) .............................. 7.4; 10.2
(c) .............................. 7.1
(d) .............................. 7.1
(e) .............................. 6.11
(S) 316(a)(1)(A) ........................ 6.5
(a)(1)(B) ........................ 6.4
(b) ........................ 6.7
(c) ........................ 9.3
(S) 317(a)(1) ........................... 6.8
(a)(2) ........................... 6.9
(b) .............................. 2.4
(S) 318(a) .............................. 10.1
(c) .............................. 10.1
</TABLE>
Note: The Cross-Reference Table shall not for any purpose be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C> <C>
ARTICLE I
Definitions and Incorporation by Reference
Section 1.1 Definitions...................................... 1
Section 1.2 Incorporation by Reference of Trust Indenture
Act.............................................. 22
Section 1.3 Rules of Construction............................ 22
ARTICLE II
The Notes
Section 2.1 Form and Dating.................................. 23
Section 2.2 Execution, Authentication and Denominations...... 24
Section 2.3 Registrar and Paying Agent....................... 25
Section 2.4 Paying Agent to Hold Money in Trust.............. 25
Section 2.5 Transfer and Exchange............................ 26
Section 2.6 Replacement Notes................................ 28
Section 2.7 Outstanding Notes................................ 29
Section 2.8 Temporary Notes.................................. 30
Section 2.9 Cancellation..................................... 30
Section 2.10 CUSIP Numbers.................................... 31
Section 2.11 Defaulted Interest............................... 31
ARTICLE III
Optional Redemption
Section 3.1 Right of Redemption.............................. 31
Section 3.2 Notices to Trustee............................... 32
Section 3.3 Selection of Notes to Be Redeemed................ 32
Section 3.4 Notice of Redemption............................. 33
Section 3.5 Effect of Notice of Redemption................... 34
Section 3.6 Deposit of Redemption Price...................... 34
Section 3.7 Payment of Notes Called for Redemption........... 35
Section 3.8 Notes Redeemed in Part........................... 35
</TABLE>
Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
i
<PAGE>
ARTICLE IV
Covenants
<TABLE>
<S> <C> <C>
Section 4.1 Payment of Notes................................. 35
Section 4.2 Maintenance of Office or Agency.................. 36
Section 4.3 Limitation on Indebtedness....................... 36
Section 4.4 Limitation on Restricted Payments................ 39
Section 4.5 Limitation on Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries... 41
Section 4.6 Limitation on the Issuance and Sale of Capital
Stock of Restricted Subsidiaries................. 43
Section 4.7 Limitation on Issuances of Guarantees by
Restricted Subsidiaries.......................... 44
Section 4.8 Limitation on Transactions with Stockholders
and Affiliates................................... 45
Section 4.9 Limitation on Liens.............................. 45
Section 4.10 Limitation on Sale-Leaseback Transactions........ 47
Section 4.11 Limitation on Asset Sales........................ 47
Section 4.12 Repurchase of Notes upon a Change of Control..... 48
Section 4.13 Limitation on Use of Proceeds.................... 48
Section 4.14 Existence........................................ 48
Section 4.15 Payment of Taxes and Other Claims................ 49
Section 4.16 Maintenance of Properties and Insurance.......... 49
Section 4.17 Compliance Certificates.......................... 50
Section 4.18 Commission Reports and Reports to Holders........ 51
Section 4.19 Waiver of Stay, Extension or Usury Laws.......... 51
Section 4.20 Limitation on Mirror Indebtedness................ 51
Section 4.22 Limitation on Activities of the Special
Subsidiary....................................... 52
ARTICLE V
Successor Corporation
Section 5.1 When Company May Merge, Etc...................... 52
</TABLE>
Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
ii
<PAGE>
ARTICLE VI
Default and Remedies
<TABLE>
<S> <C> <C>
Section 6.1 Events of Default................................ 53
Section 6.2 Acceleration..................................... 54
Section 6.3 Other Remedies................................... 55
Section 6.4 Waiver of Past Defaults.......................... 56
Section 6.5 Control by Majority.............................. 56
Section 6.6 Limitation on Suits.............................. 56
Section 6.7 Rights of Holders to Receive Payment............. 57
Section 6.8 Collection Suit by Trustee....................... 57
Section 6.9 Trustee May File Proofs of Claim................. 57
Section 6.10 Priorities....................................... 58
Section 6.11 Undertaking for Costs............................ 59
Section 6.12 Restoration of Rights and Remedies............... 59
Section 6.13 Rights and Remedies Cumulative................... 59
Section 6.14 Delay or Omission Not Waiver..................... 59
ARTICLE VII
Trustee
Section 7.1 Rights of Trustee................................ 60
Section 7.2 Individual Rights of Trustee..................... 63
Section 7.3 Trustee's Disclaimer............................. 63
Section 7.4 Notice of Default................................ 63
Section 7.5 Reports by Trustee to Holders.................... 64
Section 7.6 Compensation and Indemnity....................... 64
Section 7.7 Replacement of Trustee........................... 65
Section 7.8 Successor Trustee by Merger, Etc................. 66
Section 7.9 Eligibility...................................... 67
Section 7.10 Money Held in Trust.............................. 67
</TABLE>
Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
iii
<PAGE>
<TABLE>
ARTICLE VIII
Discharge of Indenture
<S> <C> <C>
Section 8.1 Termination of Company's Obligations............. 67
Section 8.2 Defeasance and Discharge of Indenture............ 68
Section 8.3 Defeasance of Certain Obligations................ 70
Section 8.4 Application of Trust Money....................... 71
Section 8.5 Repayment to Company............................. 72
Section 8.6 Reinstatement.................................... 72
ARTICLE IX
Amendments, Supplements and Waivers
Section 9.1 Without Consent of Holders....................... 73
Section 9.2 With Consent of Holders.......................... 73
Section 9.3 Revocation and Effect of Consent................. 75
Section 9.4 Notation on or Exchange of Notes................. 75
Section 9.5 Trustee to Sign Amendments, Etc.................. 76
Section 9.6 Conformity with Trust Indenture Act.............. 76
ARTICLE X
Miscellaneous
Section 10.1 Trust Indenture Act............................ 76
Section 10.2 Notices........................................ 76
Section 10.3 Certificate and Opinion as to Conditions
Precedent...................................... 78
Section 10.4 Statements Required in Certificate or Opinion.. 78
Section 10.5 Acts of Holders................................ 79
Section 10.6 Rules by Trustee, Paying Agent or Registrar.... 79
Section 10.7 Payment Date Other Than a Business Day......... 79
Section 10.8 Governing Law.................................. 80
Section 10.9 No Adverse Interpretation of Other Agreements.. 80
Section 10.10 No Recourse Against Others..................... 80
Section 10.11 Successors..................................... 80
Section 10.12 Duplicate Originals............................ 80
Section 10.13 Separability................................... 81
Section 10.14 Table of Contents, Headings, Etc............... 81
</TABLE>
Note: The Table of Contents shall not for any purposes be deemed to be a part
of the Indenture.
iv
<PAGE>
INDENTURE, dated as of August 27, 1996, between OMNIPOINT CORPORATION,
a Delaware corporation, as Issuer (the "Company"), and MARINE MIDLAND BANK, a
New York banking corporation and trust company, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of up to $150 million aggregate principal
amount of the Company's 115/8% Senior Notes due 2006 issuable as provided in
this Indenture, whether Original Notes (as defined below) or Exchange Notes (as
defined below). All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done, and the Company
has done all things necessary to make the Notes, when executed by the Company
and authenticated and delivered by the Trustee hereunder and duly issued by the
Company, the valid obligations of the Company as hereinafter provided.
This Indenture is subject to, and shall be governed by, the provi-
sions of the Trust Indenture Act of 1939, as amended, that are required to be a
part of and to govern indentures qualified under the Trust Indenture Act of
1939, as amended.
AND THIS INDENTURE FURTHER WITNESSETH
For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:
ARTICLE I
Definitions and Incorporation by Reference
Section 1.1 Definitions.
-----------
"Accredited Investor Notes" has the meaning provided in Section 2.1.
"Acquired Debt" means, with respect to any specified Person, Indebtedness
of any other Person existing at the time such other Person merged with or
<PAGE>
into or became a Subsidiary of such specified Person, including Indebtedness
incurred in connection with, or in contemplation of, such other Person merging
with or into or becoming a Subsidiary of such specified Person.
"Adjusted Consolidated Net Income" means, for any period, the aggregate net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined in conformity with GAAP; provided that the following items shall be
excluded in computing Adjusted Consolidated Net Income (without duplication):
(i) the net income of any Person (other than net income attributable to a
Restricted Subsidiary) in which any Person (other than the Company or any of its
Restricted Subsidiaries) has a majority interest and the net income of any
Unrestricted Subsidiary, except to the extent of the amount of dividends or
other distributions actually paid to the Company or any of its Restricted
Subsidiaries by such other Person or such Unrestricted Subsidiary during such
period; (ii) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of such net income is not at the time permitted by the operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary; (iii) any gains or losses (on an after-tax basis) attributable to
Asset Sales; and (iv) all extraordinary gains and extraordinary losses.
"Affiliate" means, as applied to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" means any Registrar, Paying Agent, authenticating agent or co-
Registrar.
"Annualized Consolidated EBITDA" means, with respect to any Person, such
Person's Consolidated EBITDA for the latest two fiscal quarters for which
financial statements are available multiplied by two.
"Asset Acquisition" means (i) an Investment by the Company or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
2
<PAGE>
become a Restricted Subsidiary of the Company or shall be merged into or
consolidated with the Company or any of its Restricted Subsidiaries, provided
that such Person's primary business is a Telecommunications Business or (ii) an
acquisition by the Company or any of its Restricted Subsidiaries of the property
and assets of any Person other than the Company or any of its Restricted
Subsidiaries that constitute all or substantially all of the assets of such
Person or a division or line of business of such Person, provided that the
property and assets acquired are Telecommunications Assets.
"Asset Disposition" means the sale or other disposition by the Company or
any of its Restricted Subsidiaries (other than to the Company or a Restricted
Subsidiary of the Company) of (i) all or substantially all of the Capital Stock
of any Restricted Subsidiary of the Company or (ii) all or substantially all of
the assets that constitute a division or line of business of the Company or any
of its Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including by
way of merger, consolidation, and any sale-leaseback transaction) in one
transaction or a series of related transactions by the Company or any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries of (i) all or any of the Capital Stock of any Restricted
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of the Company or any of its Restricted Subsidiaries
or (iii) any other property and assets of the Company or any of its Restricted
Subsidiaries disposed of outside the ordinary course of business of the Company
or such Restricted Subsidiary and, in each case, that is not governed by the
provisions of the Indenture applicable to mergers, consolidations and sales of
all or substantially all of the assets of the Company, provided that "Asset
Sale" shall not include (i) sales or other dispositions of inventory,
receivables and other current assets, (ii) substantially simultaneous exchanges
by the Company or any Restricted Subsidiary of Telecommunications Assets for
other Telecommunications Assets, provided that the Telecommunications Assets
received by the Company or such Restricted Subsidiary have at least
substantially equal value to the Company or such Restricted Subsidiary (as
determined by the Board of Directors whose good faith determination shall be
conclusive and evidenced by a Board Resolution), provided further that, after
giving pro forma effect to such exchange, the Consolidated Leverage Ratio shall
be no greater than the Consolidated Leverage Ratio immediately prior to such
exchange, (iii) sales or other dispositions of assets with a fair market value
(as certified in an Officers' Certificate) not in excess of $1 million, (iv) any
sale or other disposition of any or all the Capital Stock of an Unrestrict-
3
<PAGE>
ed Subsidiary or (v) any sale or other disposition of Temporary Cash Invest-
ments. Additionally, the contribution of Telecommunications Assets to an
Unrestricted Subsidiary whereby the Company or a Restricted Subsidiary receives
Capital Stock of an Unrestricted Subsidiary shall be deemed a Restricted Payment
only and shall not be deemed an Asset Sale.
"Average Life" means, at any date of determination with respect to any
Indebtedness, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining install-
ment, sinking fund, serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (b) the number of
years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
"Board of Directors" means the Board of Directors of the Company or any
committee of such Board of Directors duly authorized to act under this
Indenture.
"Board Resolution" means a copy of a resolution, certified by the Secre-
tary of the Company to have been duly adopted by the Board of Directors and to
be in full force and effect on the date of such certification, and delivered to
the Trustee.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether now outstanding or
issued after the Closing Date, including, without limitation, all Common Stock
and Preferred Stock.
"Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
4
<PAGE>
"Capitalized Lease Obligations" means the discounted present value of the
rental obligations under a Capitalized Lease.
"Change of Control" means (a) the sale, lease, transfer, conveyance or
other disposition of all or substantially all of the assets of the Company to
any "person" or "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of
the Exchange Act or any successor provision to either of the foregoing,
including any group acting for the purpose of acquiring, holding or disposing of
securities within the meaning of Rule 13d-5(b)(1) under the Exchange Act) other
than Existing Shareholders (except in connection with a liquidation or
dissolution of the Company that does not constitute a Change of Control under
clause (b) below), (b) the approval by the requisite shareholders of the Company
of a plan of liquidation or statutory dissolution (which shall not be construed
to include a plan of merger or consolidation) of the Company, unless Existing
Shareholders "beneficially own" (as defined in Rule 13d-3 under the Exchange
Act) at least the same percentage of voting power after the consummation of such
plan as before or otherwise retain the right or ability, by voting power, to
control the Person that acquires the proceeds of such liquidation or
dissolution, (c) any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b) under the
Exchange Act), other than the Existing Shareholders, becomes the "beneficial
owner" (as so defined) of more than 35% of the total voting power of all classes
of the Voting Stock of the Company and/or warrants or options to acquire such
Voting Stock, calculated on a fully diluted basis, provided that Existing
Shareholders "beneficially own" (as so defined) in the aggregate a percentage of
such Voting Stock or warrants having a lesser percentage of voting power than
such other "person" or "group" and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority of
the Company's Board of Directors, or (d) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Company's
Board of Directors (together with any new directors whose election or
appointment by such board or whose nomination for election by the stockholders
of the Company was approved by a vote of the Existing Shareholders or a majority
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 Company's Board
of Directors then in office.
5
<PAGE>
"Closing Date" means the date on which the Notes are originally issued
under the Indenture.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated, whether
voting or non-voting) of such Person's equity, other than Preferred Stock of
such Person, whether now outstanding or issued after the Closing Date, including
without limitation, all series and classes of such common stock.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to Article V of this Indenture and thereafter means the
successor.
"Company Order" means a written request or order signed in the name of the
Company (i) by its Chairman, a Vice Chairman, its President, its Chief Financial
Officer or a Vice President and (ii) by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary and delivered to the Trustee; provided,
however, that such written request or order may be signed by any two of the
Persons listed in clause (i) above in lieu of being signed by one of such
Persons listed in such clause (i) and one of the officers listed in clause
(ii) above.
"Consolidated EBITDA" means, for any period, the sum of the amounts for
such period of (i) Adjusted Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) income taxes, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income (other than income taxes
(x) (either positive or negative) attributable to extraordinary and nonrecurring
gains or losses or sales of assets and (y) actually payable with respect to such
period), (iv) depreciation expense, to the extent such amount was deducted in
calculating Adjusted Consolidated Net Income, (v) amortization expense, to the
extent such amount was deducted in calculating Adjusted Consolidated Net Income,
and (vi) all other non-cash items reducing Adjusted Consolidated Net Income
(other than items that will require cash payments and for which an accrual or
reserve is, or is required by GAAP to be, made), less all non-cash items
increasing Adjusted Consolidated Net Income, all as determined on a consolidated
basis for the
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Company and its Restricted Subsidiaries in conformity with GAAP; provided that,
if any Restricted Subsidiary is not a wholly owned Restricted Subsidiary,
Consolidated EBITDA shall be reduced (to the extent not otherwise reduced in
accordance with GAAP) by an amount equal to (A) the amount of Consolidated
EBITDA attributable to such Restricted Subsidiary multiplied by (B) the quotient
of (1) the number of shares of outstanding Common Stock of such Restricted
Subsidiary not owned on the last day of such period by the Company or any of its
Restricted Subsidiaries divided by (2) the total number of shares of outstanding
Common Stock of such Restricted Subsidiary on the last day of such period.
"Consolidated Interest Expense" means, for any period, the aggregate amount
of interest in respect of Indebtedness (including amortization of original issue
discount on 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 financing; the net costs
associated with Interest Rate Agreements, and Indebtedness that is Guaranteed or
secured by the Company or any of its Restricted Subsidiaries) and all but the
principal component of rentals in respect of Capitalized Leases paid, accrued
or scheduled to be paid or to be accrued by the Company and its Restricted
Subsidiaries during such period; excluding, however, any amount of such interest
of any Restricted Subsidiary to the extent the net income of such Restricted
Subsidiary is excluded in the calculation of Adjusted Consolidated Net Income
pursuant to clause (ii) of the definition thereof (but only in the same
proportion as the net income of such Restricted Subsidiary is excluded from the
calculation of Adjusted Consolidated Net Income pursuant to clause (ii) of the
definition thereof), all as determined on a consolidated basis (without taking
into account Unrestricted Subsidiaries) in conformity with GAAP.
"Consolidated Leverage Ratio" means, on any date of determination, the
ratio of (i) the aggregate amount of Indebtedness of the Company and its
Restricted Subsidiaries on a consolidated basis as of the end of the two most
recent fiscal quarters for which financial statements of the Company have become
available prior to such date (the "Reference Period") to (ii) the aggregate
amount of Annualized Consolidated EBITDA. In making the foregoing calculation,
(A) Indebtedness shall be calculated after giving pro forma effect to (x) any
Indebtedness (including, if applicable, the Notes) Incurred subsequent to the
end of the Reference Period and on or prior to such date of determination, in
each case as if such Indebtedness had been Incurred and the proceeds thereof had
been applied on the last day of such Reference Period and (y) any Indebtedness
that was
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outstanding during such Reference Period or thereafter but that is not
outstanding or is to be repaid on such date in each case as if such Indebtedness
was repaid on the last day of such Reference Period; (B) 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
occurred in such Reference Period or thereafter and on or prior to such date of
determination as if they had occurred and such proceeds had been applied on the
first day of such Reference Period; (C) pro forma effect shall be given to asset
dispositions and asset acquisitions (including giving pro forma effect to the
application of proceeds of any asset disposition) that have been made by any
Person that has become a Restricted Subsidiary or has been merged with or into
the Company or any Restricted Subsidiary during such Reference Period or
subsequent to such period and on or prior to such 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; and (D) the aggregate
amount of Indebtedness outstanding as of the end of the Reference Period will be
deemed to include the total amount of funds outstanding and/or available on the
date under any revolving credit facilities of the Company or its Restricted
Subsidiaries.
"Consolidated Net Worth" means, at any date of determination, stockholders'
equity as set forth on the most recently available consolidated balance sheet,
whether quarterly or annual, of the Company and its Restricted Subsidiaries,
less any amounts attributable to Redeemable Stock or any equity security
convertible into or exchangeable for Indebtedness, the cost of treasury stock
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of the Company or any of its Restricted Subsidiaries, each item to
be determined in conformity with GAAP.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 140 Broadway, New York, New York 10005, Attention: Corporate Trust
Administration.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
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"Depositary" means The Depository Trust Company, its nominees, and their
respective successors, until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and hereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder.
"Escrow Account" means the escrow account for the initial deposit of
approximately $53.3 million of the net proceeds from the sale of the Notes under
the Escrow Agreement.
"Escrow Agent" means The Chase Manhattan Bank, as Escrow Agent under the
Escrow Agreement, or any successor thereto appointed pursuant to such Escrow
Agreement.
"Escrow Agreement" means the Escrow Agreement, dated as of the date of the
Indenture, by and among the Escrow Agent, the Trustee and the Company, governing
the disbursement of funds from the Escrow Account, as amended.
"Event of Default" has the meaning provided in Section 6.1.
"Excess Proceeds" has the meaning provided in Section 4.11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the 11 5/8% Senior Notes due 2006 to be issued
pursuant to this Indenture in connection with the offer to exchange Exchange
Notes for Original Notes that may be made by the Company pursuant to the
Registration Rights Agreement.
"Exchange Offer" means the offer by the Company to exchange Exchange Notes
for Original Notes made pursuant to the Registration Rights Agreement.
"Existing Shareholders" means Douglas G. Smith, Madison Dearborn Capital
Partners, L.P., Allen & Company Incorporated and Chatterjee Management Company
and their respective Affiliates at the Closing Date.
"FCC" means the Federal Communications Commission.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Indenture, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
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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 approved by a significant segment
of the accounting profession.
"Global Notes" has the meaning provided in Section 2.1.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for purposes of assuring in any other manner the obligee of
such Indebtedness of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary course
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Holder" means the registered holder of any Note.
"Incur" means, with respect to any Indebtedness, to incur, create, issue,
assume, Guarantee or otherwise become liable for or with respect to, or become
responsible for, the payment of, contingently or otherwise, such Indebtedness,
including an Incurrence of Indebtedness by reason of the acquisition of more
than 50% of the Capital Stock of any Person; provided that neither the accrual
of interest nor the accretion of original issue discount shall be considered an
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person at any date of determi-
nation (without duplication), (i) all indebtedness of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all obligations of such Person in respect of
letters of credit or other similar instruments (including reimbursement
obligations with respect thereto), (iv) all obligations of such Person to pay
the deferred and unpaid purchase price of property or services, except Trade
Payables, (v) all Capitalized Lease Obligations of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such
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Indebtedness is assumed by such Person, provided that the amount of such
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other Persons Guaranteed by such Person to the extent such
Indebtedness is Guaranteed by such Person and (vii) the maximum fixed redemption
price of Redeemable Stock of such Person at the time of determination, provided,
however, if such Redeemable Stock is not permitted to be redeemed at the date
of determination, the price shall be the book value of such Redeemable Stock.
The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date (or in the case of a revolving credit or other similar
facility, the total amount of funds outstanding and/or available on the date of
determination) of all unconditional obligations as described above and, with
respect to contingent obligations, the maximum liability upon the occurrence of
the contingency giving rise to the obligation, provided (i) that the amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness and (ii) that Indebtedness shall not
include any liability for federal, state, local or other taxes.
"Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supple-
mental to this Indenture entered into pursuant to the applicable provisions of
this Indenture.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette Securities
Corporation and Goldman, Sachs & Co.
"Interest Payment Date" means each semiannual interest payment date on
February 15 and August 15 of each year, commencing February 15, 1997.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement.
"Investment" in any Person means any direct or indirect advance, loan or
other extension of credit (including, without limitation, by way of Guarantee or
similar arrangement; but excluding advances to customers in the ordinary course
of business that are, in conformity with GAAP, recorded as accounts receivable
on the balance sheet of the Company or its Restricted Subsidiaries) or capital
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contribution to (by means of any transfer of cash or other property to others or
any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, bonds, notes, debentures or other
similar instruments issued by, such Person (whether purchased or acquired from
the issuer or from a third party) and shall include the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including, without limitation, any conditional sale or other
title retention agreement or lease in the nature thereof, any sale with recourse
against the seller or any Affiliate of the seller, or any agreement to give any
security interest).
"Liquidated Damages" shall have the meaning specified in the Registration
Rights Agreement.
"Mirror Indebtedness" means Indebtedness, which may be subordinated in
right of payment to Indebtedness of the Restricted Subsidiaries permitted to be
Incurred pursuant to Section 4.3, in the form of either (i) a demand note or
(ii) a term note having a final maturity no later than the final maturity of the
Notes, in each case owed by a Restricted Subsidiary to the Company or another
Restricted Subsidiary having interest payment or accrual dates and an interest
rate (whether current pay or accrual) equal to, or more frequent than or greater
than, the Notes.
"Net Cash Proceeds" means (a) with respect to any Asset Sale, the proceeds
of such Asset Sale in the form of cash or Temporary Cash Investments net of
(i) brokerage commissions and other fees and expenses (including fees and
expenses of counsel and investment bankers) related to such Asset Sale, (ii)
provisions for all taxes (whether or not paid or payable) as a result of such
Asset Sale without regard to the consolidated results of operations of the
Company and its Subsidiaries, taken as a whole, (iii) payments made to repay
Indebtedness or any other obligation outstanding at the time of such Asset Sale
that either (A) is secured by a Lien on the property or assets sold or (B) is
required to be paid as a result of such sale and (iv) appropriate amounts to be
provided by the Company or any Restricted Subsidiary of the Company as a reserve
against any liabilities associated with such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as determined in conformity
with GAAP and (b) with respect to any issuance
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or sale of Capital Stock, the proceeds of such issuance or sale in the form of
cash or cash equivalents, including payments in respect of deferred payment
obligations (to the extent corresponding to the principal, but not interest,
component thereof) when received in the form of cash or cash equivalents (except
to the extent such obligations are financed or sold with recourse to the Company
or any Restricted Subsidiary of the Company) and proceeds from the conversion of
other property received when converted to cash or cash equivalents, net of
attorney's fees, accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other fees incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Notes" means, prior to the Exchange Offer, the Original Notes, and after
the Exchange Offer, the Original Notes, if any, and the Exchange Notes that are
issued pursuant to this Indenture.
"Offer to Purchase" means an offer by the Company to purchase Notes from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that
all Notes validly tendered will be accepted for payment on a pro rata basis;
(ii) the purchase price and the date of purchase (which shall be a Business Day
no earlier than 30 days nor later than 60 days from the date such notice is
mailed) (the "Payment Date"); (iii) that any Note not tendered will continue to
accrue interest pursuant to its terms; (iv) that, unless the Company defaults in
the payment of the purchase price, any Note accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Offer to
Purchase will be required to surrender the Note, together with the form entitled
"Option of the Holder to Elect Purchase" on the reverse side of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered, provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. On the Payment Date, the Company shall
(i) accept for payment on a pro rata basis
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Notes or portions thereof tendered pursuant to an Offer to Purchase;
(ii) deposit with the Paying Agent money sufficient to pay the purchase price
of all Notes or portions thereof so accepted; and (iii) deliver, or cause to be
delivered, to the Trustee all Notes or portions thereof so accepted together
with an Officers' Certificate specifying the Notes or portions thereof accepted
for payment by the Company. The Paying Agent shall promptly mail to the Holders
of Notes so accepted payment in an amount equal to the purchase price, and the
Trustee shall promptly authenticate and mail to such Holders a new Note equal in
principal amount to the unpurchased portion of the Note surrendered, provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. The Company will publicly announce the
results of an Offer to Purchase as soon as practicable after the Payment Date.
The Trustee shall act as the Paying Agent for an Offer to Purchase. The Company
will comply with Rule 14e-l under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable, in the event that the Company is required to repurchase Notes
pursuant to an Offer to Purchase.
"Officer" means with respect to the Company, the Chairman of the Board, the
President, any Vice President, the Chief Financial Officer, the Treasurer or any
Assistant Treasurer, or the Secretary or any Assistant Secretary.
"Officers' Certificate" means a certificate signed by two Officers and
delivered to the Trustee. Each Officers' Certificate (other than certificates
provided pursuant to TIA Section 314(a)(4)) shall include the statements
provided for in TIA Section 314(e).
"Opinion of Counsel" means a written opinion signed by legal counsel who is
acceptable to the Trustee and delivered to the Trustee. Such counsel may be an
employee of or counsel to the Company or the Trustee. Each such Opinion of
Counsel shall include the statements provided for in TIA Section 314(e).
Opinions of Counsel required to be delivered may have qualifications customary
for opinions of the type required.
"Original Notes" means the 11 5/8% Senior Notes due 2006 that are issued
pursuant to this Indenture and not exchanged for Exchange Notes in connection
with the offer to exchange Exchange Notes for Original Notes that may be made
pursuant to the Registration Rights Agreement.
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"Paying Agent" has the meaning provided in Section 2.3, except that, for
the purposes of Article VIII, the Paying Agent shall not be the Company or a
Subsidiary of the Company or an Affiliate of any of them. The term "Paying
Agent" includes any additional Paying Agent.
"Permitted Investment" means (i) an Investment in the Company or a
Restricted Subsidiary or a Person which will, upon the making of such Invest
ment, become a Restricted Subsidiary or be merged or consolidated with or into
or transfer or convey all or substantially all its assets to, the Company or a
Restricted Subsidiary; provided that such Person's primary business is a
Telecommunications Business; (ii) a Temporary Cash Investment; (iii) stock,
obligations or securities received in satisfaction of judgments; (iv) any
repurchase of stock, stock options, or warrants from employees pursuant to
agreements entered by the Company or any Restricted Subsidiary for consideration
not to exceed $2 million in any fiscal year; (v) any Investment, together with
all other Investments under this clause (v), less any previous Investments in
Persons pursuant to this clause (v) who subsequently become Restricted
Subsidiaries, not to exceed two times the Net Cash Proceeds received by the
Company on or after July 3, 1996 from the issuance and sale of its Capital Stock
(other than (A) Redeemable Stock and (B) Preferred Stock that provides for the
payment of dividends in cash) to a Person that is not a Subsidiary of the
Company, in a Person in a Telecommunications Business; and (vi) any Investment
or Investments not to exceed $50 million in the aggregate.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are being contested in good faith by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made, (ii) statutory Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to amounts not
yet delinquent or being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made; (iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, (iv) Liens incurred or deposits
made to secure the performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return of money bonds and other obligations of a
similar nature incurred in the
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ordinary course of business (exclusive of obligations for the payment of
borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other irregularities that do
not materially interfere with the ordinary course of business of the Company or
any of its Restricted Subsidiaries; (vi) Liens (including extensions and
renewals thereof) upon real or personal property; provided that (a) such Lien is
created solely for the purpose of securing Indebtedness Incurred in accordance
with Section 4.3 (1) to finance the cost (including the cost of improvement or
construction) of the item of property or assets subject thereto and such Lien
is created prior to, at the time of or within six months after the later of the
acquisition, the completion of construction or the commencement of full
operation of such property or (2) to refinance any Indebtedness previously so
secured, (b) the principal amount of the Indebtedness secured by such Lien does
not exceed 100% of such cost, and (c) any such Lien shall not extend to or cover
any property or assets other than such item of property or assets and any
improvements on such item; (vii) leases or subleases granted to others that do
not materially interfere with the ordinary course of business of the Company and
its Restricted Subsidiaries, taken as a whole; (viii) Liens encumbering
property or assets under construction arising from progress or partial payments
by a customer of the Company or its Restricted Subsidiaries relating to such
property or assets; (ix) any interest or title of a lessor in the property
subject to any Capitalized Lease or operating lease; (x) Liens arising from
filing Uniform Commercial Code financing statements regarding leases;
(xi) Liens in favor of the Company or any Restricted Subsidiary; (xii) Liens
arising from the rendering of a final judgment or order against the Company or
any Restricted Subsidiary of the Company that does not give rise to an Event of
Default; (xiii) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (xiv) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (xv) Liens encumbering
customary initial deposits and margin deposits, and other Liens that are either
within the general parameters customary in the industry and incurred in the
ordinary course of business, in each case securing Indebtedness under Interest
Rate Agreements and Currency Agreements and forward contracts, options, future
contracts, futures options or similar agreements or arrangements designed solely
to protect the Company or any of its Restricted Subsidiaries from fluctuations
in interest rates or the price of commodities; (xvi) Liens arising out of
conditional sale, title retention, consignment or similar arrangements, or the
sale of goods entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business in accordance with the past practices of the
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Company and its Restricted Subsidiaries prior to the Closing Date; and
(xvii) Liens on or sales of receivables.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated, whether
voting or non-voting) of such Person's preferred or preference equity, whether
now outstanding or issued after the Closing Date, including, without limitation,
all series and classes of such preferred or preference stock.
"principal" of a debt security, including the Notes, means the principal
amount due on the Stated Maturity as shown on such debt security.
"Public Equity Offering" means an underwritten public offering by the
Company of primary shares of Common Stock of the Company pursuant to an
effective registration statement under the Securities Act.
"Redeemable Stock" means any class or series of Capital Stock of any Person
that by its terms or otherwise is (i) required to be redeemed prior to the
Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock at an time prior to the Stated Maturity of
the Notes or (iii) convertible into or exchangeable for Capital Stock referred
to in clause (i) or (ii) above or Indebtedness having a scheduled maturity prior
to the Stated Maturity of the Notes, provided that any Capital Stock that would
not constitute Redeemable Stock but for provisions thereof giving holders
thereof the right to require such Person to repurchase or redeem such Capital
Stock upon the occurrence of an "asset sale" or "change of control" occurring
prior to the Stated Maturity of the Notes shall not constitute Redeemable Stock
if the "asset sale" or "change of control" provisions applicable to such Capital
Sock are no more favorable to the holders of such Capital Stock than the
provisions contained in Sections 4.11 and 4.12 and such Capital Stock
specifically provides that such Person will not repurchase or redeem any such
stock pursuant to such provision prior to the Company's repurchase of such Notes
as are required to be repurchased pursuant to Sections 4.11 and 4.12.
"Redemption Date", when used with respect to any Note to be redeemed, means
that date fixed for such redemption by or pursuant to this Indenture.
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"Redemption Price", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.
"Registrar" has the meaning provided in Section 2.3.
"Registration Rights Agreement" means the Registration Rights Agreement by
and among the Company and the Initial Purchasers dated as of the Closing Date.
"Regular Record Date" for the interest payable on any Interest Payment Date
means February 1 or August 1 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee with direct responsibility for the administration of the
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Payments" has the meaning provided in Section 4.4.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning provided in Section 2.3.
"Significant Subsidiary" means, at any date of determination, any Restrict-
ed Subsidiary of the Company that, together with its Subsidiaries, (i) for the
most recent fiscal year of the Company, accounted for more than 10% of the
consolidated revenues of the Company and its Restricted Subsidiaries or (ii) as
of the end of such fiscal year, was the owner of more than 10% of the
consolidated assets of the Company and its Restricted Subsidiaries, all as set
forth on the most recently available consolidated financial statements of the
Company for such fiscal year.
"Special Subsidiary" means a direct wholly-owned Subsidiary of the Company
designated as such by an Officers' Certificate, which designation may not be
revoked, and subject to Section 4.20.
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"Stated Maturity" means, (i) with respect to any debt security, the date
specified in such debt security as the fixed date on which the final installment
of principal of such debt security is due and payable and (ii) with respect to
any scheduled installment of principal of or interest or Liquidated Damages on
any debt security, the date specified in such debt security as the fixed date on
which such installment is due and payable.
"Strategic Equity Investor" means a corporation or other entity with an
equity market capitalization, a net asset value or annual revenues of at least
$2 billion which is a Telecommunications Business.
"Subsidiary" means, with respect to any Person, any corporation, associa-
tion or other business entity of which more than 50% of the outstanding Voting
Stock is owned directly or indirectly, by such Person and one or more other
Subsidiaries of such Person.
"Telecommunications Assets" means, with respect to any Person, any asset
that is utilized by such Person, directly or indirectly, for the design,
development, construction, installation, integration, operation, management or
provision of telecommunications equipment, inventory, systems and/or services,
including without limitation, any mobile telephone, PCS, microwave or paging
assets. Telecommunications Assets shall include stock, joint venture or
partnership interests of an entity where substantially all of the assets of
the entity consist of Telecommunications Assets.
"Telecommunications Business" means a business primarily involved in the
ownership, design, development, construction, acquisition, installation,
integration, management and/or provision of Telecommunications Assets.
"Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof not having a maturity of more than two years from the date of
acquisition, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America or any state thereof, and which bank or trust company
has capital surplus and undivided profits aggregating in excess of $50 million
and has outstanding debt which is rated "A" (or such similar equivalent rating)
or higher by at least one nationally recognized statistical rating organizing
(as defined in
19
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Rule 436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (ii) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) commercial paper maturing
not more than 90 days after the date of acquisition, issued by a corporation
(other than an Affiliate of the Company) organized and in existence under the
laws of the United States of America or any state thereof with a rating at the
time as of which any investment therein is made of "P-1" (or higher) according
to Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard &
Poor's Ratings Services, and (v) securities with maturities of six months or
less from the date of acquisition issued or fully and unconditionally guaranteed
by any state, commonwealth or territory of the United States of America, or by
any political subdivision or taxing authority thereof and rated at least "A" by
Standard & Poor's Ratings Services or Moody's Investors Service, Inc.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended (15 U.S. Code (S)(S) 77aaa-77bbb), as in effect on the date this Inden-
ture was executed, except as provided in Section 9.6; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "TIA" or
"Trust Indenture Act" shall mean, to the extent required by such amendment, the
Trust Indenture Act of 1939, as so amended.
"Trade Payables" means any accounts payable or any other indebtedness or
monetary obligation to trade creditors created, assumed or Guaranteed by the
Company or any of its Restricted Subsidiaries arising in the ordinary course of
business in connection with the acquisition of goods or services, except for
payables that are more than 60 days past due and not contested in good faith.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article VII of this Indenture and thereafter means such successor.
"United States Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as
amended and as codified in Title 11 of the United States Code, as amended from
time to time hereafter, or any successor federal bankruptcy law.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
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Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such Subsid-
iary owns any Capital Stock of or owns or holds any Lien on any property of the
Company or any Restricted Subsidiary, provided that either (A) the Subsidiary to
be so designated has total assets of $1,000 or less or (B) if such Subsidiary
has assets greater than $1,000 that such designation would be permitted under
Section 4.4. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary of the Company, provided that immediately after
giving effect to such designation (x) the Company could incur $1.00 of
additional Indebtedness under the first paragraph of Section 4.3 and (y) no
Default or Event of Default shall have occurred and be continuing. Any such
designation by the Board of Director shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the Board Resolution giving effect to
such designation and an Officers' Certificate that such designation complied
with the foregoing provisions.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) 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 the issuer thereof at any time prior
to the Stated Maturity of the Notes, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such U.S.
Government Obligation or a specific payment of interest on or principal of any
such U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt; provided that (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 interest on
or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"Voting Stock" means with respect to any Person, Capital Stock of any class
or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by foreign nationals mandated by
21
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applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.
Section 1.2 Incorporation by Reference of Trust Indenture Act. Whenever
-------------------------------------------------
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder or a Noteholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the Commis-
sion and not otherwise defined herein have the meanings assigned to them
therein.
Section 1.3 Rules of Construction. Unless the context otherwise requires:
---------------------
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in
the plural include the singular;
(v) provisions apply to successive events and transactions;
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<PAGE>
(vi) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article,
Section or other subdivision; and
(vii) all references to Sections or Articles refer to Sections
or Articles of this Indenture unless otherwise indicated.
ARTICLE II
The Notes
Section 2.1 Form and Dating. The Notes and the Trustee's certificate of
---------------
authentication shall be substantially in the form annexed hereto as Exhibit A.
The Notes may have notations, legends or endorsements required by law, stock
exchange agreements or requirements to which the Company is subject or usage.
The Company shall approve the form of the Notes and any notation, legend or
endorsement on the Notes. Each Note shall be dated the date of its authentica-
tion.
The terms and provisions contained in the form of the Notes annexed hereto
as Exhibit A shall constitute, and are hereby expressly made, a part of this
Indenture. To the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
The Original Notes shall be issued initially in the form of (i) one or more
global notes in registered form (the "Global Notes") deposited with, or on
------------
behalf of, the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided or (ii) definitive physical certificates in
registered form for delivery to the record holders who are institutional
"accredited investors" under Regulation D under the Securities Act (the
"Accredited Investor Notes"), duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Exchange Notes initially shall be
issued in the form of one or more Global Notes. Each Global Note shall bear
such legend as may be required or reasonably requested by the Depositary.
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
23
<PAGE>
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
Section 2.2 Execution, Authentication and Denominations. Two Officers
-------------------------------------------
shall execute the Notes for the Company by facsimile or manual signature in the
name and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office at
the time the Trustee or an authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or an authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
Pursuant to and based upon a Company Order, the Trustee or an authenti-
cating agent shall authenticate for original issue Original Notes in the
aggregate principal amount of $250,000,000 and shall authenticate for original
issue Exchange Notes up to an aggregate principal amount of $250,000,000,
provided that such Exchange Notes shall be issuable only upon the valid
surrender for cancellation of Original Notes of a like aggregate principal
amount in the Exchange Offer. Such Company Order shall specify the amount of
the Notes to be authenticated and the date on which the original issue of Notes
is to be authenticated. The aggregate principal amount of Notes outstanding at
any time may not exceed the amount set forth above except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 2.6 or 2.7.
The Trustee may appoint an authenticating agent to authenticate Notes. An
authenticating agent may authenticate Notes whenever the Trustee may do so,
except with regard to the original issuance of the Notes. Except as provided in
the preceding sentence, each reference in this Indenture to authentication by
the Trustee includes authentication by such authenticating agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company. The provisions of 7.1, 7.2 and 7.6 hereof shall be
applicable to any authenticating agent.
The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount and any integral multiple
thereof.
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Section 2.3 Registrar and Paying Agent. The Company shall maintain an
--------------------------
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
---------
for payment (the "Paying Agent") and an office or agency where notices and
------------
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall cause the Registrar to keep a register of the Notes
and of their transfer and exchange (the "Security Register"). The Security
-----------------
Register shall be in written form or any other form capable of being converted
into written form within a reasonable time. The Company may have one or more
co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Company shall give prompt written
notice to the Trustee of the name and address of any such Agent and any change
in the address of such Agent. If the Company fails to maintain a Registrar,
Paying Agent and/or agent for service of notices and demands, the Trustee shall
act as such Registrar, Paying Agent and/or agent for service of notices and
demands. The Company may remove any Agent upon written notice to such Agent and
the Trustee; provided that no such removal shall become effective until (i) the
acceptance of an appointment by a successor Agent to such Agent as evidenced by
an appropriate agency agreement entered into by the Company and such successor
Agent and delivered to the Trustee or (ii) notification to the Trustee that the
Trustee shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notice and demands. If, at any time, the Trustee is not
the Registrar, the Company shall furnish, or cause to be furnished, to the
Trustee on or before each Interest Payment Date and at such other times as the
Trustee may reasonably request in writing, the names and addresses of the
Holders as they appear in the Security Register. At the option of the Company,
payment of interest may be made by check mailed to the address of the Holders as
such address appears in the Security Register.
Section 2.4 Paying Agent to Hold Money in Trust. Not later than each due
-----------------------------------
date of the principal, premium and Liquidated Damages, if any, and interest on
any Notes, the Company shall deposit with the Paying Agent money in
25
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immediately available funds sufficient to pay such principal, premium and
Liquidated Damages, if any, and interest so becoming due. The Company shall
require each Paying Agent other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Holders or the Trustee
all money held by the Paying Agent for the payment of principal of, premium and
Liquidated Damages, if any, and interest on the Notes (whether such money has
been paid to it by the Company or any other obligor on the Notes), and such
Paying Agent shall promptly notify the Trustee of any default by the Company (or
any other obligor on the Notes) in making any such payment. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee.
Section 2.5 Transfer and Exchange. When Notes are presented to the
---------------------
Registrar or a co-Registrar with a request to register the transfer or to
exchange them for an equal principal amount of Notes of other authorized
denominations, the Registrar shall register the transfer or make the exchange as
requested if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Notes at the Registrar's request. No service charge
shall be made for any registration of transfer or exchange of the Notes, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any such
transfer taxes or other similar governmental charge payable upon exchanges
pursuant to Section 2.8, 3.8 or 9.4).
The Registrar shall not be required (i) to issue, register the transfer of
or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.3 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.
Notwithstanding any other provisions of this Section 2.5, unless and until
it is exchanged in whole or in part for Notes in definitive registered form, a
Global Note representing all or a portion of the Notes may not be transferred
26
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except as a whole by the Depositary to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary.
If the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes or if at any time the Depositary
shall no longer be eligible under the next sentence of this paragraph, the
Company shall appoint a successor Depositary with respect to the Notes. Each
Depositary appointed pursuant to this Section 2.5 must, at the time of its
appointment and at all times while it serves as Depositary, be a clearing agency
registered under the Exchange Act and any other applicable statute or
regulation. The Company will execute, and the Trustee will authenticate and
deliver, Notes in definitive registered form in any authorized denominations,
in an aggregate principal amount equal to the principal amount of the Global
Note or Notes representing such Notes in exchange for such Global Note or Notes
if the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes or if any time the Depositary shall
no longer be eligible to serve as Depositary and a successor Depositary for the
Notes is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility.
The Company may at any time and in its sole discretion determine that the
Notes shall no longer be represented by a Global Note or Notes. In such event
the Company will execute, and the Trustee will authenticate and deliver, Notes
in definitive registered form in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such Notes in exchange for such Global Note or Notes.
Upon the exchange of a Global Note for Notes in definitive registered form
without coupons, in authorized denominations, such Global Note shall be
cancelled by the Trustee. Notes in definitive registered form issued in
exchange for a Global Note pursuant to this Section 2.5 shall be registered in
such names and in such authorized denominations as the Depositary for such
Global Note, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver such Notes
to or as directed by the Persons in whose names such Notes are so registered.
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Notwithstanding the foregoing, transfer of Original Notes which are
Accredited Investor Notes may be registered only when accompanied by the
following additional information and documents as applicable:
(i) If such Accredited Investor Note is being delivered to the
Registrar by a Holder for registration in the name of such Holder, without
transfer, a certification from such Holder to that effect (in substantially
the form set forth on the reverse of the Note); or
(ii) If such Accredited Investor Note is being trans ferred
(a) to a Person who the seller reasonably believes is a qualified
institutional buyer (as defined in Rule 144A under the Securities Act) in
a transaction meeting the requirements of Rule 144A, (b) in a transaction
meeting the requirements of Rule 144 under the Securities Act, (c) outside
the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act or (d) in accordance with
another exemption from the registration requirements of the Securities Act,
a certification from such Holder to that effect (in substantially the form
set forth on the reverse of the Note) and, in the case of (d), if the
Company so requests, an Opinion of Counsel.
Any Accredited Investor Note transferred pursuant to Rule 144A or Rule 144
under the Securities Act shall thereafter be represented by a Global Note.
All Notes issued upon any registration of transfer or exchange of Notes
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Section 2.6 Replacement Notes. If a mutilated Note is surrendered to the
-----------------
Trustee or if the Holder claims that the Note has been lost, destroyed or wrong-
fully taken, then, in the absence of notice to the Company or the Trustee that
such Note has been acquired by a bona fide purchaser, the Company shall issue
and the Trustee shall authenticate a replacement Note of like tenor and
principal amount; provided that the requirements of this Section 2.6 are met.
If required by the Trustee or the Company, an indemnity bond must be furnished
that is sufficient in the judgment of both the Trustee and the Company to
protect the Company, the Trustee or any Agent from any loss that any of them may
suffer if
28
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a Note is replaced. The Company may charge such Holder for the expenses of the
Company and the Trustee in replacing a Note. In case any such mutilated, lost,
destroyed or wrongfully taken Note has become or is about to become due and
payable, the Company in its discretion may pay such Note instead of issuing a
new Note in replacement thereof.
Every replacement Note is an additional obligation of the Company and shall
be entitled to the benefits of this Indenture.
The provisions of this Section 2.6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies against the Company and the Trustee
with respect to the replacement or payment of mutilated, destroyed, lost or
wrongfully taken Notes.
Section 2.7 Outstanding Notes. Notes outstanding at any time are all
-----------------
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.7 as not outstanding.
If a Note is replaced pursuant to Section 2.6, it ceases to be outstanding
unless and until the Trustee and the Company receive proof satisfactory to each
of them that the replaced Note is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the Company)
holds on a Redemption Date or the maturity date money sufficient to pay Notes
payable on that date, then on and after that date such Notes cease to be
outstanding and interest on them shall cease to accrue.
Notes, or portions thereof, for the payment or redemption of which moneys
or U.S. Government Obligations (as provided for in Article VIII) in the
necessary amount shall have been deposited in trust with the Trustee or with any
Paying Agent (other than the Company) or shall have been set aside, segregated
and held in trust by the Company for the Holders of such Notes (if the Company
shall act as its own Paying Agent), on and after that time shall cease to be
outstanding and, in the case of redemption, interest on such Notes shall cease
to accrue, provided that if such Notes, or portions thereof, are to be redeemed
prior to the maturity thereof, notice of such redemption shall have been given
as herein provided, or provision satisfactory to the Trustee shall have been
made for giving such notice.
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A Note does not cease to be outstanding because the Company or one of its
Affiliates holds such Note, provided, however, that, in determining whether the
Holders of the requisite principal amount of the outstanding Notes have given
any request, demand, authorization, direction, notice, consent or waiver hereun-
der, Notes owned by the Company or any other obligor upon the Notes or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be outstanding, except that in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee has actual knowledge to be so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be regarded as outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Company or
any other obligor upon the Notes or any Affiliate of the Company or of such
other obligor.
Section 2.8 Temporary Notes. Until definitive Notes are ready for
---------------
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Notes, as
evidenced by their execution of such temporary Notes. If temporary Notes are
issued, the Company will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the
temporary Notes at the office or agency of the Company designated for such
purpose pursuant to Section 4.2, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Notes the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall be entitled to the same benefits under this
Indenture as definitive Notes.
Section 2.9 Cancellation. The Company at any time may deliver, or cause
------------
to be delivered, Notes to the Trustee for cancellation. The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment. The Trustee (and no one else) shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall destroy them in accordance with its normal procedure.
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Section 2.10 CUSIP Numbers. The Company in issuing the Notes may use
-------------
"CUSIP" numbers (if then generally in use), and the Company and the Trustee
shall use CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided that any such notice shall state that no representation is
made as to the correctness of such CUSIP numbers either as printed on the Notes
or as contained in any notice of redemption or exchange and that reliance may be
placed only on the other identification numbers printed on the Notes; and
provided further that failure to use CUSIP numbers in any notice of redemption
or exchange shall not affect the validity or sufficiency of such notice. The
Company shall promptly notify the Trustee of any change in CUSIP numbers.
Section 2.11 Defaulted Interest. If the Company defaults in a payment of
------------------
interest on the Notes, it shall pay, or shall deposit with the Paying Agent
money in immediately available funds sufficient to pay the defaulted interest,
plus (to the extent lawful) any interest payable on the defaulted interest, to
the Persons who are Holders on a subsequent special record date. A special
record date, as used in this Section 2.11 with respect to the payment of any
defaulted interest, shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder and to the Trustee a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest to be paid.
ARTICLE III
Optional Redemption
Section 3.1 Right of Redemption. (a) The Notes will be redeemable, at the
-------------------
Company's option, in whole or in part, at any time or from time to time, on or
after August 15, 2001 and prior to maturity, upon not less than 30 nor more than
60 days' prior notice mailed by first class mail to each Holder's last address
as it appears in the Security Register, at the Redemption Prices (expressed in
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date that is prior to
the Redemption Date to receive interest due on an Interest Payment Date), if re-
deemed during the 12-month period commencing August 15, of the years set forth
below:
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Redemption
Year Price
---- ----------
2001 105.81%
2002 103.88%
2003 101.94%
2004 and thereafter 100.00%
(b) In addition, at any time prior to August 15, 1999, the Company
may redeem up to one third of the Notes originally issued, at any time as a
whole or from time to time in part, with the proceeds of one or more Public
Equity Offerings or sales of Capital Stock (other than Redeemable Stock) to one
or more Strategic Equity Investors, each such Public Equity Offering or sale to
Strategic Equity Investors resulting in Net Cash Proceeds of $50 million or
more, at a redemption price (expressed as a percentage of principal amount) of
111.625%, plus accrued and unpaid interest and Liquidated Damages, if any, to
the Redemption Date, provided that after any such redemption at least two thirds
of the aggregate principal amount of Notes originally outstanding remains
outstanding and each such redemption is effected not more than 60 days after the
consummation of such Public Equity Offering or sale to Strategic Equity Inves-
tors.
Section 3.2 Notices to Trustee. If the Company elects to redeem Notes
------------------
pursuant to Section 3.1, it shall notify the Trustee in writing of the
Redemption Date, the principal amount of Notes to be redeemed and the clause of
this Indenture pursuant to which the redemption shall occur.
The Company shall give each notice provided for in this Section 3.2 in an
Officers' Certificate at least 45 days before the Redemption Date (unless a
shorter period shall be satisfactory to the Trustee).
Section 3.3 Selection of Notes to Be Redeemed. If less than all of the
---------------------------------
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not listed on a national securities exchange, on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem fair and
appropriate; provided that no Notes of $1,000 in principal amount or less shall
be redeemed in part.
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The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount may only be redeemed in whole. The Trustee may select for redemption
portions (equal to $1,000 in principal amount or any integral multiple thereof)
of Notes that have denominations larger than $1,000 in principal amount. Provi-
sions of this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption. The Trustee shall notify the Company
and the Registrar promptly in writing of the Notes or portions of Notes to be
called for redemption.
Section 3.4 Notice of Redemption. At least 30 days but not more than 60
--------------------
days before a Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first class mail to each Holder whose Notes are to be
redeemed.
The notice shall identify the Notes to be redeemed and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the name and address of the Paying Agent;
(iv) that Notes called for redemption must be surrendered to
the Paying Agent in order to collect the Redemption Price;
(v) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date and the only remaining right of the Holders is to
receive payment of the Redemption Price plus accrued and unpaid interest
and Liquidated Damages, if any, to the Redemption Date upon surrender of
the Notes to the Paying Agent;
(vi) that, if any Note is being redeemed in part, the portion of
the principal amount (equal to $1,000 in principal amount at Stated
Maturity or any integral multiple thereof) of such Note to be redeemed and
that, on and after the Redemption Date,
33
<PAGE>
upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion thereof will be reissued;
(vii) that, if any Note contains a CUSIP number as provided in
Section 2.10, no representation is being made as to the correctness of the
CUSIP number either as printed on the Notes or as contained in the notice
of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes; and
(viii) the aggregate principal amount of Notes being redeemed.
At the Company's request (which request may be revoked by the Company at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
the Company. If, however, the Company gives such notice to the Holders, the
Company shall concurrently deliver to the Trustee an Officers' Certificate
stating that such notice has been given.
Section 3.5 Effect of Notice of Redemption. Once notice of redemption is
------------------------------
mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued and unpaid
interest to the Redemption Date.
Notice of redemption shall be deemed to be given when mailed, whether or
not the Holder receives the notice. In any event, failure to give such notice,
or any defect therein, shall not affect the validity of the proceedings for the
redemption of Notes held by Holders to whom such notice was properly given.
Section 3.6 Deposit of Redemption Price. On or prior to 10:00 a.m. New
---------------------------
York City time on any Redemption Date, the Company shall deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, shall segregate and
hold in trust as provided in Section 2.4) money in immediately available funds
sufficient to pay the Redemption Price of and accrued and unpaid interest and
Liquidated Damages, if any, on all Notes to be redeemed on that date
34
<PAGE>
other than Notes or portions thereof called for redemption on that date that
have been delivered by the Company to the Trustee for cancellation.
Section 3.7 Payment of Notes Called for Redemption. If notice of
--------------------------------------
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued and unpaid interest and Liquidated Damages, if any, to such Redemption
Date, and on and after such date (unless the Company shall default in the
payment of such Notes at the Redemption Price and accrued and unpaid interest
and Liquidated Damages, if any, to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Notes and Liquidated Damages, if any, shall continue to
accrue), such Notes shall cease to accrue interest and Liquidated Damages, if
any. Upon surrender of any Note for redemption in accordance with a notice of
redemption, such Note shall be paid and redeemed by the Company at the
Redemption Price, together with accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date; provided that installments of interest
and Liquidated Damages whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders registered as such at the close of business
on the relevant Regular Record Date; provided, further, that if a Redemption
Date is after a Regular Record Date and on or prior to the relevant Interest
Payment Date, the accrued interest and Liquidated Damages, if any, will be
payable to the Holder of the redeemed Notes registered on the relevant Regular
Record Date.
Section 3.8 Notes Redeemed in Part. Upon surrender of any Note that is
----------------------
redeemed in part, the Trustee shall authenticate for the Holder a new Note equal
in principal amount to the unredeemed portion of such surrendered Note.
ARTICLE IV
Covenants
Section 4.1 Payment of Notes. The Company shall pay the principal of,
----------------
premium and Liquidated Damages, if any, and interest on the Notes on the dates
and in the manner provided in the Notes and this Indenture. An installment of
principal, premium and Liquidated Damages, if any, or interest shall be consid-
ered paid on the date due if the Trustee or Paying Agent (other than the Compa-
ny, a Subsidiary of the Company, or any Affiliate of any of them) holds on that
35
<PAGE>
date money deposited by the Company in immediately available funds and
designated for and sufficient to pay the installment. As provided in Section
6.9, upon any bankruptcy or reorganization procedure relative to the Company,
the Trustee shall serve as the Paying Agent and conversion agent, if any, for
the Notes.
The Company shall pay interest on overdue principal, premium and Liquidated
Damages, if any, and interest on overdue installments of interest, to the extent
lawful, at the rate per annum specified in the Notes.
Section 4.2 Maintenance of Office or Agency. The Company will maintain an
-------------------------------
office or agency in the Borough of Manhattan, the City of New York where Notes
may be surrendered for registration of transfer or exchange or for presentation
for payment and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the address of the Trustee set forth in Section 10.2.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates the Corporate Trust Office of the
Trustee as such office of the Company in accordance with Section 2.3 for the
purposes described in this Section.
Section 4.3 Limitation on Indebtedness. (a) The Company will not, and will
--------------------------
not permit any of its Restricted Subsidiaries to, Incur any Indebtedness
(including Acquired Debt), provided, however, that the Company may Incur
Indebtedness and any of its Restricted Subsidiaries may issue shares of Redeem-
able Stock if (i) no Default or Event of Default shall have occurred and be
continuing, and (ii) the Consolidated Leverage Ratio is no greater than 7 to 1,
for any Incurrence from the Closing Date through the sixth anniversary of the
Closing Date, or 6 to 1 thereafter.
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Notwithstanding the foregoing, as long as no Default or Event of Default
shall have occurred and be continuing, the Company and (except as specified
below) any Restricted Subsidiary may issue or Incur each and all of the follow-
ing:
(i) Indebtedness due and owing to government entities in
connection with telecommunications license fees or Indebtedness Incurred to
finance the payment of deposits with and license fees to the FCC in
connection with FCC license auctions;
(ii) Indebtedness Incurred by the Company or any Restricted
Subsidiary the proceeds of which are (or the credit support provided by any
such Indebtedness is) used to finance the development, construction,
expansion or operation of Telecommunications Assets;
(iii) Indebtedness Incurred by the Company or any Restricted
Subsidiary the proceeds of which are (or the credit support provided by any
such Indebtedness is) used to finance the acquisition of Telecommunications
Assets or the Capital Stock of a Telecommunications Business;
(iv) Indebtedness outstanding as of the date hereof;
(v) Indebtedness under one or more revolving credit or working
capital facilities in an aggregate principal amount outstanding or
available at any time not to exceed $100 million;
(vi) Indebtedness owed to the Company or any of its Restricted
Subsidiaries, provided that any subsequent issuance or transfer of any
Capital Stock which results in any such Restricted Subsidiary owed such
Indebtedness ceasing to be a Restricted Subsidiary or any subsequent
transfer of such Indebtedness (other than to the Company or another
Restricted Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness;
(vii) Indebtedness issued in exchange for, or the net proceeds
of which are used to refinance or refund, then outstanding Indebtedness,
other than Indebtedness Incurred under clauses (v)
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<PAGE>
and (viii) of this Section 4.3 and any refinancing thereof in an amount not
to exceed the amount so refinanced or refunded (plus premiums, Liquidated
Damages, accrued interest, fees and expenses), provided that
(x) Indebtedness Incurred to refinance or refund the Notes or Indebtedness
does not have a higher relative seniority to the Notes than the
Indebtedness being refinanced or refunded, (y) the Average Life of such new
Indebtedness is at least equal to the remaining Average Life of the
Indebtedness to be refinanced or refunded and (z) Indebtedness Incurred to
refinance Indebtedness of the Company may only be Incurred by the Company;
(viii) Indebtedness (A) in respect of performance, surety or
appeal bonds provided in the ordinary course of business, (B) under
Currency Agreements and Interest Rate Agreements, provided that such
agreements do not increase the Indebtedness of the obligor outstanding at
any time other than as a result of fluctuation or interest rates or by
reason of fees, indemnities and compensation payable thereunder or (C)
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations Incurred in connection with the
disposition of any business, assets or Restricted Subsidiary of the Company
in a principal amount not to exceed the gross proceeds actually received by
the Company or any Restricted Subsidiary in connection with such
disposition; and
(ix) Indebtedness represented by the Notes.
(b) Notwithstanding any other provision of this Section 4.3 the
maximum amount of Indebtedness that the Company or a Restricted Subsidiary may
Incur pursuant to this Section 4.3 shall not be deemed to be exceeded due solely
to the result of fluctuations in the exchange rates of currencies.
(c) For purposes of determining any particular amount of Indebt-
edness under this Section 4.3, (i) Guarantees, Liens or obligations with respect
to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (ii) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.9
described below shall not be treated as Indebtedness. For purposes of
determining compliance with this Section 4.3, in the event that an item of
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in the above
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<PAGE>
clauses, the Company, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses.
Section 4.4 Limitation on Restricted Payments. The Company will not, and
---------------------------------
will not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on its Capital Stock (other
than dividends or distributions payable solely in shares of its or such
Restricted Subsidiary's Capital Stock (other than Redeemable Stock) of the same
class held by such holders or in options, warrants or other rights to acquire
such shares of Capital Stock) held by Persons other than (a) the Company,
(b) any of its Restricted Subsidiaries, or (c) any other shareholder of such
Restricted Subsidiaries (so long as the Company and its Restricted Subsidiaries
receive their pro rata share of such dividend or distribution based on their
ownership of such class or series of such Restricted Subsidiaries Capital Stock
on which such dividend or distribution is being made), (ii) purchase, redeem,
retire or otherwise acquire for value any shares of Capital Stock of the Company
or an Unrestricted Subsidiary (including options, warrants or other rights to
acquire such shares of Capital Stock) held by any Person (other than the Company
or a Restricted Subsidiary), (iii) make any payments on indebtedness subordinate
to the Notes, or (iv) make any Investment, other than a Permitted Investment, in
any Person (such payments or any other actions described in clauses (i) through
(iv) being collectively "Restricted Payments") unless, at the time of, and after
giving effect to, the proposed Restricted Payment: (A) no Default or Event of
Default shall have occurred and be continuing, (B) the Company would be
permitted to incur additional indebtedness pursuant to the first paragraph of
Section 4.3, and (C) the aggregate amount expended for all Restricted Payments
(the amount so expended, if other than in cash, to be determined in good faith
by the Board of Directors, whose determination shall be conclusive and evidenced
by a Board Resolution) after the date of the Indenture shall not exceed the sum
of (1) the amount by which Consolidated EBITDA exceeds 1.5 times Consolidated
Interest Expense for the period from the Closing Date through the end of the
last completed fiscal quarter for which financial statements are available plus
(2) 100% of the aggregate Net Cash Proceeds received by the Company on or after
the Closing Date from the issuance and sale permitted by the Indenture of its
Capital Stock to a Person who is not a Subsidiary of the Company, or from the
issuance to a Person who is not a Subsidiary of the Company of any options,
warrants or other rights to acquire Capital Stock of the Company.
The foregoing provision shall not be violated by reason of:
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(i) the payment of any dividend within 60 days after the date of
declaration thereof if, at said date of declaration such payment would
comply with the foregoing paragraph;
(ii) the redemption, repurchase, defeasance or other acquisition
or retirement for value of Indebtedness that is subordinated in right of
payment to the Notes (including, premium and Liquidated Damages, if any,
and accrued and unpaid interest) with the proceeds of, or in exchange for,
Indebtedness incurred under clause (vii) of the second paragraph of Section
4.3;
(iii) the repurchase, redemption or other acquisition of Capital
Stock of the Company or any Restricted Subsidiary or any other Person in
exchange for shares of Capital Stock (other than Redeemable Stock) of the
Company;
(iv) the acquisition of Indebtedness of the Company which is
subordinated in right of payment to the Notes in exchange for, or out of
the proceeds of, a substantially concurrent offering of shares of the
Capital Stock of the Company (other than Redeemable Stock);
(v) payments or distributions to dissenting stockholders
pursuant to applicable law in connection with a consolidation, merger or
transfer of assets that complies with the provisions of the Indenture
applicable to mergers, consolidations and transfers of all or substantially
all of the property and assets of the Company;
(vi) the distribution to shareholders of the Company or any
Restricted Subsidiary of shares of Capital Stock of any Unrestricted
Subsidiary or the distribution to shareholders of the Company of shares of
Capital Stock of any Subsidiary holding only the assets of the Company's
technology business, provided that in such latter case, after giving effect
to such transaction on a pro forma basis, (x) the Company would be
permitted to incur additional indebtedness pursuant to the first paragraph
of Section 4.3, or (y) the Company's Annualized Consolidated EBITDA would
not decrease, provided, further, in such latter case, that such Subsidiary
has working capital not in excess of $5 million; and
40
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(vii) the purchase, redemption. acquisition, cancellation or other
retirement for value of shares of Capital Stock of the Company to the
extent required by FCC rules in order to prevent the loss or secure the
renewal or reinstatement of any license or franchise held by the Company or
any Restricted Subsidiary, provided that except in the case of clause
(i) of this paragraph no Default or Event of Default shall have occurred
and be continuing or occur as a consequence of the actions or payments set
forth therein. Each Restricted Payment permitted pursuant to this para-
graph (other than the Restricted Payment referred to in clause (ii) hereof)
and each payment pursuant to clause (vi) of the definition of Permitted
Investment shall be included in calculating the aggregate amount of
Restricted Payments for purposes of clause (C) of the first paragraph of
this Section 4.4.
Any Investment in a Subsidiary that becomes an Unrestricted Subsidiary
shall become a Restricted Payment made on such date in the amount of the greater
of (x) the book value of such Subsidiary on the date such Subsidiary becomes an
Unrestricted Subsidiary and (y) the fair market value of such Subsidiary on
such date as determined (A) in good faith by the Board of Directors if such fair
market value is determined to be less than $10 million and (B) by an investment
banking firm of national standing with high yield underwriting expertise if such
fair market value is determined to be in excess of $10 million. Any Restricted
Payment made by contribution or transfer of assets shall be valued in the amount
of the greater of (x) the book value of such asset on the date of transfer or
(y) the fair market value on such date as determined (A) in good faith by the
Board of Directors if such fair market value is determined to be less than $10
million and (B) by an investment banking firm of national standing with high
yield underwriting expertise if such fair market value is determined to be in
excess of $10 million.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which any calculations
required by this Section 4.4 were computed, which calculations may be based upon
the Company's latest available financial statements.
Section 4.5 Limitation on Dividend and Other Payment Restrictions
-----------------------------------------------------
Affecting Restricted Subsidiaries. The Company will not, and will not permit any
- ---------------------------------
Restricted Subsidiary to, create or otherwise cause or suffer to exist or become
41
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effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by the Company or any other Restricted Subsidiary,
(ii) pay any Indebtedness owed to the Company or any other Restricted
Subsidiary, (iii) make loans or advances to the Company or any other Restricted
Subsidiary or (iv) transfer any of its property or assets to the Company or any
other Restricted Subsidiary.
The foregoing provisions shall not restrict any encumbrances or restric-
tions:
(i) existing on the Closing Date in the Indenture or any other
agreements in effect on the Closing Date, and any extensions,
refinancings, renewals or replacements of such agreements, provided that
the encumbrances and restrictions in any such extensions, refinancings,
renewals or replacements are no less favorable in any material respect to
the Holders than those encumbrances or restrictions that are then in effect
and that are being extended, refinanced, renewed or replaced;
(ii) existing under or by reason of applicable law;
(iii) existing with respect to any Person or the property or
assets of such Person acquired by the Company or any Restricted Subsidiary
and existing at the time of such acquisition, which encumbrances or
restrictions are not applicable to any Person or the property or assets of
any Person other than such Person or the property or assets of such Person
so acquired;
(iv) in the case of clause (iv) of the first paragraph of this
Section 4.5, (A) that restrict in a customary manner the subletting,
assignment or transfer of any property or asset that is a license or
contract or (B) existing by virtue of any transfer of, agreement to
transfer, option or right with respect to, or Lien on, any property or
assets of the Company or any Restricted Subsidiary not otherwise prohibited
by the Indenture; or
(v) with respect to a Restricted Subsidiary and imposed pursuant
to an agreement that has been entered into for
42
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the sale or disposition of all or substantially all of the Capital Stock
of, or property and assets of such Restricted Subsidiary.
Nothing contained in this Section 4.5 shall prevent the Company or any
Restricted Subsidiary from (1) creating. incurring, assuming or suffering to
exist any Liens otherwise permitted in Section 4.9, (2) restricting the sale or
other disposition of property or assets of the Company or any of its Restricted
Subsidiaries that secure Indebtedness of the Company or any of its Restricted
Subsidiaries, or (3) restricting the payment of dividends or distributions or
other disposition of property or assets of or the making of loans by any
Restricted Subsidiary in connection with any financing for the
Telecommunications Business of such Restricted Subsidiary, provided that in the
case of clause (3) such restriction may be entered into only if at such time the
total amount, without duplication, of (i) Mirror Indebtedness owed by Restricted
Subsidiaries, less (ii) proceeds of such Mirror Indebtedness that are invested
in another Person, other than (x) Investments in other Restricted Subsidiaries
conducting no operations other than the holding of government licenses or (y)
Investments in Mirror Indebtedness of other Restricted Subsidiaries, plus (iii)
capital contributions to the Special Subsidiary, plus (iv) the cash and
Temporary Cash Investments held by the Company (not on a consolidated basis),
equals or exceeds the outstanding principal amount of the Notes.
Section 4.6 Limitation on the Issuance and Sale of Capital Stock of
-------------------------------------------------------
Restricted Subsidiaries. The Company (a) will not permit any Restricted Subsid-
- -----------------------
iary to issue any Capital Stock (other than to the Company or a Restricted
Subsidiary) and (b) will not permit any Person (other than the Company or a
Restricted Subsidiary) to own any Capital Stock of any Restricted Subsidiary,
provided, however, that this covenant will not prohibit (i) the sale or other
disposition of all of the issued and outstanding Capital Stock of any Restricted
Subsidiary owned by the Company or any Restricted Subsidiary in compliance with
the other provisions of the Indenture; (ii) the ownership by directors of
director's qualifying shares of Capital Stock of any Restricted Subsidiary, to
the extent mandated by applicable law; (iii) the ownership of Capital Stock of a
Restricted Subsidiary issued and outstanding either (A) as of the Closing Date
or (B) prior to the time that such Person becomes a Restricted Subsidiary so
long as such Capital Stock was not issued in contemplation of such Person's
becoming a Restricted Subsidiary of the Company or otherwise being acquired by
the Company; (iv) the issuance of Capital Stock of a Restricted Subsidiary
pursuant to an employee stock option plan approved by the Boards of Directors of
the Restricted Subsidiary and the Company; or (v) the issuance or sale of
Capital Stock of a
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Restricted Subsidiary in a transaction not prohibited by Section 4.11, provided
that such Restricted Subsidiary will remain a Restricted Subsidiary, and only if
at the time of such sale, the total amount, without duplication, of (i) Mirror
Indebtedness owed by Restricted Subsidiaries, less (ii) proceeds of such Mirror
Indebtedness that are invested in another Person, other than (x) Investments in
other Restricted Subsidiaries conducting no operations other than the holding of
government licenses or (y) Investments in Mirror Indebtedness of other
Restricted Subsidiaries, plus (iii) capital contributions to the Special
Subsidiary, plus (iv) the cash and Temporary Cash Investments held by the
Company (not on a consolidated basis), equals or exceeds the outstanding
principal amount of the Notes.
Section 4.7 Limitation on Issuances of Guarantees by Restricted Subsid-
----------------------------------------------------------
iaries. The Company will not permit any Restricted Subsidiary to Guarantee or
- ------
assume the payment of any Indebtedness of the Company unless (i) (A) such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture providing for a Guarantee of payment of the Notes by such Restricted
Subsidiary and (B) with respect to any Guarantee of Subordinated Indebtedness of
the Company by such Restricted Subsidiary, any such Guarantee shall be subordi-
nated 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 and (ii) such Restricted Subsidiary waives any rights of
reimbursement, indemnity or subrogation or any other rights against the Company
or any other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Guarantee until the Notes have been paid in full. The
incurrence by a Restricted Subsidiary as a primary obligor of any Indebtedness
that is guaranteed by the Company will not be deemed a Guarantee of the
Company's Indebtedness for purposes of this covenant.
Notwithstanding the foregoing, any Guarantee of the Notes or waiver of
rights created pursuant to the provisions described in the foregoing paragraph
will provide by their terms that they will be automatically and unconditionally
released and discharged upon the release by the holders of the Indebtedness of
the Company described in the preceding paragraph of their Guarantee by such
Restricted Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness, except by or as a result of payment under
such Guarantee), at a time when (A) no other Indebtedness of the Company has
been Guaranteed by such Restricted Subsidiary or (B) the holders of all such
other Indebtedness which is Guaranteed by such Restricted Subsidiary also
release their Guarantee by such Restricted Subsidiary (including any deemed
release upon payment in
44
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full of all obligations under such Indebtedness, except by or as a result of
payment under such Guarantee).
Section 4.8 Limitation on Transactions with Stockholders and Affiliates.
-----------------------------------------------------------
Except for any agreement entered into on or before the Closing Date, the Compa-
ny will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into, renew or extend any transaction (including, without
limitation, the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any holder (or any Affiliate of such holder) of
10% or more of any Voting Stock of the Company or with any Affiliate of the
Company or any Restricted Subsidiary, except upon fair and reasonable terms no
less favorable to the Company or such Restricted Subsidiary than could be
obtained, at the time of such transaction or at the time of the execution of the
agreement providing therefor, in a comparable arm's-length transaction with a
Person that is not such a holder or an Affiliate.
In addition to the foregoing, transactions with any holder (or any
Affiliate of such holder) of 10% or more of any Voting Stock (i) having a fair
market value or involving payments equal to or in excess of $3 million shall be
approved by a majority of the disinterested members of the Board of Directors
and (ii) having a fair market value or involving payments equal to or in excess
of $7 million shall require the Company or a Restricted Subsidiary to deliver to
the Trustee a written opinion of a nationally recognized investment banking firm
stating that the transaction is fair to the Company or such Restricted
Subsidiary from a financial point of view. The foregoing limitation shall not
apply to (i) any transaction between the Company and any of its Restricted
Subsidiaries or between Restricted Subsidiaries; (ii) the payment of reasonable
and customary regular fees to directors of the Company who are not employees of
the Company and any employment agreement entered into by the Company or any
Restricted Subsidiary in the ordinary course of business; (iii) any Restricted
Payments not prohibited by Section 4.4, or (iv) any transaction pursuant to an
agreement in effect on the Closing Date.
Section 4.9 Limitation on Liens. The Company will not, and will not permit
-------------------
any Restricted Subsidiary to, create, Incur, assume or suffer to exist any Lien
on any of its assets or properties of any character, or any shares of Capital
Stock or Indebtedness of any Restricted Subsidiary, without making effective
provision for all of the Notes and all other amounts due under the Indenture to
be directly secured equally and ratably with (or, if the obligation or liability
to be
45
<PAGE>
secured by such Lien is subordinated in right of payment to the Notes, prior to)
the obligation or liability secured by such Lien.
The foregoing limitation does not apply to:
(i) Liens existing on the Closing Date;
(ii) Liens granted after the Closing Date on any assets or
Capital Stock of the Company or its Restricted Subsidiaries created in
favor of the Holders;
(iii) Liens with respect to the assets of a Restricted
Subsidiary granted by such Restricted Subsidiary to the Company or a
Restricted Subsidiary to secure Indebtedness owing to the Company or such
other Restricted Subsidiary;
(iv) Liens securing obligations under revolving credit or
working capital facilities under clause (v) of the second paragraph of
Section 4.3 provided that the aggregate amount of Indebtedness secured by
any such Liens shall not at any time exceed the amount of Indebtedness
permitted to be Incurred under clause (v) of the second paragraph of
Section 4.3;
(v) Liens securing Indebtedness under clauses (i), (ii) or (iii)
of the second paragraph of Section 4.3 granted on or after the Closing Date
on the Capital Stock or assets of any Restricted Subsidiary, including any
Lien granted in connection with a refinancing thereof, provided that Lien
does not extend to any additional assets not originally pledged pursuant
to such refinanced Indebtedness;
(vi) Liens on telecommunications licenses securing obligations
to government entities;
(vii) Liens on property of a person existing at the time such
person is merged into, or the assets of such person are acquired by, the
Company or any Restricted Subsidiary, provided that such Liens were in
existence prior to the contemplation of such merger or acquisition and do
not secure any property or assets of the Company or any of its Restricted
Subsidiaries other than the
46
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property or assets subject to the Liens prior to such merger or
acquisition; or
(viii) Permitted Liens.
Section 4.10 Limitation on Sale-Leaseback Transactions. The Company will
-----------------------------------------
not, and will not permit any Restricted Subsidiary to, enter into any sale-
leaseback transaction involving any of its assets or properties whether now
owned or hereafter acquired, whereby the Company or a Restricted Subsidiary
sells or transfers such assets or properties and then or thereafter leases such
assets or properties or any part thereof or any other assets or properties which
the Company or such Restricted Subsidiary, as the case may be, intends to use
for substantially the same purpose or purposes as the assets or properties sold
or transferred.
Section 4.11 Limitation on Asset Sales. The Company will not, and will
-------------------------
not permit any Restricted Subsidiary to, consummate any Asset Sale, unless
(i) the consideration received by the Company or such Restricted Subsidiary is
at least equal to the fair market value of the assets sold or disposed of and
(ii) at least 75% of the consideration received consists of cash or Temporary
Cash Investments, provided, however, that the amount of (x) any liabilities of
the Company or any Restricted Subsidiary that are assumed by the transferee of
any such assets and (y) any notes or other obligations received by the Company
or any such Restricted Subsidiary from such transferee that are immediately
converted by the Company or such Restricted Subsidiary into cash, shall be
deemed to be Temporary Cash Investments (to the extent of the Temporary Cash
Investments received in such conversion) for the purposes of this clause (ii).
In the event and to the extent that the Net Cash Proceeds received by the
Company or any of its Restricted Subsidiaries from one or more Asset Sales
occurring after the Closing Date in any period of twelve consecutive months
exceed $5 million, then the Company shall or shall cause the relevant Restricted
Subsidiary to (1) within twelve months after the date Net Cash Proceeds so
received exceed such an amount (a) apply an amount equal to such excess Net Cash
Proceeds to permanently repay Indebtedness of the Company or any Restricted
Subsidiary or (b) invest an equal amount, or the amount not so applied pursuant
to clause (a) (or enter into a definitive agreement committing to so invest
within twelve months after the date of such agreement), in Telecommunications
Assets (or in a company engaged in a Telecommunications Business) and/or
(2) apply (no later than the end of the twelve-month period referred to in
clause (1)) such excess Net Cash Proceeds (to the extent not applied pursuant to
clause (1)) as provided in the following paragraph of this Section 4.11. The
amount of such excess Net Cash
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Proceeds required to be applied (or to be committed to be applied) during such
twelve-month period as set forth in clause (1) of the preceding sentence and not
applied as so required by the end of such period shall constitute "Excess Pro-
ceeds."
If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not theretofore subject to an Offer to Purchase pursuant to this
Section 4.11 equals or exceeds $5 million, the Company must commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate principal amount of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
100% of the principal amount of the Notes, plus, in each case accrued interest
(if any) to the Payment Date. Notwithstanding the foregoing, to the extent that
any amount of Excess Proceeds remains after completion of any such Offer to
Purchase, the Company may use such remaining amount for general corporate
purposes and the amount of Excess Proceeds shall be reset to zero.
Notwithstanding anything to the contrary contained in this Section 4.11,
the Company may distribute all or a portion of the capital stock of any
Subsidiary holding only the assets of the technology business of the Company to
the Company's shareholders, provided that after giving effect to such
transaction on a pro forma basis (A) the Company would be permitted to incur
additional indebtedness pursuant to the first paragraph of Section 4.3, or
(B) the Company's Annualized Consolidated EBITDA would not decrease.
Section 4.12 Repurchase of Notes upon a Change of Control. The Company
--------------------------------------------
shall commence within 30 days of the occurrence of a Change of Control and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the principal amount thereof, plus accrued interest and
Liquidated Damages, if any, to the Payment Date.
Section 4.13 Limitation on Use of Proceeds. The Company shall use the net
-----------------------------
proceeds from the offering of the Notes as described in the Offering Memorandum
with respect to the Notes dated August 22, 1996.
Section 4.14 Existence. Subject to Articles IV and V of this Indenture,
---------
the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and the existence of each of its
Restricted Subsidiaries in accordance with the respective organizational
documents of the Company and each such Subsidiary and the rights (whether
pursuant to charter,
48
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partnership certificate, agreement, statute or otherwise), licenses and
franchises of the Company and each such Subsidiary; provided that the Company
shall not be required to preserve any such right, license or franchise, or the
existence of any Restricted Subsidiary, if the maintenance or preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Restricted Subsidiaries taken as a whole; and provided further that any
Restricted Subsidiary may consolidate with, merge into, or sell, convey,
transfer, lease or otherwise dispose of all or part of its property and assets
to the Company or any Wholly Owned Restricted Subsidiary.
Section 4.15 Payment of Taxes and Other Claims. The Company will pay or
---------------------------------
discharge and shall cause each of its Subsidiaries to pay or discharge, or cause
to be paid or discharged, before the same shall become delinquent (i) all
material taxes, assessments and governmental charges levied or imposed upon (a)
the Company or any such Subsidiary, (b) the income or profits of any such
Subsidiary which is a corporation or (c) the property of the Company or any such
Subsidiary and (ii) all material lawful claims for labor, materials and supplies
that, if unpaid, might by law become a lien upon the property of the Company or
any such Subsidiary; provided that the Company shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax, assessment, charge
or claim the amount, applicability or validity of which is being contested in
good faith by appropriate proceedings and for which adequate reserves have been
established.
Section 4.16 Maintenance of Properties and Insurance. The Company will
---------------------------------------
cause all properties used or useful in the conduct of its business or the
business of any Restricted Subsidiary and material to the Company and its
Restricted Subsidiaries taken as a whole, to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
adequate for the level or stage of the Company's or any Restricted Subsidiary's
business and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided
that nothing in this Section 4.16 shall prevent the Company or any such
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors or the board of directors
of such Restricted Subsidiary having managerial responsibility for any such
property, desirable in the conduct of the business of the Company or such
Restricted Subsidiary.
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The Company will provide or cause to be provided, for itself and its
Restricted Subsidiaries, insurance against loss or damage of the kinds
customarily insured against by corporations similarly situated and owning like
properties, including, but not limited to, products liability insurance and
public liability insurance, with reputable insurers or with the government of
the United States of America, or an agency or instrumentality thereof, in such
amounts, with such deductibles and by such methods as the Company in good faith
shall determine to be reasonable and appropriate in the circumstances.
Section 4.17 Compliance Certificates. (a) The Company shall deliver to
-----------------------
the Trustee, within 90 days after the end of the last fiscal quarter of each
year, an Officers' Certificate stating whether or not the signers know of any
Default or Event of Default that occurred during such fiscal year. Such
certificate shall comply with the applicable provisions of the TIA. If any of
the signers of the Officers' Certificate have knowledge of such a Default or
Event of Default, the certificate shall describe any such Default or Event of
Default and its status. The first certificate to be delivered pursuant to this
Section 4.17(a) shall be for the first fiscal year ending after the execution of
this Indenture.
(b) The Company shall deliver to the Trustee, within 90 days after
the end of the Company's fiscal year, a certificate signed by the Company's
independent certified public accountants stating (i) that their audit
examination has included a review of the terms of this Indenture and the Notes
as they relate to accounting matters, (ii) that they have read the most recent
Officers' Certificate delivered to the Trustee pursuant to paragraph (a) of this
Section 4.17 and (iii) whether, in connection with their audit examination,
anything came to their attention that caused them to believe that the Company
was not in compliance with any of the terms, covenants, provisions or conditions
of Article IV and Section 5.1 of this Indenture as they pertain to accounting
matters and, if any Default or Event of Default has come to their attention,
specifying the nature and period of existence thereof; provided that such
independent certified public accountants shall not be liable in respect of such
statement by reason of any failure to obtain knowledge of any such Default or
Event of Default that would not be disclosed in the course of an audit
examination conducted in accordance with generally accepted auditing standards
in effect at the date of such examination.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or
50
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Event of Default and which action the Company is taking or proposes to take with
respect thereto.
Section 4.18 Commission Reports and Reports to Holders. The Company shall
-----------------------------------------
file with the Commission the annual, quarterly and other reports and other
information required by Section 13(a) or 15(d) of the Exchange Act, regardless
of whether such sections of the Exchange Act are applicable to the Company. If
the Commission will not accept such filings, the Company shall mail or cause to
be mailed copies of such reports to Holders and the Trustee within 15 days after
the date it would have been required to file such reports with the Commission
had it been subject to such sections; provided, however, that the copies of such
reports mailed to Holders may omit exhibits, which the Company will supply to
any Holder at such Holder's request.
Section 4.19 Waiver of Stay, Extension or Usury Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive the Company from paying all or any portion of the
principal of, premium and Liquidated Damages, if any, or interest on the Notes
as contemplated herein, wherever enacted, now or at any time hereafter in
force, or that may affect the covenants or the performance of this Indenture;
and (to the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 4.20 Limitation on Mirror Indebtedness. The Company will not
---------------------------------
forgive principal of or interest on Mirror Indebtedness, or reduce the interest
payable thereon, unless the remaining principal amount of Mirror Indebtedness
owed by Restricted Subsidiaries to the Company, plus cash and Temporary Cash
Investments held by the Company (not on a consolidated basis), equals or exceeds
the outstanding principal amount of the Notes. The Company shall not need to
maintain Mirror Indebtedness if the conditions requiring Mirror Indebtedness no
longer exist.
Section 4.21 Escrow Account. The Company shall, on the date of this
--------------
Indenture, enter into the Escrow Agreement and, pursuant thereto, shall place
the Initial Escrow Amount (as defined in the Escrow Agreement) in the Escrow
51
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Account held by the Escrow Agent for the benefit of the Trustee, for the ratable
benefit of the Noteholders. The Trustee is hereby authorized and directed to
enter into and deliver the Escrow Agreement and to perform its obligations and
duties hereunder.
Section 4.22 Limitation on Activities of the Special Subsidiary. The
--------------------------------------------------
Company shall not permit the Special Subsidiary to conduct any business or
operations other than the making of Temporary Cash Investments and investments
in Mirror Indebtedness of Restricted Subsidiaries, the holding of Temporary Cash
Investments, Mirror Indebtedness and cash and payment of dividends or distribu-
tions to the Company. Without limiting the foregoing, the Company shall not
permit the Special Subsidiary to make any Investment (other than Temporary Cash
Investments and investments in Mirror Indebtedness of Restricted Subsidiaries),
make any Restricted Payment, Incur any Indebtedness, or issue any Equity
Interest or Capital Stock except to the Company. The Company shall not sell any
Equity Interest or Capital Stock of the Special Subsidiary or designate the
Special Subsidiary an Unrestricted Subsidiary.
ARTICLE V
Successor Corporation
Section 5.1 When Company May Merge, Etc. The Company shall not
----------------------------
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into the
Company unless: (i) the Company shall be the continuing Person or the Person (if
other than the Company) formed by such consolidation or into which the Company
is merged or that acquired or leased such property and assets of the Company
shall be a corporation organized and validly existing under the laws of the
United States of America or any jurisdiction thereof and shall expressly assume
by a supplemental indenture, executed and delivered to the Trustee, all of the
obligations of the Company on all of the Notes and under the Indenture;
(ii) immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; and (iii) immediately after
giving effect to such transaction on a pro forma basis, the Consolidated Net
Worth of the Company or any entity or person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition
52
<PAGE>
will have been made will be at least equal to the Consolidated Net Worth of the
Company before such transaction.
ARTICLE VI
Default and Remedies
Section 6.1 Events of Default. An "Event of Default" shall occur with
----------------- ----------------
respect to the Notes if:
(a) defaults in the payment of principal of (or premium, if any, on)
any Note when the same becomes due and payable at Stated Maturity, upon
acceleration, redemption or otherwise;
(b) defaults in the payment of interest or Liquidated Damages, if
any, on any Note when the same becomes due and payable, and such default
continues for a period of 30 days;
(c) defaults in the performance or breach of the provisions of
Article V or the failure to make or consummate an Offer to Purchase in accor-
dance with Section 4.11 or Section 4.12;
(d) defaults in the performance of or breaches of any covenant or
agreement of the Company in the Indenture or under the Notes (other than a
default specified in clause (a), (b) or (c) above) and such default or breach
continues for a period of 30 consecutive days after written notice by the
Trustee or the Holders of 25% or more in aggregate principal amount of the
Notes;
(e) there occurs with respect to any issue or issues of Indebtedness
of the Company or any Significant Subsidiary having an outstanding principal
amount greater than $10 million in the aggregate for all such issues of all such
Persons, whether such Indebtedness now exists or shall hereafter be created, (A)
an event of default that has caused the holder thereof to declare such
Indebtedness to be due and payable prior to its Stated Maturity and/or (B) the
failure to make a principal payment and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default;
(f) any final judgment or order (not covered by insurance or
indemnification by a Person other than the Company or a Restricted Subsidiary,
53
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which indemnity party is solvent and has acknowledged responsibility) (treating
any deductibles, self-insurance or retention as not so covered) for the payment
of money greater than $10 million in the aggregate for all such final judgments
or orders shall be rendered against the Company or any Significant Subsidiary
and shall not be paid or discharged or bonded over, and there shall be any
period of 30 consecutive days following entry of the final judgment or order
that causes the aggregate amount for all such final judgments or orders
outstanding and not paid or discharged or bonded over to exceed $10 million
during which a stay of enforcement of such final judgment or order by reason of
a pending appeal or otherwise shall not be in effect;
(g) a court having jurisdiction in the premises enters a decree or
order for (A) relief in respect of the Company or any Significant Subsidiary in
an involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, (B) appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Company or
any Significant Subsidiary or for all or substantially all of the property and
assets of the Company or any Significant Subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or
(h) the Company or any Significant Subsidiary (A) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under any such law, (B) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Company or any Significant Subsidiary or
for all or substantially all of the property and assets of the Company or any
Significant Subsidiary or (C) effects any general assignment for the benefit of
creditors.
Section 6.2 Acceleration. If an Event of Default (other than an Event of
------------
Default specified in clause (g) or (h) of Section 6.1 that occurs with respect
to the Company) occurs and is continuing under the Indenture, the Trustee or the
Holders of at least 25% in aggregate principal amount of the Notes then
outstanding by written notice to the Company (and to the Trustee if such notice
is given by the Holders), may, and the Trustee at the request of such Holders
shall, declare the principal amount of, premium and Liquidated Damages, if any,
and accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal amount of, premium and Liquidated
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Damages, if any, and accrued interest shall be immediately due and payable. In
the event of a declaration of acceleration because an Event of Default set forth
in clause (e) of Section 6.1 has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event of
default triggering such Event of Default pursuant to clause (e) shall be
remedied or cured by the Company or the relevant Significant Subsidiary or
waived by the holders of the relevant Indebtedness within 60 days after the
declaration of acceleration with respect thereto. If an Event of Default
specified in clause (g) or (h) above occurs with respect to the Company, the
principal amount of, premium and Liquidated Damages, if any, and accrued
interest on the Notes then outstanding shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
At any time after such a declaration of acceleration, but before a judgment
or decree for the payment of the money due has been obtained by the Trustee, the
Holders of at least a majority in principal amount of the outstanding Notes, by
written notice to the Company and to the Trustee may waive all past Defaults and
rescind and annul such declaration of acceleration and its consequences if (a)
the Company has paid or deposited with the Trustee a sum sufficient to pay (i)
all sums paid or advanced by the Trustee hereunder and the reasonable compensa-
tion, expenses, disbursements and advances of the Trustee, its agents and
counsel and all other amounts due to the Trustee pursuant to Section 7.6 hereof,
(ii) all overdue interest on all Notes, (iii) the principal of and premium and
Liquidated Damages, if any, on any Securities that have become due otherwise
than by such declaration or occurrence of acceleration and interest thereon at
the rate prescribed therefor by such Notes, and (iv) to the extent that payment
of such interest is lawful, interest upon overdue interest, if any, at the rate
prescribed therefor by such Notes, (b) all existing Events of Default, other
than the nonpayment of the principal amount of, premium and Liquidated Damages,
if any, and interest on the Notes that have become due solely by such
declaration of acceleration have been cured or waived and (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction.
Section 6.3 Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium and Liquidated Damag-
es, if any, or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
55
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The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding.
Section 6.4 Waiver of Past Defaults. Subject to Section 6.2, 6.7 and 9.2,
-----------------------
the Holders of at least a majority in aggregate principal amount of the
outstanding Notes, by notice to the Trustee, may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of, premium and Liquidated Damages, if any, or interest on any Note as
specified in clause (a) or (b) of Section 6.1 (including in connection with an
Offer to Purchase) or in respect of a covenant or provision of this Indenture
which cannot be modified or amended without the consent of the Holder of each
outstanding Note affected. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto.
Section 6.5 Control by Majority. The Holders of at least a majority in
-------------------
aggregate principal amount of the outstanding Notes, by notice to the Trustee,
may direct the time, method and place of conducting any proceeding for exercis-
ing any remedy available to the Trustee or exercising any trust or power con-
ferred on the Trustee; provided that the Trustee may refuse to follow any direc-
tion that conflicts with law or this Indenture, that may involve the Trustee in
personal liability, or that the Trustee determines in good faith may be unduly
prejudicial to the rights of Holders not joining in the giving of such
direction; and provided further that the Trustee may take any other action it
deems proper that is not inconsistent with any directions received from Holders
of Notes pursuant to this Section 6.5.
Section 6.6 Limitation on Suits. A Holder may not institute any proceed-
-------------------
ings, judicial or otherwise, with respect to this Indenture or the Notes, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(i) such Holder has previously given to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount
of outstanding Notes have made a written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
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(iii) such Holder or Holders have offered the Trustee
indemnity reasonably satisfactory to the Trustee against any costs,
liabilities or expenses to be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes have not given the
Trustee a direction that is inconsistent with such written request.
Section 6.7 Rights of Holders to Receive Payment. Notwithstanding any
------------------------------------
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the principal of, premium or Liquidated Damages, if any, or interest
on such Holder's Note on or after the respective due dates expressed on such
Note (including in a notice with respect to an Offer to Purchase), or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default in pay-
--------------------------
ment of principal, premium and Liquidated Damages, if any, or interest specified
in clause (a) or (b) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor of the Notes for the whole amount of principal,
premium and Liquidated Damages, if any, and accrued interest remaining unpaid,
together with interest on overdue principal, premium and Liquidated Damages, if
any, and, to the extent that payment of such interest is lawful, interest on
overdue installments of interest, in each case at the rate specified in the
Notes, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee pursuant to Section 7.6 hereof.
Section 6.9 Trustee May File Proofs of Claim. The Trustee may file such
--------------------------------
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
57
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its agents and counsel, and any other amounts due the Trustee under Section 7.6)
and the Holders allowed in any judicial proceedings relative to the Company (or
any other obligor of the Notes), its creditors or its property and shall be
entitled and empowered to collect and receive any monies, securities or other
property payable or deliverable upon conversion or exchange of the Notes or upon
any such claims and to distribute the same, and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 7.6. Nothing herein contained shall be deemed to empower
the Trustee to authorize or consent to, or accept or adopt on behalf of any
Holder, any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities. If the Trustee collects any money pursuant to
----------
this Article VI, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.6, including
payment of all compensation, expense and liabilities incurred, and all
advances made, by the Trustee and the reasonable costs and expenses of
collection;
Second: to Holders for amounts then due and unpaid for principal
amount of, premium and Liquidated Damages, if any, and interest on the
Notes in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Notes for principal, premium and
Liquidated Damages, if any, and interest, respectively; and
Third: to the Company or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.
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Section 6.11 Undertaking for Costs. In any suit for the enforcement of
---------------------
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7 of this Indenture, or a suit
by Holders of more than 10% in principal amount of the outstanding Notes.
Section 6.12 Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Compa-
ny, Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 6.13 Rights and Remedies Cumulative. Except as otherwise provided
------------------------------
with respect to the replacement or payment of mutilated, destroyed, lost or
wrongfully taken Notes in Section 2.6, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 6.14 Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article VI or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
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ARTICLE VII
Trustee
Section 7.1 Rights of Trustee. (a) Except during the continuance of an
-----------------
Event of Default,
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth and correctness of the statements and
certificates or opinions furnished to it and conforming to the requirements
of this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(i) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in aggregate principal amount of the
outstanding Notes, relating to the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Notes.
(d) Subject to TIA Sections 315(a) through (d):
(i) the Trustee may rely upon any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document;
(ii) before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel, which shall
conform to Section 10.4. The Trustee shall not be liable for any action it
takes or omits to take in good faith in reliance on such certificate or
opinion;
(iii) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction;
(iv) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers; provided that the Trustee's conduct does not constitute
negligence or bad faith;
(v) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or
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adequate indemnity against such risk or liability is not reasonably assured
to it;
(vi) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed), may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(vii) the Trustee may consult with counsel and the advice of
such counsel or any opinion of counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(viii) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Compa-
ny, personally or by agent or attorney;
(ix) the Trustee may execute any of the trusts or powers
hereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(x) the Trustee may conclusively rely as to the identity and
addresses of Holders and other matters contained therein on the register of
the Notes maintained by the Registrar pursuant to Section 2.3 hereof and
shall not be affected by notice to the contrary; and
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(xi) unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
Section 7.2 Individual Rights of Trustee. The Trustee, in its individual
----------------------------
or any other capacity, may become the owner or pledgee of Notes and may other-
wise deal with the Company or its Affiliates with the same rights it would have
if it were not the Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to TIA Sections 310(b) and 311.
Section 7.3 Trustee's Disclaimer. The Trustee (i) shall not be responsi-
--------------------
ble for and makes no representation as to the validity or adequacy of this
Indenture or the Notes, (ii) shall not be accountable for the Company's use of
the proceeds from the Notes, (iii) shall not be responsible for the use or
application of any money received by the Escrow Agent or any Paying Agent other
than the Trustee, and (iv) shall not be responsible for any statement in this
Indenture, including the recitals contained herein, or in any document issued in
connection with the sale of the Notes or the Exchange Offer, or in the Notes
other than its certificate of authentication.
Section 7.4 Notice of Default. If any Default or any Event of Default
-----------------
occurs and is continuing and if such Default or Event of Default is known to the
Trustee, the Trustee shall mail to each Holder in the manner and to the extent
provided in TIA Section 313(c) notice of the Default or Event of Default within
90 days after it occurs, unless such Default or Event of Default has been cured
or waived; provided, however, that, except in the case of a default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders.
The Trustee shall not be deemed to have knowledge of any Default or Event
of Default except (i) a default described in Section 6.1(a) or (b) so long as
the Trustee is the Paying Agent or (ii) any Default or Event of Default of which
the Trustee shall have received written notification or a Responsible Officer
shall have obtained actual knowledge.
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Section 7.5 Reports by Trustee to Holders. Within 60 days after each June
-----------------------------
30, beginning with June 30, 1997, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such June 30, if
required by TIA Section 313(a).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange or of any delisting thereof.
Section 7.6 Compensation and Indemnity. The Company shall pay to the
--------------------------
Trustee such compensation as shall be agreed upon in writing for its services
hereunder. The compensation of the Trustee shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, expenses and
advances incurred or made by it in addition to compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless against,
any loss or liability or expense (including, without limitation, reasonable
attorneys' fees) incurred by it without negligence or bad faith on its part in
connection with the acceptance or administration of this Indenture and its
duties under this Indenture and the Notes, including the costs and expenses of
defending itself against any claim or liability and of complying with any
process served upon it or any of its officers in connection with the exercise or
performance of any of its powers or duties under this Indenture and the Notes.
The Trustee shall notify the Company promptly of any claim asserted against the
Trustee for which it may seek indemnity. The Company shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay reasonable fees and expenses of such counsel.
The Company need not pay for any settlements made without its consent; provided
that such consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnity against any loss or liability incurred by the
Trustee through negligence or bad faith.
The Trustee shall have a claim prior to the Notes on all money or property
held or collected by the Trustee, in its capacity as Trustee, for any amount
owing it pursuant to this Section 7.6, except money or property held in trust to
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pay principal of, premium and Liquidated Damages, if any, and interest on
particular Notes.
If the Trustee incurs expenses or renders services after the occurrence of
an Event of Default specified in clause (g) or (h) of Section 6.1, the expenses
and the compensation for the services (including the reasonable fees and
expenses of its agents and counsel) will be intended to constitute expenses of
administration under Title 11 of the United States Bankruptcy Code or any
applicable federal or state law for the relief of debtors.
To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under this Section 7.6 out of the estate in any such
proceeding, shall be denied for any reason, other than solely because of the
misconduct of the Trustee or its Agents, payment of the same shall be secured by
a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
The provisions of this Section 7.6 shall survive the resignation or removal
of the Trustee and the termination of this Indenture.
The Trustee shall comply with the provisions of TIA Section 313(b)(2) to
the extent applicable.
Section 7.7 Replacement of Trustee. A resignation or removal of the
----------------------
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.7.
The Trustee may resign by so notifying the Company in writing at least 30
days prior to the date of the proposed resignation. The Holders of a majority
in aggregate principal amount of the outstanding Notes may remove the Trustee by
so notifying the Trustee in writing and may appoint a successor Trustee with the
consent of the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.9;
(ii) the Trustee is adjudged a bankrupt or an insolvent;
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(iii) a receiver or other public officer takes charge of the Trustee
or its property; or
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed, or if a vacancy exists in the office
of the Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in aggregate principal amount of the outstanding Notes may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.
If the successor Trustee does not take office within 30 days after the retiring
Trustee resigns or is removed, the retiring Trustee, the Company or the Holders
of a majority in aggregate principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after the delivery of
such written acceptance, subject to the lien provided in Section 7.6, (i) the
retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, (ii) the resignation or removal of the retiring Trustee shall
become effective and (iii) the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. A successor Trustee
shall mail notice of its succession to each Holder.
If the Trustee fails to comply with Section 7.9, any Holder who satisfies
the requirements of TIA Section 310(b) may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Trustee shall resign immediately in the
manner and with the effect provided in this Section.
Notwithstanding replacement of the Trustee pursuant to this Section 7.7,
the Company's obligation under Section 7.6 shall continue for the benefit of the
retiring Trustee.
Section 7.8 Successor Trustee by Merger, Etc. If the Trustee consoli-
---------------------------------
dates with, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association
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without any further act shall be the successor Trustee with the same effect as
if the successor Trustee had been named as the Trustee herein.
Section 7.9 Eligibility. Any Trustee serving hereunder shall be a bank or
-----------
trust company, within or without the state, which is authorized by law to
perform all of the duties imposed upon it hereby and which either (i) has a
reported capital and surplus aggregating at least $25,000,000 or (ii) is a
wholly owned subsidiary of a bank, a trust company or a bank holding company
having a reported capital and surplus aggregating at least $25,000,000, and
shall at all times satisfy the requirements of TIA Section 310(a)(1).
Section 7.10 Money Held in Trust. The Trustee shall not be liable for
-------------------
interest on any money received by it except as the Trustee may agree with the
Company. Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law and except for money held in trust
under Article VIII of this Indenture.
ARTICLE VIII
Discharge of Indenture
Section 8.1 Termination of Company's Obligations. Except as otherwise
------------------------------------
provided in this Section 8.1, the Company may terminate its obligations under
the Notes and this Indenture if:
(i) all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes that have been replaced) have been
delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder; or
(ii) (A) the Notes have become due and payable, mature within
one year or all of them are to be called for redemption within one year
under arrangements satisfactory to the Trustee for giving the notice of
redemption, (B) the Company irrevocably deposits in trust with the Trustee
during such one-year period, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds
solely for the benefit of the Holders for that purpose, money or U.S.
Government Obligations sufficient (in the opinion of a nationally recog-
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nized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee), without consideration of
any reinvestment of any interest thereon, to pay principal, premium and
Liquidated Damages, if any, and interest on the Notes to maturity or
redemption, as the case may be, and to pay all other sums payable by it
hereunder, (C) no Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit, (D) such
deposit will not result in a breach or violation of, or constitute a
default under, this Indenture or any other agreement or instrument to which
the Company is a party or by which it is bound and (E) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, in each case stating that all conditions precedent provided for
herein relating to the satisfaction and discharge of this Indenture have
been complied with.
With respect to the foregoing clause (i), the Company's obligations under
Section 7.6 shall survive. With respect to the foregoing clause (ii), the
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.11, 4.1, 4.2, 7.6,
7.7, 8.4, 8.5 and 8.6 shall survive until the Notes are no longer outstanding.
Thereafter, only the Company's obligations in Sections 7.6, 8.4, 8.5 and 8.6
shall survive. After any such irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Notes and this Indenture except for those surviving obligations specified
above.
Section 8.2 Defeasance and Discharge of Indenture. The Company will be
-------------------------------------
deemed to have paid and will be discharged from any and all obligations in
respect of the Notes on the 123rd day after the date of the deposit referred to
in clause (A) of this Section 8.2, and the provisions of this Indenture will no
longer be in effect with respect to the Notes, and the Trustee, at the expense
of the Company, shall execute proper instruments acknowledging the same, except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
apparently mutilated, defaced, destroyed, lost or stolen Securities, (iii) the
Company's obligations under Section 4.2, (iv) the rights, obligations and
immunities of the Trustee hereunder and (v) the rights of the Holders as
beneficiaries of this Indenture with respect to the property so deposited with
the Trustee payable to all or any of them, provided that the following
conditions shall have been satisfied:
(A) the Company has deposited with the Trustee, in trust, money
and/or U.S. Government Obligations
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that through the payment of interest and principal in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment referred to in this clause (A), money in an amount
sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
to the Trustee to pay the principal of, premium and Liquidated Damages, if
any, and accrued interest on the Notes on the Stated Maturity of such
payments in accordance with the terms of this Indenture and the Notes and
shall have irrevocably instructed the Trustee to apply such money to the
payment of such principal, premium and Liquidated Damages, if any, and
interest;
(B) the Company has delivered to the Trustee (i) either (x) an
Opinion of Counsel to the effect that Holders will not recognize income,
gain or loss for federal income tax purposes as a result of the Company's
exercise of its option under this Section 8.2 and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit, defeasance and
discharge had not occurred, which Opinion of Counsel must be based upon
(and accompanied by a copy of) a ruling of the Internal Revenue Service to
the same effect unless there has been a change in applicable federal
income tax law after the date of the Indenture such that a ruling is no
longer required or (y) a ruling directed to the Trustee received from the
Internal Revenue Service to the same effect as the aforementioned Opinion
of Counsel and (ii) an Opinion of Counsel to the effect that the creation
of the defeasance trust does not violate the Investment Company Act of 1940
and after the passage of 123 days following the deposit, the trust fund
will not be subject to the effect of Section 547 of the United States Bank-
ruptcy Code or Section 15 of the New York Debtor and Creditor Law in a case
commenced by or against the Company under either such statute;
(C) immediately after giving effect to such deposit on a pro
forma basis no Event of Default, or event that after the giving of notice
or lapse of time or both would become an Event of Default, shall have
occurred and be continuing on the date of such deposit or during the period
ending on the
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123rd day after the date of such deposit, and such deposit shall not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound;
(D) if at such time the Notes are listed on a national
securities exchange, the Company has delivered to the Trustee an Opinion of
Counsel to the effect that the Notes will not be delisted as a result of
such deposit, defeasance and discharge; and
(E) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.2 have been complied with.
Section 8.3 Defeasance of Certain Obligations. The Company may omit to
---------------------------------
comply with any term, provision or condition set forth in clause (iii) of
Section 5.1 and Sections 4.3 through 4.17, in each case with respect to the
outstanding Notes if:
(i) the Company has deposited with the Trustee, in trust, money
and/or U.S. Government Obligations that through the payment of interest and
principal in respect thereof in accordance with their terms will provide,
not later than one day before the due date of any payment referred to in
this clause (i), money in an amount sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee to pay the principal
of, premium and Liquidated Damages, if any, and accrued interest on the
Notes on the Stated Maturity of such payments in accordance with the terms
of this Indenture and the Notes and shall have irrevocably instructed the
Trustee to apply such money to the payment of such principal, premium,
Liquidated Damages and interest;
(ii) immediately after giving effect to such deposit on a pro
forma basis no Event of Default, or event that after the giving of notice
or lapse of time or both would become an Event of
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Default, shall have occurred and be continuing on the date of such deposit
or during the period ending on the 123rd day after the date of such
deposit, and such deposit shall not result in a breach or violation of, or
constitute a default under, any other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or
any of its Subsidiaries is bound;
(iii) the Company has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the creation of the defeasance trust does
not violate the Investment Company Act of 1940, (B) the Holders will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and defeasance of certain obligations and will be subject
to federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred and (C) after the passage of 123 days following the deposit,
the trust funds will not be subject to the effect of Section 547 of the
United States Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law in a case commenced by or against the Company under either
such statute;
(iv) at such time the Notes are listed on a national securities
exchange, the Company has delivered to the Trustee an Opinion of Counsel to
the effect that the Notes will not be delisted as a result of such deposit,
defeasance and discharge; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.3 have been complied with.
Section 8.4 Application of Trust Money. Subject to Sections 8.5 and 8.6,
--------------------------
the Trustee or Paying Agent shall hold in trust money or U.S. Government Obli-
gations deposited with it pursuant to Section 8.1, 8.2 or 8.3, as the case may
be, and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium and Liquidated Damages, if any, and interest on the Notes;
but such money need not be segregated from other funds except to the extent
required by law.
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Section 8.5 Repayment to Company. Subject to Sections 7.6, 8.1, 8.2 and
--------------------
8.3, the Trustee and the Paying Agent shall promptly pay to the Company upon
request set forth in an Officers' Certificate any excess money held by them at
any time and thereupon shall be relieved from all liability with respect to such
money. The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal, premium and
Liquidated Damages, if any, or interest that remains unclaimed for two years;
provided that the Trustee or such Paying Agent before being required to make any
- --------
payment may cause to be published at the expense of the Company once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money at such Holder's address (as set forth in the Security
Register) notice that such money remains unclaimed and that after a date
specified therein (which shall be at least 30 days from the date of such
publication or mailing) any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person, and all liability of the Trustee and
such Paying Agent with respect to such money shall cease.
Section 8.6 Reinstatement. If the Trustee or Paying Agent is unable to
-------------
apply any money or U.S. Government Obligations in accordance with Section 8.1,
8.2 or 8.3, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obliga-
tions under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 8.1, 8.2 or 8.3, as the case
may be, until such time as the Trustee or Paying Agent is permitted to apply all
such money or U.S. Government Obligations in accordance with Section 8.1, 8.2 or
8.3, as the case may be; provided that, if the Company has made any payment of
principal of, premium and Liquidated Damages, if any, or interest on any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
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ARTICLE IX
Amendments, Supplements and Waivers
Section 9.1 Without Consent of Holders. The Company, when authorized by
--------------------------
a Board Resolution of its Board of Directors, and the Trustee may amend or
supplement this Indenture or the Notes or the Escrow Agreement without notice to
or the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article V;
(3) to comply with any requirements of the Commission in connection with
the qualification of this Indenture under the TIA;
(4) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee;
(5) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(6) to add one or more subsidiary guarantees on the terms required by this
Indenture; or
(7) to make any change that does not adversely affect the rights of any
Holder.
Section 9.2 With Consent of Holders. Subject to Sections 6.4 and 6.7 and
-----------------------
without prior notice to the Holders, the Company, when authorized by its Board
of Directors (as evidenced by a Board Resolution), and the Trustee may amend
this Indenture and the Notes and the Escrow Agreement with the written consent
of the Holders of not less than a majority of the aggregate principal amount of
the Notes then outstanding, and the Holders of not less than a majority of the
aggregate principal amount of the Notes then outstanding by written notice to
the Trustee may waive future compliance by the Company with any provision of
this Indenture or the Notes.
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Notwithstanding the provisions of this Section 9.2, without the
consent of each Holder affected, an amendment of waiver, including a waiver
pursuant to Section 6.4, may not:
(i) change the Stated Maturity of the principal of, or any
installment of interest on, on Note;
(ii) reduce the principal amount or premium and Liquidated
Damages, if any, or interest on, any Note;
(iii) change the place or currency of payment of principal of,
or premium and Liquidated Damages, if any, or interest on, any Note;
(iv) impair the right to institute suit for the enforcement of
any payment on or after the Stated Maturity (or, in the case of redemption,
on or after the Redemption Date) of any Note;
(v) reduce the above-stated percentage of outstanding Notes the
consent of whose Holders is necessary to modify or amend this Indenture;
(vi) waive a default in the payment of principal of, premium and
Liquidated Damages, if any, or interest on the Notes;
(vii) reduce the percentage of aggregate principal amount of
outstanding Notes the consent of whose Holders is necessary for waiver of
compliance with certain provisions of the Indenture or for waiver of
certain default; or
(viii) modify any of the provisions of this Section 9.2, except
to increase any such percentage or to provide that certain other provisions
of this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Note affected thereby.
It shall not be necessary for the consent of the Holders under this Section
9.2 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. The Company will mail
supplemental indentures to Holders upon request. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.
Section 9.3 Revocation and Effect of Consent. Until an amendment or
--------------------------------
waiver becomes effective, a consent to it by a Holder is an continuing consent
by the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
of aggregate principal amount of the outstanding Notes.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it is of the type described in any of clauses (i) through
(vi) of Section 9.2. In case of an amendment or waiver of the type described in
clauses (i) through (vi) of Section 9.2, the amendment or waiver shall bind each
Holder who has consented to it and every subsequent Holder of a Note that
evidences the same indebtedness as the Note of the consenting Holder.
Section 9.4 Notation on or Exchange of Notes. If an amendment, supplement
--------------------------------
or waiver changes the terms of a Note, the Trustee may require the Holder to
deliver it to the Trustee. The Trustee may place an appropriate notation on the
Note about the changed terms and return it to the Holder and the
75
<PAGE>
Trustee may place an appropriate notation on any Note thereafter authenticated.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make the appropriate notation or
issue a new Note shall not affect the validity and effect of such amendment,
supplement or waiver.
Section 9.5 Trustee to Sign Amendments, Etc. The Trustee shall be
--------------------------------
entitled to receive, and shall be fully protected in relying upon, in addition
to the documents required by Section 10.3 hereof, an Opinion of Counsel stating
that the execution of any amendment, supplement or waiver authorized pursuant to
this Article IX is authorized or permitted by this Indenture. Subject to the
preceding sentence, the Trustee shall sign such amendment, supplement or waiver
if the same does not adversely affect the rights of the Trustee. The Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 9.6 Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article IX shall conform to the requirements
of the TIA as then in effect.
ARTICLE X
Miscellaneous
Section 10.1 Trust Indenture Act. This Indenture is subject to the
-------------------
provisions of the TIA that are required to be a part of this Indenture and
shall, to the extent applicable, be governed by such provisions.
Section 10.2 Notices. Any notice or communication shall be sufficiently
-------
given if in writing and delivered in person or mailed by first class mail
(registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery addressed as follows:
76
<PAGE>
if to the Company:
-----------------
Omnipoint Corporation
2000 North 14th Street, Suite 550
Arlington, VA 22201
Telecopier No.: (703) 522-0288
Attention: Bradley E. Sparks
with (in the case of any notice under Article VI) a copy to: (which
-----------------------------------------------------------
shall not constitute notice)
Piper & Marbury, L.L.P.
1200 19th Street, N.W.
Washington, DC 20036
Telecopier No.: (202) 861-6317
Attention: Edwin M. Martin, Jr.
if to the Trustee:
-----------------
Marine Midland Bank
140 Broadway, 12th Floor
New York, NY 10005
Telecopier No.: (212) 658-6425
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class mail
(certified or registered, return receipt requested) to its address shown on the
register kept by the Registrar and shall be sufficiently given to such Holder if
so mailed or delivered within the time presented. Any notice or communication
77
<PAGE>
shall also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed given only when received, and except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 10.2, it is duly given, whether or not the
addressee receives it.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company,
the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).
Section 10.3 Certificate and Opinion as to Conditions Precedent. Upon any
--------------------------------------------------
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(ii) an Opinion of Counsel reasonably satisfactory to the
Trustee stating that, in the opinion of such Counsel, all such conditions
precedent have been complied with.
Section 10.4 Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(i) a statement that the person making such certificate or
opinion has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statement or opinion contained
in such certificate or opinion is based;
78
<PAGE>
(iii) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with, and such other
opinions as the Trustee may reasonably request; provided, however, that,
with respect to matters of fact, an Opinion of Counsel may rely on an
Officers' Certificate or certificates of public officials.
Section 10.5 Acts of Holders. (a) Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company. Proof of execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The ownership of Notes shall be proved by the Security Register.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind every future Holder
of the same Note or the Holder of every Note issued upon the transfer thereof or
in exchange therefor or in lieu thereof, in respect of anything done, suffered
or omitted to be done by the Trustee, any Paying Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.
Section 10.6 Rules by Trustee, Paying Agent or Registrar. The Trustee may
-------------------------------------------
make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for is functions.
Section 10.7 Payment Date Other Than a Business Day. If an Interest
--------------------------------------
Payment Date, Redemption Date, Payment Date for an Offer to Purchase, Stated
79
<PAGE>
Maturity or date of maturity of any Note shall not be a Business Day at any
place of payment, then payment of principal of, premium and Liquidated Damages,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day at such place of
payment with the same force and effect as if made on the Interest Payment Date,
Payment Date for an Offer to Purchase, or Redemption Date, or at the Stated
Maturity or date of maturity of such Note; provided that no interest shall
accrue for the period from and after such Interest Payment Date, Payment Date
for an Offer to Purchase, Redemption Date, Stated Maturity or date of maturity,
as the case may be.
Section 10.8 Governing Law. This Indenture and the Notes shall be
-------------
governed by the laws of the State of New York. The Trustee, the Company and the
Holders agree to submit to the jurisdiction of the courts of the State of New
York in any action or proceeding arising out of or relating to this Indenture or
the Notes.
Section 10.9 No Adverse Interpretation of Other Agreements. This
---------------------------------------------
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any Subsidiary of the Company. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 10.10 No Recourse Against Others. No recourse for the payment of
--------------------------
the principal of, premium and Liquidated Damages, if any, or interest on any of
the Notes, or for any claim based thereon or otherwise in respect thereof, and
no recourse under or upon any obligation, covenant or agreement of the Company
contained in this Indenture, or in any of the Notes, or because of the creation
of any Indebtedness represented thereby, shall be had against any incorporator
or against any past, present or future partner, shareholder, other equityholder,
officer, director, employee or controlling person, as such, of the Company or of
any successor Person, either directly or through the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and a consideration for, the execution of this Indenture and the
issue of the Notes.
Section 10.11 Successors. All agreements of the Company in this Indenture
----------
and the Notes shall bind its successors. All agreements of the Trustee in this
Indenture shall bind its successor.
80
<PAGE>
Section 10.12 Duplicate Originals. The parties may sign any number of
-------------------
copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
Section 10.13 Separability. In case any provision in this Indenture or in
------------
the Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 10.14 Table of Contents, Headings, Etc. The Table of Contents,
---------------------------------
Cross-Reference Table and headings of the Article and Sections of this Indenture
have been inserted for convenience of reference only, are not to be considered a
part hereof and shall in no way modify or restrict any of the terms and
provisions hereof.
81
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
OMNIPOINT CORPORATION,
as Issuer
_________________________
Name:
Title:
MARINE MIDLAND BANK,
as Trustee
_________________________
Name:
Title:
82
<PAGE>
EXHIBIT A
---------
[FACE OF NOTE]
[Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for Notes in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.]/1/
[THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE EVI-
DENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED
OR OTHERWISE
- ---------------
/1/ To be included in Global Notes registered in the name of DTC or its
nominee.
A-1
<PAGE>
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANS-
ACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.]/2/
Omnipoint Corporation
11 5/8% Senior Notes due 2006
CUSIP ______
$_______
OMNIPOINT CORPORATION, a Delaware corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to ________, or its registered assigns, the
principal sum of ________________ ($______) on August 15, 2006.
Interest Payment Dates: February 15 and August 15, commencing
February 15, 1997.
Regular Record Dates: February 1 and August 1.
- -------------------------
/2/ To be included in Original Notes.
A-2
<PAGE>
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: OMNIPOINT CORPORATION,
as Issuer
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
Title:
(Form of Trustee's Certificate of Authentication)
This is one of 11 5/8% Senior Notes due 2006 described in the within-mentioned
Indenture.
MARINE MIDLAND BANK,
as Trustee
By
---------------------------------
Authorized Signatory
A-4
<PAGE>
[REVERSE SIDE OF NOTE]
OMNIPOINT CORPORATION
11 5/8% Senior Note due 2006
(1) Principal and Interest. The Company will pay the principal of this
----------------------
Note on August 15, 2006.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semiannually in arrears (to the holders of record
of the Notes, as reflected in the Security Register at the close of business on
the February 1 or August 1 immediately preceding the Interest Payment Date) on
each Interest Payment Date, commencing February 15, 1997.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from August 27, 1996;
provided that, if there is no existing default in the payment of interest and if
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium and
Liquidated Damages, if any, and interest on overdue installments of interest, to
the extent lawful, at the rate borne by the Notes.
(2) Method of Payment. The Company will pay interest (except defaulted
-----------------
interest) on the principal amount of the Notes as provided above and Liquidated
Damages on each February 15 and August 15 to the persons who are Holders (as
reflected in the Security Register at the close of business on the February 1
and August 1 immediately preceding the Interest Payment Date), in each case,
even if the Note is cancelled on registration of transfer, registration of
exchange,
A-5
<PAGE>
redemption or repurchase after such Regular Record Date. With respect to the
payment of principal, the Company will make payment to the Holder that
surrenders this Note to a Paying Agent on or after August 15, 2006.
The Company will pay principal, premium and Liquidated Damages, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts at the office or agency of the
Company maintained for such purposes in the Borough of Manhattan, City of New
York. The Company, at its option, may pay principal, premium and Liquidated
Damages, if any, and interest by its check payable in such money mailed to a
Holder's registered address (as reflected in the Security Register), provided
that payment by wire transfer of immediately available funds will be required
with respect to principal, premium and Liquidated Damages, if any, and interest
on all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. If an Interest
Payment Date is a date other than a Business Day at a place of payment, payment
may be made on the next succeeding day that is a Business Day with the same
force and effect as if made on the day such payment was due and in the case of
such payment no interest shall accrue for the intervening period.
(3) Paying Agent and Registrar. Initially, the Trustee will act as
--------------------------
authenticating agent, Paying Agent and Registrar. The Company may change any
authenticating agent, Paying Agent or Registrar without notice. The Company,
any Subsidiary or any Affiliate of any of them may act as Paying Agent, Regis-
trar or co-Registrar.
(4) Indenture; Limitations. The Company issued the Notes under an
----------------------
Indenture dated as of August 27, 1996 (the "Indenture"), between the Company and
Marine Midland Bank, as trustee (the "Trustee"). Capitalized terms herein are
used as defined in the Indenture unless otherwise indicated. Reference is made
to the Indenture and the Trust Indenture Act for a full, complete and detailed
statement of the purposes for which the Notes are issued, the terms on which the
Notes are issued, a description of the security pledged and assigned for payment
of the Notes and the terms, provisions and conditions governing payment of the
Notes and the provisions, among others, with respect to the nature and extent of
the rights, duties and obligations of the Trustee, the Paying Agent, the
Registrar, the authenticating agent, Holders and the Company. The holder of
this Note, by acceptance of this Note, is deemed to have agreed and consented to
the terms and provisions of the Indenture. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
A-6
<PAGE>
Trust Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. If any provision of this Note conflicts with the Indenture, the
terms of the Indenture control.
The Notes are general unsecured obligations of the Company. The Indenture
limits the original aggregate principal amount of the Notes to $250,000,000.
(5) Optional Redemption. The Notes will be redeemable, at the Company's
-------------------
option, in whole or in part, at any time or from time to time, on or after
August 15, 2001 and prior to maturity, upon not less than 30 nor more than 60
days' prior notice mailed by first class mail to each Holder's last address as
it appears in the Security Register, at the Redemption Prices (expressed in
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date that is prior to
the Redemption Date to receive interest due on an Interest Payment Date), if re-
deemed during the 12-month period commencing August 15, of the years set forth
below:
Redemption Year Price
----------------- ----------
2001 105.81%
2002 103.88%
2003 101.94%
2004 and thereafter 100.00%
In addition, at any time prior to August 15, 1999, the Company may redeem
up to one-third of the Notes originally issued, at any time as a whole or from
time to time in part, with the proceeds of one or more Public Equity Offerings
or sales of Capital Stock (other than Redeemable Stock) to one or more Strategic
Equity Investors, each such Public Equity Offering or sale to Strategic Equity
Investors resulting in Net Cash Proceeds of $50 million or more, at a redemption
price (expressed as a percentage of principal amount) of 111.625%, plus accrued
and unpaid interest and Liquidated Damages, if any, to the Redemption Date,
provided that after any such redemption at least two-thirds of the aggregate
principal amount of Notes originally outstanding remains outstanding and each
such redemption is effected not more than 60 days after the consummation of
such Public Equity Offering or sale to Strategic Equity Investors.
A-7
<PAGE>
If less than all of the Notes are to be redeemed at any time, the Trustee
will select the Notes, or portions thereof, for redemption in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not listed on a national securities
exchange, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem to be fair and appropriate. Notes in
denominations larger than $1,000 may be redeemed in part. Any notice mailed as
provided herein and in the Indenture will be conclusively presumed to have been
given whether or not actually received by any Holder. On and after the
Redemption Date, interest ceases to accrue on Notes or portions of Notes called
for redemption, unless the Company defaults in the payment of the Redemption
Price. A new Note in original amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note.
(6) Repurchase upon Change of Control and Asset Sale. The Company shall
------------------------------------------------
commence within 30 days of the occurrence of a Change of Control and consummate
an Offer to Purchase for all Notes then outstanding at a purchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Payment Date. The Notes may also be subject
to an Offer to Purchase in connection with an Asset Sale. Any Note delivered
for payment of a purchase price shall be accompanied by an instrument in the
form of the Option of the Holder to Elect Purchase below.
(7) Denominations; Transfer; Exchange. The Notes are in registered form
---------------------------------
without coupons in denominations of $1,000 of principal amount and multiples of
$1,000 in excess thereof. A Holder may register the transfer or exchange of
Notes in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
(including a certificate in the form of the Certificate to be Delivered upon
Exchange or Registration of Transfer of Securities below) and to pay any taxes,
fees and/or other governmental charges required by law or permitted by the
Indenture. The Registrar need not register the transfer or exchange of any
Notes selected for redemption. Also, it need not register the transfer or
exchange of any Notes for a period of 15 days before the day of the mailing of a
notice of redemption of Notes selected for redemption.
(8) Persons Deemed Owners. A Holder shall be treated as the owner of a
---------------------
Note for all purposes.
A-8
<PAGE>
(9) Unclaimed Money. If money for the payment of principal, premium and
---------------
Liquidated Damages, if any, or interest remains unclaimed for two years, the
Trustee and the Paying Agent will pay the money back to the Company at its
written request. After that, Holders entitled to the money must look to the
Company for payment, unless applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
(10) Defeasance and Discharge Prior to Redemption or Maturity. If the
--------------------------------------------------------
Company deposits with the Trustee money or U.S. Government Obligations
sufficient to pay the then outstanding principal of, premium and Liquidated
Damages, if any, and accrued interest on the Notes to redemption or maturity,
and complies with certain other provisions of the Indenture relating thereto,
(i) the Company will be deemed to have paid and will be discharged from any and
all obligations in respect of the Notes or (ii) certain provisions set forth in
the Indenture will no longer be in effect with respect to the Notes.
(11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing default or compliance with any provision may be
waived with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, defect or inconsistency and make any
change that does not adversely affect the rights of any Holder.
(12) Restrictive Covenants. The Indenture imposes certain limitations on
---------------------
the ability of the Company and its Restricted Subsidiaries, among other things,
to (a) Incur additional Indebtedness, (b) make Restricted Payments, (c) use the
proceeds from Asset Sales, (d) suffer to exist restrictions on the ability of
Restricted Subsidiaries to make certain payments to the Company, (e) issue
Capital Stock of Restricted Subsidiaries, (f) engage in transactions with
certain stockholders and Affiliates, (g) suffer to exist or incur Liens,
(h) Guarantee Indebtedness of the Company or (i) merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of the last fiscal
quarter of each year, the Company shall deliver to the Trustee an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default under such restrictive covenants.
A-9
<PAGE>
(13) Successor Persons. When a successor person or other entity assumes
-----------------
all the obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
(14) Defaults and Remedies. An Event of Default is: (a) a default in
---------------------
payment of principal or premium, if any, on the Notes; (b) default in the
payment of interest or Liquidated Damages, if any, on the Notes for 30 days; (c)
failure by the Company for 30 days after notice to it to comply with any of its
other agreements in the Indenture; (d) certain events of bankruptcy or
insolvency as described in the Indenture; (e) certain final judgments which
remain undischarged as described in the Indenture; and (f) certain events of
default on other Indebtedness of the Company and/or one or more of its
Significant Subsidiaries as described in the Indenture.
If an Event of Default, as defined in the Indenture, occurs and is continu-
ing, the Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding may, and the Trustee at the request of such Holders
shall, declare all the Notes to be due and payable. If a bankruptcy or
insolvency default with respect to the Company occurs and is continuing, the
Notes automatically become due and payable. Holders may not enforce the
Indenture or the Notes, or take any action with respect to any Event of Default
under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations under the Indenture,
Holders of at least a majority in principal amount of the Notes then outstanding
may direct in accordance with the provisions of the Indenture the Trustee in its
exercise of any trust or power, including waiver of all past defaults,
rescission and annulment of a declaration of acceleration and its consequences
and exercise of any right, remedy or power available to the Trustee.
(15) Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may make loans to, accept deposits from
and perform services for the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates as if it were not the Trustee.
(16) No Recourse Against Others. No incorporator or any past, present or
--------------------------
future partner, shareholder, other equity holder, officer, director, employee or
controlling person as such, of the Company or of any successor Person shall have
any liability for any obligations of the Company under the Notes or the
Indenture
A-10
<PAGE>
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder by accepting a Note expressly waives and releases
all such liability. The waiver and release are a condition of, and part of the
consideration for the issuance of the Notes.
(17) Authentication. This Note shall not be entitled to any right or
--------------
benefit under the Indenture, or be valid, or become obligatory for any purpose,
until the Trustee or authenticating agent signs the certificate of
authentication on the other side of this Note.
(18) Abbreviations. Customary abbreviations may be used in the name of a
-------------
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A
(= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Omnipoint
Corporation, 2000 North 14th Street, Suite 550, Arlington, VA 22201, Attention:
Bradley E. Sparks.
A-11
<PAGE>
ASSIGNMENT
I or we assign and transfer this Note to
---------------------------------------
- -------------------------------------------------------------------------------
Print or type name, address and zip code of Assignee
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------
- -------------------------------------
and irrevocably appoint
--------------------------------------------------------
- ------------------------------------------------------------------------------,
as agent, to transfer this Note on
the books of the Company.
The agent may substitute another
to act for him/her.
Date
-----------------------------------
Signature Guarantee: Signed
- --------------------------------------- --------------------------
The Holder's signature must be guaranteed (Sign here exactly as name
by a member firm of a registered national appears on the other side of
securities exchange or of the this Note)
National Association of Securities
Dealers, Inc., a commercial bank or trust
company having an office or correspondent
in the United States or an "eligible
guarantor institution" as defined by
Rule 17Ad-15 under the Exchange Act.
- -------------------------------------------------------------------------------
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or Section 4.12 of the Indenture, as applicable, check the box: [ ].
If you wish to have a portion of this Note purchased by the Company pursuant
to Section 4.11 or Section 4.12 of the Indenture, as applicable, state the
principal amount to be purchased:
$____________.
If you wish to have a portion of this Note purchased by the Company pursuant
to Section 4.11 or Section 4.12 of the Indenture, as applicable, please provide
instructions regarding delivery of and the Persons in whose name(s) the
unredeemed portion of such surrendered Note(s) should be registered, the address
of such Person(s) and appropriate delivery instructions.
Date:
--------------------------------------------------------------------------
Your Signature:
----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
- -------------------------------------------------------------------------------
The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution: as
defined by Rule 17Ad-15 under the Exchange Act.
- -------------------------------------------------------------------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SECURITIES
Re: 11 5/8% SENIOR NOTES DUE 2006 OF OMNIPOINT CORPORATION
This certificate relates to $ principal amount of Notes held in
------
definitive form by (the "Transferor").
-------------------------------------
The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above-captioned Notes and, as provided in Section 2.5 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act because:
[ ] Such Note is being registered for the Transferor's own account, without
transfer.
[ ] Such Note is being transferred (a) to a person who the seller reasonably
believes is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (b) in a
transaction meeting the requirements of Rule 144 under the Securities Act,
(c) outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act or (d) in accordance with
another exemption from the registration requirements of the Securities Act, and
in the case of (d), this request for transfer is accompanied by an opinion of
counsel.
- -------------------------------------------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
DATED AS OF AUGUST 27, 1996
BY AND AMONG
OMNIPOINT CORPORATION
AS ISSUER
AND
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
AND
GOLDMAN, SACHS & CO.
AS INITIAL PURCHASERS
- --------------------------------------------------------------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is made and entered
into as of August 27, 1996, among OMNIPOINT CORPORATION, a Delaware corporation
(the "Issuer"), and DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION and
GOLDMAN, SACHS & CO. (together, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated August 22,
1996, among the Issuer and the Initial Purchasers (the "Purchase Agreement"),
which provides for the sale by the Issuer to the Initial Purchasers of
$250,000,000 aggregate principal amount of 11 5/8% Senior Notes due 2006 (the
"Notes"). In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Issuer has agreed to provide to the Initial Purchasers and their
respective direct and indirect transferees, among other things, the registration
rights for the Notes set forth in this Agreement. The execution of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
-----------
As used in this Agreement, the following terms shall have the following
meanings (and, unless otherwise indicated, capitalized terms used herein without
definition shall have the respective meanings ascribed to them by the Purchase
Agreement):
Applicable Period: See Section 2(b) hereof.
-----------------
Business Day: Any day except a Saturday, Sunday or other day in the City
------------
of New York, or in the city of the corporate trust office of the Trustee, on
which banks are authorized to close.
Closing Date: The Closing Date as defined in the Purchase Agreement.
------------
Effectiveness Period: See Section 3(a) hereof.
--------------------
Effectiveness Target Date: The 90th day following the Closing Date.
-------------------------
1
<PAGE>
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
------------
rules and regulations of the SEC promulgated thereunder.
Exchange Notes: See Section 2(a) hereof.
--------------
Exchange Offer: See Section 2(a) hereof.
--------------
Exchange Offer Registration Statement: See Section 2(a) hereof.
-------------------------------------
Filing Date: The 45th day after the Closing Date.
-----------
Holder: Any holder of Transfer Restricted Notes.
------
Indemnified Party: See Section 7 hereof.
-----------------
Indemnified Person: See Section 7 hereof.
------------------
Indemnifying Person: See Section 7 hereof.
-------------------
Indenture: The Indenture, dated as of August 27, 1996, by and between the
---------
Issuer and Marine Midland Bank, as Trustee, pursuant to which the Notes are
being issued, as amended or supplemented from time to time in accordance with
the terms thereof.
Initial Purchasers: See the introductory paragraph to this Agreement.
------------------
Inspectors: See Section 3(m) hereof.
----------
Issuer: See the introductory paragraph of this Agreement.
------
Liquidated Damages: See Section 4(a) hereof.
------------------
Notes: See the introductory paragraphs to this Agreement.
-----
Participating Broker-Dealer: See Section 2(b) hereof.
---------------------------
Person or person: An individual, trustee, corporation, partnership, joint
------ ------
stock company, trust, unincorporated association, union, business association,
limited liability company, limited liability partnership, firm or other legal
entity.
2
<PAGE>
Prospectus: The prospectus included in any Registration Statement
----------
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion
of the Exchange Notes and/or the Transfer Restricted Notes (as applicable),
covered by such Registration Statement, and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incor porated by reference in such
Prospectus.
Records: See Section 4(m) hereof.
-------
Registration Default: See Section 4(a) hereof.
--------------------
Registration Statement: Any registration statement of the Issuer,
----------------------
including, but not limited to, the Exchange Offer Registration Statement, Shelf
Registration or a registration statement of the Issuer that otherwise covers any
of the Transfer Restricted Notes pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Rule 144: Rule 144 promulgated pursuant to the Securities Act, as
--------
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
Rule 144A: Rule 144A promulgated pursuant to the Securities Act, as
---------
currently in effect, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated pursuant to the Securities Act, as such
--------
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
---
Securities Act: The Securities Act of 1933, as amended, and the rules and
--------------
regulations of the SEC promulgated thereunder.
3
<PAGE>
Shelf Notice: See Section 2(c) hereof.
------------
Shelf Registration: See Section 3(a) hereof.
------------------
TIA: The Trust Indenture Act of 1939, as amended, and the rules and
---
regulations of the SEC promulgated thereunder.
Transfer Restricted Notes: The Notes upon original issuance thereof and at
-------------------------
all times subsequent thereto, until (i) a Registration Statement covering such
Notes has been declared effective by the SEC and such Notes have been disposed
of in accordance with such effective Registration Statement, (ii) such Notes are
sold in compliance with Rule 144 or (iii) such Notes cease to be outstanding.
Trustee: The trustee under the Indenture and, if existent, the trustee
-------
under any indenture governing the Exchange Notes.
Underwritten registration or underwritten offering: A registration in
--------------------------------------------------
which securities of the Issuer are sold to an underwriter for reoffering to the
public.
2. Exchange Offer
--------------
(a) The Issuer agrees to file with the SEC as soon as practicable after the
Closing Date, but in no event later than the Filing Date, an offer to exchange
(the "Exchange Offer"), any and all of the Transfer Restricted Notes for a like
aggregate principal amount of debt securities of the Issuer (the "Exchange
Notes"), which Exchange Notes will be (i) substantially identical in all
material respects to the Notes, except that such Exchange Notes will not
contain terms with respect to transfer restrictions, (ii) entitled to the
benefits of the Indenture or a trust indenture which is identical to the
Indenture (other than such changes to the Indenture or any such identical trust
indenture as are necessary to comply with any requirements of the SEC to effect
or maintain the qualification thereof under the TIA), and which, in either case,
has been qualified under the TIA, and (iii) registered pursuant to an effective
Registration Statement in compliance with the Securities Act. The Exchange
Offer will be registered pursuant to the Securities Act on an appropriate form
of Registration Statement (the "Exchange Offer Registration Statement"), and
will comply with all applicable tender offer rules and regulations promulgated
pursuant to the Exchange Act and shall be duly registered or qualified pursuant
to all applicable state securities or Blue Sky laws. The Exchange Offer shall
not be subject to any condition, other than that the Exchange Offer does not
violate any applicable law, policy or interpretation of the staff of the SEC.
No securities shall be included
4
<PAGE>
in the Exchange Offer Registration Statement other than the Exchange Notes. The
Issuer agrees to use its best efforts to (x) cause the Exchange Offer
Registration Statement to become effective pursuant to the Securities Act on or
before the Effectiveness Target Date; and (y) keep the Exchange Offer open for
not less than 20 Business Days (or such longer period required by applicable
law), after the date that the notice of the Exchange Offer referred to below is
mailed to Holders. Each Holder who participates in the Exchange Offer will be
required to represent that any Exchange Notes received by it will be acquired in
the ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
person to participate in the distribution of the Exchange Notes, and that such
Holder is not an "affiliate" of the Issuer within the meaning of Rule 405 of the
Securities Act (or that if it is such an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable). Each Holder that is not a Participating Broker-Dealer will
be required to represent that it is not engaged in, and does not intend to
engage in, the distribution of the Exchange Notes. Each Holder that (i) is a
Participating Broker-Dealer and (ii) will receive Exchange Notes for its own
account in exchange for the Transfer Restricted Notes that it acquired as the
result of market-making or other trading activities will be required to
acknowledge that it will deliver a Prospectus as required by law in connection
with any resale of such Exchange Notes. Upon consummation of the Exchange Offer
in accordance with this Agreement, the Issuer shall have no further obligation
to register Transfer Restricted Notes pursuant to Section 3 of this Agreement.
(b) The Issuer shall include within the Prospectus contained in the
Exchange Offer Registration Statement a section entitled "Plan of Distribution,"
acceptable to the Initial Purchasers, which shall contain a summary statement of
the positions taken or policies made by the staff of the SEC with respect to the
potential "underwriter" status of any broker-dealer that is the beneficial owner
(as defined in Rule 13d-3 under the Exchange Act), of Exchange Notes received by
such broker-dealer in the Exchange Offer (a "Participating Broker-Dealer").
Such "Plan of Distribution" section shall also allow the use of the Prospectus
by all persons subject to the prospectus delivery requirements of the Securities
Act, including all Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell the
Exchange Notes.
The Issuer shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein, in order to permit such Prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time
5
<PAGE>
as such persons must comply with such requirements in order to resell the
Exchange Notes; provided that such period shall not exceed 180 days after
--------
consummation of the Exchange Offer (or such longer period if extended pursuant
to the last paragraph of Section 5 hereof) (the "Applicable Period").
In connection with the Exchange Offer, the Issuer shall:
(i) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(ii) utilize the services of a depositary for the Exchange Offer with
an address in the Borough of Manhattan, The City of New York; and
(iii) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last Business Day on which the
Exchange Offer shall remain open by sending to the institution and at the
address (located in the Borough of Manhattan, The City of New York)
specified in the notice, a telegram, telex, facsimile transmission or
letter setting forth the name of such Holder, the principal amount of
Transfer Restricted Securities delivered for exchange and a statement that
such Holder is withdrawing his or her election to have such Transfer
Restricted Securities exchanged.
As soon as practicable after the close of the Exchange Offer, the Issuer
shall:
(i) accept for exchange all Notes tendered and not validly
withdrawn pursuant to the Exchange Offer;
(ii) deliver, or cause to be delivered, to the Trustee for cancella-
tion all Notes so accepted for exchange; and
(iii) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes equal in principal amount to the Notes of
such Holder so accepted for exchange.
(c) If (1) prior to the consummation of the Exchange Offer, applicable
interpretations of the staff of the SEC do not permit the Issuer to effect the
Exchange Offer, or (2) if for any other reason the Exchange Offer is not
consummated within 135 days of the Closing Date, then the Issuer shall promptly
deliver to the Holders
6
<PAGE>
and the Trustee written notice thereof (the "Shelf Notice"), and the Issuer
shall file a Registration Statement pursuant to Section 3 hereof. Following the
delivery of a Shelf Notice to the Holders of Transfer Restricted Notes, the
Issuer shall not have any further obligation to conduct the Exchange Offer
pursuant to this Section 2, provided, that the Issuer shall have the right,
--------
nonetheless, to proceed to consummate the Exchange Offer notwithstanding its
obligations pursuant to this Section 2(c) (and, upon such consummation, its
obligation to consummate a Shelf Registration shall terminate).
3. Shelf Registration
------------------
If the Issuer is required to deliver a Shelf Notice as contemplated by
Section 2(c) hereof, then:
(a) Shelf Registration. The Issuer shall prepare and file with the SEC, as
------------------
promptly as practicable following the Shelf Notice, a Registration Statement for
an offering to be made on a continuous basis pursuant to Rule 415 covering all
of the Transfer Restricted Notes (the "Shelf Registration"). The Shelf
Registration shall be on Form S-1 or another appropriate form permitting
registration of the Transfer Restricted Notes for resale by the Holders in the
manner or manners reasonably designated by them (including, without limitation,
one or more underwritten offerings). The Issuer shall not permit any securities
other than the Transfer Restricted Notes to be included in the Shelf
Registration. The Issuer shall use its best efforts, as described in Section
5(b) hereof, to cause the Shelf Registration to be declared effective pursuant
to the Securities Act as promptly as practicable after the filing of such Shelf
Registration and to keep the Shelf Registration continuously effective under the
Securities Act until the earlier of (i) the date which is 36 months after the
Closing Date, (ii) the date that all Transfer Restricted Notes covered by the
Shelf Registration have been sold in the manner set forth and as contemplated in
the Shelf Registration or (iii) the date that there ceases to be outstanding any
Transfer Restricted Notes (the "Effectiveness Period").
(b) Supplements and Amendments. The Issuer shall use its best efforts to
--------------------------
keep the Shelf Registration continuously effective by supplementing and amending
the Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Notes covered
by such Registration Statement or by any underwriter of such Transfer Restricted
Notes.
7
<PAGE>
4. Liquidated Damages
------------------
(a) The Issuer and the Initial Purchasers agree that the Holders of
Transfer Restricted Notes will suffer damages if the Issuer fails to fulfill its
obliga tions pursuant to Section 2 or Section 3 hereof and that it would not be
possible to ascertain the extent of such damages. Accordingly, in the event of
such failure by the Issuer to fulfill such obligations, the Issuer hereby agrees
to pay liquidated damages ("Liquidated Damages") to each Holder of Transfer
Restricted Notes under the circumstances and to the extent set forth below:
(i) if neither the Exchange Offer Registration Statement nor the
Shelf Registration has been filed with the SEC on or prior to the Filing
Date; or
(ii) if neither the Exchange Offer Registration Statement nor the
Shelf Registration is declared effective by the SEC on or prior to the
Effectiveness Target Date; or
(iii) if an Exchange Offer Registration Statement is declared
effective by the SEC, and on or prior to 45 days following the earlier of
(A) the effectiveness thereof or (B) the Effectiveness Target Date, the
Issuer has not exchanged Exchange Notes for all Notes validly tendered in
accordance with the terms of the Exchange Offer; or
(iv) the Shelf Registration has been declared effective by the SEC
and such Shelf Registration ceases to be effective or usable at any time
during the Effectiveness Period, without being succeeded on the same day
immediately by a post-effective amendment to such Shelf Registration that
cures such failure and that is itself immediately declared effective on the
same day;
(any of the foregoing, a "Registration Default"), then, with respect
to the first 90-day period following such Registration Default, the Issuer shall
pay to each Holder of Transfer Restricted Notes Liquidated Damages in an amount
equal to $0.05 per week per $1,000 principal amount of Transfer Restricted Notes
held by such Holder for each week or portion thereof that the Registration
Default continues. The amount of such Liquidated Damages will increase by an
additional $0.05 per week per $1,000 principal amount of Transfer Restricted
Notes with respect to each subsequent 90-day period until all Registration
Defaults have been cured; provided, however, that Liquidated Damages shall not
-------- -------
at any time exceed $0.50 per week per
8
<PAGE>
$1,000 principal amount of Transfer Restricted Notes (regardless of whether one
or more than one Registration Defaults has occurred and is continuing).
Following the cure of all Registration Defaults relating to any Transfer
Restricted Notes, the accru al of Liquidated Damages with respect to such
Transfer Restricted Notes will cease. A Registration Default under clause
(i) above shall be cured on the date that either the Exchange Offer Registration
Statement or the Shelf Registration is filed with the SEC; a Registration
Default under clause (ii) above shall be cured on the date that either the
Exchange Offer Registration Statement or the Shelf Registration is declared
effective by the SEC; a Registration Default under clause (iii) above shall be
cured on the earlier of the date (A) the Exchange Offer is consummated or (B) a
Shelf Registration is declared effective; and a Registration Default under
clause (iv) above shall be cured on the earlier of (A) the date that the post-
effective amendment curing the deficiency in the Shelf Registration is declared
effective or (B) the Effectiveness Period expires.
(b) The Issuer shall notify the Trustee within one Business Day after each
and every date on which a Registration Default first occurs. Liquidated Damages
shall be paid by the Issuer to the Holders by wire transfer of immediately
available funds to the accounts specified by them or by mailing checks to their
respective addresses as such addresses appear in the Security Register if no
such accounts have been specified on or before the semi-annual interest payment
date provided in the Indenture and on each payment date provided in the
Indenture including, without limitation, whether upon redemption, maturity (by
acceleration or otherwise), purchase upon a Change of Control or purchase upon a
sale of assets. Each obligation to pay Liquidated Damages shall be deemed to
commence accruing on the date of the applicable Registration Default and to
cease accruing when all Registration Defaults have been cured. In no event
shall the Issuer pay Liquidated Damages in excess of the applicable maximum
weekly amount set forth above, regardless of whether one or multiple
Registration Defaults exist.
(c) The parties hereto agree that the Liquidated Damages provided for in
this Section 4 constitute a reasonable estimate of the damages that will be
suffered by Holders by reason of the failure to file the Exchange Offer
Registration Statement or the Shelf Registration Statement, the failure of the
Exchange Offer Registration Statement or the Shelf Registration Statement to be
declared effective, the failure to consummate the Exchange offer or the failure
of the Shelf Registration Statement to remain effective, as the case may be, in
accordance with this Agreement.
9
<PAGE>
5. Registration Procedures
-----------------------
In connection with the registration of any Exchange Notes or Transfer
Restricted Notes pursuant to Sections 2 or 3 hereof, the Issuer shall effect
such registration to permit the sale of such Exchange Notes or Transfer
Restricted Notes (as applicable), in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Issuer shall:
(a) prepare and file with the SEC a Registration Statement or Registration
Statements as prescribed by Section 2 or Section 3 hereof, and use its best
efforts to cause such Registration Statement to become effective and remain
effective as provided herein; provided that, if (1) such filing is pursuant to
--------
Section 3 hereof, or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Notes during the Applicable Period, before filing any
Registration Statement or Prospectus or any amendments or supplements thereto,
the Issuer shall furnish to and afford the Holders of the Transfer Restricted
Notes and each such Participating Broker-Dealer, as the case may be, covered by
such Registration Statement, their counsel and the managing underwriters, if
any, a reasonable opportunity to review copies of all such documents (including
copies of any documents to be incorporated by reference therein and all exhibits
thereto), proposed to be filed (at least 3 Business Days prior to such filing,
or such later date as is reasonable under the circumstances). The Issuer shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto in respect of which the Holders, pursuant to this Agreement,
must be afforded an opportunity to review prior to the filing of such document,
if the Holders of a majority in aggregate principal amount of the Transfer
Restricted Notes covered by such Registration Statement, or such Participating
Broker-Dealer, as the case may be, their counsel, or the managing underwriters,
if any, shall reasonably object on a timely basis (except that documents filed
as exhibits that are incorporated by reference or deemed to be incorporated by
reference shall not be subject to such objections);
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration or Exchange Offer Registration Statement,
as the case may be, as may be necessary to keep such Registration Statement
continuously effective for the Effectiveness Period or the Applicable Period, as
the case may be, or such shorter period as will terminate when all Transfer
Restricted Notes covered by such Registration Statement have been sold; cause
the related Prospectus to be supplemented by any required prospectus
supplement, and as so supple-
10
<PAGE>
mented to be filed pursuant to Rule 424 (or any similar provisions then in
force), under the Securities Act; and comply with the provisions of the
Securities Act, the Exchange Act and the rules and regulations of the SEC
promulgated thereunder with respect to the disposition of all securities covered
by such Registration Statement, as so amended, or in such Prospectus, as so
supplemented, and with respect to the subsequent resale of any Notes being sold
by a Participating Broker-Dealer covered by any such Prospectus; the Issuer
shall be deemed not to have used its best efforts to keep a Registration
Statement effective during the Applicable Period if it voluntarily takes any
action that would result in selling Holders of the Transfer Restricted Notes
covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes
not being able to sell such Transfer Restricted Notes or such Exchange Notes
during that period, unless (i) such action is required by applicable law, or
(ii) such action is taken by it in good faith and for valid business reasons
(not including avoidance of its obligations hereunder), including the
acquisition or divestiture of assets;
(c) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, notify the selling Holders of Transfer Restricted Notes,
or each known Participating Broker-Dealer, as the case may be, their counsel and
the managing underwriters, if any, promptly and confirm such notice in writing,
(i) when a Prospectus, any prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective (including in such notice a
written statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment
including financial statements and schedules, documents incorporated or deemed
to be incorporated by reference and exhibits), (ii) of the issuance by the SEC
of any stop order suspending the effectiveness of a Registration Statement or of
any order preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii) if at any time when a
Prospectus is required by the Securities Act to be delivered in connection with
sales of the Transfer Restricted Notes the representations and warranties of
the Issuer contained in any agreement (including any underwriting agreement),
contemplated by Section 5(l) hereof cease to be true and correct, (iv) of the
receipt by the Issuer of any notification with respect to the suspension of the
qualification or exemption from qualification of a Registration Statement or
any of the Transfer Restricted Notes or the Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or the
initiation
11
<PAGE>
of any proceeding for such purpose, (v) of the happening of any event or any
information becoming known that makes any statement made in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires the making of any changes in such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, and (vi) of the
Issuer's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate;
(d) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the qualification
(or exemption from qualification), of any of the Transfer Restricted Notes or
the Exchange Notes (as applicable), to be sold by any Participating Broker-
Dealer, for sale in any jurisdiction, and, if any such order is issued, to use
its best efforts to obtain the withdrawal of any such order at the earliest
possible moment;
(e) if a Shelf Registration is filed pursuant to Section 3 hereof and if
requested by the managing underwriters, if any, or the Holders of a majority in
aggregate principal amount of the Transfer Restricted Notes being sold in
connection with an underwritten offering, (i) promptly incorporate in a
prospectus supplement or post-effective amendment such information relating to
underwriters, if any, any Holder of Transfer Restricted Notes or the plan of
distribution of the Transfer Restricted Notes as the managing underwriter, if
any, or such Holders may reasonably request to be included therein, (ii) make
all required filings of such prospectus supplement or such post-effective
amendment as soon as practicable after the Issuer has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment pursuant to clause (i), and (iii) supplement or make amendments to
such Registration Statement with such information as is required in connection
with any request made pursuant to clause (i);
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(f) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, furnish to each selling Holder of Transfer Restricted
Notes and to each such Participating Broker-Dealer who so requests and to
counsel and each managing underwriter, if any, without charge, one conformed
copy of the Registration Statement or Registration Statements and each post-
effective amendment thereto, including financial statements and schedules, and,
if requested, all documents incorporated or deemed to be incorporated therein by
reference and all exhibits;
(g) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, deliver to each selling Holder of Transfer Restricted
Notes, or each such Participating Broker-Dealer, as the case may be, its
counsel, and the underwriters, if any, without charge, as many copies of the
Prospectus or Prospectuses (including each form of preliminary Prospectus), and
each amendment or supplement thereto and any documents incorporated by reference
therein, as such Persons may reasonably request; and, subject to the last
paragraph of this Section 5 hereof, the Issuer hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the selling
Holders of Transfer Restricted Notes or each such Participating Broker-Dealer,
as the case may be, and their underwriters or agents, if any, and dealers, if
any, in connection with the offering and sale of the Transfer Restricted Notes
covered by or the sale by Participating Broker-Dealers of the Exchange Notes
pursuant to such Prospectus and any amendment or supplement there to;
(h) prior to any public offering of Transfer Restricted Notes or any
delivery of a Prospectus contained in the Exchange Offer Registration Statement
by any Participating Broker-Dealer who seeks to sell Exchange Notes during the
Applicable Period, to use its best efforts to register or qualify, and to
cooperate with the selling Holders of Transfer Restricted Notes or each such
Participating Broker-Dealer, as the case may be, the underwriters, if any, and
their respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification), of such Transfer
Restricted Notes for offer and sale under the securities or Blue Sky laws of
such jurisdictions as any selling Holder, Participating Broker-Dealer, or the
managing underwriters reasonably request in writing; keep each such registration
or qualification (or exemption therefrom) effective during the
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period such Registration Statement is required to be kept effective and do any
and all other acts or things reasonably necessary or advisable to enable the
disposition in such jurisdictions of the Exchange Notes held by Participating
Broker-Dealers or the Transfer Restricted Notes covered by the applicable
Registration Statement; provided that the Issuer shall not be required to (A)
--------
qualify generally to do business in any jurisdiction where it is not then so
qualified, (B) take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or (C) subject
it to taxation in any such jurisdiction where it is not so subject;
(i) if a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Transfer Restricted Notes and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Notes to be sold, which
certificates shall not bear any restrictive legends and shall be in a form
eligible for deposit with The Depository Trust Company ("DTC"), and enable such
Transfer Restricted Notes to be in such denominations and registered in such
names as the managing underwriters, if any, or Holders may reasonably request at
least two Business Days prior to any sale of the Transfer Restricted Notes;
(j) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) above, as promptly as practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the expense of the
Issuer, a supplement or post-effective amendment to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, or file any other required document so
that, as thereafter delivered to the purchasers of the Transfer Restricted Notes
being sold thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(k) prior to the effective date of the first Registration Statement
relating to the Transfer Restricted Notes, (i) provide the Trustee with
certificates for the
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Transfer Restricted Notes in a form eligible for deposit with DTC and (ii) use
its best efforts to provide a CUSIP number for the Transfer Restricted Notes;
(l) in connection with an underwritten offering of Transfer Restricted
Notes pursuant to a Shelf Registration, enter into an underwriting agreement as
is customary in underwritten offerings and take all such other actions as are
reasonably requested by the managing underwriters in order to expedite or
facilitate the regis tration or the disposition of such Transfer Restricted
Notes, and in such connection, (i) make such representations and warranties to
the underwriters, with respect to the business of the Issuer, its subsidiaries
and the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Issuer and updates thereof in form and substance reasonably satis factory to the
managing underwriters, addressed to the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by underwriters; (iii) obtain "cold
comfort" letters and updates thereof in form and substance reasonably
satisfactory to the managing underwriters from the independent certified public
accountants of the Issuer (and, if necessary, any other independent certified
public accountants of any subsidiary of the Issuer or of any business acquired
by any of them for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as are reasonably requested by
underwriters as permitted by Statement on Auditing Standards No. 72; and (iv) if
--------------------------------------
an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 7 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of outstanding Transfer Re-
stricted Notes covered by such Registration Statement and the managing
underwriters or agents), with respect to all parties to be indemnified pursuant
to said Section. The above shall be done at each closing under such
underwriting agreement, or as and to the extent required thereunder;
(m) if (1) a Shelf Registration is filed pursuant to Section 3 hereof, or
(2) a Prospectus contained in an Exchange Offer Registration Statement filed
pursuant to Section 2 hereof is required to be delivered under the Securities
Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during
the Applicable Period, make available for inspection by any selling Holder of
such Transfer
15
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Restricted Notes being sold, or each such Participating Broker-Dealer, as the
case may be, any underwriter participating in any such disposition of Transfer
Restricted Notes, if any, and any attorney, accountant or other agent retained
by any such selling Holder or each such Participating Broker-Dealer, as the case
may be, or underwriter (collectively, the "Inspectors"), at the offices where
normally kept, during reasonable business hours, all financial and other
records, pertinent corporate documents and properties of the Issuer and its
subsidiaries (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise any applicable due diligence responsibilities, and cause
the officers, directors and employees of the Issuer and its subsidiaries to
supply all information in each case reasonably requested by any such Inspector
in connection with such Registration Statement;
(n) provide an indenture trustee for the Transfer Restricted Notes or the
Exchange Notes, as the case may be, and cause the Indenture to be qualified
under the TIA not later than the effective date of the Exchange Offer or the
first Registration Statement relating to the Transfer Restricted Notes; and in
connection therewith, cooperate with the trustee under any such indenture and
the Holders of the Transfer Restricted Notes, to effect such changes to such
indenture as may be required for such indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use its best efforts to cause such
trustee to execute, all customary documents as may be required to effect such
changes, and all other forms and documents required to be filed with the SEC to
enable such indenture to be so qualified in a timely manner;
(o) comply with all applicable rules and regulations of the SEC and, as
soon as reasonably practicable, make generally available to the holders of
Exchange Notes and the Holders, if any, consolidated earning statements of the
Issuer that satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder;
(p) If an Exchange Offer is to be consummated, upon delivery of the
Transfer Restricted Notes by Holders to the Issuer (or to such other Person as
directed by the Issuer), in exchange for the Exchange Notes, the Issuer shall
mark, or cause to be marked, on such Transfer Restricted Notes that such
Transfer Restricted Notes are being cancelled in exchange for the Exchange
Notes; in no event shall such Transfer Restricted Notes be marked as paid or
otherwise satisfied.
(q) cooperate with each seller of Transfer Restricted Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Transfer Restricted Notes and their respective counsel in
connection with any
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<PAGE>
filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD");
(r) use its best efforts to take all other steps necessary to effect the
registration of the Transfer Restricted Notes or the Exchange Notes covered by a
Registration Statement contemplated hereby; and
(s) use its best efforts to cause the Transfer Restricted Notes or the
Exchange Notes, as applicable, covered by an effective registration statement
required by Section 2 or Section 3 hereof to be rated with the appropriate
rating agencies, if so requested by the Holders of a majority in aggregate
principal amount of Transfer Restricted Notes relating to such registration
statement or the managing underwriters in connection therewith, if any.
The Issuer may require each seller of Transfer Restricted Notes or
Participating Broker-Dealer as to which any registration is being effected to
furnish to the Issuer such information regarding such seller or Participating
Broker-Dealer and the distribution of such Transfer Restricted Notes or Exchange
Notes to be sold by such Participating Broker-Dealer, as the case may be, as the
Issuer may, from time to time, reasonably request. The Issuer may exclude from
such registration the Transfer Restricted Notes or Exchange Notes of any seller
or Participating Broker-Dealer, as the case may be, who fails to furnish such
information within a reason able time after receiving such request.
Each Holder of Transfer Restricted Notes and each Participating Broker-
Dealer agrees by acquisition of such Transfer Restricted Notes or Exchange Notes
to be sold by such Participating Broker-Dealer, as the case may be, that, upon
receipt of any notice from the Issuer of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v) or 5(c)(vi) hereof, such Holder
shall forthwith discontinue disposition of such Transfer Restricted Notes
covered by such Registration Statement or Prospectus or such Exchange Notes to
be sold by such Participating Broker-Dealer, as the case may be, until such
Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(j) hereof, or until it is advised in writing by the
Issuer that the use of the applicable Prospectus may be resumed, and has
received copies of any amendments or supplements thereto.
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6. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or compliance with
this Agreement by the Issuer shall be borne by the Issuer, whether or not the
Exchange Offer or a Shelf Registration is filed or becomes effective, including,
without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the NASD
in connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue
Sky qualifications of the Transfer Restricted Notes or Exchange Notes and
determination of the eligibility of the Transfer Restricted Notes or Exchange
Notes for investment under the laws of such jurisdictions (x) where the Holders
of Transfer Restricted Notes are located, in the case of the Exchange Notes, or
(y) as provided in Section 5(h) hereof, in the case of Transfer Restricted Notes
or Exchange Notes to be sold by a Participating Broker-Dealer during the
Applicable Period)), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Transfer Restricted Notes or Exchange
Notes in a form eligible for deposit with DTC and of printing Prospectuses if
the printing of Prospectuses is requested by the managing underwriters, if any,
or, in respect of Transfer Restricted Notes or Exchange Notes to be sold by any
Participating Broker-Dealer during the Applicable Period, by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Notes included
in any Registration Statement or of such Exchange Notes, as the case may be),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Issuer, (v) fees and disbursements of all independent certified
public accountants referred to in Section 5(l)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) rating agency fees, (vii)
Securities Act liability insurance, if the Issuer desires such insurance, (viii)
fees and expenses of all other Persons retained by the Issuer, (ix) internal
expenses of the Issuer (including, without limitation, all salaries and
expenses of officers and employees of the Issuer and its subsidiaries performing
legal or accounting duties), (x) the expense of any annual audit and (xi) the
fees and expenses incurred in connection with the listing of the securities to
be registered on any securities exchange. Nothing contained in this Section 6
shall create an obligation on the part of the Issuer to pay or reimburse any
Holder for any underwriting commission or discount attributable to any such
Holder's Transfer Restricted Notes included in an underwritten offering pursuant
to a Registration Statement filed in accordance with the terms of this
Agreement, or to guarantee such Holder any profit or proceeds from the sale of
such Notes.
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<PAGE>
(b) In connection with any Shelf Registration hereunder, the Issuer shall
reimburse the Holders of the Transfer Restricted Notes being registered in such
registration for the reasonable fees and disbursements of not more than one
counsel (in addition to appropriate local counsel), chosen by the Holders of a
majority in aggregate principal amount of the Transfer Restricted Notes to be
included in such Registration Statement.
7. Indemnification
---------------
The Issuer agrees to indemnify and hold harmless (i) the Initial
Purchasers, each Holder of Transfer Restricted Notes, each initial Holder of
Exchange Notes and each Participating Broker-Dealer, (ii) each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act), any such Person (any of the persons referred to in this
clause (ii) being hereinafter referred to as a "controlling person"), and (iii)
the respective officers, directors, partners, employees, representatives and
agents of any of such Person or any controlling person (any person referred to
in clause (i), (ii) or (iii) may hereinafter be referred to as an "Indemnified
Person"), to the fullest extent lawful, from and against any and all losses,
claims, damages, judgments, actions, expenses, and other liabilities (the
"Liabilities"), including without limitation and as incurred, reimbursement of
all reasonable costs of investigating, preparing, pursuing or defending any
claim or action, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, including the reasonable fees and expenses of
counsel to any Indemnified Person, directly or indirectly related to, based
upon, arising out of or in connection with any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement or
Prospectus (as amended or supplemented if the Issuer shall have furnished to
such Indemnified Person any amendments or supplements thereto), or any
preliminary prospectus, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as such Liabilities arise out of or are based upon
(i) any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with information relating to any
Indemnified Person furnished to the Issuer or any underwriter in writing by such
Indemnified Person expressly for use therein, or (ii) any untrue statement
contained in or omission from a preliminary prospectus if a copy of the
Prospectus (as then amended or supplemented, if the Issuer shall have furnished
to or on behalf of the Holder participating in the distribution relating to the
relevant Registration Statement any amendments or supplements thereto) was not
sent or given by or on behalf of such Holder to the person asserting any such
Liabilities who purchased Notes, if
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<PAGE>
such Prospectus (or Prospectus as amended or supplemented), is required by law
at or prior to the written confirmation of the sale of such Notes to such person
and the untrue statement contained in or omission from such preliminary
prospectus was completely corrected in the Prospectus (or the Prospectus as
amended or supplemented). The Issuer shall notify the Holders promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation), or litigation of which it shall have become aware
in connection with the matters addressed by this Agreement which involves the
Issuer, any subsidiary of the Issuer or an Indemnified Person.
In connection with any Registration Statement in which a Holder of Transfer
Restricted Notes is participating, such Holder of Transfer Restricted Notes
agrees, severally and not jointly, to indemnify and hold harmless the Issuer,
each person who controls the Issuer within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and the respective partners,
directors, officers, representatives, employees and agents of such person or
controlling person to the same extent as the foregoing indemnity from the Issuer
to each Indemnified Person, but only with reference to information relating to
such Indemnified Person furnished to the Issuer in writing by such Indemnified
Person expressly for use in any Registration Statement or Prospectus, any
amendment or supplement thereto, or any preliminary Prospectus. The liability
of any Indemnified Person pursuant to this paragraph shall in no event exceed
the net proceeds received by such Indemnified Person from sales of Transfer
Restricted Notes giving rise to such obligations.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted against any person
in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "Indemnified Party"), shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person"), in writing, and the Indemnifying Person, upon request of the
Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the reasonable fees and expenses actually incurred by such counsel related to
such proceeding. In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel shall
be at the expense of such Indemnified Party, unless (i) the Indemnifying Person
and the Indemnified Party shall have mutually agreed in writing to the contrary,
(ii) the Indemnifying Person failed promptly to assume the defense and employ
counsel reasonably satisfactory to the Indemnified Party or (iii) the named
parties to any such action (including any impleaded parties), include both
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such Indemnified Party and the Indemnifying Person, or any affiliate of the
Indemnifying Person, and such Indemnified Party shall have been reasonably
advised by counsel that, either (x) there may be one or more legal defenses
available to it which are different from or additional to those available to the
Indemnifying Person or such affiliate of the Indemnifying Person or (y) a
conflict may exist between such Indemnified Party and the Indemnifying Person or
such affiliate of the Indemnifying Person (in which case the Indemnifying Person
shall not have the right to assume the defense of such action on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Person
shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel), for
all such indemnified parties, which firm shall be designated in writing by those
indemnified parties who sold a majority in outstanding aggregate principal
amount of Transfer Restricted Notes sold by all such indemnified parties and any
such separate firm for the Issuer, its directors, its officers and such control
persons of the Issuer as shall be designated in writing by the Issuer. The
Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably
withheld, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified Party
from and against any loss or liability by reason of such settlement or
judgment. No Indemnifying Person shall, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first and second paragraphs of
this Section 7 is unavailable to an Indemnified Party in respect of any
Liabilities referred to therein (other than by reason of the exceptions provided
therein), then each Indemnifying Person under such paragraphs, in lieu of
indemnifying such Indemnified Party thereunder, shall contribute to the amount
paid or payable by such Indemnified Party as a result of such Liabilities (i) in
such proportion as is appropriate to reflect the relative benefits of the
Indemnified Party on the one hand and the Indemnifying Person(s) on the other in
connection with the statements or omissions that resulted in such Liabilities,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
21
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relative fault of the Indemnifying Person(s) and the Indemnified Party, as well
as any other relevant equitable considerations. The relative fault of the
Issuer on the one hand and any Indemnified Persons on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Issuer or by such
Indemnified Persons and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if such
--- ----
indemnified parties were treated as one entity for such purpose), or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Party as a result of any Liabilities referred
to in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any reasonable legal or other expenses actually
incurred by such Indemnified Party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this Section 7, in
no event shall an Indemnified Person be required to contribute any amount in
excess of the amount by which proceeds received by such Indemnified Person from
sales of Transfer Restricted Notes or Exchange Notes exceeds the amount of any
damages that such Indemnified Person has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act), shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section 7 will
be in addition to any liability which the indemnifying parties may otherwise
have to the indemnified parties referred to above. The Indemnified Persons'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amount of Notes sold by each of the Indemnified
Persons hereunder and not joint.
8. Rules 144 and 144A
------------------
The Issuer covenants that it will file the reports required to be filed by
it pursuant to the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any time
the Issuer is
22
<PAGE>
not required to file such reports, it will, upon the request of any Holder of
Transfer Restricted Notes, make available information required by Rule 144 and
Rule 144A under the Securities Act in order to permit sales pursuant to Rule 144
and Rule 144A. The Issuer further covenants that it will take such further
action as any Holder of Transfer Restricted Notes may reasonably request, all to
the extent required from time to time to enable such Holder to sell Transfer
Restricted Notes without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 and Rule 144A or (b) any
similar rule or regulation hereafter adopted by the SEC.
9. Underwritten Registrations
--------------------------
(a) If any of the Transfer Restricted Notes covered by any Shelf
Registration are to be sold in an underwritten offering, the investment banker
or investment bankers and manager or managers that will manage the offering
will be selected by the Holders of a majority in aggregate principal amount of
such Transfer Restricted Notes included in such offering and shall be reasonably
acceptable to the Issuer.
No Holder of Transfer Restricted Notes may participate in any underwritten
registration hereunder, unless such Holder (a) agrees to sell such Holder's
Transfer Restricted Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
(b) Each Holder of Transfer Restricted Notes agrees, if requested (pursuant
to a timely written notice), by the managing underwriters in an underwritten
offering or by a placement agent in a private offering of the Issuer's debt
securities, not to effect any private sale or distribution (including a sale
pursuant to Rule 144(k) or Rule 144A under the Securities Act, but excluding
non-public sales to any of its affiliates, officers, directors, employees and
controlling persons), of any of the Notes except pursuant to an Exchange Offer,
during the period beginning 10 days prior to, and ending 90 days after, the
closing date of the underwritten offering.
The foregoing provisions shall not apply to any Holder of Transfer
Restricted Notes if such Holder is prevented by applicable statute or regulation
from entering into any such agreement.
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10. Miscellaneous
-------------
(a) Remedies. In the event of a breach by the Issuer of any of its
--------
obligations under this Agreement, each Holder of Transfer Restricted Notes and
each Participating Broker-Dealer holding Exchange Notes, in addition to being
entitled to exercise all rights provided herein, in the Indenture or, in the
case of the Initial Purchasers, in the Purchase Agreement, or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. Subject to Section 4, the Issuer agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to or departures from the provisions hereof may not be
given, unless the Issuer has obtained the written consent of holders of at least
a majority of the then outstanding aggregate principal amount of Transfer
Restricted Notes and Exchange Notes held by Participating Broker-Dealers taken
as one class. Notwithstanding the foregoing, a waiver or consent to or
departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and Participating Broker-Dealers holding
Exchange Notes whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair, limit or
compromise the rights of other Holders and Participating Broker-Dealers holding
Exchange Notes may be given by holders of at least a majority in aggregate
principal amount of the Transfer Restricted Notes and Exchange Notes held by
Participating Broker-Dealers being sold by such Holders and Participating
Broker-Dealers pursuant to such Registration Statement; provided that the
--------
provisions of this sentence may not be amended, modified or supplemented except
in accordance with the provisions of the immediately preceding sentence.
(c) Notices. All notices and other communications (including, without
-------
limitation, any notices or other communications to the Trustee), provided for or
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, next-day air courier or telecopier:
(i) if to a Holder of Transfer Restricted Notes, at the most current
address given by the Trustee to the Issuer; and
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(ii) if to the Issuer, Omnipoint Corporation, 2000 North 14th Street,
Arlington, Virginia 22201, Attention: Chief Financial Officer.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; one Business Day after
being timely delivered to a nationally recognized next-day air courier, if made
by next-day air courier; and when receipt is acknowledged by the addressee, if
telecopied on a Business Day on such Business Day, if not on a Business Day, on
the first Business Day thereafter.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee under the
Indenture at the address specified in such Indenture.
(d) Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
and be binding upon the successors and assigns of each of the parties hereto,
includ ing, without limitation and without the need for an express assignment,
subsequent Holders of Transfer Restricted Notes. The Issuer agrees that the
Holders of Transfer Restricted Notes and Participating Broker-Dealers holding
Exchange Notes shall be third party beneficiaries to the agreements made
hereunder by the Initial Purchasers and the Issuer, and each Holder and
Participating Broker-Dealer shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights hereunder.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MAN-
25
<PAGE>
HATTAN IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENER ALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORE SAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCON VENIENT
FORUM.
(h) Severability. If any term, provision, covenant or restriction of this
------------
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties hereto that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
(i) Entire Agreement. This Agreement, together with the Purchase
----------------
Agreement, is intended by the parties hereto as a final expression of their
agreement, and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and therein.
(j) Notes Held by the Issuer or its Affiliates. Whenever the consent or
------------------------------------------
approval of Holders of a specified percentage of Transfer Restricted Notes is
required hereunder, Transfer Restricted Notes held by the Issuer or its
affiliates (as such term is defined in Rule 405 under the Securities Act), shall
not be counted in determining whether such consent or approval was given by the
Holders of such required percentage.
26
<PAGE>
(k) Survival. This Agreement is intended to survive the consummation of
--------
the transactions contemplated by the Purchase Agreement. The indemnification
and contribution obligations under Section 7 of this Agreement shall survive the
termination of the Issuer's obligations under Sections 2 and 3 of this
Agreement.
27
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
OMNIPOINT CORPORATION
By:
--------------------------------------
Name:
Title:
The foregoing Registration Rights
Agreement is hereby confirmed and
accepted as of the date first
above written.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
By: Donaldson, Lufkin & Jenrette Securities Corporation
By:
--------------------------------------
Name:
Title:
<PAGE>
[FACE OF NOTE]
[Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
Unless and until it is exchanged in whole or in part for Notes in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.]/1/
[THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE EVI-
DENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE NOTE EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED
OR OTHERWISE
- ---------------
/1/ To be included in Global Notes registered in the name of DTC or its
nominee.
1
<PAGE>
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANS-
ACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT,
(c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.]/2/
Omnipoint Corporation
11 5/8% Senior Notes due 2006
CUSIP ______
$_______
OMNIPOINT CORPORATION, a Delaware corporation (the "Company", which
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to ________, or its registered assigns, the
principal sum of ________________ ($______) on August 15, 2006.
Interest Payment Dates: February 15 and August 15, commencing
February 15, 1997.
Regular Record Dates: February 1 and August 1.
- -------------------------
/2/ To be included in Original Notes.
2
<PAGE>
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers.
Date: OMNIPOINT CORPORATION,
as Issuer
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
Title:
(Form of Trustee's Certificate of Authentication)
This is one of 11 5/8% Senior Notes due 2006 described in the within-mentioned
Indenture.
MARINE MIDLAND BANK,
as Trustee
By
---------------------------------
Authorized Signatory
4
<PAGE>
[REVERSE SIDE OF NOTE]
OMNIPOINT CORPORATION
11 5/8% Senior Note due 2006
(1) Principal and Interest. The Company will pay the principal of this
----------------------
Note on August 15, 2006.
The Company promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above.
Interest will be payable semiannually in arrears (to the holders of record
of the Notes, as reflected in the Security Register at the close of business on
the February 1 or August 1 immediately preceding the Interest Payment Date) on
each Interest Payment Date, commencing February 15, 1997.
Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from August 27, 1996;
provided that, if there is no existing default in the payment of interest and if
this Note is authenticated between a Regular Record Date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium and
Liquidated Damages, if any, and interest on overdue installments of interest, to
the extent lawful, at the rate borne by the Notes.
(2) Method of Payment. The Company will pay interest (except defaulted
-----------------
interest) on the principal amount of the Notes as provided above and Liquidated
Damages on each February 15 and August 15 to the persons who are Holders (as
reflected in the Security Register at the close of business on the February 1
and August 1 immediately preceding the Interest Payment Date), in each case,
even if the Note is cancelled on registration of transfer, registration of
exchange,
5
<PAGE>
redemption or repurchase after such Regular Record Date. With respect to the
payment of principal, the Company will make payment to the Holder that
surrenders this Note to a Paying Agent on or after August 15, 2006.
The Company will pay principal, premium and Liquidated Damages, if any, and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts at the office or agency of the
Company maintained for such purposes in the Borough of Manhattan, City of New
York. The Company, at its option, may pay principal, premium and Liquidated
Damages, if any, and interest by its check payable in such money mailed to a
Holder's registered address (as reflected in the Security Register), provided
that payment by wire transfer of immediately available funds will be required
with respect to principal, premium and Liquidated Damages, if any, and interest
on all Global Notes and all other Notes the Holders of which shall have provided
wire transfer instructions to the Company or the Paying Agent. If an Interest
Payment Date is a date other than a Business Day at a place of payment, payment
may be made on the next succeeding day that is a Business Day with the same
force and effect as if made on the day such payment was due and in the case of
such payment no interest shall accrue for the intervening period.
(3) Paying Agent and Registrar. Initially, the Trustee will act as
--------------------------
authenticating agent, Paying Agent and Registrar. The Company may change any
authenticating agent, Paying Agent or Registrar without notice. The Company,
any Subsidiary or any Affiliate of any of them may act as Paying Agent, Regis-
trar or co-Registrar.
(4) Indenture; Limitations. The Company issued the Notes under an
----------------------
Indenture dated as of August 27, 1996 (the "Indenture"), between the Company and
Marine Midland Bank, as trustee (the "Trustee"). Capitalized terms herein are
used as defined in the Indenture unless otherwise indicated. Reference is made
to the Indenture and the Trust Indenture Act for a full, complete and detailed
statement of the purposes for which the Notes are issued, the terms on which the
Notes are issued, a description of the security pledged and assigned for payment
of the Notes and the terms, provisions and conditions governing payment of the
Notes and the provisions, among others, with respect to the nature and extent of
the rights, duties and obligations of the Trustee, the Paying Agent, the
Registrar, the authenticating agent, Holders and the Company. The holder of
this Note, by acceptance of this Note, is deemed to have agreed and consented to
the terms and provisions of the Indenture. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
6
<PAGE>
Trust Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. If any provision of this Note conflicts with the Indenture, the
terms of the Indenture control.
The Notes are general unsecured obligations of the Company. The Indenture
limits the original aggregate principal amount of the Notes to $250,000,000.
(5) Optional Redemption. The Notes will be redeemable, at the Company's
-------------------
option, in whole or in part, at any time or from time to time, on or after
August 15, 2001 and prior to maturity, upon not less than 30 nor more than 60
days' prior notice mailed by first class mail to each Holder's last address as
it appears in the Security Register, at the Redemption Prices (expressed in
percentages of principal amount) set forth below, plus accrued and unpaid
interest and Liquidated Damages, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Regular Record Date that is prior to
the Redemption Date to receive interest due on an Interest Payment Date), if re-
deemed during the 12-month period commencing August 15, of the years set forth
below:
Redemption Year Price
----------------- ----------
2001 105.81%
2002 103.88%
2003 101.94%
2004 and thereafter 100.00%
In addition, at any time prior to August 15, 1999, the Company may redeem
up to one-third of the Notes originally issued, at any time as a whole or from
time to time in part, with the proceeds of one or more Public Equity Offerings
or sales of Capital Stock (other than Redeemable Stock) to one or more Strategic
Equity Investors, each such Public Equity Offering or sale to Strategic Equity
Investors resulting in Net Cash Proceeds of $50 million or more, at a redemption
price (expressed as a percentage of principal amount) of 111.625%, plus accrued
and unpaid interest and Liquidated Damages, if any, to the Redemption Date,
provided that after any such redemption at least two-thirds of the aggregate
principal amount of Notes originally outstanding remains outstanding and each
such redemption is effected not more than 60 days after the consummation of
such Public Equity Offering or sale to Strategic Equity Investors.
7
<PAGE>
If less than all of the Notes are to be redeemed at any time, the Trustee
will select the Notes, or portions thereof, for redemption in compliance with
the requirements of the principal national securities exchange, if any, on which
the Notes are listed or, if the Notes are not listed on a national securities
exchange, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem to be fair and appropriate. Notes in
denominations larger than $1,000 may be redeemed in part. Any notice mailed as
provided herein and in the Indenture will be conclusively presumed to have been
given whether or not actually received by any Holder. On and after the
Redemption Date, interest ceases to accrue on Notes or portions of Notes called
for redemption, unless the Company defaults in the payment of the Redemption
Price. A new Note in original amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note.
(6) Repurchase upon Change of Control and Asset Sale. The Company shall
------------------------------------------------
commence within 30 days of the occurrence of a Change of Control and consummate
an Offer to Purchase for all Notes then outstanding at a purchase price equal to
101% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Payment Date. The Notes may also be subject
to an Offer to Purchase in connection with an Asset Sale. Any Note delivered
for payment of a purchase price shall be accompanied by an instrument in the
form of the Option of the Holder to Elect Purchase below.
(7) Denominations; Transfer; Exchange. The Notes are in registered form
---------------------------------
without coupons in denominations of $1,000 of principal amount and multiples of
$1,000 in excess thereof. A Holder may register the transfer or exchange of
Notes in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
(including a certificate in the form of the Certificate to be Delivered upon
Exchange or Registration of Transfer of Securities below) and to pay any taxes,
fees and/or other governmental charges required by law or permitted by the
Indenture. The Registrar need not register the transfer or exchange of any
Notes selected for redemption. Also, it need not register the transfer or
exchange of any Notes for a period of 15 days before the day of the mailing of a
notice of redemption of Notes selected for redemption.
(8) Persons Deemed Owners. A Holder shall be treated as the owner of a
---------------------
Note for all purposes.
8
<PAGE>
(9) Unclaimed Money. If money for the payment of principal, premium and
---------------
Liquidated Damages, if any, or interest remains unclaimed for two years, the
Trustee and the Paying Agent will pay the money back to the Company at its
written request. After that, Holders entitled to the money must look to the
Company for payment, unless applicable law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
(10) Defeasance and Discharge Prior to Redemption or Maturity. If the
--------------------------------------------------------
Company deposits with the Trustee money or U.S. Government Obligations
sufficient to pay the then outstanding principal of, premium and Liquidated
Damages, if any, and accrued interest on the Notes to redemption or maturity,
and complies with certain other provisions of the Indenture relating thereto,
(i) the Company will be deemed to have paid and will be discharged from any and
all obligations in respect of the Notes or (ii) certain provisions set forth in
the Indenture will no longer be in effect with respect to the Notes.
(11) Amendment; Supplement; Waiver. Subject to certain exceptions, the
-----------------------------
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing default or compliance with any provision may be
waived with the consent of the Holders of at least a majority in principal
amount of the Notes then outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, defect or inconsistency and make any
change that does not adversely affect the rights of any Holder.
(12) Restrictive Covenants. The Indenture imposes certain limitations on
---------------------
the ability of the Company and its Restricted Subsidiaries, among other things,
to (a) Incur additional Indebtedness, (b) make Restricted Payments, (c) use the
proceeds from Asset Sales, (d) suffer to exist restrictions on the ability of
Restricted Subsidiaries to make certain payments to the Company, (e) issue
Capital Stock of Restricted Subsidiaries, (f) engage in transactions with
certain stockholders and Affiliates, (g) suffer to exist or incur Liens,
(h) Guarantee Indebtedness of the Company or (i) merge, consolidate or transfer
substantially all of its assets. Within 90 days after the end of the last fiscal
quarter of each year, the Company shall deliver to the Trustee an Officers'
Certificate stating whether or not the signers know of any Default or Event of
Default under such restrictive covenants.
9
<PAGE>
(13) Successor Persons. When a successor person or other entity assumes
-----------------
all the obligations of its predecessor under the Notes and the Indenture, the
predecessor person will be released from those obligations.
(14) Defaults and Remedies. An Event of Default is: (a) a default in
---------------------
payment of principal or premium, if any, on the Notes; (b) default in the
payment of interest or Liquidated Damages, if any, on the Notes for 30 days; (c)
failure by the Company for 30 days after notice to it to comply with any of its
other agreements in the Indenture; (d) certain events of bankruptcy or
insolvency as described in the Indenture; (e) certain final judgments which
remain undischarged as described in the Indenture; and (f) certain events of
default on other Indebtedness of the Company and/or one or more of its
Significant Subsidiaries as described in the Indenture.
If an Event of Default, as defined in the Indenture, occurs and is continu-
ing, the Trustee or the Holders of at least 25% in aggregate principal amount of
the Notes then outstanding may, and the Trustee at the request of such Holders
shall, declare all the Notes to be due and payable. If a bankruptcy or
insolvency default with respect to the Company occurs and is continuing, the
Notes automatically become due and payable. Holders may not enforce the
Indenture or the Notes, or take any action with respect to any Event of Default
under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations under the Indenture,
Holders of at least a majority in principal amount of the Notes then outstanding
may direct in accordance with the provisions of the Indenture the Trustee in its
exercise of any trust or power, including waiver of all past defaults,
rescission and annulment of a declaration of acceleration and its consequences
and exercise of any right, remedy or power available to the Trustee.
(15) Trustee Dealings with Company. The Trustee under the Indenture, in
-----------------------------
its individual or any other capacity, may make loans to, accept deposits from
and perform services for the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates as if it were not the Trustee.
(16) No Recourse Against Others. No incorporator or any past, present or
--------------------------
future partner, shareholder, other equity holder, officer, director, employee or
controlling person as such, of the Company or of any successor Person shall have
any liability for any obligations of the Company under the Notes or the
Indenture
10
<PAGE>
or for any claim based on, in respect of or by reason of, such obligations or
their creation. Each Holder by accepting a Note expressly waives and releases
all such liability. The waiver and release are a condition of, and part of the
consideration for the issuance of the Notes.
(17) Authentication. This Note shall not be entitled to any right or
--------------
benefit under the Indenture, or be valid, or become obligatory for any purpose,
until the Trustee or authenticating agent signs the certificate of
authentication on the other side of this Note.
(18) Abbreviations. Customary abbreviations may be used in the name of a
-------------
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A
(= Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to Omnipoint
Corporation, 2000 North 14th Street, Suite 550, Arlington, VA 22201, Attention:
Bradley E. Sparks.
11
<PAGE>
ASSIGNMENT
I or we assign and transfer this Note to
---------------------------------------
- -------------------------------------------------------------------------------
Print or type name, address and zip code of Assignee
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------
- -------------------------------------
and irrevocably appoint
--------------------------------------------------------
- ------------------------------------------------------------------------------,
as agent, to transfer this Note on
the books of the Company.
The agent may substitute another
to act for him/her.
Date
-----------------------------------
Signature Guarantee: Signed
- --------------------------------------- --------------------------
The Holder's signature must be guaranteed (Sign here exactly as name
by a member firm of a registered national appears on the other side of
securities exchange or of the this Note)
National Association of Securities
Dealers, Inc., a commercial bank or trust
company having an office or correspondent
in the United States or an "eligible
guarantor institution" as defined by
Rule 17Ad-15 under the Exchange Act.
- -------------------------------------------------------------------------------
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to Section
4.11 or Section 4.12 of the Indenture, as applicable, check the box: [ ].
If you wish to have a portion of this Note purchased by the Company pursuant
to Section 4.11 or Section 4.12 of the Indenture, as applicable, state the
principal amount to be purchased:
$____________.
If you wish to have a portion of this Note purchased by the Company pursuant
to Section 4.11 or Section 4.12 of the Indenture, as applicable, please provide
instructions regarding delivery of and the Persons in whose name(s) the
unredeemed portion of such surrendered Note(s) should be registered, the address
of such Person(s) and appropriate delivery instructions.
Date:
--------------------------------------------------------------------------
Your Signature:
----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
- -------------------------------------------------------------------------------
The Holder's signature must be guaranteed by a member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor institution: as
defined by Rule 17Ad-15 under the Exchange Act.
- -------------------------------------------------------------------------------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SECURITIES
Re: 11 5/8% SENIOR NOTES DUE 2006 OF OMNIPOINT CORPORATION
This certificate relates to $ principal amount of Notes held in
------
definitive form by (the "Transferor").
-------------------------------------
The Transferor has requested the Trustee by written order to exchange or
register the transfer of a Note or Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that Transferor is familiar with the Indenture
relating to the above-captioned Notes and, as provided in Section 2.5 of such
Indenture, the transfer of this Note does not require registration under the
Securities Act because:
[ ] Such Note is being registered for the Transferor's own account, without
transfer.
[ ] Such Note is being transferred (a) to a person who the seller reasonably
believes is a qualified institutional buyer (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, (b) in a
transaction meeting the requirements of Rule 144 under the Securities Act,
(c) outside the United States to a foreign person in a transaction meeting the
requirements of Rule 904 under the Securities Act or (d) in accordance with
another exemption from the registration requirements of the Securities Act, and
in the case of (d), this request for transfer is accompanied by an opinion of
counsel.
- -------------------------------------------------------------------------------
[INSERT NAME OF TRANSFEROR]
By:
----------------------------------------------------------------------------
<PAGE>
OMNIPOINT CORPORATION
11 5/8% Senior Notes due 2006
PURCHASE AGREEMENT
------------------
August 22, 1996
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
c/o Donaldson, Lufkin & Jenrette
Securities Corporation
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
Subject to the terms and conditions herein contained, Omnipoint
Corporation, a Delaware corporation (the "Company"), proposes to issue and sell
to Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and Goldman,
Sachs & Co. (together with DLJ, the "Initial Purchasers"), an aggregate of
$250,000,000 principal amount of 11 5/8% Senior Notes due 2006 (the "Notes").
The Notes are to be issued pursuant to the provisions of an Indenture (the
"Indenture"), to be dated as of August 27, 1996, by and between the Company and
Marine Midland Bank, a New York banking corporation and trust company, as
trustee (the "Trustee"). In connection with the closing contemplated by this
Agreement, the Company will enter into the Registration Rights Agreement (as
hereinafter defined). The Notes and the Indenture are more fully described in
the Offering Memorandum (as hereinafter defined).
<PAGE>
Capitalized terms used herein without definition shall have the respective
meanings ascribed thereto in the Offering Memorandum.
1. Delivery and Payment. Delivery to you of and payment for the Notes shall be
--------------------
made at 10:00 A.M., New York City time, on August 27, 1996 (such time and date
being referred to as the "Closing Date") at the offices of Skadden, Arps, Slate,
Meagher & Flom, 1440 New York Avenue, N.W., Washington, D.C., 20005 or such
other place as DLJ shall reasonably designate. The Closing Date and the
location of delivery of, and the form of payment for the Notes may be varied by
agreement between DLJ and the Company.
One or more of the Notes in definitive form, registered in the name of Cede
and Co., as nominee of The Depository Trust Company ("DTC"), or such other names
as you shall request in writing not later than one full business day prior to
the Closing Date, having an aggregate principal amount corresponding to the
aggregate principal amount of Notes resold pursuant to Rule 144A under the
Securities Act of 1933, as amended, and the rules and regulations promulgated by
the Securities and Exchange Commission (the "Commission") thereunder (the
"Act"), as such rule may be amended from time to time ("Rule 144A"), to
qualified institutional buyers ("QIBs") within the meaning of Rule 144A
(collectively, the "Global Notes"), and one or more Notes in definitive form
shall be registered in such names and issued in such denominations as you shall
request in writing not later than one business day prior to the Closing Date,
having an aggregate principal amount corresponding to the aggregate principal
amount of the Notes sold to Institutional Accredited Investors (as defined
herein) (collectively, the "Certificated Notes"), shall be delivered by the
Company to you on the Closing Date with any transfer taxes payable upon initial
issuance thereof duly paid by the Company, for your respective accounts against
payment of the Purchase Price (as hereinafter defined) by wire transfer of same
day funds to such bank accounts as the Company shall designate at least two
business days prior to the Closing Date. At least one of the bank accounts (the
"Escrow Account") will be created pursuant to an Escrow Agreement (the "Escrow
Agreement"), to be dated the Closing Date, between the Company and The Chase
Manhattan Bank, as escrow agent, substantially in the form of Exhibit B hereto.
The Global Notes and Certificated Notes in definitive form shall be made
available to you at the offices of DLJ (or at such other place as shall be
acceptable to you) for inspection not later than 9:30 A.M., New York City time,
on the business day next preceding the Closing Date.
2
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2. Offering of the Notes and the Initial Purchasers' Representations.
-----------------------------------------------------------------
(a) You have advised the Company that it is your intention, as promptly as
you deem appropriate after the Company shall have furnished you with copies of
the Offering Memorandum, to resell the Notes pursuant to the procedures and upon
the terms set forth in the Offering Memorandum.
(b) Each Initial Purchaser, severally and not jointly, represents, warrants
and agrees that it:
(i) is not acquiring the Notes with a view to any distribution
thereof or with any present intention of offering or selling any of
the Notes in a transaction that would violate the Act or the
securities laws of any state of the United States or any other
applicable jurisdiction;
(ii) will solicit offers for Notes only from, and will offer
Notes only to, persons that it reasonably believes are (y) QIBs in
transactions meeting the requirements of Rule 144A, or (z) other
institutional "accredited investors" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Act ("Institutional Accredited Investors"));
(iii) will offer and sell the Notes only (y) to persons who it
reasonably believes to be QIBs or (z) to institutions which it
reasonably believes are Institutional Accredited Investors that
execute and deliver a letter containing certain representations and
agreements in the form attached as Annex A to the Offering Memorandum;
(iv) is an Institutional Accredited Investor with such knowledge
and experience in financial and business matters as are necessary in
order to evaluate the merits and risks of an investment in the Notes;
(v) has not and will not offer or sell the Notes by any form of
general solicitation or general advertising, including but not limited
to, the methods described in Rule 502(c) under the Act; and
(vi) will, during its initial distribution of the Notes, unless
prohibited by applicable law, furnish to each person to whom it offers
any Notes a copy of the preliminary offering memorandum (as
3
<PAGE>
defined) or inform each such person that a copy of such preliminary
offering memorandum is available upon request and will, during its
initial distribution of the Notes, furnish to each person to whom it
sells any Notes a copy of the Offering Memorandum (as then amended or
supplemented).
3. Agreements to Sell and Purchase. On the basis of the representations and
-------------------------------
warranties contained in this Agreement, and subject to the terms and conditions
contained in this Agreement, the Company agrees to issue and sell to the Initial
Purchasers, and each Initial Purchaser agrees, severally and not jointly, to
purchase from the Company, Notes in the respective principal amount set forth
opposite the name of such Initial Purchaser in Schedule I hereto, plus such
amount as they may individually become obligated to purchase pursuant to Section
8 hereof, at a purchase price per Security equal to the percentage of the
principal amount thereof set forth in the table on the cover page of the
Offering Memorandum under the heading "Proceeds to the Company" (the "Purchase
Price"). The portion of the Purchase Price so set forth in the Offering
Memorandum will be paid into the Escrow Account.
The Notes will be offered and sold to you without being registered under
the Act in reliance on an exemption therefrom. The Company has prepared a
preliminary offering memorandum dated August 9, 1996 (such preliminary offering
memorandum is referred to herein as the "preliminary offering memorandum"), and
an offering memorandum dated August 22, 1996 (such offering memorandum, in the
form first furnished to the Initial Purchasers for use in connection with the
offering of the Notes, is referred to herein as the "Offering Memorandum"),
setting forth information regarding the Company and the Notes. The Company
hereby confirms that it has authorized the use of the preliminary offering
memorandum and the Offering Memorandum in connection with the offering and
resale of the Notes.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"), to be dated the Closing Date, in substantially
the form of Exhibit B hereto, for so long as such Notes constitute "Registrable
Securities" (as defined in the Registration Rights Agreement). Pursuant to the
Registration Rights Agreement, the Company will agree to file with the
Commission under the circumstances set forth therein (i) a registration
statement under the Act (the "Exchange Offer Registration Statement"),
registering an issue of senior notes identical in all material respects to the
Notes (the "Exchange Notes"), to be offered in exchange for the Notes (the
"Exchange Offer"), or (ii), under certain circumstances, a registration
4
<PAGE>
statement pursuant to Rule 415 under the Act (the "Shelf Registration Statement"
and collectively, with the Exchange Offer Registration Statement, the
"Registration Statements").
4. Agreements of the Company. The Company agrees with each of you that:
-------------------------
(a) It will advise you promptly and, if requested by you, confirm such
advice in writing, of the happening of any event during the period as in your
judgment you are required to deliver an Offering Memorandum in connection with
sales of the Notes by you which makes any statement of a material fact made in
the Offering Memorandum untrue or which requires the making of any additions to
or changes in the Offering Memorandum (as amended or supplemented from time to
time) in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) It will notify you promptly of (i) the receipt of any comments from any
state securities commission or any other regulatory authority that relate to the
preliminary offering memorandum or the Offering Memorandum, (ii) the suspension
of qualification of the Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any state securities commission
or any other regulatory authority. The Company shall use its best efforts to
prevent the issuance of any stop order or order suspending the qualification or
exemption of the Notes under any state securities or Blue Sky laws, and, if at
any time any state securities commission or any other regulatory authority shall
issue an order suspending the qualification or exemption of the Notes under any
state securities or Blue Sky laws, the Company shall use its best efforts to
obtain the withdrawal or lifting of such order at the earliest possible time.
(c) Promptly after the execution of this Agreement, and from time to time
thereafter for such period as in your judgment the Offering Memorandum is
required to be delivered in connection with sales of the Notes by you, it will
furnish to you, without charge, as many copies of the Offering Memorandum (and
of any amendment or supplement to the Offering Memorandum) as you may reasonably
request.
(d) If, during such period as in your judgment you are required to deliver
the Offering Memorandum in connection with sales of the Notes by you, any event
shall occur as a result of which it becomes necessary to amend or supplement the
Offering Memorandum in order to make the statements therein, in light of the
circumstances existing as of the date the Offering Memorandum is delivered to a
5
<PAGE>
purchaser, not misleading, or if it is necessary to amend or supplement the
Offering Memorandum so that the statements in the Offering Memorandum, as so
amended or supplemented, will not, in light of the circumstances existing as of
the date the Offering Memorandum is so delivered, be misleading, or so that the
Offering Memorandum will comply with applicable law, it will so amend or
supplement the Offering Memorandum and will furnish to you without charge such
number of copies thereof as you may reasonably request.
(e) Whether or not the transactions contemplated hereby are consummated or
this Agreement is terminated, it will pay and be responsible for all costs,
expenses, fees and taxes incurred in connection with or incident to (i) the
printing, filing, processing and distribution and delivery of the Offering
Memorandum, each preliminary offering memorandum and all amendments and
supplements thereto, (ii) the printing, processing, execution, distribution and
delivery of this Agreement, the Indenture, any memoranda describing state
securities or Blue Sky laws and all other agreements, memoranda, correspondence
and other documents printed, distributed and delivered in connection with the
offering of the Notes, (iii) the registration or qualification of the Notes for
offer and sale under the securities or Blue Sky laws of the jurisdictions
referred to in paragraph (h), below (including, in each case, the reasonable
fees and disbursements of counsel relating to such registration or quali-
fication and memoranda relating thereto and any filing fees in connection
therewith), (iv) furnishing such copies of the preliminary offering memorandum
and the Offering Memorandum, all amendments and supplements to any of them as
may be reasonably requested by the Initial Purchasers, (v) the inclusion of the
Notes on the National Association of Securities Dealers, Inc. (the "NASD")
Private Offerings, Resales and Trading through Automated Linkages ("PORTAL") and
the approval of the Notes by DTC for "book-entry" transfer, (vi) the rating of
the Notes by investment rating agencies and (vii) the performance by the Company
of its other obligations under this Agreement, including (without limitation)
the fees of the Trustee, the cost of its per sonnel and other internal costs,
the cost of printing and engraving the certificates representing the Notes and
all expenses and taxes incident to the sale and delivery of the Notes to the
Initial Purchasers.
(f) It will furnish to each Initial Purchaser, without charge, two (2)
signed copies (plus one additional signed copy to your legal counsel) of the
Registration Statements as first filed with the Commission and of each amendment
or supplement to it, including each post-effective amendment and all exhibits
filed therewith.
(g) It will not make any amendment or supplement to any preliminary
offering memorandum or the Offering Memorandum, of which you shall not previ-
6
<PAGE>
ously have been advised and provided a copy within two business days prior to
the first use thereof (or such reasonable amount of time as is necessitated by
the exigency giving rise to the need for such amendment or supplement), or to
which you shall object; and it will prepare and provide you with, promptly upon
your request, any amendment or supplement to the Offering Memorandum which may
be necessary or advisable in connection with the resale of the Notes by you.
(h) It will cooperate with you and your counsel in connection with the
registration or qualification of the Notes for offer and sale to and by the
Initial Purchasers under the state securities or Blue Sky laws of such
jurisdictions as you may request. The Company will continue such qualification
in effect so long as required by law for distribution of the Notes (provided,
--------
that the Company shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or to take any action that
would subject it to taxation or to general consent to service of process in any
jurisdiction in which it is not now so subject).
(i) For so long as and at any time that it is not subject to Section 13 or
15(d) of the Securities Exchange Act of 1934 and the Commission's rules and
regulations thereunder (the "Exchange Act"), the Company, upon request of any
holder of the Notes, will furnish to such holder, and to any prospective
purchaser or purchasers of the Notes designated by such holder, information
satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act;
provided, however, that the Company's obligations under this Section 4(i) shall
- -------- -------
terminate upon the earlier of (i) the date the Exchange Offer is concluded and
the exchange of the Exchange Notes for the Notes tendered therein is consummated
or (ii) the date the Shelf Registration Statement is declared effective by the
Commission; provided further that, notwithstanding the foregoing proviso, the
-------- -------
Company shall be obligated to deliver, upon request, any information required by
Rule 144A(d)(4) under the Act to prospective purchasers of the Notes during any
period during which, pursuant to the Registration Rights Agreement, the Shelf
Registration Statement is required to be effective, but such effectiveness has
been suspended or revoked for any reason.
(j) It will, so long as any of the Notes are outstanding, deliver to the
Initial Purchasers, without charge, a copy of each report or such other publicly
available information furnished to holders of the Notes, or filed with the
Commission, whether or not required by law or pursuant to the Indenture, and
such other publicly available information concerning the Company and its
subsidiaries (the "Subsidiaries") as you may reasonably request, at the same
time as such reports or other infor mation are furnished to such holders.
7
<PAGE>
(k) It will not voluntarily claim, and will actively resist any attempts to
claim, the benefit of any usury laws against the holders of the Notes.
(l) It will use the proceeds from the sale of the Notes in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(m) It will cooperate with you to cause the Notes to be designated as
eligible for trading through PORTAL in accordance with the rules and regulations
of the NASD.
(n) It will not, and will ensure that no affiliate (as such term is defined
in the Commission's Rule 501(b) under the Act) of the Company will offer, sell
or solicit offers to buy or otherwise negotiate in respect of any "security" (as
defined in the Act) which could be integrated with the offer and sale of the
Notes in a manner that would require the registration of the Notes under the
Act.
(o) Except in connection with the Exchange Offer or the filing of the Shelf
Registration Statement, as the case may be, it will not, and will not authorize
or knowingly permit any person acting on its behalf to, solicit any offer to buy
or offer to sell the Notes by means of any form of general solicitation or
general advertising (as such terms are used in Regulation D under the Act), or
in any manner involving a public offering within the meaning of Section 4(2) of
the Act.
(p) It will cause each Security to bear the following legend until such
legend shall no longer be necessary or advisable because the Notes are no longer
subject to the restrictions on transfer described therein:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
8
<PAGE>
THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE
THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) (2) TO
THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE.
(q) It will use its best efforts to do and perform all things required to
be done and performed under this Agreement by it prior to or after the Closing
Date and to satisfy all conditions precedent to the delivery of the Notes.
5. Representations and Warranties. The Company represents and warrants to
------------------------------
each of you that:
(a) Each of the preliminary offering memorandum and the Offering
Memorandum, as of its date, contains all the information that, if requested by a
prospective purchaser of the Notes, would be required to be provided pursuant to
Rule 144A(d)(4) under the Act. The Offering Memorandum does not, and at the
Closing Date will not, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that the representations and warranties contained
in this paragraph (a) shall
9
<PAGE>
not apply to statements in or omissions from the preliminary offering memorandum
or the Offering Memorandum (or any supplement or amendment to them), made in
reliance upon and in conformity with information relating to the Initial
Purchasers furnished to the Company in writing by or on behalf of the Initial
Purchasers by you expressly for use therein. The Company acknowledges for all
purposes under this Agreement (including this paragraph and Section 6 hereof and
legal opinions) that the statements set forth in the third paragraph (first four
sentences) and fourth paragraph (third sentence), under the caption "Plan of
Distribution" and in the last paragraph of the cover page in any preliminary
offering memorandum and in the Offering Memorandum constitute the only written
information furnished to the Company by or on behalf of the Initial Purchasers
expressly for use in the Offering Memorandum (or any amendment or supplement to
any of them), and that the Initial Purchasers shall not be deemed to have
provided any information (and therefore are not responsible for any statements
or omissions), pertaining to any arrangement or agreement with respect to any
party other than the Initial Purchasers. On the date hereof, at the date of the
Offering Memorandum, and any amendment or supplement thereto (if different), and
at the Closing Date, the Indenture will conform in all material respects to the
requirements of the Trust Indenture Act of 1939, as amended, and the rules and
regulations promulgated pursuant thereto (collectively, the "TIA"), which would
be applicable to an Indenture qualified under the TIA. No contract or document
of a character required to be described in the Offering Memorandum, were the
Offering Memorandum to be the form of prospectus contained in a registration
statement under the Act on Form S-1, has not been described as so re quired.
(b) No action has been taken and no statute, rule, regulation or order has
been enacted, adopted or issued by any governmental body, agency or official
which prevents the issuance of the Notes or prevents or suspends the use of any
preliminary offering memorandum or suspends the sale of the Notes in any
jurisdiction referred to in Section 4(h) hereof; no injunction, restraining
order or order of any nature by any Federal or state court of competent
jurisdiction has been issued with respect to the Company which would prevent or
suspend the issuance or sale of the Notes or the use of any preliminary offering
memorandum or the Offering Memorandum in any jurisdiction referred to in Section
4(h) hereof; no action, suit or proceeding before any court or arbitrator or any
governmental body, agency or official, domestic or foreign, is pending against
or, to the best knowledge of the Company, threatened against the Company which,
if adversely determined, could materially interfere with or adversely affect the
issuance of the Notes or in any manner draw into question the validity of the
Registration Rights Agreement, this Agreement, the Indenture or the Notes.
10
<PAGE>
(c) The Indenture has been duly authorized by the Company and, when duly
executed and delivered by the Company in accordance with its terms, will be a
legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar laws affecting creditors' rights and remedies
generally and to general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity) and except to the extent that a
waiver of rights or defenses under any usury laws may be unenforceable.
(d) The Notes have been duly authorized by the Company and, on the Closing
Date, will have been duly executed by the Company and will, when issued,
executed, authenticated and delivered in accordance with the Indenture and paid
for in accordance with the terms of this Agreement, constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws affecting creditors' rights and remedies generally
and to general principles of equity (regardless of whether enforcement is sought
in a proceeding at law or in equity), and except to the extent that a waiver of
rights or defenses under any usury laws may be unenforceable. The Notes will be
entitled to the benefits of the Indenture and will conform in all material
respects to the descriptions thereof in the Offering Memorandum.
(e) This Agreement has been duly authorized and validly executed and
delivered by the Company and constitutes a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its terms
(assuming due execution and delivery by you of this Agreement), except as rights
of indemnity or contribution, or both, may be limited by state and Federal laws.
(f) The execution and delivery of this Agreement, the Indenture, the
Registration Rights Agreement, the Escrow Agreement and the Notes by the
Company, the issuance and sale of the Notes, the performance of this Agreement
and the Indenture and the consummation of the transactions contemplated by this
Agree ment and the Indenture will not conflict with or result in a breach or
violation of (A) any of the respective charters or bylaws of the Company or any
of the Subsidiaries or (B) any of the terms or provisions of, or constitute a
default or cause an accel eration of any obligation under or result in the
imposition or creation of (or the obligation to create or impose) any security
interest, mortgage, pledge, claim, lien, encumbrance or adverse interest of any
nature (each, a "Lien"), with respect to, any
11
<PAGE>
obligation, bond, agreement, note, debenture, or other evidence of indebtedness,
or any indenture, mortgage, deed of trust or other agreement, lease or
instrument to which the Company or any Subsidiary is a party or by which it or
any of them is bound, or to which any properties of the Company or any
Subsidiary is or may be subject, or contravene any order of any court or
governmental agency, body or official having jurisdiction over the Company or
any Subsidiary or any of their prop erties, or violate or conflict with any
statute, rule or regulation or administrative regulation or decree or court
decree applicable to the Company or any Subsidiary or any of their respective
assets or properties.
(g) Each of the Registration Rights Agreement and the Escrow Agreement has
been duly and validly authorized by the Company and on the Closing Date will
have been duly executed and delivered by the Company and, when duly executed and
delivered by the other parties thereto, will be a legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except as rights of indemnity or contribution, or both, may be limited by
state and Federal laws and except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and similar laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity). Each of the Registration Rights Agreement
and the Escrow Agreement conforms in all material respects with the descriptions
thereof in the Offering Memorandum.
(h) No authorization, approval or consent or order of, or filing with, any
court or governmental body, agency or official is necessary in connection with
the transactions contemplated by this Agreement, the Registration Rights
Agreement, the Escrow Agreement and the Indenture except such as may be required
by state securities or Blue Sky laws or regulations and, with respect to the
Registration Rights Agreement, the Act and the TIA. None of the Company nor any
of its affiliates is presently doing business with the government of Cuba or
with any person or affiliate located in Cuba.
(i) The Company and each of the Subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has the requisite power and authority to carry
on its business as it is currently being conducted and as described in the
Offering Memorandum as proposed to be conducted, and to own, lease and operate
its properties, as applicable, and, with respect to the Company, to authorize
the offering of the Notes, to execute, deliver and perform this Agreement, the
Indenture, the
12
<PAGE>
Escrow Agreement and the Registration Rights Agreement and to issue, sell and
deliver the Notes; and the Company and each of the Subsidiaries is duly
qualified and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualifi cation, except where the
failure to be so qualified would not have a material adverse effect, whether
singly or in the aggregate, on the properties, business, results of operations,
affairs, condition (financial or otherwise) or prospects of the Company and the
Subsidiaries taken as a whole (a "Material Adverse Effect");
(j) The consolidated capitalization of the Company is as set forth in the
Offering Memorandum, under the caption "Capitalization" in the column "Actual"
and, after consummation of the Offering, will be as set forth in the column "As
Adjusted."
(k) All of the outstanding shares of capital stock of, or other ownership
interests in, each Subsidiary have been duly authorized and validly issued and
are fully paid and nonassessable, and other than (i) the ownership by an
unaffiliated third-party of 549 shares of common stock, $0.01 par value (the
"OCI Common Stock"), of Omnipoint Communications Inc., a Delaware corporation
("OCI"), constituting 4.4% of the outstanding capital stock of OCI and (ii) the
pledge by Omnipoint PCS, Inc., a Delaware corporation, of 11,874 shares of OCI
Common Stock, constituting 95.6% of the outstanding capital stock of OCI, to
Mellon Bank, N.A., as collateral agent for the ratable benefit of Northern
Telecom Inc., as administrative agent and Ericsson Inc., as administrative
agent, pursuant to the Amended and Restated Pledge Agreement dated as of August
7, 1996, are owned by the Company free and clear of any Lien. There are no
outstanding subscriptions, rights, warrants, options, calls, convertible or
exchangeable securities, commitments of sale, or Liens related to or entitling
any person to purchase or otherwise to acquire any shares of the capital stock
of, or other ownership interest in, any Subsidiary.
(l) Neither the Company nor any Subsidiary is (A) in violation of its
respective charter or bylaws or (B) in default in the performance of any
obligation, bond, agreement, debenture, note or any other evidence of
indebtedness, or any indenture, mortgage, deed of trust or other contract, lease
or other instrument to which it is a party or by which it is bound, or to which
any of the property or assets any of them is subject, except in the case of (B)
defaults which, singly or in the aggregate, as could not reasonably be expected
to have a Material Adverse Effect.
13
<PAGE>
(m) There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, pending against or affecting
the Company or any Subsidiary or any of their respective assets or properties,
which, taken singly or in the aggregate, could have a Material Adverse Effect,
or which might materially and adversely affect the performance by the Company of
its obligations pursuant to this Agreement or the transactions contemplated
hereby or thereby and, to the best knowledge of the Company, no such action,
suit or proceeding is contemplated or threatened.
(n) Neither the Company nor any Subsidiary has violated any foreign,
federal, state or local law or regulation relating to the protection of human
health and safety or the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), nor any federal or state law
relating to discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of the
Employee Retirement Income Security Act, as amended, or the rules and
regulations promulgat ed thereunder, which violations, singly or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(o) The Company and each of the Subsidiaries has such permits, licenses,
franchises and authorizations of governmental or regulatory authorities
("permits"), including, without limitation, under any applicable Environmental
Laws, as are necessary to own, lease and operate its respective properties and
to carry on its business as it is currently being conducted and as it is
proposed to be conducted as described in the Prospectus; the Company and each of
the Subsidiaries has fulfilled and performed all of its material obligations
with respect to such permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
permit; and, except as described in the Offering Memorandum, such permits
contain no restrictions that are materially burdensome to the Company or any of
the Subsidiaries.
(p) In the ordinary course of its business, the Company conducts a periodic
review of the effect of Environmental Laws on the business, operations and
properties of the Company and the Subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated
14
<PAGE>
costs and liabilities, singly or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(q) Except as could not reasonably be expected to have a Material Adverse
Effect, each of the Company and the Subsidiaries has good and marketable title,
free and clear of all Liens (except as permitted by clauses (v), (vi) and (viii)
of Section 4.9 of the Indenture), to all property and assets described in the
Offering Memorandum as being owned by it and such properties and assets are in
the condition and suitable for use as so described. All leases to which any of
the Company and the Subsidiaries is a party are valid and binding and no default
has occurred and is continuing thereunder (in the case of defaults by persons
other than the Company and the Subsidiaries, to the best knowledge of the
Company and the Subsidiaries), which could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect, and the Company and
the Subsidiaries enjoy peaceful and undisturbed possession under all such leases
to which any of them is a party as lessee with such exceptions as do not
interfere with the use made or proposed to be made by them.
(r) The Company and the Subsidiaries maintain insurance at least in such
amounts and covering at least such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses in similar industries.
(s) Coopers & Lybrand L.L.P., the firm of accountants that has certified or
shall certify the applicable consolidated financial statements of the Company
and subsidiaries and the other financial statements included or to be included
as part of the Offering Memorandum, are independent public accountants with
respect to the Company, as would be required under the Act. The consolidated
financial statements and the other financial statements, together with related
schedules and notes, set forth in the Offering Memorandum, comply as to form in
all material respects with the requirements applicable to registration
statements on Form S-1 under the Act and fairly present the consolidated
financial position of the Company and the financial position of its subsidiaries
at the respective dates indicated and the results of their operations and their
cash flows, as applicable, for the respective periods indicated, and were
prepared in accordance with generally accepted accounting principles in the
United States of America ("GAAP"), consistently applied throughout such periods
subject in the case of interim statements to normal recurring adjust ments. The
other financial and statistical information and data included in the Offer ing
Memorandum are accurately presented and prepared on a basis consistent with the
financial statements and the books and records of the Company.
15
<PAGE>
(t) Subsequent to the respective dates as of which information is given in
the Offering Memorandum and up to the Closing Date, except as set forth in the
Offering Memorandum, neither the Company nor any of the Subsidiaries has
incurred any liabilities or obligations, direct or contingent, which are
material to the Company and the Subsidiaries, taken as a whole, nor entered into
any transaction not in the ordinary course of business and there has not been,
singly or in the aggregate, any material adverse change, or any development
which could reasonably be expected to involve a material adverse change, in the
properties, business, results of operations, condition (financial or otherwise),
affairs or prospects of the Company and the Subsidiaries, taken as a whole (a
"Material Adverse Change").
(u) The Company and each of the Subsidiaries have filed (or have had filed
on their behalf) all tax returns required to be filed by any of them prior to
the date hereof under applicable law, other than those filings being contested
in good faith. All such tax returns and amendments thereto are true, correct
and complete in all material respects. The Company and each of the Subsidiaries
have paid (or have had paid on their behalf) all material taxes, including all
Federal, state, local and foreign taxes, and other assessments of a similar
nature (whether imposed directly or through withholding), including any
interest, additions to tax, or penalties applicable thereto, other than those
taxes being contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest. To the best of
the Company's and each of the Subsidiaries' knowledge, there are no tax items of
a material nature that are currently under examination by the Internal Revenue
Service or any other domestic or foreign governmental authority responsible for
the administration of any such taxes.
(v) The Company and the Subsidiaries possess the patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names (collectively,
"Intellectual Property"), presently employed by them in connection with the
businesses now operated by them, and neither the Company nor any Subsidiary has
received any notice of infringement of or conflict with asserted rights of
others with respect to the foregoing except as could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The use of
such Intellectual Property in connection with the business and operations of the
Company and the Subsidiaries does not infringe on the rights of any person.
(w) (i) Except as set forth in the Offering Memorandum, (i) the Company
and each of the Subsidiaries have applied for or obtained all certificates,
consents,
16
<PAGE>
exemptions, orders permits, licenses, authorizations or other approvals (each,
an "Authorization") of and from, and has made all declarations and filings with,
all Governmental Authorities, including, without limitation, the Federal
Communications Commission ("FCC") and each applicable state regulatory agency or
body that exercises or will exercise jurisdiction over the Company ("Applicable
PUC"), necessary to conduct its business as it is currently being conducted and
as it is proposed to be conducted as described in the Offering Memorandum,
except to the extent that the failure to obtain, declare or file would not,
singly or in the aggregate, have a Material Adverse Effect, (ii) all such
Authorizations are valid and in full force and effect, except where the failure
of any such Authorization to be in full force and effect would not, singly or in
the aggregate, have a Material Adverse Effect and (iii) the Company and each of
the Subsidiaries is in compliance in all material respects with the rules and
regulations of the FCC and all Applicable PUCs and the terms and conditions of
all such Authorizations; (2) except for rulemaking proceedings of general
applicability to the PCS industry not required to be described in the Offering
Memorandum, there are no legal or governmental proceedings pending before any
Governmental Authority (except as such as may be required under the securities
or Blue Sky Laws of the various states), including without limitation, the FCC
or any Applicable PUC, to which the Company or any Subsidiary is a party or of
which any property of the Company or any Subsidiary is subject, and to the
Company's knowledge, no such proceedings against the Company or any Subsidiary
are threatened or contemplated; and (3) the execution, delivery and performance
of this Agreement by the Company, the compliance by the Company with all the
provisions hereof and the consummation of the transactions contemplated herein
and in the Offering Memorandum, including, without limitation, the issuance and
sale of the Notes to the Initial Purchasers, (i) do not conflict with or result
in a violation of the Telecommunications Act of 1996, the Communications Act of
1934, as amended, the rules or regulations of the FCC or any Applicable PUC, or
any judgment, order or decree of any Governmental Authority, (ii) will not cause
any cancellation, termination, revocation, forfeiture or material impairment of
any Authorization, and (iii) do not and will not require notice to or the
approval of the FCC, any Applicable PUCs, or any other Governmental Authorities
(except as such may be required under the securities or Blue Sky laws of the
various states).
(x) The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization;
17
<PAGE>
and (iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences.
(y) Neither the Company nor any Subsidiary nor any agent acting on their
behalf has taken or will take any action that is reasonably likely to cause the
issuance or sale of the Notes to violate Regulation G, T, U, or X of the Board
of Governors of the Federal Reserve System, in each case as in effect on the
Closing Date.
(z) Neither the Company nor any Subsidiary nor the Escrow Account is (i) an
"investment company" or a company "controlled" by an investment company within
the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" of a holding company, or an
"affiliate" thereof within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
(aa) No holder of any security of the Company has or will have any right to
require registration of such security by virtue of the transactions contemplated
by this Agreement or the Registration Rights Agreement, except as have been
waived in writing or except as may and will be satisfied by the filing of a
separate registration statement.
(ab) Except as disclosed in the Offering Memorandum, there are no business
relationships or related party transactions which would be required to be
disclosed therein by Item 404 of Regulation S-K of the Commission if the
Offering Memorandum were a prospectus contained in a registration statement on
Form S-1 filed under the Act.
(ac) On the Closing Date, the Notes will have been approved for inclusion
on PORTAL, subject to official notice of issuance.
(ad) Neither the Company nor any affiliate (as such term is defined in Rule
501(b) under the Act) of the Company has, directly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in respect of,
any "security" (as defined in the Act) which is or will be integrated with the
sale of the Notes in a manner that would require registration of the offering
and sale of the Notes under the Act.
(ae) Neither the Company nor any officer, director or other person (other
than you, as to whom the Company makes no representation), acting on its behalf
18
<PAGE>
has engaged, in connection with the offering of the Notes, in any form of
general solicitation or general advertising, including but not limited to the
methods described in Rule 502(c) under the Act.
(af) Assuming the accuracy of your representations contained in Section
2(b) hereof and your compliance with your agreements therein set forth, it is
not necessary, in connection with the sale and delivery of the Notes to you and
the offer and resale of the Notes by you, in each case in the manner
contemplated by this Agreement and the Offering Memorandum, to register the
Notes under the Act or to qualify the Indenture under the TIA.
(ag) The Company has delivered to the Initial Purchasers true and correct
copies of each of the Senior Notes, the NT Credit Facility and the Ericsson
Credit Facility in the form executed and delivered, and there have been no
amendments, alterations, modifications or waivers of any of the provisions of
the Senior Notes, the NT Credit Facility or the Ericsson Credit Facility from
the form which has been delivered to the Initial Purchasers; there exists as of
the date hereof no event or condition which would constitute a default or an
event of default (in each case as defined in the Senior Notes, the NT Credit
Facility or the Ericsson Credit Facility, as applicable), under either such
facility which would result in a Material Adverse Effect or materially adversely
effect the ability of the Company to consummate the transactions contemplated by
this Agreement. The Senior Notes, the NT Credit Facility and the Ericsson
Credit Facility conform in all material respects with the respective
descriptions thereof in the Offering Memorandum.
(ah) Each certificate signed by any officer of the Company and delivered to
the Initial Purchasers or counsel for the Initial Purchasers in connection with
the transactions contemplated by this Agreement shall be deemed to be a
representation and warranty by the Company to each Initial Purchaser as to the
matters covered thereby.
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless (i) each of the
Initial Purchasers and (ii) each person, if any, who controls (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act), any of the
Initial Purchasers (any of the persons referred to in this clause (ii) being
hereinafter referred to as a "controlling person"), and (iii) the respective
officers, directors, partners, employees, representatives and agents of any of
the Initial Purchasers or any controlling person (any person referred to in
clause (i), (ii) or (iii) may hereinaf-
19
<PAGE>
ter be referred to as an "Indemnified Person"), to the fullest extent lawful,
from and against any and all losses, claims, damages, judgments, actions,
expenses and other liabilities (collectively, "Liabilities"), including without
limitation and as incurred, reimbursement of all reasonable costs of
investigating, preparing, pursuing or defending any claim or action, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Person, directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in the Offering Memorandum (including any
amendment or supplement thereto), or any preliminary offering memorandum, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in light of the
circumstances under which they were made), not misleading, except insofar as
such Liabilities are caused by an untrue statement or omission or alleged untrue
statement or omission that is (x) made in reliance upon and in conformity with
information relating to either of the Initial Purchasers furnished in writing to
the Company by or on behalf of such Initial Purchaser expressly for use in any
preliminary offering memorandum or the Offering Memorandum (or any amendment or
supplement there to), or (y) with respect to the Initial Purchaser from whom the
person asserting the Liabilities purchased Notes, made in any preliminary
offering memorandum if a copy of the Offering Memorandum (as amended or
supplemented, if the Company shall have furnished the Initial Purchasers with
such amendments or supplements thereto on a timely basis), was not delivered by
or on behalf of such Initial Purchaser to the person asserting the Liabilities,
if required by law to have been so delivered by the Initial Purchaser seeking
indemnification, at or prior to the written confirmation of the sale of the
Notes, and it shall be finally determined by a court of competent jurisdiction,
in a judgment not subject to appeal or review, that the Offering Memorandum (as
so amended or supplemented), would have completely corrected such untrue
statement or omission. The Company shall notify you promptly of the institution,
threat or assertion of any claim, proceeding (including any governmental
investigation), or litigation in connection with the matters addressed by this
Agreement which involves the Company or an Indemnified Person.
(b) In case any action or proceeding (for all purposes of this Section 6,
including any governmental investigation), shall be brought or asserted against
any of the Indemnified Persons with respect to which indemnity may be sought
against the Company, such Indemnified Person shall promptly notify the Company
in writing; provided, that the failure to give such notice shall not relieve the
--------
Company of its obligations pursuant to this Agreement. Upon receiving such
notice, the Company shall assume, at its sole expense, the defense thereof, with
counsel reason-
20
<PAGE>
ably satisfactory to such Indemnified Person and, after written notice from the
Company to such Indemnified Person of its election so to assume the defense
thereof made within five business days after receipt of the notice from the
Indemnified Person of such action or proceeding, the Company shall not be liable
to such Indemnified Person hereunder for legal expenses of other counsel
subsequently incurred by such Indemnified Person in connection with the defense
thereof, other than costs of investigation, unless (i) the Company agrees in
writing to pay such fees and expenses, or (ii) the Company fails promptly to
assume such defense or fails to employ counsel reasonably satisfactory to such
Indemnified Person or (iii) the named parties to any such action or proceeding
(including any impleaded parties), include both such Indemnified Person and any
of the Company or an affiliate of the Company, and either (x) such Indemnified
Person shall have been advised by counsel that there may be one or more legal
defenses available to such Indemnified Person that are different from or
additional to those available to one or more of the Company or such affiliate or
(y) a conflict may exist between such Indemnified Person and the Company or such
affiliate. In the event of any of clause (i), (ii) and (iii) of the immediately
preceding sentence, if such Indemnified Person notifies the Company in writing,
the Company shall not have the right to assume the defense thereof and such
Indemnified Person shall have the right to employ its own counsel in any such
action and the reasonable fees and expenses of such counsel shall be paid, as
incurred, by the Company, it being understood, however, that the Company shall
not, in connection with any one such action or proceeding or separate but
substantially similar or related actions or proceedings arising out of the same
general allegations or circum stances, be liable for the fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for all such Indemnified Persons. The Company agrees to be liable for
any settlement of such action or proceeding effected with the Company's prior
written consent, which consent will not be unreasonably withheld, and the
Company agrees to indemnify and hold harmless any Indemnified Person from and
against any Liabilities by reason of any settlement of any action effected with
the written consent of the Company. The Company agrees to be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than ten business days after receipt by the
Company of the aforesaid request for payment in respect of an indemnification
obligation pursuant hereto and (ii) the Indemnified Person shall not have been
reimbursed in accordance with such request prior to the date of such settlement.
The Company shall not, without the prior written consent of each Indemnified
Person, settle or compromise or consent to the entry of any judgment in or
otherwise seek to terminate any pending or threatened action, claim, litigation
or proceeding in respect of which indemnification or contribution may be sought
pursuant hereto (whether or not any Indemnified Person is a party thereto),
21
<PAGE>
unless such settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Person from all liability arising out
of such action, claim, litigation or proceeding.
(c) Each of the Initial Purchasers agrees, severally and not jointly, to
indemnify and hold harmless the Company and any person controlling (within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company,
and the officers, directors, partners, employees, representatives and agents of
each such person, to the same extent as the foregoing indemnity from the Company
to each of the Indemnified Persons, but only with respect to claims and actions
based on information relating to such Initial Purchaser and conforming to
information furnished in writing by or on behalf of such Initial Purchaser
expressly for use in the Offering Memorandum or any preliminary offering
memorandum, as applicable. In case any action or proceeding (including any
governmental investigation), shall be brought or asserted against the Company,
any of its directors, any such officer, or any such controlling person based on
the Offering Memorandum or any preliminary offering memorandum in respect of
which indemnity is sought against any Initial Purchaser pursuant to the
foregoing sentence, the Initial Purchaser shall have the rights and duties given
to the Company (except that if the Company shall have as sumed the defense
thereof, such Initial Purchaser shall not be required to do so, but may employ
separate counsel therein and participate in the defense thereof but the fees and
expenses of such counsel shall be at the expense of such Initial Purchaser), and
the Company, its directors, any such officers and each such controlling person
shall have the rights and duties given to the Indemnified Person by Section 7(b)
above.
(d) If the indemnification provided for in this Section 6 is finally
determined by a court of competent jurisdiction to be unavailable to an
indemnified party in respect of any Liabilities referred to herein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and such Initial
Purchaser, on the other hand, from the offering of the Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of the indemnifying
parties and the indemnified party, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one
hand, and any of the Initial Purchasers (and its related Indemnified Persons),
on the other hand, shall be deemed to be in the same proportion as the total
proceeds from the Notes
22
<PAGE>
(net of discounts and commissions but before deducting expenses), received by
the Company bears to the total discounts and commissions received by such
Initial Purchaser, in each case as set forth in the Offering Memorandum. The
relative fault of the Company, on the one hand, and such Initial Purchaser, on
the other hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact related to information supplied by the
Company, on the one hand, or by such Initial Purchaser, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The indemnity and contribution
obligations of the Company set forth herein shall be in addition to any
liability or obligation the Company may otherwise have to any Indemnified
Person.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by
pro rata allocation (even if the Initial Purchasers were treated as one entity
- --- ----
for such purpose), or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of any
Liabilities, referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, none of the Initial Purchasers (and their related
Indemnified Persons) shall be required to contribute, in the aggregate, any
amount in excess of the amount by which the total discounts and commissions
applicable to the Notes purchased by such Initial Purchaser exceeds the amount
of any damages and related expenses which such Initial Purchaser (and its
related Indemnified Persons), has otherwise been required to pay or incur by
reason of such untrue or alleged untrue statement or omission or alleged
omission. The Initial Purchasers' obligations to contribute pursuant to this
Section 6(d) are several in proportion to the respective aggregate principal
amount of Notes purchased by each of the Initial Purchasers hereunder and not
joint .
7. Conditions to Initial Purchasers' Obligations. The respective obligations
---------------------------------------------
of the several Initial Purchasers to purchase any Notes under this Agreement are
subject to the satisfaction of each of the following conditions on the Closing
Date:
(a) All the representations and warranties of the Company contained in this
Agreement shall be true and correct on the Closing Date with the same force and
effect as if made on and as of the Closing Date. The Company shall have
per-
23
<PAGE>
formed or complied with all of its obligations and agreements herein contained
and required to be performed or complied with by it at or prior to the Closing
Date.
(b) At the Closing Date, no stop order suspending the sale of the Notes in
the United States or any jurisdiction referred to in Section 4(h) shall have
been issued and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental agency,
body or official which would, as of the Closing Date, prevent the issuance of
the Notes; and no injunction, restraining order or order of any nature by any
Federal or state court of competent jurisdiction shall have been issued as of
the Closing Date which would prevent the issuance of the Notes. Subsequent to
the execution and delivery of this Agreement and prior to the Closing Date,
there shall not have been any down grading or indication that such securities
have been placed on any "watch list" for possible downgrading, nor shall any
review for a possible change, that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
nationally recognized statistical rating organization, as such term is defined
for purposes of Rule 436(g)(2) of the Act.
(d) Since the earlier of the date hereof or the dates as of which informa
tion is given in the Offering Memorandum, there shall not have been any Material
Adverse Change, (ii) since the date of the latest balance sheet included in the
Offering Memorandum, there shall not have been any material adverse change, or
any development involving a prospective material adverse change, in the capital
stock or debt, of the Company and (iii) the Company shall have no liability or
obligation, direct or contingent, that is material to the Company and the
Subsidiaries, taken as a whole, and which is not disclosed in the Offering
Memorandum.
(e) You shall have received a certificate of the Company, dated the Closing
Date, executed on behalf of the Company, by the vice president and chief
financial officer and secretary of the Company confirming, as of the Closing
Date, the matters set forth in paragraphs (a), (b), (c) and (d) of this Section
7.
(f) On the Closing Date, you shall have received an opinion (satisfactory
to you and your counsel), dated the Closing Date, of Piper & Marbury L.L.P.,
counsel for the Company, to the effect that:
24
<PAGE>
(i) The Company and each of the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation and has the
corporate power and authority to carry on its business as it is
currently being conducted and as described in the Offering Memorandum
as proposed to be conducted, and to own, lease and operate its
properties;
(ii) the Company and each of the Subsidiaries is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect;
(iii) all of the outstanding shares of capital stock of, or
other ownership interests in, each Subsidiary have been duly
authorized and validly issued and are fully paid and nonassessable,
and, to the best of such counsel's knowledge after due inquiry, other
than (i) the ownership by an unaffiliated third-party of 549 shares of
OCI Common Stock and (ii) the pledge by Omnipoint PCS, Inc. of 11,874
shares of OCI Common Stock to Mellon Bank, N.A., as collateral agent,
for the ratable benefit of Northern Telecom, Inc., as adminis trative
agent, and Ericsson Inc., as administrative agent, pursuant to the
Amended and Restated Pledge Agreement dated as of August 7, 1996, are
owned by the Company free and clear of any Lien; and, to the best of
such counsel's knowledge after due inquiry, there are no outstanding
subscriptions, rights, warrants, options, calls, convertible or
exchangeable securities, commitments of sale, or Liens related to or
entitling any person to purchase or otherwise to acquire any shares of
the capital stock of, or other ownership interest in, any Subsidiary;
(iv) the Company has the requisite corporate power and authority
to authorize the offering of the Notes, to execute, deliver and
perform its obligations under this Agreement, the Notes, the
Indenture, the Registration Rights Agreement and the Escrow Agreement
and to issue, sell and deliver the Notes; each of this Agreement, the
Notes, the Indenture, the Registration Rights Agree-
25
<PAGE>
ment and the Escrow Agreement have been duly authorized by all
necessary corporate action, executed and delivered by the Company;
(v) when issued, executed and authenticated and delivered in
accordance with the Indenture and paid for by you in accordance with
the terms of this Agreement, the Notes will constitute legal, valid
and binding obligations of the Company, enforceable against the Com
pany in accordance with their terms and entitled to the benefits of
the Indenture, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting the rights or
remedies of creditors generally and to general principles of equity
(regardless of whether enforcement is considered in a proceeding at
law or in equity), and except to the extent that a waiver of rights
or defenses under any usury laws may be unenforceable;
(vi) the Indenture, assuming due authorization, execution and
delivery thereof by the Trustee, will be a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting the
rights or remedies of creditors generally and to general principles
of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity), and except to the extent that a
waiver of rights or defenses under any usury laws may be
unenforceable;
(vii) neither the Company nor any Subsidiary nor the Escrow
Account is (a) an "investment company" or a company "controlled" by
an investment company within the meaning of the Investment Company
Act of 1940, as amended, or (b) a "holding company" or a "subsidiary
company" of a holding company, or an "affiliate" thereof within the
meaning of the Public Utility Holding Company Act of 1935, as amended;
(viii) no authorization, approval, consent or order of, or
filing with, any court or governmental body or agency is required for
the consummation by the Company of the transactions contemplated by
this Agreement, the Indenture, the Registration Rights Agreement and
the Escrow Agreement, except that such counsel need express no
26
<PAGE>
opinion with respect to state securities or Blue Sky laws or
regulations and, with respect to the Registration Rights Agreement,
the Act and the TIA;
(ix) the execution and delivery of this Agreement, the Indenture,
the Registration Rights Agreement and the Escrow Agreement, the
issuance and sale of the Notes, the performance of its obligations
under this Agreement, the Notes, the Indenture, the Registration
Rights Agreement and the Escrow Agreement and the consummation of the
transactions contemplated by this Agreement, the Indenture, the
Registration Rights Agreement and the Escrow Agreement will not
conflict with or result in a breach or violation of any of the
respective charters or bylaws of the Company or any of the
Subsidiaries or the terms or provisions of, or constitute a default or
cause an acceleration of any obligation under or result in the
imposition or creation of (or the obligation to create or impose) any
Lien, with respect to, any obligation, bond, agreement, note,
debenture or other evidence of indebtedness, or any indenture,
mortgage, deed of trust or other agreement, lease or instrument
(identified to such counsel in writing by the Company as material to
the Company and the Subsidiaries, taken as a whole), any order of any
court or governmental agency, body or official having jurisdiction
over the Company or any Subsidiary or any of their respective assets
or properties, or violate or conflict with any statute, rule or
regulation or administrative regulation or decree or court decree
applicable to the Company or any Subsidiary or any of their respective
assets or properties;
(x) each of the Registration Rights Agreement and the Escrow
Agreement, assuming due authorization, execution and delivery thereof
by the other parties thereto, will be a legal, valid and binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights of indemnity or
contribution, or both, may be limited by state and Federal laws and
except as such enforceability may be limited by applicable bank-
ruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and other similar laws affecting the rights or remedies of creditors
generally and to general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity). Each
of the Registration Rights Agreement and the Escrow Agreement
27
<PAGE>
conforms in all material respects with the descriptions thereof in the
Offering Memorandum;
(xi) neither the Company nor any Subsidiary is (A) in violation
of its respective charter or bylaws or (B) in default in the
performance of any obligation, bond, agreement, debenture, note or any
other evidence of indebtedness, or any indenture, mortgage, deed of
trust or other contract, lease or other instrument (identified to such
counsel in writing by the Company as material to the Company and the
Subsidiaries, taken as a whole) to which it is a party or by which it
is bound, or to which any of the property or assets of any of them is
subject;
(xii) the Escrow Agreement is sufficient to create a security
interest in the financial assets described therein under the Uniform
Commercial Code. Assuming that the Escrow Agent continues to hold the
financial assets described in the Escrow Agreement for the benefit of
the Trustee in accordance with the Escrow Agreement, there has been
granted to the Trustee a valid and perfected security interest in the
financial assets described in the Escrow Agreement in accordance with
the Uniform Commercial Code;
(xiii) all of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully
paid and nonassessable;
(xiv) to the best of such counsel's knowledge, after due
inquiry, neither the Company nor any of its Subsidiaries has violated
any Environmental Laws, nor any Federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable Federal or state wages and hours laws, nor any provisions
of the Employee Retirement Income Security Act, as amended, or the
rules and regulations promulgated thereunder, which in each case might
result in any Material Adverse Change;
(xv) the Company and each of its Subsidiaries has such material
permits, licenses, franchises and authorizations of governmental or
regulatory authorities ("permits"), including, without limitation,
under any applicable Environmental Laws, as are necessary to own,
lease and operate its respective properties and to conduct
28
<PAGE>
its business as currently being conducted and as proposed to be
conduct ed as described in the Offering Memorandum; to the best of
such counsel's knowledge, after due inquiry, the Company and each of
the Subsidiaries has fulfilled and performed all of its material
obligations with respect to such permits and no event has occurred
which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material permit,
subject in each case to such qualification as may be set forth in the
Offering Memorandum; and, except as described in the Offering
Memorandum, such permits contain no restrictions that are materially
burdensome to the Company or any of the Subsidiaries;
(xvi) (1) except as set forth in the Offering Memorandum, (i)
the Company and each of the Subsidiaries has applied for or obtained
all Authorizations of and from, and has made all declarations and
filings with, all Governmental Authorities, including, without
limitation, the FCC and each Applicable PUC necessary to conduct its
business as it is currently being conducted and as it is proposed to
be conducted as described in the Offering Memorandum, except to the
extent that the failure to obtain, declare or file would not, singly
or in the aggregate, have Material Adverse Effect, (ii) all such
Authorizations are valid and in full force and effect, except where
the failure of any such Authorization to be in full force and effect
would not, singly or in the aggregate, have a Material Adverse Effect
and (iii) the Company and each of the Subsidiaries is in compliance in
all material respects with the rules and regulations of the FCC and
all Applicable PUCs and the terms and conditions of all such
Authorizations; (2) except for rulemaking proceedings of general
applicability to the PCS industry not required to be described in the
Offering Memorandum, there are no material legal or governmental
proceedings pending before any Governmental Authority (except as such
may be required under the Act or other securities or Blue Sky laws of
the various states or by the NASD), including without limitation, the
FCC or any Applicable PUC, to which the Company or any Subsidiary is a
party or of which any property of the Company or any Subsidiary is the
subject, and to the best of such counsel's knowledge, no such
proceedings against the Company or any Subsidiary are threatened or
contemplated; and (3) the execution, delivery and performance of this
Agreement by the Company, the compliance by the Company with all the
provisions thereof and the consummation of
29
<PAGE>
the transactions contemplated therein and in the Offering Memorandum,
including, without limitation, the issuance and sale of the Notes to
the Initial Purchasers, (i) do not conflict with or result in a
violation of the Telecommunications Act of 1996, the Communications
Act of 1934, as amended, the rules or regulations of the FCC or any
Applicable PUC, or any judgment, order or decree of any Governmental
Authori ty, (ii) will not cause any cancellation, termination,
revocation, forfeiture or material impairment of any Authorization,
and (iii) do not and will not require notice to or the approval of the
FCC, any Applicable PUCs, or any other Governmental Authorities
(except as such may be required under the Act or other securities or
Blue Sky laws of the various states or by the NASD);
(xvii) the Notes conform in all material respects to the
description thereof in the Offering Memorandum under the caption
"Description of the Notes";
(xviii) the statements under the captions "Business -- Strategic
Relationships" and "-- Regulatory Environment", "Plan of Distribu
tion" and "Management", insofar as such statements constitute a
summary of legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect to
such legal matters, documents and proceedings; and
(xix) The article appearing in the August 19, 1996, edition of
the New York Times does not constitute a general solicitation or
general advertising in connection with the offering and sale of the
Notes which would render unavailable the exemption provided by Section
4(2) of the Act.
(xx) assuming the accuracy of the representations and warranties
of the Initial Purchasers in Section 2(b) of this Purchase Agreement
and of the Company in Section 5(ad) of this Purchase Agreement, the
issuance and sale of the Notes to the Initial Purchasers and the
offering, resale and delivery of the Notes by the Initial Purchasers,
in each case in the manner disclosed in the Offering Memorandum, are
exempt from the registration requirements of Section 5 of the Act and
it is not necessary to qualify the Indenture under the TIA.
30
<PAGE>
With respect to paragraph (xix), the opinion letter will permit Skadden,
Arps, Slate, Meagher & Flom to rely on such paragraph for purposes of its
opinion. Such opinion letter will also recite that the New York Times article
and surrounding factual circumstances and all relevant case law and SEC
interpretations, including no action letters, were reviewed by such counsel.
In giving their opinion required by subsection (f) of this Section 7, such
counsel (i) may state that such opinions are limited to matters governed by the
Federal laws of the United States of America, the laws of the State of New York,
and the General Corporation Law of the State of Delaware, and (ii) shall state
that such counsel has participated in conferences with officers and other
representatives of the Company, representatives of the independent public
accountants for the Company, your representatives and your counsel in connection
with the preparation of the Offering Memorandum and such counsel shall advise
you that such counsel believes that the Offering Memorandum (as amended or
supplemented), as of its date and as of the Closing Date, did not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading (except no opinion need
be expressed as to the financial statements, notes and schedules included in the
Offering Memorandum).
(g) You shall have received an opinion dated the Closing Date, of Skadden,
Arps, Slate, Meagher & Flom, counsel for the Initial Purchasers, in form and
substance reasonably satisfactory to you.
(h) You shall have received letters on and as of the date hereof as well as
on and as of the Closing Date, in form and substance satisfactory to you, from
Coopers & Lybrand L.L.P., independent public accountants complying with Rule 2-
01 of Regulation S-X of the Commission, with respect to the financial statements
and certain financial and statistical information contained in the Offering
Memorandum as you shall reasonably request.
(i) Prior to the Closing Date, the Company shall have furnished to you such
further information, certificates and documents as you may reasonably request.
(j) The Company shall not have failed at or prior to the Closing Date to
perform or comply with any of the agreements herein contained and required to be
performed or complied with by the Company at or prior to the Closing Date.
(k) The Notes shall have been approved for inclusion on the PORTAL system,
subject to notice of official issuance.
31
<PAGE>
(l) The Registration Rights Agreement and the Escrow Agreement shall have
been executed and delivered by the Company and upon closing the Escrow Account
shall be funded from the Purchase Price as provided for in the Offering
Memorandum.
8. Effective Date of Agreement, Defaults and Termination. This Agreement
-----------------------------------------------------
shall become effective upon the later of (i) the execution and delivery of this
Agreement by the parties hereto, and (ii) the delivery of the Offering
Memorandum to the Initial Purchasers for their use in connection with sales of
the Notes.
This Agreement may be terminated at any time on or prior to the Closing
Date by the Initial Purchasers by notice to the Company if any of the following
has occurred: (i) subsequent to the date of the Offering Memorandum or the date
of this Agreement, any Material Adverse Change which, in the judgment of DLJ,
impairs the investment quality of the Notes, (ii) any outbreak or escalation of
hostilities or other national or international calamity or crisis or material
adverse change in the financial markets of the United States or elsewhere or any
other substantial national or international calamity or emergency if the effect
of such outbreak, escalation, calamity, crisis or emergency would, in DLJ's
judgment, make it impracticable or inadvisable to market the Notes or to enforce
contracts for the sale of the Notes, (iii) any suspension or limitation of
trading generally in securities on the New York or American Exchanges or the
National Association of Securities Dealers Automated Quotation National Market,
PORTAL or the over-the-counter markets or any setting of minimum prices for
trading on such exchanges or markets, (iv) any declaration of a general banking
moratorium by either Federal or New York state authorities, (v) the taking of
any action by any Federal, state or local government or agency in respect of its
monetary or fiscal affairs that in DLJ's judgment has a material adverse effect
on the financial markets in the United States, and would, in DLJ's judgment,
make it impracticable or inadvisable to market the Notes or to enforce contracts
for the sale of the Notes, (vi) any securities of the Company shall have been
downgraded or placed on any "watch list" for possible downgrading or reviewed
for a possible change that does not indicate the direction of the possible
change by any "nationally recognized statistical rating organization," as such
term is defined for purposes of Rule 436(g)(2) of the Act, or (vii) the
enactment, publication, decree or other promulgation of any Federal, state or
local statute, regulation, rule or order of any court or other governmental
authority which would in the judgment of DLJ have a Material Adverse Effect or
make it inadvisable or impractical to market the Notes.
32
<PAGE>
If this Agreement shall be terminated by the Initial Purchasers pursuant to
clause (i), (vi) or (vii) of the second paragraph of this Section 8 or because
of the failure or refusal on the part of the Company to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company agrees to
reimburse you for all reasonable out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) incurred by you. Notwithstanding
any termination of this Agreement, the Company shall be liable for all expenses
which it agrees to pay pursuant to Section 4 hereof. If this Agreement is
terminated pursuant to this Section 8, such termination shall be without
liability of any Initial Purchaser to the Company.
If on the Closing Date either of the Initial Purchasers shall fail or
refuse to purchase the Notes which it has agreed to purchase hereunder on such
date and arrangements satisfactory to you and the Company for the purchase of
such Notes are not made within 48 hours after such default, this Agreement shall
terminate without liability on the part of the non-defaulting Initial Purchaser
and the Company, except as otherwise provided in this Section 8. In any such
case that does not result in termination of this Agreement, either you or the
Company may postpone the Closing Date for not longer than seven (7) days, in
order that the required changes, if any, in the Offering Memorandum or any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve a defaulting Initial Purchaser from liability in
respect of any default of any such Initial Purchaser under this Agreement.
9. Notices. Notices given pursuant to any provision of this Agreement shall
-------
be addressed as follows: (a) if to the Company, to Omnipoint Corporation at
2000 North 14th Street, Arlington, Virginia 22201, with a copy to Piper &
Marbury L.L.P, 1200 19th Street, N.W., Washington, D.C. 20036, Attention: Edwin
M. Martin, Esq., (b) if to any Initial Purchaser, to Donaldson, Lufkin &
Jenrette Securities Corporation, 277 Park Avenue, New York, New York 10172,
Attention: Debt Capital Markets, with a copy to Skadden, Arps, Slate, Meagher &
Flom at 333 West Wacker Drive, Chicago, Illinois 60606, Attention: Gary P.
Cullen, Esq., or (c) in any case to such other address as the person to be
notified may have requested in writing.
10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
-------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
33
<PAGE>
11. Severability. Any determination that any provision of this Agreement may
------------
be, or is, unenforceable shall not affect the enforceability of the remainder of
this Agreement.
12. Successors. Except as otherwise provided, this Agreement has been and is
----------
made solely for the benefit of and shall be binding upon the Company, the
Initial Purchasers, any Indemnified Person referred to herein and their
respective successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or by
virtue of this Agreement. The terms "successors and assigns" shall not include
a purchaser of any of the Notes from any of the several Initial Purchasers
merely because of such purchase.
13. Certain Definitions. For purposes of this Agreement, "business day" means
-------------------
any day on which the New York Stock Exchange, Inc. is open for trading.
14. Counterparts. This Agreement may be executed in one or more counterparts
------------
and, if executed in one or more counterparts, the executed counterparts shall
each be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.
15. Headings. The headings herein are inserted for convenience of reference
--------
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
16. Survival. The indemnity and contribution provisions and the other
--------
agreements, representations and warranties of the Company, its officers and
directors and of the Initial Purchasers set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will survive
delivery of and payment for the Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any of the Initial
Purchasers or by or on behalf of the Company or the officers or directors of the
Company or any controlling person of the Company, (ii) acceptance of the Notes
and payment for them hereunder and (iii) termination of this Agreement.
34
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement among
the Company and you.
Very truly yours,
OMNIPOINT CORPORATION
By: _______________________________
Name:
Title:
35
<PAGE>
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written
.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
By: Donaldson, Lufkin & Jenrette
Securities Corporation
By: _______________________________
Name:
Title:
36
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Principal
Amount
---------
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation $166,666,667
Goldman, Sachs & Co. 83,333,333
------------
$250,000,000
</TABLE>
<PAGE>
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement"), dated as of August 27, 1996,
----------
among The Chase Manhattan Bank, as escrow agent (the "Escrow Agent", which term
------------
includes a successor thereto in such capacity), Marine Midland Bank, a New York
banking corporation, as Trustee (the "Trustee", which term includes a successor
thereto in such capacity) under the Indenture (as defined herein), and Omnipoint
Corporation, a Delaware corporation (the "Company").
--------
RECITALS
A. Pursuant to the Indenture, dated as of August 27, 1996 (the
"Indenture"), between the Company and the Trustee, the Company is issuing
- ----------
$250,000,000 aggregate principal amount of its 11 5/8% Senior Notes due 2006
(the "Notes").
-----
B. As security for its obligations under the Notes and the Indenture,
the Company has agreed to grant to the Trustee, for the ratable benefit of the
holders of the Notes, a security interest in and lien upon the Escrow Account
(as defined herein) in accordance with this Agreement.
C. The parties have entered into this Agreement in order to set
forth the conditions upon which, and the manner in which, funds will be
disbursed from the Escrow Account and released from the security interest and
lien described in Section 6(a) of this Agreement.
AGREEMENT
NOW, THEREFORE, for good and valuation consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. In addition to any other defined terms used
-------------
herein, the following terms shall constitute defined terms for purposes of this
Agreement and shall have the meanings set forth below:
"Affiliates" means, as applied to any Person (as defined in the
----------
Indenture), any other Person directly or indirectly controlling, controlled by,
or under direct
<PAGE>
or indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling," "con-
trolled by" and "under common control with"), as applied to any Person, means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"Applied" means that disbursed funds have been applied (i) pursuant to
-------
Section 3(a), (ii) pursuant to Section 3(c) or (iii) pursuant to Section
6(b)(iii).
"Available Funds" means (A) the sum of (i) the Initial Escrow Amount
---------------
and (ii) interest earned or dividends paid on the funds in the Escrow Account
(including holdings of Temporary Cash Investments), less (B) the aggregate
disbursements previously made pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 6(a) hereof.
----------
"Escrow Account" shall mean the escrow account established pursuant to
--------------
Section 2.
"Escrow Account Statement" shall have the meaning given in Section
------------------------
2(f).
"Escrow Agent" shall have the meaning set forth in the preamble to
------------
this Agreement.
"Initial Escrow Amount" shall mean $53,214,987.10.
---------------------
"Interest Payment Date" means February 15 and August 15 of each year
---------------------
commencing on February 15, 1997 until the Notes are paid in full (or if any such
day is not a Business Day (as defined in the Indenture) the next succeeding
Business Day.)
"Issue Date" means August 27, 1996.
----------
"Payment Notice and Disbursement Request" means a notice sent by the
---------------------------------------
Trustee to the Escrow Agent requesting a disbursement of funds from the Escrow
Account, in
2
<PAGE>
substantially the form of Exhibit A hereto. Each Payment Notice and
Disbursement Request shall be signed by an officer of the Trustee.
"Temporary Cash Investment" means any of the following: direct
-------------------------
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof not having a maturity of more than two years from the date of
acquisition, (ii) time deposit accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America or any state thereof, and which bank or trust company
has capital surplus and undivided profits aggregating in excess of $50 million
and has outstanding debt which is rated "A" (or such similar equivalent rating)
or higher by at least one nationally recognized statistical rating organizing
(as defined in Rule 436 under the Securities Act of 1933) or any money-market
fund sponsored by a registered broker dealer or mutual fund distributor, (iii)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (ii) above entered into with a bank
meeting the qualifications described in clause (ii) above, (iv) commercial paper
maturing not more than 90 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company) organized and in existence
under the laws of the United States of America or any state thereof with a
rating at the time as of which any investment therein is made of "P-1" (or
higher) according to Moody's Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Ratings Services, and (v) securities with
maturities of six months or less from the date of acquisition issued or fully
and unconditionally guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority
thereof and rated at least "A" by Standard & Poor's Ratings Services or Moody's
Investors Service, Inc.
2. Escrow Account; Escrow Agent.
----------------------------
(a) Appointment of Escrow Agent. The Trustee hereby appoint the
---------------------------
Escrow Agent, and the Escrow Agent hereby accepts appointment, as escrow agent,
under
3
<PAGE>
the terms and conditions of this Agreement. The Company hereby consents to such
appointment.
(b) Establishment of Escrow Account. Concurrent with the execution
-------------------------------
and delivery hereof, the Escrow Agent shall establish the Escrow Account
designated "Escrow Account pledged by Omnipoint Corporation to Marine Midland
Bank, as Trustee" at its office located at 450 West 33rd Street, New York, New
York 10001. All funds accepted by the Escrow Agent pursuant to this Agreement
shall be held for the exclusive benefit of the Trustee, for the ratable benefit
of the holders of the Notes. All such funds shall be held in the Escrow
Account until disbursed in accordance with the terms hereof. The Escrow Account,
the funds held therein and any Temporary Cash Investments held by the Escrow
Agent shall be under the sole dominion and control of the Escrow Agent for the
benefit of the Trustee for the ratable benefit of holders of the Notes, and all
such funds and Temporary Cash Investments shall be held by the Escrow Agent
separate and apart from all other funds of or held by the Escrow Agent.
Concurrently with the execution and delivery hereof, the Company shall deliver
the Initial Escrow Amount to the Escrow Agent for deposit into the Escrow
Account against the Escrow Agent's written acknowledgement and receipt of the
Initial Escrow Amount.
(c) Escrow Agent Compensation. The Company shall pay to the Escrow
-------------------------
Agent such compensation for services to be performed by it under this Agreement
as the Company and the Escrow Agent may agree in writing from time to time. The
Escrow Agent shall be paid any compensation owed to it directly by the Company
in accordance with such agreement(s) between the Company and the Escrow Agent
and shall not disburse from the Escrow Account any such amounts (except to the
extent that the Company is entitled to such amounts under this Agreement and the
Company directs in writing the payment of any such amount to the Escrow Agent).
The Company shall reimburse the Escrow Agent upon request for all
reasonable and actual out-of-pocket expenses, disbursements, and advances
incurred or made by the Escrow Agent in implementing any of the provisions of
this Agreement, including compensation and the reasonable expenses and
disbursements of its counsel. The Escrow Agent shall be paid any such expenses
owed to it directly
4
<PAGE>
by the Company in accordance with such agreement(s) between the Company and the
Escrow Agent and shall not disburse from the Escrow Account any such amounts
(except to the extent that the Company is entitled to such amounts under this
Agreement and the Company directs in writing the payment of any such amount to
the Escrow Agent).
(d) Investment of Funds in Escrow Account. Funds deposited in the
-------------------------------------
Escrow Account shall be invested and reinvested only upon the following terms
and conditions:
(i) Acceptable Investments. All funds deposited or held in the
----------------------
Escrow Account at any time shall be invested by the Escrow Agent in
Temporary Cash Investments in accordance with the Company's written
instructions from time to time to the Escrow Agent; provided, however,
-------- -------
that the Company shall only designate Temporary Cash Investments generating
interest income which the Company reasonably determines at such times is
sufficient to, when added to the Escrow Account, provide for the payment of
interest on the outstanding Notes on each Interest Payment Date beginning
on and including February 15, 1997, and through and including the Interest
Payment Date on August 15, 1998; provided, further, however, that any such
-------- ------- -------
written instruction shall specify the particular investment to be made,
shall state that such investment is authorized to be made hereby and in
particular satisfies the requirements of the preceding proviso, shall
contain the certification referred to in Section 2(d)(ii), if required,
and shall be executed by any officer of the Company, provided, further,
-------- -------
however, that in no event shall the Escrow Agent have an independent
-------
obligation to invest the funds deposited or held in the Escrow Account at
any time absent written instructions from the Company. All Temporary Cash
Investments shall be assigned to and held in the possession of, or, in the
case of Temporary Cash Investments maintained in book entry form with the
Federal Reserve Bank, transferred to a book entry account in the name of,
the Escrow
5
<PAGE>
Agent, for the ratable benefit of the Trustee for the benefit of the
holders of the Notes, with such guarantees as are customary, except that
Temporary Cash Investments maintained in book entry form with the Federal
Reserve Bank shall be transferred to a book entry account in the name of
the Escrow Agent at the Federal Reserve Bank that includes only Temporary
Cash Investments held by the Escrow Agent for its customers and segregated
by separate recordation in the books and records of the Escrow Agent.
(ii) Security Interest in Investments. No investment of funds
--------------------------------
in the Escrow Account shall be made unless the Company has certified to
the Escrow Agent and the Trustee that, upon such investment, the Trustee
will have a first priority perfected security interest in the applicable
investment. A certificate as to a class of investments need not be issued
with respect to individual investments in securities in that class if the
certificate applicable to the class remains accurate with respect to such
individual investments, which continued accuracy the Escrow Agent may
conclusively assume. On the Issue Date, and on each August 1 thereafter
until the date upon which the balance of the Available Funds shall have
been reduced to zero, each of the Trustee and the Escrow Agent shall
receive an Opinion of Counsel (as such term is defined in the Indenture) to
the Company, dated each such date as applicable, which opinion shall meet
the requirements of Section 314(b) of the Trust Indenture Act of 1939, as
amended (the "TIA").
---
(iii) Interest and Dividends. All interest earned and dividends
----------------------
paid on funds invested in Temporary Cash Investments shall be deposited in
the Escrow Account as additional Collateral for the exclusive benefit of
the Trustee for the ratable benefit of the holders of the Notes and shall
be reinvested in accordance with the terms hereof at the Company's
6
<PAGE>
written instruction and subject to disbursement as provided herein.
(iv) Limitation on Escrow Agent's Responsibilities. The Escrow
---------------------------------------------
Agent's sole responsibilities under this Section 2 shall be (A) to retain
possession of certificated Temporary Cash Investments (except, however,
that Escrow Agent may surrender possession to the issuer of any such
security for the purpose of effecting assignment, crediting interest, or
reinvesting such security or reducing such security to cash) and to be the
registered or designated owner of Temporary Cash Investments which are not
certificated, (B) to follow the Company's written in structions given in
accordance with Section 2(d)(i), (C) to invest and reinvest funds pursuant
to this Section 2(d) and (D) to use reasonable efforts to reduce to cash
such Temporary Cash Investments as may be required to fund any
disbursement or payment in accordance with Section 3. In connection with
clause (A) above, the Escrow Agent will maintain continuous possession in
the State of New York of certificated Temporary Cash Investments and cash
included in the Collateral and will cause uncertificated Temporary Cash
Investments to be registered in the book-entry system of, and transferred
to an account of the Escrow Agent or a sub-agent of the Escrow Agent at,
the Federal Reserve Bank of New York. Except as provided in Section 6, the
Escrow Agent shall have no other responsibilities with respect to
perfecting or maintaining the perfection of the Trustee's security interest
in the Collateral and shall not be required to file any instrument,
document or notice in any public office at any time or times, and (E) to
keep accurate and detailed records of all investments, receipts,
disbursements and other transactions involving the Escrow Account. In
connection with clause (D) above the Escrow Agent shall not be required to
reduce to cash any Temporary Cash Investments to fund any disbursement or
payment in accordance with Section 3 in the absence of written instructions
signed by an
7
<PAGE>
officer of the Company specifying the particular investment to liquidate.
If no such written instructions are received, the Escrow Agent shall
liquidate those Temporary Cash Investments having the lowest interest rate
per annum, regardless of maturity, or if none such exist, those having the
nearest maturity.
(v) Manner of Investment. Funds deposited in the Escrow Account
--------------------
shall initially be invested in a manner such that the Company reasonably
determines at such time that there will be sufficient funds available
without any further investment by the Company to cover all interest due on
the outstanding Notes, as such interest becomes due, for each Interest
Payment Date occurring from the Issue Date and ending on (and including)
August 15, 1998. The Escrow Agent shall have no responsibility for
determining whether funds held in the Escrow Account shall have been
invested in such a manner so as to comply with the requirements of this
clause (v).
(e) Substitution of Escrow Agent. The Escrow Agent may resign by
----------------------------
giving no less than 30 days' prior written notice to the Company and the
Trustee. Such resignation shall take effect upon the later to occur of (i)
delivery of all funds and Temporary Cash -- Investments maintained by the Escrow
Agent hereunder and copies of all books, records, plans and other documents in
the Escrow Agent's possession relating to such funds or Temporary Cash
Investments or this Agreement to a successor escrow agent mutually approved by
the Company and the Trustee (which approvals shall not be unreasonably withheld,
delayed or conditioned) and (ii) the Company, the Trustee and such successor
escrow agent entering into this Agreement or any written successor agreement no
less favorable to the interests of the holders of the Notes and the Trustee than
this Agreement; and the Escrow Agent shall thereupon be discharged of all
obligations under this Agreement and shall have no further duties, obligations
or responsibilities in connection herewith, except as set forth in Section 4.
If a successor escrow agent has not been appointed or has not accepted such
appointment within 30 days after notice of resignation is given to the Company,
the Escrow Agent may
8
<PAGE>
apply to a court of competent jurisdiction for the appointment of a successor
escrow agent.
(f) Escrow Account Statement. At least 30 days prior to each
------------------------
Interest Payment Date, the Escrow Agent shall deliver to the Company and the
Trustee a statement setting forth with reasonable particularity the Collateral
then held by the Escrow Agent, including the balance of funds then in the Escrow
Account, and the manner in which such funds are invested (the "Escrow Account
--------------
Statement"). The books and records of the Escrow Agent with respect to the
- ---------
Escrow Account shall be open to inspection and audit at reasonable times during
reasonable business hours by the Trustee and the Company or their respective
representatives. The parties hereto irrevocably instruct the Escrow Agent that
on the first date upon which the balance in the Escrow Account (including the
holdings of all Temporary Cash Investments) is reduced to zero, the Escrow Agent
shall deliver to the Company and to the Trustee a notice that the balance in the
Escrow Account has been reduced to zero.
3. Disbursements.
-------------
(a) Payment Notice and Disbursement Request; Disbursements. After
------------------------------------------------------
an Interest Payment Date, the Trustee shall within five days of receipt by the
Trustee of the amount described in clause (i) of this sentence or an Officers'
Certificate as required in clause (ii) of this sentence, submit to the Escrow
Agent a completed Payment Notice and Disbursement Request substantially in the
form of Exhibit A hereto; provided, (i) the Company has disbursed and the
--------
Trustee has received funds from the Company in an amount equal to the interest
owed on the Notes under the Indenture for payment of such interest on such
Interest Payment Date or (ii) the Trustee has received an Officers' Certificate
(as defined in the Indenture) from the Company that the Company has disbursed
funds in the amount and manner set forth in clause (i) of this sentence.
The Escrow Agent's disbursement pursuant to any Payment Notice and
Disbursement Request shall be subject to the satisfaction of the applicable
conditions set forth in Section 3(b). The Escrow Agent, within three (3)
Business Days after receipt of such Payment Notice and Disbursement Request,
subject to the conditions
9
<PAGE>
described in Section 3(b), shall disburse the funds requested in such Payment
Notice and Disbursement Request by wire or book-entry transfer of immediately
available funds to the account of the Company. The Escrow Agent shall notify
the Trustee and the Company as soon as reasonably possible (but not later than
two (2) Business Days from the date of receipt of the Payment Notice and
Disbursement Request) if any Payment Notice and Disbursement Request is
rejected and the reason(s) therefor. In the event such rejection is based upon
nonsatisfaction of the condition in Section 3(b)(i) below, the Trustee shall
thereupon resubmit the Payment Notice and Disbursement Request with appropriate
changes.
(b) Conditions Precedent to Disbursement. The Escrow Agent's payment
------------------------------------
of any disbursement shall be made only if (i) the Trustee shall have submitted,
in accordance with the provisions of Section 3(a) herein, a completed Payment
Notice and Disbursement Request to the Escrow Agent substantially in the form of
Exhibit A with blanks appropriately filled in and (ii) at any time prior to the
requested disbursement, the Escrow Agent shall not have received any notice from
the Trustee that as a result of an Event of Default (as defined in the Inden-
ture) the indebtedness represented by the Notes has been accelerated and has
become due and payable (in which event the Escrow Agent shall apply all
Available Funds as required by Section 6(b)(iii)).
(c) Retired Notes. In the event a portion of the Notes has been
-------------
retired by the Company and submitted to the Trustee for cancellation and there
is no Default or Event of Default under the Indenture, funds representing the
lesser of (A) the excess of the amount sufficient to pay interest through and
including August 15, 1998 on the Notes not so retired and (B) the interest
payments which have not previously been made on such retired Notes for each
Interest Payment Date through the Interest Payment Date to occur on August 15,
1998 shall, upon written request of the Company to the Escrow Agent and the
Trustee, be paid to the Company upon compliance with the release of collateral
provisions of the TIA and upon receipt by the Escrow Agent of a notice relating
thereto from the Trustee.
10
<PAGE>
4. Escrow Agent.
------------
(a) Limitation of the Escrow Agent's Liability; Responsibilities of
---------------------------------------------------------------
the Escrow Agent. The Escrow Agent's responsibility and liability under this
- ----------------
Agreement shall be limited as follows: (i) the Escrow Agent does not represent,
warrant or guaranty to the holders of the Notes from time to time the
performance of the Company or the Trustee; (ii) the Escrow Agent shall have no
responsibility to the Company or the holders of the Notes or the Trustee from
time to time as a consequence of performance or nonperformance by the Escrow
Agent hereunder, except for any gross negligence or willful misconduct of the
Escrow Agent; (iii) the Company shall remain solely responsible for all aspects
of the Company's business and conduct; and (iv) the Escrow Agent is not
obligated to supervise, inspect or inform the Company or any third party of any
matter referred to above.
No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or liquidation, in
good faith and in accordance with the terms hereof, of any funds or Temporary
Cash Investments held by it hereunder, including without limitation any
liability for any delay not resulting from gross negligence or willful
misconduct in such investment, reinvestment or liquidation, or for any loss of
principal or income incident to any such delay.
The Escrow Agent shall be entitled to rely upon any judicial order or
judgment, upon any written opinion of counsel or upon any certification,
instruction, notice, or other writing delivered to it by the Company or the
Trustee in compliance with the provisions of this Agreement without being
required to determine the authenticity or the correctness of any fact stated
therein or the propriety or validity of service thereof. The Escrow Agent may
act in reliance upon any instrument comporting with the provisions of this
Agreement or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make
11
<PAGE>
any statement or execute any document in connection with the provisions hereof
has been duly authorized to do so.
The Escrow Agent may act pursuant to the written advice of counsel
chosen by it with respect to any matter relating to this Agreement and (subject
to Section 4(a)(ii)) shall not be liable for any action taken or omitted in
accordance with such advice.
The Escrow Agent shall not be called upon to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds or property deposited hereunder, the Escrow Agent shall be
entitled to refuse to comply with any and all claims, demands or instructions
with respect to such funds or property, and the Escrow Agent shall not be or
become liable for its failure or refusal to comply with conflicting claims,
demands or instructions. The Escrow Agent shall be entitled to refuse to act
until either any conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting claimants as evidenced in a writing, satisfactory to the
Escrow Agent, or the Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless
from and against any and all loss, liability or expense which the Escrow Agent
may incur by reason of its acting. The Escrow Agent may in addition elect in
its sole option to commence an interpleader action or seek other judicial relief
or orders as the Escrow Agent may deem necessary.
No provision of this Agreement shall require the Escrow Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
5. Indemnity. The Company shall indemnify, hold harmless and defend
---------
the Escrow Agent and its directors, officers, agents, employees and controlling
persons, from and against any and all claims, actions, obligations, liabilities
and expenses, including defense costs, investigative fees and costs, legal fees,
and
12
<PAGE>
claims for damages, arising from the Escrow Agent's performance under this
Agreement, except to the extent that such liability, expense or claim is
attributable to the gross negligence or willful misconduct of the Escrow Agent
or any of the other foregoing persons. Anything in this agreement to the
contrary notwithstanding, in no event shall the Escrow Agent be liable for
special, indirect or consequential loss or damage of any kind whatsoever,
including, but not limited to, lost profits, even if the Escrow Agent has been
advised of the likelihood of such loss or damage and regardless of the form of
action; provided, however, that in no event shall "lost profits" be construed to
-------- -------
include interest or dividends on funds in the Escrow Account (including holdings
of Temporary Cash Investments) not earned due to the gross negligence or
wilful misconduct of the Escrow Agent in its performance of its duties
hereunder. The provisions of this Section shall survive any termination,
satisfaction or discharge of this Agreement as well as the resignation or
removal of the Escrow Agent.
6. Grant of Security Interest; Instructions to Escrow Agent.
--------------------------------------------------------
(a) The Company hereby irrevocably grants a first priority security
interest in and pledges, assigns and sets over to the Trustee for the ratable
benefit of the holders of the Notes all of the Company's right, title and
interest in the Escrow Account, and all property now or hereafter placed or
deposited in, or delivered to the Escrow Agent for placement or deposit in, the
Escrow Account, including, without limitation, all funds held therein, all
Temporary Cash Investments held by (or otherwise maintained in the name of) the
Escrow Agent pursuant to Section 2, and all proceeds thereof as well as all
rights of the Company under this Agreement (collectively, the "Collateral"), in
----------
order to secure all obligations and indebtedness of the Company under the Notes
and any other obligation, now or hereafter arising, of every kind and nature,
owed by the Company under the Indenture to the holders of the Notes or to the
Trustee. The Escrow Agent hereby acknowledges the Trustee's security interest
as set forth above. The Company shall take all actions necessary on its part to
insure the continuance of a first priority security interest in the Collateral
in favor of the Trustee in order to secure all such obligations and
indebtedness.
13
<PAGE>
(b) The Company and the Trustee hereby irrevocably instruct the
Escrow Agent to, and the Escrow Agent shall, (i) (A) maintain sole dominion and
control over the Collateral, including any funds and Temporary Cash Investments
in the Escrow Account, for the benefit of the Trustee to the extent specifically
required herein, (B) maintain, or cause its agent within the State of New York
to maintain, possession of all certificated Temporary Cash Investments purchased
hereunder that are physically possessed by the Escrow Agent in order for the
Trustee to enjoy a continuous perfected first priority security interest therein
under the law of the State of New York (the Company hereby agreeing that in the
event any certificated Temporary Cash Investments are in the possession of the
Company or a third party, the Company shall use its best efforts to deliver all
such certificates to the Escrow Agent or in the case of a third party provide a
custodial letter agreement in form and substance satisfactory to the Company),
(C) take all steps specified in writing by the Company pursuant to paragraph (a)
above to cause the Trustee to enjoy a continuous perfected first priority
security interest under the New York Uniform Commercial Code and any applicable
law of the State of New York in all Temporary Cash Investments purchased
hereunder that are not certificated and (D) maintain the Collateral free and
clear of all liens, security interests, safekeeping or other charges, demands
and claims against the Escrow Agent of any nature now or hereafter existing in
favor of anyone other than the Trustee; (ii) promptly notify the Trustee if the
Escrow Agent receives written notice that any person other than the Trustee has
a lien or security interest upon any portion of the Collateral and (iii) in
addition to disbursing amounts held in escrow pursuant to any Payment Notice
and Disbursement Requests given to it by the Trustee pursuant to Section 3, upon
receipt of written notice from the Trustee of the acceleration of the maturity
of the Notes, and direction from the Trustee to disburse all Available Funds to
the Trustee, as promptly as practicable disburse all funds held in the Escrow
Account to the Trustee and transfer title to all Temporary Cash Investments
held by the Escrow Agent hereunder to the Trustee. The lien and security
interest provided for by this Section 6 shall automatically terminate and cease
as to, and shall not extend or apply to, and the Trustee shall have no security
interest in, any funds disbursed by the Escrow Agent to the Company pursuant to
14
<PAGE>
this Agreement to the extent not inconsistent with the terms hereof.
Notwithstanding any other provision contained in this Agreement, the Escrow
Agent shall act solely as the Trustee's agent in connection with its duties
under this Section 6; provided, however, that the Trustee shall not be liable or
responsible for the acts or omissions of the Escrow Agent. The Escrow Agent
shall not have any right to receive compensation from the Trustee and is without
any authority to obligate the Trustee or to compromise or pledge its security
interest hereunder. Accordingly, the Escrow Agent is hereby di rected to
cooperate with the Trustee in the exercise of its rights in the Collateral
provided for herein.
(c) Any money and Temporary Cash Investments collected by the
Trustee pursuant to Section 6(b)(iii) shall be applied as provided in Section
6.10 of the Indenture.
(d) Upon demand, the Company will execute and deliver to the Trustee
such instruments and documents as the Trustee may reasonably deem necessary or
advisable to confirm or perfect the rights of the Trustee under this Agreement
and the Trustee's interest in the Collateral. The Trustee shall be entitled to
take all necessary action to preserve and protect the security interest created
hereby as a lien and encumbrance upon the Collateral; provided, however, that
absent written direction from the Company, the Trustee shall have no duty or
obligation to take any action pursuant to this subparagraph (d).
(e) The Company hereby appoints the Trustee as its attorney-in-fact
with full power of substitution to do any act which the Company is obligated
hereto to do, except that the Trustee shall not direct the investment of any
monies on deposit in the Escrow Account, and the Trustee may exercise such
rights as the Company might exercise with respect to the Collateral and take any
action in the Company's name to protect the Trustee's security interest
hereunder. In addition to the rights provided under Section 6(b)(iii) hereof,
upon an Event of Default as defined in the Indenture and for so long as such
Event of Default continues, the Trustee may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a
15
<PAGE>
secured party under the New York Uniform Commercial Code or other applicable
law, and the Trustee may also upon obtaining possession of the Collateral as set
forth herein, without notice to the Company except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Trustee's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the
Trustee may deem commercially reasonable. The Company acknowledges and agrees
that any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale. The Company agrees that, to
the extent notice of sale shall be required by law, at least ten (10) days'
notice to the Company of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification.
The Trustee shall not be obligated to make any sale regardless of notice of sale
having been given. The Trustee may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned.
7. Termination. This Agreement shall terminate automatically ten
-----------
(10) days following disbursement of all funds remaining in the Escrow Account
(including the proceeds of any Temporary Cash Investments), unless sooner
terminated by agreement of the parties hereto (in accordance with the terms
hereof, not in violation of the Indenture). The Trustee may not agree to
terminate this Agreement unless it has received the consent of 100% of the
holders of all of the Notes outstanding; provided, however, that the obligations
of the Company under Section 2(c) and Section 5 (and any existing claims
thereunder) shall survive termination of this Agreement or the resignation or
removal of the Escrow Agent; provided, further, however, that until such tenth
day, the Company will cause this Agreement (or any permitted successor
agreement) to remain in effect and will cause there to be an escrow agent
(including any permitted successor thereto) acting hereunder (or under any such
permitted successor agreement).
16
<PAGE>
8. Miscellaneous.
-------------
(a) Waiver. Any party hereto may specifically waive any breach of
------
this Agreement by any other party, but no such waiver shall be deemed to have
been given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of the
----------
provisions of this Agreement shall be held or deemed to be inoperative, unen-
forceable or invalid in a particular case or in all cases, such circumstances
shall not have the effect of rendering any of the other provisions of this
Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties hereto,
----------
and the rights and duties of any party hereunder shall not be assignable except
with the prior written consent of the other parties. Notwithstanding the
foregoing, this Agreement shall inure to and be binding upon the parties and
their successors and permitted assigns.
(d) Benefit. The parties hereto and their successors and permitted
-------
assigns, but no others, shall be bound hereby and entitled to the benefits here
of; provided, however, that the holders of the Notes and their permitted assigns
shall be entitled to the benefits hereof and to enforce this Agreement to the
same extent as the Trustee, subject to the provisions of the Indenture.
(e) Time. Time is of the essence with respect to each provision
----
of this Agreement.
(f) Entire Agreement; Amendments. This Agreement and the Indenture
----------------------------
contain the entire agreement among the parties with respect to the subject
matter hereof and supersede any and all prior agreements, understandings and
commitments, whether oral or written. This Agreement may be amended only in
accordance with Article
17
<PAGE>
IX of the Indenture and further by a writing signed by a duly authorized
representative of each party hereto.
(g) Notices. All notices and other communications required or
-------
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three Business Days
following the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; (c) when transmitted by telecopy with verbal confirmation of receipt by
the telecopy operator to the telecopy number set forth below; or (d) one
business day following the day timely delivered to a next-day air courier
addressed as set forth below, except with respect to the Escrow Agent as to
which notices shall be deemed to have been given on the date received by the
Escrow Agent:
To Escrow Agent:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Escrow Administration
15th Floor
Telecopy: 212-946-8156
To Trustee:
Marine Midland Bank
140 Broadway, 12th Floor
New York, New York 10005
Attention: Corporate Trust Administration
Telecopy: 212-658-6425
Telephone: 212-658-6433
To the Company:
Omnipoint Corporation
2000 N. 14th Street
Arlington, Virginia 22201
Attention: Bradley E. Sparks
18
<PAGE>
Telecopy: (703) 522-7778
Telephone: (703) 522-7747
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience only
--------
and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) Choice of Law; Waiver of Jury Trial. The existence, validity,
-----------------------------------
construction, operation and effect of any and all terms and provisions of this
Agreement shall be determined in accordance with and governed by the laws of
the State of New York, without regard to principles of conflicts of law. The
parties to this Agreement hereby agree that jurisdiction over such parties and
over the subject matter of any action or proceeding arising under this
Agreement may be exercised by a competent Court of the State of New York, or by
a United States Court, sitting in New York City. The Company hereby waives the
right to a trial by jury in any action or proceeding with the Escrow Agent.
(k) Authority of the Company; Valid and Binding Agreement. The
-----------------------------------------------------
Company hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes the legal,
valid and binding obligation of the Company. The execution, delivery and
performance of this Agreement by the Company does not violate any applicable law
or regulation to which the Company is subject and does not require the consent
of any governmental or other regulatory body to which the Company is subject,
except for such consents and approvals as have been obtained and are in full
force and effect.
(l) Authority of the Escrow Agent and the Trustee; Valid and Binding
----------------------------------------------------------------
Agreement. Each of the Escrow Agent and the Trustee hereby represents and
- ---------
warrants that
19
<PAGE>
this Agreement has been duly authorized, executed and delivered on its behalf
and constitutes its legal, valid and binding obligation.
(m) Agent for Service; Submission to Jurisdiction; Waiver of
--------------------------------------------------------
Immunities. By the execution and delivery of this Agreement, the Company (i)
- ----------
hereby irrevocably designates and appoints Bradley E. Sparks (or any
successor), as its authorized agent upon which process may be served in any suit
or proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the State of New York, or brought
under federal or state securities laws, and acknowledges that Bradley E. Sparks
has accepted such designation, (ii) submits to the jurisdiction of any such
court in any such suit or proceeding, and (iii) agrees that service of process
upon Bradley E. Sparks (or any successor) and written notice of said service to
the Company (mailed or delivered to its Chief Financial Officer at the Company's
principal office in Arlington, Virginia), shall be deemed in every respect
effective service of process upon the Company in any such suit or proceeding.
The Company further agrees to take any and all action, including the execution
and filing of any and all such documents and instruments, as may be necessary to
continue such destination and appointment of Bradley E. Sparks (or any
successor) in full force and effect so long as any of the Notes shall be
outstanding.
To the extent that the Company has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, it
hereby irrevocably waives such immunity in respect of its obligations under
this Agreement, to the extent permitted by law.
(n) Taxes. The Company shall provide the Escrow Agent with its Tax
-----
Identification Number (TIN) as assigned by the Internal Revenue Service. All
interest or other income earned under the Escrow Agreement shall be allocated
and paid as provided herein and reported by the recipient to the internal
Revenue Service as having been so allocated and paid.
20
<PAGE>
(o) Reliance on Oral Confirmation. In the event funds transfer
-----------------------------
instructions are given (other than in writing at the time of execution of the
Agreement), whether in writing, by telecopier or otherwise, the Escrow Agent is
authorized to seek confirmation of such instructions by telephone call-back to
the person or persons designated on Schedule 1 hereto, and the Escrow Agent may
rely upon the confirmations of anyone purporting to be the person or persons so
designated. The persons and telephone numbers for call-backs may be changed
only in a writing actually received and acknowledged by the Escrow Agent. The
parties to this Agreement acknowledge that such security procedure is
commercially reasonable.
(p) Reliance on Account Numbers. It is understood that the Escrow
---------------------------
Agent and the beneficiary's bank in any funds transfer may rely solely upon any
account numbers or similar identifying number provided by either of the other
parties hereto to identify (i) the beneficiary, (ii) the beneficiary's bank, or
(iii) an intermediary bank. The Escrow Agent may apply any of the escrowed
funds for any payment order it executes using any such identifying number, even
where its use may result in a person other than the beneficiary being paid, or
the transfer of funds to a bank other than the beneficiary's bank, or an
intermediary bank designated.
(q) Successor to Parties. Any corporation into which the Escrow
--------------------
Agent or the Trustee in their respective individual capacities may be merged or
converted or with which they may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent or the
Trustee in their respective individual capacities shall be a party, or any
corporation to which substantially all the corporate trust business of the
Escrow Agent or the Trustee in their respective individual capacities may be
transferred, shall be the Escrow Agent or Trustee, as the case may be, under
this Escrow Agreement without further act.
(r) Other Business with Escrow Agent. Nothing contained herein shall
--------------------------------
be deemed to prohibit the Company from conducting other business with the Escrow
Agent.
21
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this
Escrow Agreement as of the day first above written.
ESCROW AGENT: THE CHASE MANHATTAN BANK, as
Escrow Agent
By:
-----------------------------------
Name:
Title:
TRUSTEE: MARINE MIDLAND BANK, as Trustee
By:
-----------------------------------
Name:
Title:
COMPANY: OMNIPOINT CORPORATION
By:
-----------------------------------
Name:
Title:
22
<PAGE>
Schedule 1
Telephone Number(s) for Call-Backs and Person(s)
Designated to Confirm Funds Transfer Instructions
-------------------------------------------------
If to Company:
Name Telephone Number
---- ----------------
1. Bradley E. Sparks (703) 522-7533
2. Douglas Smith (703) 524-2172
If to the Trustee:
Name Telephone Number
---- ----------------
1. Frank Godino (212) 658-6433
2. James D. Nesci (212) 658-1149
3. Charles E. Bauer (212) 658-1792
Telephone call-backs shall be made to each Company and Trustee if joint
instructions are required pursuant to the Agreement.
<PAGE>
EXHIBIT A
Form of Payment Notice and Disbursement Request
[Letterhead of the Trustee]
[Date]
[Escrow Agent]
[Address]
Attention: [ ]
Re: Disbursement Request No.
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Escrow Agreement, dated as of August 27, 1996 (the
"Escrow Agreement") among you (the "Escrow Agent"), the undersigned as Trustee,
and Omnipoint Corporation, a Delaware corporation (the "Company"). Capitalized
terms used herein shall have the meaning given in the Escrow Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Escrow Agreement.
[Choose one of the following, as applicable]
[The undersigned hereby notifies you that a scheduled interest payment
in the amount of $______ has been made by the Company on _____________, 199__
and requests a disbursement of funds contained in the Escrow Account in such
amount to the Company pursuant to Section 3 (a) of the Escrow Agreement (to an
account designated by the Company in writing).]
[The undersigned hereby notifies you that Notes equaling $___________
in aggregate principal amount have been retired and authorizes you to release
$_________ of funds in the Escrow Account to the Company (to an account
designated by the Company in writing), which amount represents the amount
permitted to be released in accordance with Section 3(c) of the Escrow
Agreement.]
[In accordance with Section 6(b)(iii) of the Escrow Agreement, the
undersigned hereby notifies you
<PAGE>
that there has been an acceleration of the maturity of the Notes. Accordingly,
you are hereby requested to disburse all remaining funds contained in the
Escrow Account to the Trustee such that the balance in the Escrow Account is
reduced to zero.]
In connection with the requested disbursement, the undersigned hereby
notifies you that:
1. [The Notes have not, as a result of an Event of Default (as
defined in the Indenture), been accelerated and become due and payable.]
2. All prior disbursements to the Trustee from the Escrow Account
have been applied.
3. [add Wire instructions for payment to Trustee.]
The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
MARINE MIDLAND BANK, as Trustee
By:
-------------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 99.1
[LETTERHEAD OF OMNIPOINT CORPORATION APPEARS HERE]
FOR IMMEDIATE RELEASE CONTACT:
Bradley E. Sparks
Chief Financial Officer
Omnipoint Corporation
(703) 522-7778
August 22, 1996
OMNIPOINT CORPORATION TO SELL $250 MILLION OF SENIOR NOTES
Arlington, virginia, August 22, 1996 -- Omnipoint Corporation (NASDAQ: OMPT)
----
announced today the offering and pricing of $250 million (gross proceeds) of
11 5/8% Senior Notes due August 15, 2006 in a private placement under rule 144A.
The settlement date has been set for August 27, 1996. The Senior Notes have not
been registered under the Securities Act of 1933 and may not be offered or sold
in the United States absent registration or applicable exemption from
registration requirements.
Funds available to the company after deducting two years of interest payments
escrowed, discounts and commissions, and offering expenses will be approximately
$187.7 million. The net proceeds will be used for working capital and for
general corporate purposes, including payments for licenses awarded, if any,
through participation in the D, E, and F block PCS auctions.
This press release may contain forward-looking information within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and is subject to the safe harbor created by those
sections. Omnipoint assumes no obligation to update the information contained in
this press release. Omnipoint's future results may be impacted by risk factors
listed from time to time in Omnipoint's SEC reports, including but not limited
to the report on Form 10-Q for the quarter ended June 30, 1996, as amended and
the Registration Statement on Form S-1 filed on May 14, 1996, as amended.
