<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1999 COMMISSION FILE NUMBER: 0-27442
OMNIPOINT CORPORATION
THREE BETHESDA METRO CENTER, SUITE 400
BETHESDA, MD 20814
(301) 951-2500
DELAWARE 04-2969720
-------- ----------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each Exchange
Title of Each Class: on which Registered:
-------------------- --------------------
COMMON STOCK, PAR VALUE NASDAQ NATIONAL MARKET
$0.01 PER SHARE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
NONE
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Shares of common stock outstanding as of November 9, 1999 were 53,938,288.
<PAGE>
Form 10-Q
Omnipoint Corporation and Subsidiaries
Table of Contents
<TABLE>
<CAPTION>
Page No.
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<S> <C>
Part I. FINANCIAL INFORMATION (Unaudited):
Condensed Consolidated Balance Sheets -
September 30, 1999 and December 31, 1998 2
Condensed Consolidated Statements of Operations -
Three and Nine Months Ended September 30, 1999 and
September 30, 1998 3
Condensed Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1999 and September 30, 1998 4
Condensed Consolidated Statements of Stockholders' Equity (Deficit) -
Nine Months Ended September 30, 1999 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis of Results of Operations
and Financial Condition 11
Part II. OTHER INFORMATION AND SIGNATURE 18
</TABLE>
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<PAGE>
PART I. FINANCIAL INFORMATION
OMNIPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(unaudited)
------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 251,302 $ 194,732
Short term investments 117,889 43,571
Accounts receivable, net of allowances of $19,849 and $12,094 as of
September 30, 1999 and December 31, 1998, respectively 64,089 38,065
Inventory 49,593 29,729
Prepaid expenses and other current assets 15,540 22,057
------------------------------
Total current assets 498,413 328,154
Fixed assets, at cost
Network infrastructure equipment in-service 1,048,786 907,649
Construction in progress 187,096 163,410
Other fixed assets 115,444 110,473
Accumulated depreciation (269,251) (150,357)
------------------------------
Fixed assets, net 1,082,075 1,031,175
FCC licensing costs, net of accumulated amortization of $54,752 and
$42,824 as of September 30, 1999 and December 31, 1998, respectively 647,105 645,408
Deferred financing costs and other intangible assets, net of accumulated amortization
of $12,128 and $7,455 as of September 30, 1999 and December 31, 1998, respectively 51,106 44,959
Investments in affiliates and joint ventures 999 3,506
FCC deposits 6,197 --
Other long term assets 26,492 13,402
------------------------------
Total assets $ 2,312,387 $ 2,066,604
==============================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses $ 228,776 $ 182,941
Accrued interest payable 34,919 48,313
FCC license obligations 126,152 116,076
Loans payable under financing agreements 15,420 13,731
Deferred revenue and other current liabilities 13,428 8,393
------------------------------
Total current liabilities 418,695 369,454
Deferred revenue and other credits 6,549 --
Loans payable under financing agreements 1,658,928 1,350,613
Senior notes 812,934 603,896
FCC license obligations 237,837 328,661
Commitments and contingencies
Stockholders' equity (deficit):
7% Cumulative Convertible Preferred Stock, par value $0.01 per share;
10,000,000 shares authorized, 325,000 shares issued and outstanding
as of September 30, 1999 and December 31, 1998 291,880 276,191
Series A Non-Voting Convertible Preferred Stock, par value $0.01 per share; 12,500
shares authorized, 10,521 shares issued and outstanding as of September 30, 1999 252,504 --
Common stock, par value, $0.01 per share; 200,000,000 shares authorized,
53,758,507 and 53,082,360 shares issued and outstanding as of
September 30, 1999 and December 31, 1998, respectively 537 531
Additional paid-in capital 310,816 315,762
Accumulated deficit (1,665,786) (1,171,220)
Unearned compensation and notes receivable (12,507) (7,284)
------------------------------
Total stockholders' equity (deficit) (822,556) (586,020)
------------------------------
Total liabilities and stockholders' equity (deficit) $ 2,312,387 $ 2,066,604
==============================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE>
OMNIPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- -----------------------------
1999 1998 1999 1998
------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Revenues:
Service revenues, net $ 95,847 $ 35,043 $ 226,061 $ 98,042
Handset and accessories revenues, net 13,757 6,409 40,595 17,119
License fees and engineering services 255 703 2,521 3,251
------------- ------------- ------------ --------------
Total revenues 109,859 42,155 269,177 118,412
Operating costs and expenses:
Cost of service revenues and operations 37,885 29,372 110,712 89,589
Cost of handset and accessories revenues 36,781 17,012 114,286 69,401
Cost of engineering services 145 460 1,831 2,818
Research and development, net 1,848 4,327 2,019 13,724
Sales, general and administrative 90,543 69,868 239,857 172,563
Depreciation and amortization 49,894 33,654 143,360 85,169
------------- ------------- ------------ --------------
Total operating costs and expenses 217,096 154,693 612,065 433,264
Loss from operations (107,237) (112,538) (342,888) (314,852)
Other income (expense):
Equity in losses of joint ventures (1,711) (2,350) (4,718) (6,547)
Interest income 3,429 2,113 7,848 9,327
Interest expense (66,149) (44,428) (192,639) (136,660)
Gain on sale of subsidiary stock 37,120 -- 37,120 --
Other income (expense), net 306 170 711 (2,320)
------------- ------------- ------------ --------------
Loss before extraordinary item (134,242) (157,033) (494,566) (451,052)
Extraordinary loss on return of C Block licenses -- -- -- (11,115)
------------- ------------- ------------ --------------
Net loss $(134,242) $(157,033) $(494,566) $(462,167)
Accretion of 7% Cumulative Convertible Preferred Stock (5,230) (5,230) (15,688) (8,716)
------------- ------------- ------------ --------------
Net loss attributable to common stockholders $(139,472) $(162,263) $(510,254) $(470,883)
============= ============= ============ ==============
Basic and diluted loss per common share:
Loss per common share before extraordinary item $ (2.60) $ (3.08) $ (9.57) $ (8.75)
Loss per common share on extraordinary item -- -- -- (0.21)
------------- ------------- ------------ --------------
Net loss per common share - basic and diluted $ (2.60) $ (3.08) $ (9.57) $ (8.96)
============= ============= ============ ==============
Weighted average common shares outstanding - basic and diluted 53,590 52,747 53,308 52,571
============= ============= ============ ==============
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE>
OMNIPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1999 1998
------------- ------------
<S> <C> <C>
Cash flows used in operating activities:
Net loss $(494,566) $(462,167)
Extraordinary loss on return of C Block licenses -- 11,115
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on sale of subsidiary stock (37,120) --
Depreciation and amortization 143,360 85,169
Accrued interest and payment of in kind interest on financing agreements 14,126 (4,559)
Losses on investments in joint ventures 3,006 6,547
Interest income associated with restricted cash -- (1,084)
(Purchases)/Sales of trading securities, net (74,319) 14,742
Interest expense associated with amortization of discount, premium and issuance
costs 6,305 --
Other 2,503 1,655
Changes in operating accounts:
Accounts receivable, net (26,048) (15,096)
Prepaid expenses and other assets 7,390 (15,889)
Inventory (19,864) 5,310
Accounts payable and accrued expenses 47,011 29,444
Deferred revenue and other liabilities 9,182 2,317
------------- ------------
Net cash used in operating activities (419,034) (342,496)
Cash flows used in investing activities:
Purchase of fixed assets (143,848) (326,410)
Purchase of FCC licenses (14,086) (13,000)
Return of FCC licenses -- 31,094
Capitalized interest on C and F Block licenses -- (6,285)
Proceeds from held to maturity investments and restricted cash -- 52,314
Investment in joint ventures 461 (9,497)
Deferred revenue and other credits 3,976 --
Proceeds from sale and advances of subsidiaries stock 52,092 --
Other long term assets (13,967) --
FCC deposit (6,197) --
------------- ------------
Net cash used in investing activities (121,569) (271,784)
Cash flows from financing activities:
Proceeds from issuance of 7% Convertible Preferred Stock, net -- 252,222
Proceeds from issuance of Series A Non-Voting Convertible Preferred Stock, net 248,510 --
Proceeds from issuance of common stock 7,017 2,977
Proceeds from vendor financing agreements 90,760 109,534
Payment of vendor financing agreements (1,732) (14,484)
Payment on FCC licenses obligation (83,836) (52,508)
Payment of deferred financing costs (7,110) (19,937)
Proceeds from OCI financing arrangements 149,850 425,000
Payments on OCI financing arrangements (5,625) (3,750)
Proceeds from issuance of 11 1/2% Senior Notes, net 199,375 --
Other (36) (46)
------------- ------------
Net cash provided by financing activities 597,173 699,008
Net increase in cash and cash equivalents 56,570 84,728
Cash and cash equivalents at beginning of the period 194,732 63,581
------------- ------------
Cash and cash equivalents at end of period $251,302 $148,309
============= ============
Non-cash investing and financing activities:
Purchases of Urban Wireless' customer base $ -- $ 4,232
Purchases of network fixed assets with vendor financing 49,480 121,016
Refinancing of interim credit facility -- 350,000
Proceeds from financing agreement used to pay origination fee 3,710 --
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
-4-
<PAGE>
OMNIPOINT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For The Nine Months Ended September 30, 1999
(Unaudited, in thousands, except share data)
<TABLE>
<CAPTION>
7% Cumulative Series A Unearned Total
Additional Convertible Non-Voting Compensation Stockholders'
Common Stock Paid-In Preferred Preferred Accumulated and Notes Equity
Shares Amount Capital Stock Stock Deficit Receivable (Deficit)
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 53,082,360 $531 $315,762 $276,191 $ -- $(1,171,220) $ (7,284) $(586,020)
Exercise of stock options 450,771 4 4,603 -- -- -- -- 4,607
Sale of common stock under
Employee Stock
Purchase Plan 102,099 1 867 -- -- -- -- 868
Issuance of options in
form of advanced
compensation -- -- 9,921 -- -- -- (9,921) --
Issuance of common stock
for employee 401(k)
matching 123,277 1 1,540 -- -- -- -- 1,541
Issuance of Series A
Non-Voting Preferred Stock -- -- (3,994) -- 252,504 -- -- 248,510
Accretion of 7% Cumulative
Convertible Preferred Stock -- -- (15,688) 15,688 -- -- -- --
Amortization of unearned
compensation -- -- -- -- -- -- 2,753 2,753
Cancellation of unearned
compensation -- -- (2,195) -- -- -- 2,051 (144)
Interest on employee notes
receivable -- -- -- -- -- -- (106) (106)
Net loss -- -- -- -- -- (494,566) -- (494,566)
-------------------------------------------------------------------------------------------------------
Balance,
September 30, 1999 53,758,507 $537 $310,816 $291,880 $252,504 $(1,665,786) $(12,507) $(822,556)
=======================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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<PAGE>
OMNIPOINT CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL:
The accompanying condensed consolidated financial statements of Omnipoint
Corporation and subsidiaries (the "Company" or "Omnipoint") have been prepared
by the Company without audit pursuant to the rules and regulations of the
Securities and Exchange Commission (the "SEC"). However, such information
includes all adjustments (including all normal recurring adjustments) which, in
the opinion of management, are considered necessary for a fair presentation of
the consolidated results for those periods. The results of operations for the
periods ended September 30, 1999 and September 30, 1998 are not necessarily
indicative of the results of operations that may be expected for the complete
fiscal year. Certain information and footnote disclosures normally included in
financial statements presented in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the SEC. The Company believes the disclosures made are adequate to make the
information presented not misleading. However, the condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's annual report
on Form 10-K for the year ended December 31, 1998.
In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments necessary to present
fairly the financial position of the Company as of September 30, 1999 and
December 31, 1998, and the results of operations for the three and nine months
ended and cash flows for the nine months ended September 30, 1999 and September
30, 1998, and stockholders' equity (deficit) for the nine months ended September
30, 1999. Interim results are not necessarily indicative of fiscal year
performance because of the impact of seasonal or short-term variations.
Certain prior period amounts have been reclassified to conform to current
presentation.
2. MERGER:
On June 23, 1999, the Company, VoiceStream Wireless Corporation, a
Washington corporation ("VoiceStream") and VoiceStream Wireless Holding
Corporation, a Delaware corporation ("VHC"), entered into an Agreement and Plan
of Reorganization (the "Reorganization Agreement"). Pursuant to the
Reorganization Agreement, the Company will be merged with and into a newly
formed, wholly owned subsidiary of VHC (the "Merger"). At the effective time of
the Merger, each outstanding share of Omnipoint common stock will be exchanged
for the right to receive 0.825 shares of VoiceStream Common Stock plus $8.00 in
cash. There will be a cash or stock election option available to the Company's
shareholders subject to proration. The Merger is subject to shareholder
approval as well as federal, state and other regulatory approvals.
In connection with the execution of the Reorganization Agreement, the
Company entered into an agreement (the "Purchase Agreement") with VoiceStream
and Hutchison Telecommunications PCS (USA) Limited, a British Virgin Islands
company ("Hutchison") on June 23, 1999. The Purchase Agreement provided for the
sale to VoiceStream and Hutchison of a total of $300 million of the Company's
Series A Non-Voting Convertible Preferred Stock (the "Non-Voting Preferred
Stock"). On June 24, 1999, the Company sold 4,271 shares of its Non-Voting
Preferred Stock to each of VoiceStream and Hutchison for an aggregate purchase
price of approximately $205 million. The Purchase Agreement provided for the
remaining $95 million to be invested by VoiceStream and Hutchison in exchange
for additional shares of the Company's Non-Voting Preferred Stock. The Company
received the remaining portion of this investment from Hutchison and VoiceStream
on September 30, 1999 and October 1, 1999, respectively. Each investor purchased
an additional 1,979 shares of the Non-Voting Preferred Stock for an aggregate
purchase price of approximately $95 million, which is convertible at the option
of these investors into shares of Omnipoint common stock at a price of $24.00
per share.
3. LOSS PER COMMON SHARE:
The Company computes basic and diluted earnings per share in accordance
with Financial Accounting Standard No. 128, "Earnings per Share," ("SFAS 128").
Since the Company is in a loss position, both basic and diluted earnings per
share are the same amount. Options and warrants to purchase 9,893,355 and
9,279,989 shares of common stock outstanding as of September 30, 1999 and 1998,
respectively, have been excluded from the calculation of diluted net loss per
share as the effect of their inclusion would have been anti-dilutive. The
Company's 325,000 shares of 7% Cumulative Convertible Preferred Stock
(convertible into 10,445,123 shares of common stock) and Series A Non-Voting
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<PAGE>
Preferred Stock (convertible into 10,521,000 shares of common stock) have also
been excluded from the calculation of diluted net loss per share as the effect
of their inclusion would have been anti-dilutive.
4. INVENTORY:
Inventory consists of the following (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(unaudited)
<S> <C> <C>
GSM Handsets $43,692 $25,596
Accessories and SIM Cards 5,901 4,133
------- -------
$49,593 $29,729
======= =======
</TABLE>
5. FCC LICENSE RE-AUCTION:
In March 1999, the Company, through a wholly owned subsidiary, made a $41
million deposit with the FCC to participate in the FCC's Auction 22. This
deposit was partially financed by a transaction with a financial institution.
The auction commenced on March 23, 1999 and ended on April 15, 1999. At the
conclusion of the auction, the Company was the high bidder on 34 PCS licenses
that covered a total of 18.9 million POPs at a cost of $45.1 million, or $2.39
per POP.
In May 1999, the Company made a payment of $9.0 million utilizing the $41
million deposit with the FCC. The remaining amount of the deposit was refunded
to the Company and the financing was paid off in full. In June 1999, the
Company made a payment of $11.3 million for 23 licenses. The deposit for the
remaining 11 licenses of $6.2 million is reflected as FCC deposits at September
30, 1999 pending their issuance. In October 1999, the Company paid the $24.8
million balance due for the remaining 11 licenses, and the licenses were issued.
6. JOINT VENTURE INTERESTS:
On August 3, 1999, Omnipoint Technologies, Inc. ("OTI") and the Siemens
Information and Communication Networks Group ("Siemens") announced the formation
of a joint venture to develop wireless IP-based solutions to integrate mobile
radio and Internet technology. In anticipation of this transaction, OTI
contributed the assets and liabilities of its Wireless IP Networks division into
a wholly owned subsidiary, Omnipoint Technologies III, Inc. ("OTI3"). On August
2, 1999, Siemens and OTI executed a Stock Purchase Agreement, whereby Siemens
purchased a majority interest of the outstanding stock of OTI3 for $40.5
million. In connection with the joint venture and sale of stock, Siemens
extended a demand loan to OTI in the amount of $4.5 million, collateralized by
the remaining shares in OTI3 owned by OTI. Omnipoint recorded a gain of $37.1
million related to this transaction.
7. SENIOR NOTE OFFERING:
On September 23, 1999, Omnipoint Corporation ("Omnipoint") completed the
private placement of $205 million in aggregate principal amount of its 11 1/2%
Senior Notes due 2009 (the "11 1/2% Senior Notes"). The 11 1/2% Senior Notes
were issued at par. Omnipoint received net proceeds of $197.85 million, net of
offering expenses, which it intends to use for the buildout and operation of its
PCS networks and for the acquisition of licenses, systems, networks and network
operators. The 11 1/2% Senior Notes were sold under Rule 144A of the Securities
Act of 1933, as amended and Regulation S promulgated thereunder. The 11 1/2%
Senior 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. Interest on the Notes will be payable
semi-annually on March 15 and September 15 of each year, commencing March 15,
2000. On or after September 15, 2004, Omnipoint may redeem the 11 1/2% Senior
Notes, in whole or in part, at redemption prices declining over time from
105.75% to 100%, plus accrued and unpaid interest and liquidated damages as
defined in the Indenture, if any, to the date of redemption. In addition, at
any time prior to September 15, 2002, Omnipoint may redeem up to 35% of the 11
1/2% Senior Notes originally outstanding at a redemption price of 111.50% 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 certain
equity offerings as defined in the Indenture. Upon the occurrence of a change
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<PAGE>
of control, other than the Merger, Omnipoint may be required to offer to
repurchase the outstanding 11 1/2% Senior 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.
8. FINANCING AGREEMENTS:
On March 30, 1999, the Company entered into an arrangement with Siemens for
financing of up to $200 million (the "Siemens Arrangement"). The Siemens
Arrangement includes $100 million that was funded on March 31, 1999 for general
corporate purposes, and $100 million of financing on equipment and services for
expansion of the Company's wireless communications network in New York and other
markets pursuant to a separate credit agreement ("Siemens Credit Facility"). The
principal amount on the Siemens Credit Facility is payable in twenty consecutive
equal quarterly installments beginning in 2003, with the final payment due on
March 31, 2008. Interest on the Siemens Credit Facility is payable quarterly at
varying interest rates at a base rate or LIBOR plus a set margin, at the
Company's election. The Siemens Credit Facility ranks pari passu with the
Institutional OCI Financing Agreements and is collateralized by the same
collateral serving the Institutional OCI Financing Agreements. At September 30,
1999, $25.7 million was outstanding on the Siemens Credit Facility.
In addition, Nortel Networks, Inc., formerly known as Northern Telecom,
Inc., ("Nortel") expanded its financing to the Company by up to $50 million, of
which $25 million was funded on March 31, 1999 and $25 million was funded on
August 12, 1999 for general corporate purposes.
The Nortel and Siemens $150 million financing for general corporate
purposes was obtained by their participation in the Institutional OCI Financing
Agreements.
On July 16, 1999, Omnipoint Communications Inc. ("OCI"), entered into a
credit facility with Nortel, under which Nortel agreed to provide up to $100
million for financing purchases of equipment and services from Nortel for
expansion of OCI's wireless communications network in New York and other
markets. On August 4, 1999, an initial $25 million of this credit facility was
funded. This credit facility ranks pari passu with the Institutional OCI
Financing Agreements and the Siemens Vendor Credit Facility.
9. SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK:
On June 24, 1999, the Company issued Series A Non-Voting Convertible
Preferred Stock, par value $.01 per share, for gross proceeds of $205 million.
Hutchison and VoiceStream together purchased an additional 3,958 shares of the
Non-Voting Preferred Stock on September 30, 1999 and October 1, 1999,
respectively, for an aggregate purchase price of $95 million. The Company
authorized 12,500 shares of which 10,521 shares are issued and outstanding as of
September 30, 1999. All or any portion of the outstanding shares of Series A
Non-Voting Convertible Preferred Stock may be converted at any time into common
stock at the option of VoiceStream or Hutchison at a conversion price of $24.00
per common share, subject to adjustment as defined in the agreement. The
Liquidation Preference of this preferred stock is $24,000 per preferred share,
which represents the issuance price at June 24, 1999.
10. SEGMENT INFORMATION:
In 1998, the Company adopted Financial Accounting Standard No. 131,
"Disclosures about Segments of an Enterprise and Related Information" ("SFAS
131"). The prior year's quarterly segment information has been restated to
present the Company's two reportable segments, which are as follows:
PCS Services-provides digital wireless services in several markets in the
United States
PCS Technology-developer and supplier of wireless communication
technologies, products and engineering services
Segment data includes intersegment revenues, as well as a partial charge
for corporate headquarters costs to its PCS services segment. The Company
evaluates the performance of its segments and allocates resources to them based
on earnings before interest, taxes, depreciation and amortization (EBITDA).
However, most of the corporate headquarters costs including, but not limited to,
costs related to strategic partnering, legal, accounting, consulting, human
resources, auction-related etc., have not been allocated to the segments.
-8-
<PAGE>
The Company is organized on the basis of products and services. The
Company's segments are strategic business units that offer different products
and services. The Company's PCS Services regions have been aggregated into the
PCS services segment.
The table below presents information about reported segments for the
Statements of Operations for the three and nine months ended September 30, 1999
and 1998, and for the Balance Sheets as of September 30, 1999 (unaudited) and
December 31, 1998, (in thousands):
<TABLE>
<CAPTION>
PCS Services PCS Technology Reconciling Items Consolidated Totals
--------------- ---------------- -------------------- -------------------
<S> <C> <C> <C> <C>
1999
Three months:
---------------
Revenues $ 109,604 $ 255 $ -- $ 109,859
EBITDA $ (46,020) $ (6,244) $ (5,079) (2) $ (57,343)
Nine months:
---------------
Revenues $ 266,656 $ 2,521 $ -- $ 269,177
EBITDA $ (176,518) $ (6,481) $(16,529) (2) $ (199,528)
Total Assets $1,916,394 $ 7,389 $388,604 $2,312,387
1998
Three months:
---------------
Revenues $ 41,452 $ 703 $ -- $ 42,155
EBITDA $ (68,529) $ (6,241) $ (4,114) (2) $ (78,884)
Nine months:
---------------
Revenues $ 115,161 $ 6,209 $ (2,958) (1) $ 118,412
EBITDA $ (195,175) $(18,433) $(16,075) (2) $ (229,683)
Total Assets $1,808,983 $ 5,168 $252,453 $2,066,604
</TABLE>
(1) Represents intersegment revenue
(2) Represents corporate expenses (including legal, regulatory, accounting,
information services, human resource management, financing, investment
banking, strategic partnering related activities and FCC auction related
costs) not allocated to the segments
A reconciliation of total segment EBITDA to consolidated net loss for the
three and nine months ended September 30, 1999 and 1998 is as follows
(unaudited, in thousands):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
----------------------- ------------------------
<S> <C> <C> <C> <C>
Total EBITDA for reportable segments $ (57,343) $ (78,884) $(199,528) $(229,683)
Depreciation and amortization (49,894) (33,654) (143,360) (85,169)
Equity in losses of joint ventures (1,711) (2,350) (4,718) (6,547)
Interest income 3,429 2,113 7,848 9,327
Interest expense (66,149) (44,428) (192,639) (136,660)
Gain on sale of subsidiary stock 37,120 - 37,120 -
Other income (expense), net 306 170 711 (2,320)
Extraordinary loss on return of C Block licenses - - - (11,115)
Accretion of 7% Cumulative Convertible Preferred Stock (5,230) (5,230) (15,688) (8,716)
---------- ---------- ---------- ----------
Net loss attributable to common stockholders $(139,472) $(162,263) $(510,254) $(470,883)
========== ========== ========== ==========
</TABLE>
-9-
<PAGE>
Reconciling items from segment total assets to consolidated total assets at
September 30, 1999 (unaudited) and December 31, 1998 are as follows (in
thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(unaudited)
_______________ ____________
<S> <C> <C>
Corporate cash and short term investments $ 356,596 $ 232,187
Unallocated corporate assets 32,008 20,266
--------- ---------
Total reconciling items $ 388,604 $ 252,453
========= =========
</TABLE>
11. SUBSEQUENT EVENTS:
On October 22, 1999, the Company entered into an Agreement and Plan of
Merger with East/West Communications, Inc., a Delaware corporation ("EWCM"),
pursuant to which, among other things, EWCM will merge with and into Omnipoint,
which will be the surviving corporation in the merger. EWCM holds five licenses
covering a total of approximately 22.2 million POPs (population equivalents),
consisting primarily of Los Angeles and Washington, D.C. with a combined 20.6
million POPs, as well as Sarasota, Fla., Reno, Nev., and Santa Barbara, Calif.
which make up the remaining 1.6 million POPs. The Company invested $3 million in
EWCM in exchange for 300,000 shares of EWCM common stock. In addition, the
Company simultaneously agreed to purchase all outstanding EWCM common shares at
the closing of the proposed acquisition in exchange for new Series E Omnipoint
preferred stock, equivalent to a fixed 1.775 million shares of Omnipoint common
stock. Based on the October 21, 1999 closing price of $71.00 per share of
Omnipoint common stock, the acquisition is valued at approximately $118 million,
or $5.32 per POP. The Company also will assume approximately $15 million in FCC
debt and will redeem approximately $8 million in EWCM preferred stock, for a
combined total acquisition cost of approximately $6.50 per POP.
-10-
<PAGE>
OMNIPOINT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain matters discussed in this Form 10-Q include forward-looking
statements within the meaning of the Private Litigation Reform Act of 1995. All
forward-looking statements involve known and unknown risks, uncertainties, and
other factors, many of which are not within the control of the Company, that may
cause actual transactions, results, performance or achievements to be materially
different from any future transactions, results, performance or achievements
expressed or implied by such forward-looking statements. While the Company
believes that the expectations reflected in these forward-looking statements are
based upon reasonable assumptions, it can give no assurance that its performance
or other expectations will be attained. The Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking statements
that may be made to reflect any future events or circumstances.
OVERVIEW
Omnipoint Corporation ("Omnipoint" or the "Company") is a leader in
commercializing personal communications services ("PCS") and developing PCS
technology.
The Company provides wireless PCS services and equipment based on the
Global System for Mobile Communications ("GSM") standard. According to wireless
industry sources, this standard has been implemented by carriers in over 140
countries worldwide and is used by over 200 million subscribers. GSM subscribers
are estimated to account for approximately 50% of worldwide wireless subscribers
and approximately 60% of wireless subscribers outside the United States.
Omnipoint's licenses, including those won in the recently completed FCC re-
auction, cover approximately 100 million non-overlapping POPs in the United
States.
Since 1996, the Company has aggressively built out its licenses and
currently covers and markets to over 46 million POPs, including all major
markets in the northeastern United States from Boston to Delaware, as well as
southern Florida from Palm Beach to Key West, and certain Midwest markets, which
include the greater Detroit, Indianapolis, and Wichita markets. Omnipoint also
provides service in the Harrisburg, York, and Lancaster, Pennsylvania markets
through a joint venture with D&E Communications ("PCS One"). Omnipoint intends
to continue its aggressive buildout through both wholly owned affiliates and
joint ventures. Additionally, the Company offers out of network roaming both in
over 3,600 North American cities (including Canada), through roaming agreements
with members of the North American GSM Alliance, and worldwide, through active
roaming agreements with 100 carriers in 53 countries. PCS service offerings
available from Omnipoint include voice communications, caller ID, call
forwarding, call waiting, voice activated dialing, fax storage and retrieval,
Internet access, short messaging, numeric paging, and information services
including, but not limited to, stock quotes, news, weather and sports scores.
Every activated handset has its own Internet address and is capable of receiving
and sending Internet e-mail up to 160 characters in length.
Omnipoint had approximately 698,000 subscribers as of September 1999,
including approximately 17,000 proportionate subscribers from its joint venture
in Pennsylvania. A significant portion of these subscribers use the Company's
prepaid service. Omnipoint utilizes multiple distribution channels through which
its services are sold and intends to continue this strategy as new markets are
opened. Omnipoint had over 5,000 distribution outlets as of September 30, 1999.
Through the Company's OTI subsidiary, it is also a developer and supplier
of wireless communication technologies, products and engineering services. OTI's
business divisions include the PCS Infrastructure Products division, which
develops base station equipment for wireless E911 and other location-based
services for GSM infrastructure providers, and the Wireless Solutions Division,
which provides GSM-based solutions such as the Redhawk GSM data terminal unit
and the Eagle OEM module which are used to integrate GSM solutions directly into
wireless applications such as telematics and telemetry. OTI is also working on
next-generation wireless products and systems including GPRS (General Packet
Radio Systems) wireless packet systems.
-11-
<PAGE>
RESULTS OF OPERATIONS
Three and Nine Months Ended September 30, 1999 Compared with Three and Nine
Months Ended September 30, 1998.
Revenues:
Revenues for the three months ended September 30, 1999 were $109.9 million,
as compared to revenues of $42.2 million for September 30, 1998, an increase of
$67.7 million, or 160.6%. Revenues for the nine months ended September 30, 1999
increased $150.8 million, or 127.3% to $269.2 million compared to revenues of
$118.4 million for the nine months ended September 30, 1998.
PCS Services
Net PCS services revenues for the three months ended September 30, 1999
were $95.8 million, as compared to $35.0 million for the three months ended
September 30, 1998, an increase of $60.8 million, or 173.5%. Year-to-date net
PCS services revenues increased by $128.0 million or 130.6% to $226.1 million
compared to service revenues of $98.0 million for the nine months ended
September 30, 1998. The increase in service revenues was due to the increase in
the number of subscribers related to increased penetration in the Company's
existing markets, as well as expansion into Michigan and Indiana, coupled with
an increase in average revenue per subscriber during the third quarter. As a
result of the increase in the number of subscribers and distribution outlets,
handset and accessories revenues for the quarter ended September 30, 1999 were
$13.8 million, as compared to $6.4 million for the quarter ended September 30,
1998, an increase of $7.4 million, or 114.7%. Handset and accessories revenues
for the nine months ended September 30, 1999 were $40.6 million, as compared to
$17.1 million, an increase of $23.5 million, or 137.1% from the nine months
ended September 30, 1998. The larger customer base resulted from the launches
of the Michigan and Indiana markets in December 1998, as well as expansion of
the Company's New York, Philadelphia, New England and Florida markets.
PCS Technology
PCS Technology revenues were $0.3 million during the quarter ended
September 30, 1999, as compared to revenues of $0.7 million for the quarter
ended September 30, 1998. PCS Technology revenues for the nine months ended
September 30, 1999 were $2.5 million compared to $3.3 million over the same
period in 1998. The Company is a party to several engineering contract services
agreements which are expected to continue into 1999, but can be terminated under
certain circumstances at either party's option.
Cost of Sales:
Total cost of service revenues and operations, handset and accessories
revenues and engineering services for the quarter ended September 30, 1999 were
$74.8 million, as compared to $46.8 million for the quarter ended September 30,
1998, an increase of $28.0 million, or 59.7%. Year-to-date cost of service
revenues and operations, handset and accessories revenues and engineering
services were $226.8 million, as compared to $161.8 million for the nine months
ended September 30, 1998, an increase of $65.0 million, or 40.2%.
PCS Services
Cost of service revenues and operations were $37.9 million for the quarter
ended September 30, 1999, as compared to $29.4 million for the quarter ended
September 30, 1998, and $110.7 million for the nine months ended September 30,
1999 as compared to $89.6 million for the nine months ended September 30, 1998.
This includes cost of service revenues of $28.0 million for the third quarter
and $80.3 million year-to-date, which includes network site rentals,
intercarrier and interconnect costs, and other network operating expenses. As a
result of service revenues increasing at a rate greater than cost of service
revenues and operations, third quarter gross margin improved to 60.5% from 51.0%
in the second quarter of 1999. The remaining cost of operations of $9.9 million
includes salaries, maintenance and other indirect costs of operating the
network. During the third quarter, the Company's managed customer base grew by
approximately 101,000 subscribers to a managed subscriber base of approximately
681,000, or an increase of approximately 17.4%.
Cost of handset and accessories revenues for the quarter ended September
30, 1999 were $36.8 million, as compared to $17.0 million for the quarter ended
September 30, 1998, an increase of $19.8 million, or 116.2%. Cost of handset and
accessories revenues for the nine months ended September 30, 1999 were $114.3
million, as compared to $69.4 million for the nine months ended September 30,
1998, an increase of $44.9 million, or 64.7%. Handsets and accessories costs
-12-
<PAGE>
increased as a result of strong growth in customer additions as well as
distribution channel stocking related to an increase in distribution outlets
during the quarter.
PCS Technology
Engineering services total cost of sales were $0.1 million and $0.5 million
for the quarters ended September 30, 1999 and 1998, respectively. Year-to-date
engineering services total cost of sales were $1.8 million in 1999 and $4.4
million in 1998, a decrease of $2.6 million, or 58.8%.
Direct Expenses:
Research and development expenses in the PCS Technology segment for the
first three quarters of 1999 were $2.0 million as compared to $13.3 million for
the same period in 1998. In 1999, the Company has entered into several joint
developmental arrangements that fund portions of the Company's research and
development efforts.
General and administrative costs include costs such as legal fees, patents,
regulatory costs, merger related costs, auction and negotiation expenses, office
rents and incidentals, management information systems, accounting and finance,
bad debt, customer care and all payroll and benefits costs other than those
classified as research and development, those related to the cost of service,
and those related to selling. Approximately $4 million of such costs during the
third quarter were related to the sale of a majority interest in a joint venture
and to the Merger.
Selling costs include all marketing, advertising, promotion, telemarketing,
market research, and all indirect and direct distribution channels, but excludes
costs of handsets and accessories.
Sales, general and administrative costs for the third quarter of 1999 were
$90.5 million, as compared to $69.9 million for the third quarter of 1998, an
increase of $20.7 million, or 29.6%, and were $239.9 million for the nine months
ended September 30, 1999 as compared to $172.6 million for the nine months ended
September 30, 1998, an increase of $67.3 million or 39.0%. This increase was
primarily driven by increases in operating costs, customer care expenses and
selling costs due to the increase in customers. Customer care expenses increased
as a result of the 151.2% increase in ending managed subscribers from 271,000 in
September 1998 to 681,000 in September 1999. The increased selling costs were
due to a greater than 80% increase in the number of net subscriber additions in
the third quarter 1999 over the same quarter in 1998, and increased sales and
marketing headcount related expenses due to market launches in December 1998 in
Michigan and Indiana.
EBITDA
Earnings before interest, taxes, depreciation and amortization (EBITDA) was
a loss of $57.3 million for the third quarter of 1999, a $10.9 million, or 15.9%
improvement from the second quarter of 1999, and a $21.5 million, or 27.3%
improvement from the third quarter of 1998. Approximately $46.0 million of the
third quarter of 1999 EBITDA loss was attributable to the Company's PCS
services, which is a $13.4 million, or 22.6% improvement over the second quarter
of 1999 and a $22.5 million, or 32.8% improvement over the third quarter of
1998. The EBITDA loss for the nine months ended September 30, 1999 was $199.5
million, or a 13.1% improvement from the EBITDA loss of $229.7 million for the
nine months ended September 30, 1998.
Other Expenses and Income:
Depreciation and amortization expenses for the third quarter of 1999 were
$49.9 million, as compared to $33.7 million for the third quarter of 1998, an
increase of approximately $16.2 million, or 48.3% and $143.4 million for the
nine months ended September 30, 1999 as compared to $85.2 million for the nine
months ended September 30, 1998, an increase of approximately $58.2 million, or
68.3%. The increase in depreciation expense was related to network
infrastructure equipment placed into service as a result of the Company's
continued expansion of coverage in its existing markets as well as services
launched in new markets during 1998. The growth in amortization expense was
primarily due to amortization of FCC licenses associated with the markets placed
into commercial service.
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<PAGE>
As a result of the revenues and operating costs and expenses discussed
above, the Company's loss from operations for the third quarter of 1999 was
$107.2 million, as compared to $112.5 million for the third quarter of 1998,an
improvement of $5.3 million, or 4.7%, and an $8.6 million decrease, or 7.4%
improvement from the second quarter of 1999. The loss from operations for the
nine months ended September 30, 1999 was $342.9 million, as compared to $314.9
million for the nine months ended September 30, 1998, an increase of $28.0
million, or 8.9%. This increased loss was primarily due to costs associated with
the addition of 311,000 net new managed subscribers during the nine months ended
September 30, 1999 (versus 129,000 net additions for the nine months ended
September 30, 1998) coupled with $58.2 million of increased depreciation and
amortization expenses related to expansions of the Company's networks.
Equity in losses from joint ventures for the third quarter of 1999 was $1.7
million, as compared to $2.4 million in the third quarter of 1998 and $4.7
million for the nine months ended September 30, 1999 as compared to $6.5 million
for the nine months ended September 30, 1998. The Company expects to incur
additional losses as a result of its equity ownership interest in the PCS One
joint venture.
Interest income for the third quarter of 1999 was $3.4 million, as compared
to $2.1 million for the third quarter of 1998, an increase of $1.3 million, or
62.3%. Interest income for the nine months ended September 30, 1999 was $7.8
million, as compared to $9.3 million for the nine months ended September 30,
1998, a decrease of $1.5 million, or 15.9%.
Interest expense for the third quarter of 1999 was $66.1 million, as
compared to $44.4 million for the third quarter of 1998, an increase of $21.7
million, or 48.9%. The increase was due to the increased amounts outstanding
from loans payable under financing agreements and senior notes and cessation of
capitalization of interest during construction of the network, partially offset
by a reduction in FCC obligations. Interest expense for the nine months ended
September 30, 1999 was $192.6 million, as compared to $136.7 million for the
nine months ended September 30, 1998, an increase of $56.0 million, or 41.0%.
Net loss after accretion of the 7% Cumulative Convertible Preferred Stock
for the third quarter of 1999 was $139.5 million, as compared to $162.3 million
for the third quarter of 1998, an improvement of $22.8 million, or 14.1%. Net
loss after accretion of the 7% Cumulative Convertible Preferred Stock for the
nine months ended September 30, 1999 was $510.3 million, as compared to $470.9
million, an increase of $39.4 million, or 8.4%.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents and short-term investments of
$369.2 million as of September 30, 1999, compared to $238.3 million as of
December 31, 1998. Of this balance, cash and cash equivalents of $251.3 million
increased by $56.6 million from December 31, 1998. This increase was primarily
due to $597.2 million of cash provided from financing activities, partially
offset by $419.0 million of cash used in operating activities and $121.6 million
of cash used in investing activities. As of September 30, 1999, the Company had
working capital of $79.7 million. The Company expects operating losses and
working capital deficits to continue as the Company continues to grow its PCS
operations. The Company believes that access to capital and financial
flexibility is necessary to successfully implement its strategy.
Operations of the Company for the three and nine months ended September 30,
1999 have been principally financed through proceeds from the issuance of
preferred stock related to the Merger, proceeds from the issuance of Senior
Notes, advances from various financing agreements and payments from subscribers
and working capital management.
The cash provided from financing activities included net proceeds of $248.5
million from the issuance of Series A Non-Voting Convertible Preferred Stock
related to the merger, $199.4 million from issuance of 11 1/2% Senior Notes,
$150 million of funding by Siemens and Nortel via their participation in the
Institutional OCI Financing Agreement, and $90.8 million of proceeds from vendor
financings for working capital and purchases of network fixed assets. These
amounts were partially offset by principal repayments associated with the
Company's FCC and related obligations and financings.
Cash used in operating activities resulted from the Company's operations
and expenses related to its core PCS networks and interest expense on its
various borrowings as well as net purchases of trading securities of $74.3
million. The Company incurred increased network operating costs due to the
growth in the number of subscribers and the related network usage.
Cash used in investing activities related to the purchase of fixed assets
of $143.8 million to support the Company's continuing expansion and the FCC
license payments of $20.3 million in connection with the FCC's Auction 22. The
Company also received $52.1 million from the sale of a majority interest and
advances related to a joint venture with Siemens and the proceeds on the sale of
a tower venture.
The Company anticipates that its future revenue growth will outpace the
percentage growth in operating costs and expenses (exclusive of depreciation and
amortization). In the third quarter of 1999, the number of managed subscribers
grew by approximately 101,000, which is expected to decrease the cash
requirement that would otherwise be used in operations during the rest of the
year. The Company plans to reduce customer acquisition cost per subscriber and
improve its economies of scale in its network operating costs relative to 1998.
The Company also anticipates decreasing its level of 1999 (as compared to 1998)
capital expenditures to approximately $250 million, almost all of which will be
financed through vendors. The Company has future purchase commitments, which it
plans to finance pursuant to available financing agreements with related
vendors.
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<PAGE>
The Company also believes that access to capital during 1999 and future
periods is necessary to build out its networks. The Company continues to have
recurring operating losses, working capital deficiencies, and negative cash
flows from operating activities. On June 23, 1999, the Company entered into a
Purchase Agreement with VoiceStream and Hutchison providing for gross proceeds
from the issuance of Non-Voting Convertible Preferred Stock. On June 24, 1999,
the Company received $205 million from VoiceStream and Hutchison and
subsequently received an additional $95 million from them with the receipt of
$47.5 million from Hutchison on September 30, 1999 and $47.5 million from
VoiceStream on October 1, 1999. Additionally, the Company has available
cumulative financing commitments of $330 million. The Company, if necessary, may
seek additional financing from the remaining availability under the
Institutional OCI Financing Agreement, prior vendor commitments and
arrangements, along with other incremental actions. Other incremental actions,
if necessary, may include the sale of non-core assets (such as towers or
licenses for markets which the Company has no plans to build), inventory
reduction and the raising of additional debt. Additionally, certain of the
Company's financing arrangements may be increased under certain circumstances to
provide additional working capital. Although the Company does not currently plan
to do so, the Company also at its discretion, may gain access to working capital
through the issuance of its capital stock in lieu of cash under certain existing
finance agreements.
The Company's future financing requirements will depend on many factors,
including the successful development of products and services, the extent and
timing of acceptance of the Company's products and services in the market,
requirements to maintain adequate facilities, the progress of the Company's
research and development efforts, expansion of the Company's marketing and sales
efforts, the Company's results of operations and the status of competitive
products and services.
The Company believes that it will require substantial amounts of additional
capital over the next several years and anticipates that this capital will be
derived from the consummation of the merger, a mix of strategic partnering
arrangements or public offerings and private placements of debt or equity
securities or both. There can be no assurance, however, that the Company will
obtain additional funding to fund its operations and capital expenditures. To
the extent that the buildout of the networks is faster than expected, the costs
are greater than anticipated or the Company takes advantage of other
opportunities, including those that may arise through current and future FCC
actions, the Company may require additional funding to implement its business
strategy.
YEAR 2000 COMPLIANCE
Many of the world's computer systems (including those in non-information
technology equipment and systems) currently record years in a two-digit format.
If not addressed, such computer systems will be unable to properly interpret
dates beyond the year 1999, which could lead to business disruptions in the U.S.
and internationally (the "Y2K" issue). A number of the Company's technology
systems are affected by the Y2K issue. To ensure that the Company will be Y2K
compliant before the new millennium, the Company formed a Y2K compliance team in
the fourth quarter of 1997 and allocated corporate resources to determine the
extent of non-compliance with the Y2K issue and to formulate a Y2K compliance
plan. Since then, the Company has been reviewing its embedded technology and
infrastructure equipment, as well as non-embedded technology equipment to
identify those that contain two-digit year codes, and is in the process of
upgrading its infrastructure and corporate facilities to achieve Y2K compliance.
In addition, the Company is actively working with its suppliers to assess their
compliance and remediation efforts and the Company's exposure to them. The
Company believes that all of its critical business systems are Y2K compliant,
with additional system testing and contingency planning to continue.
The Company has focused on three major areas of concern for the Y2K issue:
embedded technology and infrastructure equipment, non-embedded technology
equipment and third party suppliers. The Y2K compliance team created a five-
stage process for becoming Y2K compliant. The five process stages the Company
performed were:
. compiling a complete inventory of all date sensitive technology
equipment;
. prioritizing systems affected based on estimated time to compliance, as
well as vendor and maintenance schedules;
. performing modification to affected systems;
. completing testing of modified systems; and
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<PAGE>
. implementing modified systems.
The Company has completed the inventory and assessment of its date
sensitive technology equipment and modified and tested all of its systems.
Embedded Technology and Infrastructure Equipment. The embedded technology
and infrastructure equipment area of concern consists primarily of the hardware
portion of the switching platforms and network surveillance equipment. Much of
this equipment, specifically the switching platforms, is purchased from third
party vendors and has maintenance contracts. The maintenance contracts include
regular software and hardware upgrades that should automatically bring the
equipment into Y2K compliance. The Company is dependent on those third parties
to assess the impact of the Y2K problem on the technology they have supplied and
to take any necessary corrective action. All corrective action taken by these
third parties is covered under maintenance contracts and would be part of
regularly scheduled maintenance. The Company is monitoring the progress of these
third parties and selectively conducting tests to determine whether they have
accurately assessed the problem and taken corrective action. The Company
believes that all embedded technology systems and infrastructure equipment
directly supporting call processing are Y2K compliant. The remaining embedded
technology systems and infrastructure equipment are Y2K compliant. In addition,
in order to protect against the acquisition of additional non-compliant
products, the Company now requires suppliers to warrant that products sold or
licensed to the Company are Y2K compliant.
Non-embedded Technology Equipment. Non-embedded technology systems include
predominately applications software and interfacing software. Much of this
equipment has previously been upgraded to Y2K compliance through software
upgrades and the purchase of new systems. The Company has prioritized the
systems that are not Y2K compliant and believes that it has upgraded non-
compliant systems. The Company also believes that all business-critical non-
embedded technology systems have been upgraded to Y2K compliant versions. These
have been tested by the Company's vendors and by the Company. Testing will
continue throughout 1999. Thus far, no significant Y2K issues have been found.
Third Party Suppliers. The Company has prioritized its critical suppliers
and communicated with them in order to obtain their plans and progress in
addressing the Y2K issue. Detailed evaluations of the most critical third party
suppliers are complete. The Company believes that its major third party
suppliers are prepared for Y2K. However, the Company has developed contingency
plans to deal with their non-compliance, if any.
Risk and Contingency Plan. There are many risks associated with the Y2K
issue, including the possibility of a failure of the Company's signal, computer,
and non-information technology systems. Such failures could have a material
adverse effect upon the Company and may cause systems malfunctions, signal loss,
incorrect or incomplete transaction processing, the inability to reconcile
accounting books and records, and the inability of the Company to manage its
business. In addition, even if the Company successfully becomes Y2K compliant,
it can be materially and adversely affected by failures of third parties to
become Y2K compliant. The failure of third parties with which the Company has
financial or operational relationships such as network maintenance contractors,
roaming partners, handset and accessory providers, financial institutions,
payroll contractors, regulatory agencies and utility companies, to become Y2K
compliant in a timely manner could result in material adverse effects on the
Company's results of operations.
The Company believes that all of its business-critical systems are Y2K
compliant, with testing to continue throughout the remainder of 1999. However,
there can be no assurance that the Company will be successful in taking
corrective action in a timely manner. The Company has developed and continues
to assess contingency plans with regard to its key technology systems, although
there can be no assurance that these contingency plans will successfully avoid a
service disruption. The Company is documenting Y2K contingency plans as part of
its Y2K risk mitigation efforts.
Costs. Total costs incurred to date specifically associated with becoming
Y2K compliant have been approximately $1.2 million. The Company believes that
the total costs of becoming Y2K compliant have been substantially incurred with
no significant additional expenditures planned for the remainder of 1999.
Previous estimates included costs to replace existing software for a critical
business system. The Company was able to remediate this software which resulted
in significantly lower expenditures than the $2.8 million that was originally
planned. Non-specific costs associated with becoming Y2K compliant, such as
maintenance contracts that automatically upgrade certain technology components
within a larger upgrade, which have not been included in this estimate are
approximately $10.6 million. These costs are considered by the Company to be a
normal expense. The portions of these costs that relate specifically to Y2K
compliance are included in the Y2K estimates if they can be separately
identified.
The Company's expectations about future costs and timely completion of its
Y2K modifications are subject to uncertainties that could cause actual results
to differ materially from what has been discussed above. Factors that could
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<PAGE>
influence the amount of future costs and the effective timing of remediation
efforts include the success of the Company in identifying embedded technology
and infrastructure equipment as well as non-embedded equipment that contain two-
digit year codes, the nature and amount of programming and testing required to
upgrade or replace each of the affected systems and equipment, the nature and
amount of testing, verification, the rate and magnitude of related labor costs,
and the success of the Company's suppliers in addressing the Y2K issue.
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PART II. OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
The Company is from time to time the subject of, or involved in,
judicial proceedings. Management believes that any liability or loss
resulting from such matters will not have a material adverse effect on
the consolidated financial position, results of operations or cash
flows of the Company.
ITEM 5: OTHER INFORMATION
11-1/2% Senior Notes due 2009
-----------------------------
On September 23, 1999, the Company completed the private placement
of $205 million in aggregate principal amount of its 11-1/2% Senior
Notes due 2009. See Note 7 to the Condensed Consolidated Financial
Statements.
East/West Merger
----------------
Pursuant to the Merger, each issued and outstanding share of the
common stock of EWCM shall be converted into the right to receive one
share of Series E Preferred Stock of Omnipoint (the "Series E
Preferred"), and each issued and outstanding share of existing
preferred stock of East West shall be converted into the right to
receive the liquidation value of each such share plus all accrued and
unpaid dividends thereon, representing approximately $8 million in the
aggregate. The Merger is subject to customary closing conditions and
governmental approvals. See Note 11 to Notes to Condensed Consolidated
Financial Statements.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Indenture, by and between Omnipoint Corporation and HSBC Bank
USA, as trustee, dated as of September 23, 1999.
4.2 Form of Note.
10.1 Purchase Agreement, by and among Omnipoint Corporation, Lehman
Brothers Inc and Barclays Capital Inc., dated September 17,
1999.
10.2 Registration Rights Agreement, by and among Omnipoint
Corporation, Lehman Brothers Inc and Barclays Capital Inc.,
dated September 23, 1999.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
On July 2, 1999, a Form 8-K was filed relating to the Reorganization
Agreement and the Purchase Agreement. See Notes 2 and 9 to the Condensed
Consolidated Financial Statements.
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<PAGE>
SIGNATURE
---------
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.
OMNIPOINT CORPORATION
Date: November 15, 1999
/s/ Harry Plonskier
-------------------
Treasurer and Chief Accounting Officer
-19-
<PAGE>
EXHIBIT 4.1
OMNIPOINT CORPORATION,
as Issuer
and
HSBC BANK USA,
as Trustee
_______________
INDENTURE
Dated as of September 23, 1999
_______________
11 1/2% Senior Notes due 2009
<PAGE>
CROSSREFERENCE 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.
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<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE I Definitions and Incorporation by Reference................................................... 1
Section 1.1 Definitions............................................................................ 1
Section 1.2 Incorporation by Reference of Trust Indenture Act...................................... 21
Section 1.3 Rules of Construction.................................................................. 22
ARTICLE II The Notes.................................................................................... 22
Section 2.1 Form and Dating........................................................................ 22
Section 2.2 Execution, Authentication and Denominations............................................ 23
Section 2.3 Registrar and Paying Agent............................................................. 23
Section 2.4 Paying Agent to Hold Money in Trust.................................................... 24
Section 2.5 Holder Lists........................................................................... 24
Section 2.6 Transfer and Exchange.................................................................. 24
Section 2.7 Replacement Notes...................................................................... 37
Section 2.8 Outstanding Notes...................................................................... 38
Section 2.9 Temporary Notes........................................................................ 39
Section 2.10 Cancellation........................................................................... 39
Section 2.11 CUSIP Numbers.......................................................................... 39
Section 2.12 Defaulted Interest..................................................................... 39
ARTICLE III Optional Redemption.......................................................................... 40
Section 3.1 Right of Redemption.................................................................... 40
Section 3.2 Notices to Trustee..................................................................... 40
Section 3.3 Selection of Notes to Be Redeemed...................................................... 41
Section 3.4 Notice of Redemption................................................................... 41
Section 3.5 Effect of Notice of Redemption......................................................... 42
Section 3.6 Deposit of Redemption Price............................................................ 42
Section 3.7 Payment of Notes Called for Redemption................................................. 42
Section 3.8 Notes Redeemed in Part................................................................. 43
ARTICLE IV Covenants.................................................................................... 43
Section 4.1 Payment of Notes....................................................................... 43
Section 4.2 Maintenance of Office or Agency........................................................ 43
Section 4.3 Limitation on Indebtedness............................................................. 44
Section 4.4 Limitation on Restricted Payments...................................................... 46
</TABLE>
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<TABLE>
<S> <C> <C>
Section 4.5 Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries...................................................... 48
Section 4.6 Limitation on the Issuance and Sale of Capital Stock of Restricted Subsidiaries........ 50
Section 4.7 Limitation on Issuances of Guarantees by Restricted Subsidiaries....................... 50
Section 4.8 Limitation on Transactions with Stockholders and Affiliates............................ 51
Section 4.9 Limitation on Liens.................................................................... 52
Section 4.10 Limitation on Sale-Leaseback Transactions.............................................. 53
Section 4.11 Limitation on Asset Sales.............................................................. 53
Section 4.12 Repurchase of Notes upon a Change of Control........................................... 54
Section 4.13 Limitation on Use of Proceeds.......................................................... 54
Section 4.14 Existence.............................................................................. 54
Section 4.15 Payment of Taxes and Other Claims...................................................... 54
Section 4.16 Maintenance of Properties and Insurance................................................ 55
Section 4.17 Compliance Certificates................................................................ 55
Section 4.18 Commission Reports and Reports to Holders.............................................. 56
Section 4.19 Waiver of Stay, Extension or Usury Laws................................................ 56
Section 4.20 Limitation on Mirror Indebtedness...................................................... 56
Section 4.21 Limitation on Activities of the Special Subsidiary..................................... 57
ARTICLE V Successor Corporation........................................................................ 57
Section 5.1 When Company May Merge, Etc............................................................ 57
ARTICLE VI Default and Remedies......................................................................... 57
Section 6.1 Events of Default...................................................................... 57
Section 6.2 Acceleration........................................................................... 59
Section 6.3 Other Remedies......................................................................... 59
Section 6.4 Waiver of Past Defaults................................................................ 60
Section 6.5 Control by Majority.................................................................... 60
Section 6.6 Limitation on Suits.................................................................... 60
Section 6.7 Rights of Holders to Receive Payment................................................... 60
Section 6.8 Collection Suit by Trustee............................................................. 61
Section 6.9 Trustee May File Proofs of Claim....................................................... 61
</TABLE>
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<TABLE>
<S> <C> <C>
Section 6.10 Priorities............................................................................. 61
Section 6.11 Undertaking for Costs.................................................................. 62
Section 6.12 Restoration of Rights and Remedies..................................................... 62
Section 6.13 Rights and Remedies Cumulative......................................................... 62
Section 6.14 Delay or Omission Not Waiver........................................................... 62
ARTICLE VII Trustee...................................................................................... 63
Section 7.1 Rights of Trustee...................................................................... 63
Section 7.2 Individual Rights of Trustee........................................................... 65
Section 7.3 Trustee's Disclaimer................................................................... 65
Section 7.4 Notice of Default...................................................................... 65
Section 7.5 Reports by Trustee to Holders.......................................................... 65
Section 7.6 Compensation and Indemnity............................................................. 66
Section 7.7 Replacement of Trustee................................................................. 67
Section 7.8 Successor Trustee by Merger, Etc....................................................... 68
Section 7.9 Eligibility............................................................................ 68
Section 7.10 Money Held in Trust.................................................................... 68
ARTICLE VIII Discharge of Indenture....................................................................... 68
Section 8.1 Termination of Company's Obligations................................................... 68
Section 8.2 Defeasance and Discharge of Indenture.................................................. 69
Section 8.3 Defeasance of Certain Obligations...................................................... 70
Section 8.4 Application of Trust Money............................................................. 71
Section 8.5 Repayment to Company................................................................... 71
Section 8.6 Reinstatement.......................................................................... 72
ARTICLE IX Amendments, Supplements and Waivers.......................................................... 72
Section 9.1 Without Consent of Holders............................................................. 72
Section 9.2 With Consent of Holders................................................................ 72
Section 9.3 Revocation and Effect of Consent....................................................... 73
Section 9.4 Notation on or Exchange of Notes....................................................... 74
Section 9.5 Trustee to Sign Amendments, Etc........................................................ 74
Section 9.6 Conformity with Trust Indenture Act.................................................... 74
ARTICLE X Miscellaneous................................................................................ 75
Section 10.1 Trust Indenture Act.................................................................... 75
</TABLE>
iii
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<TABLE>
<S> <C> <C>
Section 10.2 Notices................................................................................ 75
Section 10.3 Certificate and Opinion as to Conditions Precedent..................................... 76
Section 10.4 Statements Required in Certificate or Opinion.......................................... 76
Section 10.5 Acts of Holders........................................................................ 77
Section 10.6 Rules by Trustee, Paying Agent or Registrar............................................ 77
Section 10.7 Payment Date Other Than a Business Day................................................. 77
Section 10.8 Governing Law.......................................................................... 77
Section 10.9 No Adverse Interpretation of Other Agreements.......................................... 77
Section 10.10 No Recourse Against Others............................................................. 78
Section 10.11 Successors............................................................................. 78
Section 10.12 Duplicate Originals.................................................................... 78
Section 10.13 Separability........................................................................... 78
Section 10.14 Table of Contents, Headings, Etc....................................................... 78
</TABLE>
iv
<PAGE>
INDENTURE, dated as of September 23, 1999, between OMNIPOINT
CORPORATION, a Delaware corporation, as Issuer (the "Company"), and HSBC BANK
-------
USA, 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 $205 million aggregate principal
amount of the Company's 11 1/2% Senior Notes due 2009 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 provisions
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.
-----------
"144A Global Note" means a global note in substantially the form of
----------------
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that shall be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person,
-------------
Indebtedness of any other Person existing at the time such other Person merged
with or 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
1
<PAGE>
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.
"Applicable Procedures" means, with respect to any transfer or
---------------------
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Cedel that apply to such transfer or
exchange.
"Asset Acquisition" means (i) an Investment by the Company or any of
-----------------
its Restricted Subsidiaries in any other Person pursuant to which such Person
shall 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
2
<PAGE>
Company or (ii) all or substantially all of the assets that constitute a
division or line of business of the Company or any of its Restricted
Subsidiaries.
"Asset Sale" means any sale, transfer or other disposition (including
----------
by way of merger, consolidation, and any sale and 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 this 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) Permitted Asset Swaps, (iii)
Restricted Payments permitted by Section 4.4, (iv) Permitted Investments, (v)
sales or other dispositions of assets with a fair market value (as certified in
an Officers' Certificate) not in excess of $1 million, (vi) any sale or other
disposition of any or all the Capital Stock of an Unrestricted Subsidiary, (vii)
any sale or other disposition of Temporary Cash Investments or (viii) any
transaction subject to Section 5.1. 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.
"Attributable Debt" means in respect of a sale and leaseback
-----------------
transaction, at the time of determination, the present value of the lessee for
the net rental payments during the remaining term of the lease included in such
sale and leaseback transaction including any period for which such lease has
been extended or may, at the option of the lessor, be extended. Such present
value shall be calculated using a discount rate equal to the rate of interest
implicit in such transaction, determined in accordance with GAAP.
"Authentication Order" has the meaning provided in Section 2.2(c).
--------------------
"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
installment, 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.
3
<PAGE>
"Board Resolution" means a copy of a resolution, certified by the
----------------
Secretary 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.
"Broker-Dealer" has the meaning set forth in the Registration Rights
-------------
Agreement.
"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 nonvoting) 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.
"Capitalized Lease Obligations" means the discounted present value of
-----------------------------
the rental obligations under a Capitalized Lease.
"Cedel" means Cedel Bank, S.A.
-----
"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
(or if the VoiceStream Transactions occur, Holdings or any Wholly Owned
Subsidiary of Holdings that beneficially owns 100% of the outstanding Voting
Stock 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, Holdings or such Subsidiary of Holdings, as the case may be, 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)(1) under the Exchange Act), other than Existing Shareholders,
4
<PAGE>
becomes the "beneficial owner" (as so defined) of more than 50% of the total
voting power of all classes of the Voting Stock of the Company (or if the
VoiceStream Transactions occur, Holdings or any Wholly Owned Subsidiary of
Holdings that beneficially owns 100% of the outstanding 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 (and/or if the VoiceStream
Transactions occur, Holdings' and any Wholly Owned Subsidiary of Holdings' that
beneficially owns 100% of the outstanding Voting Stock of the Company) 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 (or
Holdings or such Subsidiary of Holdings as the case may be) 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. Notwithstanding anything herein to the contrary, neither the
consummation of the VoiceStream Transactions nor the pledge of (but not the
foreclosure upon) the Capital Stock of the Company or any of its Restricted
Subsidiaries to secure a Guarantee entered into pursuant to clause (x) of the
second paragraph of Section 4.3 shall be deemed to constitute a Change of
Control.
"Change of Control Event" means the occurrence of both a Change of
-----------------------
Control and a Rating Decline.
"CIRI Transactions" means the transactions contemplated by the
-----------------
Purchase Agreement, dated as of June 23, 1999, between the Company and Cook
Inlet/VoiceStream GSM II PCS, LLC, a Delaware limited liability company, and the
Purchase Agreement, dated as of June 23, 1999, between the Company and Cook
Inlet/VoiceStream GSM III PCS, LLC , a Delaware limited liability company, each
as described in the Offering Memorandum.
"Closing Date" means the date on which the Notes are originally issued
------------
hereunder (it being understood that, if the Holdings Exchange Offer occurs, the
term "Closing Date" used in the indenture governing the notes offered by
Holdings shall mean the date on which the Holdings Exchange Offer is
consummated).
"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 nonvoting) of such
5
<PAGE>
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 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
6
<PAGE>
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 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; and (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.
"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.
7
<PAGE>
"Custodian" means the Trustee, as custodian with respect to the Global
---------
Notes, or any successor entity thereto.
"Default" means any event that is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
---------------
the Holder thereof and issued in accordance with Section 2.6 hereof, in
substantially the form of Exhibit A hereto except that such Note shall not bear
the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Global Notes issuable or
----------
issued in whole or in part, the Person specified in Section 2.3 hereof as the
Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Distribution Compliance Period" means the 40-day distribution
------------------------------
compliance period as defined in Rule 903(b)(2) of Regulation S.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
office, as operator of the Euroclear systems.
"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 Notes to be issued in the Exchange Offer
--------------
pursuant to Section 2.6(f) hereof.
"Exchange Offer" means the offer by the Company to exchange Exchange
--------------
Notes for Original Notes made pursuant to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
-------------------------------------
Registration Statement as defined in the Registration Rights Agreement.
"Existing Shareholders" means (i) Douglas G. Smith, Madison Dearborn
---------------------
Capital Partners, L.P., Allen & Company Incorporated and Chatterjee Management
Company and their respective Affiliates at the Closing Date and (ii) if the
VoiceStream Transactions occur, Holdings or any Wholly Owned Subsidiary thereof,
Hutchison Whampoa, John W. Stanton and Providence Equity Partners Inc., and, in
each case above, their respective Affiliates as of the consummation of the
VoiceStream Transactions.
"FCC" means the Federal Communications Commission.
---
8
<PAGE>
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the date hereof, including, without
limitation, those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession.
"Global Note Legend" means the legend set forth in Section 2.6(g)(ii),
------------------
which is required to be placed on all Global Notes issued under this Indenture.
"Global Notes" means, individually and collectively, each of the
------------
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Article 2 hereof.
"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.
------
"Holdings" means VoiceStream Wireless Holding Corporation, a Delaware
--------
corporation.
"Holdings Exchange Offer" has the meaning set forth in the
-----------------------
Registration Rights Agreement.
"IAI Global Note" means a Global Note in substantially the form of
---------------
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee, that shall be initially issued in a denomination
equal to $0, but shall thereafter be revised to represent the outstanding
principal amount of the Notes transferred to Institutional Accredited Investors.
"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.
9
<PAGE>
"Indebtedness" means, with respect to any Person at any date of
------------
determination (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 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, (viii) 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 and (ix) Acquired Debt. The amount of Indebtedness of any
Person at any date shall be the outstanding balance at such date 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. Notwithstanding the foregoing, solely for
purposes of clause (iv) of the second paragraph of Section 4.3, in the case of a
revolving credit or other similar facility, the total amount of funds
outstanding at the Closing Date shall be deemed to include the total amount of
committed funds available on the Closing Date; provided, that, the Company from
time to time may designate less than all of the committed borrowing capacity
under such revolving credit or similar facilities as being outstanding under
such clause (iv), it being understood that if the Company designates a lesser
amount, it may not subsequently redesignate a greater amount under that clause
(iv).
"Indenture" means this Indenture as originally executed or as it may
---------
be amended or supplemented from time to time by one or more indentures
supplemental to this Indenture entered into pursuant to the applicable
provisions of this Indenture.
"Indirect Participant" means a Person who holds a beneficial interest
--------------------
in a Global Note through a Participant.
"Initial Purchasers" means Lehman Brothers Inc. and Barclays Capital
------------------
Inc.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on
---------------------
March 15 and September 15 of each year, commencing March 15, 2000.
"Interest Rate Agreement" means any interest rate protection
-----------------------
agreement, interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate
10
<PAGE>
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 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.
"Letter of Transmittal" means the letter of transmittal to be prepared
---------------------
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"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.
"Moody's" means Moody's Investors Services, Inc. or any successor to
-------
the rating agency business thereof.
"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
11
<PAGE>
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 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.
"Non U.S. Person" means a Person who is not a U.S. Person.
-----------------
"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 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
12
<PAGE>
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.
"Offering Memorandum" means the offering memorandum of the Company,
-------------------
dated September 17, 1999, relating to the Notes.
"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 1/2% Senior Notes due 2009 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.
"Participant" means, with respect to the Depositary, Euroclear or
-----------
Cedel, a Person who has an account with the Depositary, Euroclear or Cedel,
respectively, and, with respect to the Depository Trust Company, shall include
Euroclear and Cedel.
"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 Asset Swaps" means any exchange of Telecommunications
---------------------
Assets by the Company or a Restricted Subsidiary of the Company where the
Company and/or its Restricted Subsidiaries receive aggregate consideration
consisting of Telecommunications Assets, cash and other assets (or any
combination thereof) having an aggregate value at least
13
<PAGE>
equal to the fair market value of the Telecommunications Assets being disposed
of by the Company or such Restricted Subsidiary (as determined by the Board of
Directors whose good faith determination shall be conclusive and evidenced by
the Board of Resolution); provided that (i) at least 75% of the consideration
received in such Permitted Asset Swap that does not consist of
Telecommunications Assets shall be in the form of cash or Temporary Cash
Investments and (ii) 100% of the consideration received in such transaction that
does not consist of Telecommunications Assets shall be treated as having been
received in an Asset Sale otherwise permitted by, but subject to, the terms of
Section 4.11.
"Permitted Investment" means (i) an Investment in the Company or a
--------------------
Restricted Subsidiary or a Person which will, upon the making of such
Investment, 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 after September 23, 1999 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 and (C) other than Net Cash Proceeds to the extent
used to Incur Indebtedness pursuant to clause (ii)(B) of the first paragraph of
Section 4.3) to a Person that is not a Subsidiary of the Company, in a Person in
a Telecommunications Business; (vi) the CIRI Transactions; (vii) any Investment
in any Person to the extent such Investment represents the non-cash portion of
the consideration received in an Asset Sale as permitted by Section 4.11 or in a
Permitted Asset Swap, (viii) Investments (including acquisitions of other
Telecommunications Businesses) made with Capital Stock or options, warrants or
rights to acquire Capital Stock, (ix) customary loans and advances made in the
ordinary course of business to officers, directors or employees of the Company
or any of its Restricted Subsidiaries for travel, entertainment, and moving and
relocation expenses; (x) any Investments outstanding as of the Closing Date; and
(xi) 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
14
<PAGE>
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 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 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 nonvoting) of such
15
<PAGE>
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.
"Private Placement Legend" means the legend set forth in Section
------------------------
2.6(g)(i) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"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.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
---
"Rating Agency" means each of S&P and Moody's.
-------------
"Rating Category" means (i) with respect to S&P, any of the following
---------------
categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor
categories) and (ii) with respect to Moody's any of the following categories:
Aaa, Aa, A, Baa, Ba, B, Caa, Ca and C (or equivalent successor categories). In
determining whether the rating of the Notes has decreased by one or more
gradations, gradations within Rating Categories (+ and -- for S&P: 1, 2 and 3
for Moody's) shall be taken into account (e.g., with respect to S&P, a decline
in a rating from BB+ to BB, as well as from BB-- to B+, will constitute a
decrease of one gradation).
"Rating Decline" means (i) a decrease of one or more gradations,
--------------
including gradations within Rating Categories as well as between Rating
Categories, in the rating of the Notes from the rating previously assigned to
the Notes by either Rating Agency or (ii) a withdrawal of the rating of the
Notes by either Rating Agency; provided that the decrease or withdrawal occurs
on, or within 90 days after, the date of public notice of the occurrence of a
Change of Control or of the intention by the Company to effect a Change of
Control, which period shall be extended so long as the rating of the Notes is
under publicly announced consideration for possible downgrade by either Rating
Agency.
"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
16
<PAGE>
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.
"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, dated as of September 23, 1999, among the Company and the Initial
Purchasers.
"Regular Record Date" for the interest payable on any Interest Payment
-------------------
Date means March 1 or September 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities
------------
Act.
"Regulation S Global Note" means a Global Note in substantially the
------------------------
form of Exhibit A hereto bearing the Global Note Legend and the Private
Placement Legend and deposited with or on behalf of and registered in the name
of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Regulation S.
"Responsible Officer", when used with respect to the Trustee, means
-------------------
any officer of the Trustee with direct responsibility for the administration of
this 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 Definitive Note" means a Definitive Note bearing the
--------------------------
Private Placement Legend.
"Restricted Global Note" means the 144A Global Note, the IAI Global
----------------------
Note and the Regulation S Global Note, each of which shall bear the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
---------------------
Investment.
"Restricted Payments" has the meaning provided in Section 4.4.
-------------------
"Restricted Subsidiary" means any Subsidiary of the Company other than
---------------------
an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
--------
17
<PAGE>
"Rule 144A" means Rule 144A promulgated under the Securities Act.
---------
"Rule 903" means Rule 903 promulgated under the Securities Act.
--------
"Rule 904" means Rule 904 promulgated under the Securities Act.
--------
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
---
Inc., or any successor to the rating agency business thereof.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Security Register" has the meaning provided in Section 2.3.
-----------------
"Shelf Registration Statement" means the Shelf Registration Statement
----------------------------
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means, at any date of determination, any
----------------------
Restricted 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.
"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,
----------
association 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,
18
<PAGE>
microwave or paging assets. Telecommunications Assets shall include stock, joint
venture or partnership interests of an entity principally engaged in a
Telecommunications Business.
"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 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 or "A-1" (or higher) according to S&P 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 S&P or Moody's.
"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
Indenture 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.
"Total Consolidated Indebtedness" means, at any date of determination,
-------------------------------
an amount equal to (a) the accreted value of all Indebtedness, in the case of
any Indebtedness issued with original issue discount, plus (b) the principal
amount (or other amount referred to in the definition of Indebtedness) of all
other Indebtedness of the Company and its Restricted Subsidiaries outstanding as
of the date of determination.
"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
19
<PAGE>
acquisition of goods or services, except for payables that are more than 60 days
past due and not contested in good faith.
"Transfer Restricted Securities" means securities that bear or are
------------------------------
required to bear the Private Placement Legend set forth in Section 2.6(g)(i)
hereof.
"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 Definitive Note" means one or more Definitive Notes that
----------------------------
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means one or more Global Notes in
------------------------
substantially the form of Exhibit A attached hereto that bears the Global Note
Legend and that has the "Schedule of Exchanges of Interests in the Global Note"
attached thereto, and that is deposited with or on behalf of and registered in
the name of the Depositary, representing a series of Notes that do not bear the
Private Placement Legend.
"Unrestricted Subsidiary" means (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 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
Subsidiary 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
20
<PAGE>
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.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under the
-----------
Securities Act.
"VoiceStream" means VoiceStream Wireless Corporation, a Washington
-----------
corporation.
"VoiceStream Transactions" means the transactions contemplated in
------------------------
connection with the proposed reorganization between the Company and Holdings,
including any consents an approvals required therefor, pursuant to the Agreement
and Plan of Reorganization, dated as of June 23, 1999, among VoiceStream
Wireless Corporation, Holdings and the Company.
"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 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.
21
<PAGE>
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
Commission 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;
(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. (a) The Notes and the Trustee's
---------------
certificate of authentication shall be substantially in the form of Exhibit A
hereto. The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof. The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture, and the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form shall be substantially
-------------
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Note issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of
22
<PAGE>
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any endorsement
of a Global Note to reflect the amount of any increase or decrease in the
aggregate principal amount of outstanding Notes represented thereby shall be
made by the Trustee or the Custodian, at the direction of the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.6 hereof.
(c) Euroclear and Cedel Procedures Applicable. The provisions of the
-----------------------------------------
"Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank"
and "Customer Handbook" of Cedel shall be applicable to transfers of beneficial
interests in Global Notes that are held by Participants through Euroclear or
Cedel.
Section 2.2 Execution, Authentication and Denominations. (a) Two
-------------------------------------------
Officers shall sign the Notes for the Company by manual or facsimile signature.
The Company's seal may be reproduced on the Notes and may be in facsimile form.
(b) If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
(c) A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
(d) The Trustee shall, upon a written order of the Company signed by
at least one Officer (an "Authentication Order"), authenticate up to
--------------------
$205,000,000 in aggregate principal amount of Notes for original issue. The
aggregate principal amount of Notes outstanding at any time may not exceed such
amount except as provided in Section 2.7 hereof.
(e) The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.3 Registrar and Paying Agent.
--------------------------
(a) The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
---------
office or agency where Notes may be presented for payment ("Paying Agent"). The
------------
Registrar shall keep a register of the Notes and of their transfer and exchange
(the "Security Register"). The Company may appoint one or more co-registrars and
-----------------
one or more additional paying agents. The term "Registrar" includes any co-
registrar and the term "Paying Agent" includes any additional paying agent. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company shall notify the Trustee in writing of the name and address of any
Agent not a party to this Indenture. If the Company fails to appoint or maintain
another entity as Registrar or Paying
23
<PAGE>
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar.
(b) The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
---
(c) The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes and as
agent for service of notice and demands. 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 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 (if other than the Company or a
Subsidiary) shall have no further liability for the money so paid over to the
Trustee. If the Company or a Subsidiary Acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.5 Holder Lists. The Trustee shall preserve in as current a form
------------
as is reasonably practicable the most recent list available to it of the names
and addresses of all Holders and shall otherwise comply with TIA (S) 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least seven Business Days before each interest payment date and at such other
-----
times as the Trustee may request in writing, a list in such form and as of such
date or such shorter time as the Trustee may allow, as the Trustee may
reasonably require of the names and addresses of the Holders of Notes and the
Company shall otherwise comply with TIA (S) 312(a).
Section 2.6 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Notes. A Global Note may not be
-------------------------------------
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary
24
<PAGE>
or any such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes shall be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Trustee. Upon the occurrence of either of the preceding events in (i) or
(ii) above, Definitive Notes shall be issued in such names as the Depositary
shall instruct the Trustee. Global Notes also may be exchanged or replaced, in
whole or in part, as provided in Sections 2.6, 2.7 or 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.6 or Section 2.7 or 2.10 hereof,
shall be authenticated and delivered in the form of, and shall be, a Global
Note. A Global Note may not be exchanged for another Note other than as provided
in this Section 2.6(a), although beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.6(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
-----------------------------------------------------------------
The transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer comparable to those
set forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
--------------------------------------------------------
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend; provided, however, that prior to the expiration of
the Distribution Compliance Period, transfers of beneficial interests in the
Regulation S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than the Initial Purchasers). Beneficial
interests in any Unrestricted Global Note may be transferred only to Persons who
take delivery thereof in the form of a beneficial interest in an Unrestricted
Global Note. No written orders or instructions shall be required to be delivered
to the Registrar to effect the transfers described in this Section 2.6(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests in
------------------------------------------------------------
Global Notes. In connection with all transfers and exchanges of beneficial
- ------------
interests that are not subject to Section 2.6(b)(i) above, the transferor of
such beneficial interest must deliver to the Registrar either (A) (1) a written
order from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in another Global Note in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with
25
<PAGE>
the Applicable Procedures containing information regarding the Participant
account to be credited with such increase or (B) (1) a written order from a
Participant or an Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to cause to be issued a
Definitive Note in an amount equal to the beneficial interest to be transferred
or exchanged and (2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such Definitive Note
shall be registered to effect the transfer or exchange referred to in (B)(1)
above. Upon consummation of the Exchange Offer by the Company in accordance with
Section 2.6(f) hereof, the requirements of this Section 2.6(b)(ii) shall be
deemed to have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial interests in Global
Notes contained in this Indenture and the Notes or otherwise applicable under
the Securities Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.6(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted
------------------------------------------------------
Global Note. A beneficial interest in any Restricted Global Note may be
- -----------
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in another Restricted Global Note if the transfer complies with the
requirements of Section 2.6(b)(ii) above and the Registrar receives the
following:
(A) if the transferee shall take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications in
item (1) thereof; and
(B) if the transferee shall take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transferee shall take delivery in the form of a
beneficial interest in the IAI Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications in
item (3) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a
--------------------------------------------------
Restricted Global Note for Beneficial Interests in the Unrestricted Global Note.
- -------------------------------------------------------------------------------
A beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note if the exchange or transfer complies
with the requirements of Section 2.6(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the
holder of the beneficial interest to be transferred, in the case of an exchange,
or the transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a
26
<PAGE>
broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a certificate from such holder in
the form of Exhibit C hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Company
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Company, if applicable, to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D)
above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
------------------------------------------------------------------
(i) Beneficial Interests in Restricted Global Notes to Restricted
-------------------------------------------------------------
Definitive Notes. Restricted Global Notes and beneficial interests therein shall
- ----------------
be exchangeable for Definitive Notes if (i) the Depositary (x) notifies the
Company that it is unwilling or unable
27
<PAGE>
to continue as depositary for the Restricted Global Notes and the Company
thereupon fails to appoint a successor depositary or (y) has ceased to be a
clearing agency registered under the Exchange Act and the Company fails to
appoint a successor, (ii) the Company, at its option, notifies the Trustee in
writing that it elects to cause the issuance of the Definitive Notes or (iii)
there shall have occurred and be continuing a Default with respect to the Notes.
In all cases, Definitive Notes delivered in exchange for any Restricted Global
Note or beneficial interests therein shall be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with the Applicable Procedures).
In such event, the Trustee shall cause the Restricted Global Notes to
be canceled accordingly pursuant to Section 2.10 hereof, and the Company shall
execute and upon receipt of an Authentication Order the Trustee shall
authenticate and deliver to the Person designated in the instructions a
Definitive Note in the appropriate principal amount. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.6(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered.
Any Definitive Note issued in exchange for a beneficial interest in a Restricted
Global Note pursuant to this Section 2.6(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to
--------------------------------------------------
Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted
- -----------------------------
Global Note may exchange such beneficial interest for an Unrestricted Definitive
Note or may transfer such beneficial interest to a Person who takes delivery
thereof in the form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the
holder of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the Letter of Transmittal
that it is not (1) a broker-dealer, (2) a Person participating in the
distribution of the Exchange Notes or (3) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a Definitive
Note
28
<PAGE>
that does not bear the Private Placement Legend, a certificate from
such holder in the form of Exhibit C hereto, including the certifications
in item (1)(b) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a Definitive Note that does not
bear the Private Placement Legend, a certificate from such holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Company
so requests or if the Applicable Procedures so require, an Opinion of
Counsel in form reasonably acceptable to the Company, if applicable, to the
effect that such exchange or transfer is in compliance with the Securities
Act and that the restrictions on transfer contained herein and in the
Private Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
(iii) Beneficial Interests in Unrestricted Global Notes to
----------------------------------------------------
Unrestricted Definitive Notes. Unrestricted Global Notes and beneficial
- -----------------------------
interests therein shall be exchangeable for Definitive Notes if (i) the
Depositary (x) notifies the Company that it is unwilling or unable to continue
as depositary for the Unrestricted Global Notes and the Company thereupon fails
to appoint a successor depositary or (y) has ceased to be a clearing agency
registered under the Exchange Act and the Company fails to appoint a successor,
(ii) the Company, at its option, notifies the Trustee in writing that it elects
to cause the issuance of the Definitive Notes or (iii) there shall have occurred
and be continuing a Default with respect to the Notes. In all cases, Definitive
Notes delivered in exchange for any Unrestricted Global Note or beneficial
interests therein shall be registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in accordance with
the Applicable Procedures). In such event, the Trustee shall cause the
Unrestricted Global Notes to be canceled accordingly pursuant to Section 2.10
hereof, and the Company shall execute and the Trustee shall authenticate and
deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.6(c)(iv) shall be registered in
such name or names and in such authorized denomination or denominations as the
holder of such beneficial interest shall instruct the Registrar through
instructions from the Depositary and the Participant or Indirect Participant.
The Trustee shall deliver such Definitive Notes to the Persons in whose names
such Notes are so registered. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.6(c)(iv) shall not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
--------------------------------------------------------
Interests.
- ---------
(i) Restricted Definitive Notes to Beneficial Interests in
------------------------------------------------------
Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes
- -----------------------
to exchange such Note for a beneficial interest in a Restricted Global Note or
to register any transfer such Restricted Definitive Notes to a Person who takes
delivery thereof in the form of a beneficial interest in a Restricted Global
Note, then, upon receipt by the Registrar of the following documentation:
29
<PAGE>
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred
to a QIB in accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such Restricted Definitive Note is being transferred
to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred
pursuant to an exemption from the registration requirements of the Securities
Act in accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred
to an Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth in
Exhibit B hereto, including the certifications, certificates and Opinion of
Counsel required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred
to the Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred
pursuant to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above,
the appropriate Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the Regulation S Global Note,
and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in
------------------------------------------------------
Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange
- -------------------------
such Note for a beneficial interest in an Unrestricted Global Note or transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note only if:
30
<PAGE>
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to
the Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Definitive Notes proposes to exchange
such Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(2) if the Holder of such Definitive Notes proposes to transfer
such Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from
such Holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Company so
requests or if the Applicable Procedures so require, an Opinion of Counsel in
form reasonably acceptable to the Company to the effect that such exchange or
transfer is in compliance with the Securities Act and that the restrictions on
transfer contained herein and in the Private Placement Legend are no longer
required in order to maintain compliance with the Securities Act. Upon
satisfaction of the conditions of any of the subparagraphs in this Section
2.6(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause
to be increased the aggregate principal amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
--------------------------------------------------------
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
- -------------------------
exchange such Note for a beneficial interest in an Unrestricted Global Note or
transfer such Definitive Notes to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note at any time. Upon
receipt of a request for such an exchange or the registration of such a
transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note
and increase or cause to be increased the aggregate principal amount of one of
the Unrestricted Global Notes.
If any such exchange or registration of transfer from a Definitive
Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B),
(ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet
been issued, the Company shall issue and, upon
31
<PAGE>
receipt of an Authentication Order in accordance with Section 2.2 hereof, the
Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of Definitive Notes so
transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
--------------------------------------------------------------
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.6(e), the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.6(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes.
----------------------------------------------------------
Any Restricted Definitive Note may be transferred to and registered in the name
of Persons who take delivery thereof in the form of a Restricted Definitive Note
if the Registrar receives the following:
(A) if the transfer shall be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof; and
(B) if the transfer shall be made pursuant to Rule 903 or Rule 904
under the Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transfer shall be made pursuant to any other exemption from
the registration requirements of the Securities Act, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive
------------------------------------------------------
Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for
- -----
an Unrestricted Definitive Note or transferred to a Person or Persons who take
delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement and the
Holder, in the case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the Exchange
Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the
Company;
32
<PAGE>
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications
in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Company
so requests, an Opinion of Counsel in form reasonably acceptable to the
Company, if applicable, to the effect that such exchange or transfer is in
compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required
in order to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
--------------------------------------------------------
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a
- -----
Person who takes delivery thereof in the form of an Unrestricted Definitive
Note. Upon receipt of a request to register such a transfer, the Registrar shall
register the Unrestricted Definitive Notes pursuant to the instructions from the
Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
--------------
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.2, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not broker-
dealers, (y) they are not participating in a distribution of the Exchange Notes
and (z) they are not affiliates (as defined in Rule 144) of the Company, and
accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
33
<PAGE>
(g) Legends. The following legends shall appear on the face of all
-------
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(i) Private Placement Legend.
------------------------
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in exchange therefor
or substitution thereof) shall bear the legend in substantially the following
form:
"THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3)
OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH
SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT
OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON
WHICH OMNIPOINT CORPORATION OR ANY AFFILIATE OF OMNIPOINT CORPORATION WAS
THE OWNER OF ANY NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER
DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION
TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO OMNIPOINT CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS
THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
34
<PAGE>
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
INSIDE THE UNITED STATES, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF
RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT OMNIPOINT CORPORATION SHALL HAVE THE RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (I) PURSUANT TO CLAUSE (D) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO IT, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE
THAT A CERTIFICATION OF TRANSFER IN THE FORM APPEARING IN THE INDENTURE
GOVERNING THIS NOTE IS COMPLETE AND DELIVERED BY THE TRANSFEROR TO THE
TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER
THE RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(ii), c(iii),
(d)(ii), (d)(iii), e(ii), e(iii) or (f) to this Section 2.6 (and all Notes
issued in exchange therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
------------------
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.6
OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION
35
<PAGE>
2.6(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO
THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE
AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY
WITH THE PRIOR WRITTEN CONSENT OF OMNIPOINT CORPORATION.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR
BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE
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."
(h) Cancellation or Adjustment of Global Notes. At such time as all
------------------------------------------
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.10 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who shall take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
------------------------------------------------------
36
<PAGE>
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.9,
3.8, 4.11, 4.12 and 9.4 hereof).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Global Notes or Definitive
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required (A) to issue, to
register the transfer of or to exchange any Notes during a period beginning at
the opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.3 hereof and ending at the close of business on the
day of selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part or (c) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest Payment
Date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and treat
the Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on such
Notes and for all other purposes, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.2 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted pursuant to this Section 2.6 to effect a registration
of transfer or exchange may be submitted by facsimile.
Section 2.7 Replacement Notes. If a mutilated Note is surrendered to the
-----------------
Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, then, in the absence of notice to the Company or the Trustee
that such Note has been acquired by a protected 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 2.7 are met.
If
37
<PAGE>
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 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 2.7 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 2.8 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, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section 2.8 as not outstanding.
If a Note is replaced pursuant to Section 2.7, 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 protected
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.
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
hereunder, 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,
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<PAGE>
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 2.9 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 Officer or Officers executing the temporary Notes, as
evidenced by the 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 2.10 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.
Section 2.11 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 2.12 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 2.12 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
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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 September 15, 2004 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 redeemed during the 12 month period commencing September 15, of the
years set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
- ------------------- --------
<S> <C>
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
</TABLE>
(b) In addition, at any time prior to September 15, 2002, the Company
may redeem up to 35% of the aggregate principal amount 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 111.50%, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, provided that after any such
redemption at least 65% 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.
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).
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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 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; provided that no Note of $1,000 in
principal amount or less shall be redeemed in part.
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. Provisions 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, 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
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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 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 under Section 3.4, 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
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<PAGE>
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
considered paid on the date due if the Trustee or Paying Agent (other than the
Company, a Subsidiary of the Company, or any Affiliate of any of them) holds on
that 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 4.2.
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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
Redeemable Stock if (i) no Default or Event of Default shall have occurred and
be continuing, and (ii) (A) the Consolidated Leverage Ratio is no greater than 7
to 1, for any Incurrence from the Closing Date through the fifth anniversary of
the Closing Date, or 6 to 1 thereafter or (B) with respect to Indebtedness
Incurred under this clause (B), the aggregate principal amount of all
Indebtedness so Incurred and outstanding is in an aggregate principal amount
that does not exceed 1.4 times the aggregate Net Cash Proceeds received by the
Company after September 23, 1999 from the issuance and sale (other than to a
Subsidiary) of Capital Stock (other than Redeemable Stock), other than (x)
proceeds to the extent relied upon to permit the making of one or more
Restricted Payments in compliance with Section 4.4 and (y) proceeds to the
extent relied upon to permit the making of one or more Permitted Investments
pursuant to clause (v) of the definition of that term.
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 following:
(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 Closing Date;
(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 $500 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;
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(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) 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, accrued interest, fees and expenses), provided that (x)
Indebtedness Incurred to refinance or refund the Notes or other 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 not be Incurred by any Restricted Subsidiary;
(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;
(ix) Indebtedness represented by the Notes; and
(x) Guarantees by the Company or its Restricted Subsidiaries
of Indebtedness of Holdings or of any Wholly Owned Subsidiary of Holdings that
beneficially owns 100% of the outstanding Voting Stock of the Company, but only
to the extent that (A) the proceeds of any such Indebtedness Guaranteed by the
Company or any of its Restricted Subsidiaries are lent or contributed to the
Company, (B) without giving effect to the application of this clause (x), the
Company or its Restricted Subsidiaries could have Incurred the Indebtedness
being Guaranteed directly pursuant to the provisions of this Section 4.3 and
(C) the Guarantee by any Restricted Subsidiary shall not extend to any portion
of such Indebtedness to the extent that the Restricted Subsidiary could not
Incur such Indebtedness pursuant to clause (a)(vii)(z) of this Section 4.3).
(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 Indebtedness
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
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
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one of the types of Indebtedness described in this Section 4.3 or would be
entitled to be Incurred pursuant to the first paragraph of Section 4.3(a), the
Company, in its sole discretion, shall classify, and from time to time may
reclassify (in whole or in part), such item of Indebtedness and only be required
to include the amount and type of such Indebtedness in one of such clauses.
(d) Accrual of interest, accretion of accreted value and the payment
of interest in kind or the payment of dividends on Redeemable Stock in kind will
not be deemed an Incurrence of Indebtedness or the issuance of Redeemable Stock
for the purpose of this Section 4.3
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) 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) purchase, redeem, defease, retire or otherwise acquire for
value any Indebtedness subordinate to the Notes prior to any scheduled maturity,
repayment or sinking fund payment, 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 hereof 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 this Indenture of its Capital Stock (other than Redeemable
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 (other than Redeemable Stock) of the
Company, or from the issuance and sale of convertible debt securities of the
Company to the extent converted into Capital Stock (other than Redeemable Stock
of the Company) (except, in any of the foregoing cases, to the extent such Net
Cash Proceeds are used to Incur Indebtedness pursuant to clause (ii)(B) of the
first paragraph of Section 4.3), plus (3) an amount equal to the net reduction
in Investments made by the Company or a Restricted Subsidiary after the Closing
Date in any Person resulting from (x) payments of interest on debt, dividends,
repayment of loans or advances, or other transfers or distributions of
46
<PAGE>
property, in each case to the Company or any Restricted Subsidiary from any
Person, (y) to the extent that an Investment is sold for cash or otherwise
liquidated or repaid for cash, the after-tax cash return of capital with respect
to such Investment (less the cost of disposition, if any) and (z) the
redesignation of any Unrestricted Subsidiary as a Restricted Subsidiary,
provided that in each of the foregoing cases, the aggregate amount of the net
reduction in Investments will not be deemed to exceed the amount of such
Investments previously made by the Company and its Restricted Subsidiaries in
such Person or Unrestricted Subsidiary which were treated as Restricted
Payments.
The foregoing provision shall not be violated by reason of:
(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 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 (or any options, warrants or other rights to acquire, or out of the
proceeds of a substantially concurrent offering of, shares 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 redemption, repurchase, defeasance or other acquisition
or retirement for value 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 this 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;
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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
(viii) the repurchase of Indebtedness subordinated to the Notes
at a purchase price not greater than 101% of the principal (or accreted) amount
thereof, plus accrued and unpaid interest, if any, pursuant to a mandatory offer
to repurchase made after a Change of Control provided that the Company shall
first have made any Offer to Purchase (and repurchased all tendered Notes)
pursuant to Section 4.12; and
(ix) to the extent that Indebtedness Guaranteed pursuant to
clause (x) of the second paragraph of Section 4.3 has been contributed to the
capital of or loaned to the Company, the payment of dividends or distributions
by the Company in an amount sufficient to repay such Indebtedness (to the extent
of the Guarantee) in accordance with its terms; provided that except in the case
of clauses (i) and (ix) 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
paragraph (other than the Restricted Payment referred to in clauses (ii) and
(ix) 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
effective any consensual encumbrance or
48
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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
restrictions:
(i) existing on the Closing Date in this 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 this Indenture; or
(v) with respect to a Restricted Subsidiary and imposed
pursuant to an agreement that has been entered into for 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
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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 and all other Indebtedness
outstanding on the Closing Date that ranks equally with 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
- -----------------------
Subsidiary 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 Section 4.6 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 this 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 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
---------------------------------------------------
Subsidiaries. The Company will not permit any Restricted Subsidiary to Guarantee
- ------------
or assume the payment of any Indebtedness of the Company (other than
Indebtedness described in clause (x) of the second paragraph of Section 4.3)
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 subordinated to such Restricted Subsidiary's Guarantee with respect to
the Notes at least to the same extent as such Subordinated Indebtedness is
subordinated to the Notes 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
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Company will not be deemed a Guarantee of the Company's Indebtedness for
purposes of this Section 4.7.
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 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 Company
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 $5 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 $10 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; (iv) any transaction pursuant to an
agreement to which the Company or any Restricted Subsidiary is a party and in
effect on the Closing Date; (v) commercial or technical agreements customary in
the industry (as determined by the Board of Directors) in which the Company and
its Restricted Subsidiaries are engaged and entered into in the ordinary course
of business between the Company and any joint venture (regardless of
organizational form) in which the Company has a substantial economic interest,
(vi) solely with respect to the requirement that the Company obtain a fairness
opinion, Guarantees of Indebtedness pursuant to clause (x) of the second
paragraph of
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Section 4.3, (vii) loans or advances to officers or employees of the Company or
any of its Restricted Subsidiaries to pay business related travel expenses or
reasonable relocation costs of such officers or employees in connection with
their employment by the Company or any of its Restricted Subsidiaries, and
(viii) in the case of the indenture governing the notes that may be issued in
the Holdings Exchange Offer, payments and other transactions required under or
contemplated by any agreement in effect on the Closing Date and disclosed in
VoiceStream's Form 10/A filed with the Commission on April 13, 1999 or its Form
10-Q for the quarter ended June 30, 1999 (or that were not required to be
disclosed in the Form 10/A pursuant to the rules and regulations of the
Commission) or any ordinary course commercial agreement in effect at the time an
entity becomes a Restricted Subsidiary or is merged into the Company (and not
entered into in anticipation of such acquisition) or any amendment thereto or
replacement of such agreement so long as any such amendment or replacement is
not disadvantageous to the Holders of the Notes in any material respect.
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 this Indenture to
be directly secured equally and ratably with (or, if the obligation or liability
to be 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), (iii)
or (x) 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;
(vi) Liens on telecommunications licenses securing obligations
to government entities;
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(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 property or assets subject to the Liens prior to such merger or
acquisition;
(viii) Permitted Liens; or
(ix) Liens in addition to those set forth above, provided that
such Liens secure only Indebtedness of the Company and its Restricted
Subsidiaries and, at the time of determination, the aggregate amount of such
Indebtedness then outstanding shall not exceed 5% of the Company's consolidated
total assets as reflected on its most recent publicly available consolidated
balance sheet.
Section 4.10 Limitation on Sale-Leaseback Transactions. The Company will
-----------------------------------------
not, and will not permit any Restricted Subsidiary to, enter into any sale and
leaseback transactions (except between or among the Company and one or more of
its direct or indirect Wholly Owned Restricted Subsidiaries) unless (A) the
Company or that Restricted Subsidiary could have (x) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such sale and leaseback
transaction under Section 4.3 and (y) incurred a Lien to secure such
Indebtedness under Section 4.9; (B) the gross cash proceeds of that sale and
leaseback transaction are at least equal to the fair market value, as determined
in good faith by the Board of Directors and set forth in an Officer's
Certificate delivered to the Trustee, of the property that is the subject of the
sale and leaseback transaction; and (z) the Company applies the proceeds of the
sale and leaseback transaction in compliance with Section 4.11.
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
53
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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 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 Proceeds."
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 with the holders of any other
Indebtedness of the Company ranking equally with the Notes and entitled at the
time to receive a comparable Offer to Purchase an aggregate principal amount of
Notes and such other Indebtedness 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.
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.
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,
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
54
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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.
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
55
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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 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.
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Section 4.21 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
distributions 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 this Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction on a pro forma basis, either (A) 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 will have been made will be at least equal to
the Consolidated Net Worth of the Company before such transaction or (B) the
Company would be able to incur $1.00 of Indebtedness under the first paragraph
of Section 4.3; and (iv) the Company shall have furnished to the Trustee an
Officers' Certificate and an Opinion of Counsel, each to the effect that such
and the supplemental indenture (if any) comply with this Section 5.1.
Notwithstanding the foregoing, the provisions of this Article V shall not apply
to the VoiceStream Transactions.
ARTICLE VI
Default and Remedies
Section 6.1 Events of Default. An "Event of Default" shall occur with
----------------- ----------------
respect to the Notes if:
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(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 hereof or the failure to make or consummate an Offer to Purchase in accordance
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 this Indenture or under the Notes (other than a
default specified in clause (a), (b) or (c) of this Section 6.1) and such
default or breach continues for a period of 30 consecutive days after written
notice to the Company by the Trustee or to the Company and the Trustee by 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,
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
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(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 this 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
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) of this Section 6.2 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 (i) 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 (ii) 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
Damages, if any, or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.
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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
exercising any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that the Trustee may refuse to follow any
direction 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
-------------------
proceedings, 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;
(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
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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 payment
--------------------------
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,
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,
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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.
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
Company, 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
(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;
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(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 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 Company, 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;
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(x) the Trustee may conclusively rely as to the identity and
addresses of Holders and other matters contained therein on the Security
Register maintained by the Registrar pursuant to Section 2.3 hereof and shall
not be affected by notice to the contrary; and
(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 otherwise
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 responsible
--------------------
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 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.
Section 7.5 Reports by Trustee to Holders. Within 60 days after each June
-----------------------------
30, beginning with June 30, 2000, 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.
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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 lien 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 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.
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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;
(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.
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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 consolidates
---------------------------------
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 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 recognized 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
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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, 2.7, 2.12, 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 in this Section 8.1.
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 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 hereof such that a ruling is
no longer required or (y) a ruling directed to the Trustee
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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
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;
(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
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 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
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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 times 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
Obligations 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.
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.
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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 obligations
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.
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 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 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 this 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.
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
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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 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.
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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:
if to the Company:
-----------------
Omnipoint Corporation
3 Bethesda Metro Center
Bethesda, MD 20814
Telecopier No.: (301) 951-2580
Attention: Harry Plonskier
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:
-----------------
HSBC Bank USA
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.
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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 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;
(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
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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 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.
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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.
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.
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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
/s/ Douglas G. Smith
------------------------------
Name: Douglas G. Smith
Title President
HSBC BANK USA,
as Trustee
/s/ Frank J. Godino
------------------------------
Name: Frank J. Godino
Title: Vice President
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EXHIBIT 4.2
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.6 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
FOR CANCELLATION PURSUANT TO SECTION 2.10 OF THE INDENTURE AND (IV) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF OMNIPOINT CORPORATION.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET,
NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR OTHER SECURITIES LAWS.
NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (B) IT IS NOT A U.S. PERSON AND IS
ACQUIRING ITS NOTE IN AN "OFFSHORE TRANSACTION" PURSUANT TO RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3)
OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR FOR
INVESTMENT
<PAGE>
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT PRIOR TO (X) THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD OF
TIME AS PERMITTED BY RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR
PROVISION THEREUNDER) AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF (OR
OF ANY PREDECESSOR OF THIS NOTE) OR THE LAST DAY ON WHICH OMNIPOINT
CORPORATION OR ANY AFFILIATE OF OMNIPOINT CORPORATION WAS THE OWNER OF ANY
NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (Y) SUCH LATER DATE, IF ANY, AS
MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE RESTRICTION TERMINATION
DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO OMNIPOINT
CORPORATION, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A INSIDE THE UNITED STATES, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT OMNIPOINT
CORPORATION SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
(I) PURSUANT TO CLAUSE (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT, AND
(II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF
TRANSFER IN THE FORM APPEARING IN THE INDENTURE GOVERNING THIS NOTE IS
COMPLETE AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL
BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
2
<PAGE>
OMNIPOINT CORPORATION
____
11 1/2% Senior Notes due 2009
CUSIP _________
$__________
OMNIPOINT CORPORATION, a Delaware corporation (the "Company", which
-------
term includes any successor under the Indenture hereinafter referred to), for
value received, promises to pay to Cede & Co., or its registered assigns, the
principal sum of ________________________ dollars ($__________) on September 15,
2009.
Interest Payment Dates: March 15 and September 15, commencing March
15, 2000.
Regular Record Dates: March 1 and September 1.
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:
This is one of the 11 1/2% Senior Notes due 2009 described in the
withinmentioned Indenture.
HSBC BANK USA,
as Trustee
By_________________________
Authorized Signatory
4
<PAGE>
REVERSE SIDE OF NOTE
OMNIPOINT CORPORATION
11 1/2% Senior Note due 2009
(1) Principal and Interest. The Company promises to pay the principal
----------------------
of this Note on September 15, 2009.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, at 11 1/2% per annum
until maturity and shall pay the Liquidated Damages, if any, payable pursuant to
Section 5 of the Registration Rights Agreement referred to below.
Interest and Liquidated Damages, if any, 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 March 1 or September 1 immediately
preceding the Interest Payment Date) on each Interest Payment Date, commencing
March 15, 2000.
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 the date of
issuance; 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 (including post-petition interest in
any proceeding under any Bankruptcy Law) 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, if any, on each March 15 and September 15 to the Persons who
are Holders (as reflected in the Security Register at the close of business on
the March 1 and September 1 immediately preceding the Interest Payment Date), in
each case, even if the Note is cancelled on registration of transfer,
registration of exchange, 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 September
15, 2009.
5
<PAGE>
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, 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,
Registrar or co-Registrar.
(4) Indenture; Limitations. The Company issued the Notes under an
----------------------
Indenture, dated as of September 23, 1999 (the "Indenture"), between the Company
---------
and HSBC Bank USA, 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
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
$205,000,000.
(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 September 15, 2004 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
6
<PAGE>
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 redeemed during the 12
month period commencing September 15, of the years set forth below:
<TABLE>
<CAPTION>
Redemption
Year Price
---- ----------
<S> <C>
2004 105.750%
2005 103.833%
2006 101.917%
2007 and thereafter 100.000%
</TABLE>
In addition, at any time prior to September 15, 2002, the Company may
redeem up to 35% of the aggregate principal amount 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 111.50%, plus accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, provided that after any such
redemption at least 65% 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.
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, provided
that no Note of $1,000 in principal amount or less shall be redeemed in part.
Notes in denominations larger than $1,000 may be redeemed in part. If any Note
is to be redeemed in part only, the notice of redemption relating to such Note
shall state the portion of the principal amount thereof to be redeemed. 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
7
<PAGE>
Event, 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. 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.
(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.
8
<PAGE>
(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.
(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) 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 of the Indenture or the failure to make or
consummate an Offer to Purchase in accordance with Sections 4.11 or 4.12 of the
Indenture; (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 to the
Company by the Trustee or to the Company and the Trustee by 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, (i) 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 (ii) 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, 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
9
<PAGE>
shall not be in effect; (g) a court having jurisdiction in the premises enters a
decree or order for (i) 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, (ii) 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 (iii) 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 (i) 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, (ii) 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 (iii) effects any general assignment for the benefit of creditors.
If an Event of Default (other than an Event of Default specified in clause
(g) or (h) above 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 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) above 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 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 a declaration of acceleration and its consequences if (i) 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 (ii)
the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction.
10
<PAGE>
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 exercising any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee; provided that
the Trustee may refuse to follow any direction that conflicts with law or the
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 of Notes 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 such direction received from Holders of Notes. A Holder
may not pursue any remedy with respect to the Indenture or the Notes unless: (i)
the Holder gives the Trustee written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of outstanding
Notes make a written request to the Trustee to pursue the remedy, (iii) such
Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any costs, liability or expense; (iv) the Trustee does not comply with
the request within 60 days after receipt of the request and the offer of
indemnity, and (v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Notes do not give the Trustee a
direction that is inconsistent with the request. However, such limitations do
not apply to the right of any Holder of a Note to receive payment of the
principal amount of, premium and Liquidated Damages, if any, or interest on,
such Note or to bring suit for the enforcement of any such payment, on or after
the due date expressed in the Notes, which right shall not be impaired or
affected without the consent of the Holder.
The Indenture requires certain officers of the Company to certify, on or
before a date not more than 90 days after the end of each fiscal year, that a
review has been conducted of the activities of the Company and its Restricted
Subsidiaries and the Company's and its Restricted Subsidiaries' performance
under the Indenture and that the Company has fulfilled all obligations
thereunder, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default and the nature and status thereof. The
Company is also obligated to notify the Trustee of any default or defaults in
the performance of any covenants or agreements under the Indenture.
(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 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.
11
<PAGE>
(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).
(19) Additional Rights of Holders of Notes. In addition to the rights
-------------------------------------
provided under the Indenture, Holders of Notes shall have all the rights set
forth in the Registration Rights Agreement, dated as of September 23, 1999,
among the Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
(20) CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
(21) Governing Law. The 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 the Indenture or the
Notes.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to Omnipoint Corporation, 3 Bethesda Metro Center,
Bethesda, MD 20814, Attention: Harry Plonskier.
12
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:
----------------
Your Signature:
--------------------------
(Sign exactly as your name appears on the
face of this Note)
-----------------------------------------
Signature Guarantee:
13
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.11 or 4.12 of the Indenture, check the box below:
[ ] Section 4.11 [ ] Section 4.12
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.11 or Section 4.12 of the Indenture, state the
amount you elect to have purchased: $
--------
Date: Your Signature:
--------- --------------------------
(Sign exactly as your name appears on the
Note)
-----------------------------------------
Signature Guarantee:
Tax Identification No:
------------------
14
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
<TABLE>
<CAPTION>
Principal Amount
Amount of decrease Amount of increase of this
in in Principal Amount Global Note Signature of
Principal Amount of this following such authorized officer
of this Global Note decrease (or of Trustee or
Global Note increase) Custodian
Date of Exchange
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
15
<PAGE>
EXHIBIT 10.1
OMNIPOINT CORPORATION
$205,000,000
11 1/2% Senior Notes due 2009
PURCHASE AGREEMENT
Lehman Brothers Inc.
Barclays Capital Inc.
c/o Lehman Brothers Inc. September 17, 1999
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Omnipoint Corporation, a Delaware corporation (the "Company"),
-------
proposes to issue and sell (the "Initial Placement") to each of Lehman Brothers
-----------------
Inc. ("Lehman Brothers") and Barclays Capital Inc. ("Barclays" and, together
--------------- --------
with Lehman Brothers, the "Initial Purchasers"), $205,000,000 aggregate
------------------
principal amount of the Company's 11 1/2% Senior Notes due 2009 (the "Notes"
-----
and, together with the Exchange Notes (as defined below), the "Securities"), to
----------
be issued pursuant to an Indenture, dated as of the Closing Date (the
"Indenture"), between the Company and HSBC Bank USA, as trustee (the "Trustee").
--------- -------
Capitalized terms used herein shall have the meanings specified therefor in the
Final Memorandum (as defined below).
The Notes will be offered and sold without being registered under the
Securities Act of 1933, as amended (the "Securities Act"), in reliance on
--------------
exemptions therefrom.
The Initial Purchasers and the Company will enter into a Registration
Rights Agreement, to be dated as of the Closing Date (the "Registration Rights
-------------------
Agreement") to be substantially in the form attached hereto as Exhibit A.
- ---------
In connection with the offer of the Notes, the Company has prepared a
preliminary offering memorandum, dated September 8, 1999 (the "Preliminary
-----------
Memorandum") and a final offering memorandum, dated September 17, 1999 (the
- ----------
"Final Memorandum" and together with the Preliminary Memorandum, the "Offering
- ----------------- --------
Documents") setting forth or including a description of the terms of the Notes,
- ---------
the terms of the offering, a description of the Company and any material
developments relating to the Company occurring after the date of the most recent
financial statements included therein.
1. Representations, Warranties and Agreements of the Company. The
Company represents and warrants to, and agrees with the Initial Purchasers that:
<PAGE>
(a) The Preliminary Memorandum as of its date did not, and the
Final Memorandum at the date hereof, does not, and at the Closing Date
(as defined), will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, except that the representations and warranties set
forth in this Section 1(a) do not apply to statements or omissions in
the Offering Documents based upon information furnished to the Company
in writing by or on behalf of the Initial Purchasers expressly for use
therein. To the best knowledge of the Company, no order preventing
the use of any of the Offering Documents, or any amendment or
supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Securities Act or any state
securities or blue sky laws has been issued.
(b) Assuming (i) that the representations and warranties of the
Initial Purchasers in Sections 3 and 6 hereof are true and correct and
(ii) compliance by the Initial Purchasers with the covenants set forth
in Sections 3 and 6 hereof, the purchase and resale of the Notes
pursuant hereto is exempt from the registration requirements of the
Securities Act and is not required to qualify the Indenture under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
-------------------
and the rules and regulations of the Commission applicable to an
indenture which is qualified thereunder.
(c) The Company and each of its subsidiaries (as defined in
Section 16) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct
of their respective businesses requires such qualification, except
where the failure to be so qualified would not reasonably be expected
to have a material adverse effect on the consolidated financial
position, stockholder's equity, results of operations, business or
property of the Company and the subsidiaries of the Company taken as a
whole (a "Material Adverse Effect"), and have all power and authority
-----------------------
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged.
(d) The Company has an authorized capitalization as set forth in
the Final Memorandum in the column entitled "Actual" under the caption
"Capitalization" (and on the Closing Date will have the authorized
capitalization so set forth therein as of that date), and all of the
issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable; and
all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued and are fully
paid and non-
2
<PAGE>
assessable and are owned directly or indirectly by the Company (except
for 549 shares of common stock of Omnipoint Communications, Inc.,
which are owned by a third-party and which are described in the Final
Memorandum), free and clear of all liens, encumbrances, equities or
claims (other than pledges of the stock of subsidiaries pursuant to
financing agreements to which the Company or one or more of its
subsidiaries is a party and which are described in the Final
Memorandum).
(e) This Agreement has been duly authorized, executed and
delivered by the Company and (assuming due execution and delivery by
the Initial Purchasers), constitutes a valid and binding agreement of
the Company enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) or
an implied covenant of good faith and fair dealing, and except that
rights to indemnification and contribution thereunder may be limited
by federal or state securities laws or public policy relating thereto.
(f) The Registration Rights Agreement has been duly authorized by
the Company, and when duly executed by the proper officers of the
Company (assuming due execution and delivery by the Initial
Purchasers) and delivered by the Company will constitute a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith
and fair dealing, and except that rights to indemnification and
contribution thereunder may be limited by federal or state securities
laws or public policy relating thereto.
(g) The Indenture has been duly authorized by the Company, and
when duly executed by the proper officers of the Company (assuming due
execution and delivery by the Trustee) and delivered by the Company
will constitute a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) or an implied
covenant of good faith and fair dealing, and except that (A) rights to
indemnification and contribution thereunder may be limited by federal
or state securities laws or public policy relating thereto and (B) to
the extent that a waiver of rights or defenses under applicable usury
laws may be unenforceable. On the Closing Date, the Indenture will
conform in all material respects to the
3
<PAGE>
requirements of the Trust Indenture Act, and the rules and regulations
of the Commission applicable to an indenture which is qualified
thereunder. The Offering Documents contain a summary of the terms of
the Indenture, which is accurate in all material respects.
(h) The Notes have been duly authorized by the Company, and, when
duly executed, authenticated, issued and delivered as contemplated in
the Indenture, and paid for by the Initial Purchasers in accordance
with the terms of this Agreement, will be duly and validly issued and
outstanding, and will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable in
accordance with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith
and fair dealing, and except to the extent that a waiver of rights or
defenses under applicable usury laws may be unenforceable.
(i) The Company's 11 1/2% Senior Notes due 2009 that may be
issued in exchange for the Notes pursuant to the Registration Rights
Agreement (the "Exchange Notes") have been duly authorized by the
--------------
Company, and, when duly executed, authenticated, issued and delivered
as contemplated in the Indenture to the holders of Notes who acquire
such Exchange Notes pursuant to the exchange offer contemplated by the
Registration Rights Agreement, will be duly and validly issued and
outstanding, and will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable in
accordance with their terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) or an implied covenant of good faith
and fair dealing, and except to the extent that a waiver of rights or
defenses under applicable usury laws may be unenforceable.
(j) The execution, delivery and performance of this Agreement,
the Registration Rights Agreement and the Indenture by the Company and
the consummation of the transactions contemplated hereby and thereby,
and the issuance and delivery of the Securities, (i) will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or 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 or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, except for such conflicts, breaches or violations that,
individually or in the aggregate, would not
4
<PAGE>
have a Material Adverse Effect, (ii) nor will such actions result in
any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries, (iii) nor will such actions result
in any violation of any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets, except for such violations that, individually or in the
aggregate, would not have a Material Adverse Effect, and (iv) except
for such consents, approvals, authorizations, registrations or
qualifications as may be required (x) under applicable state
securities laws in connection with the purchase and sale of the Notes
by the Initial Purchasers, or (y) under applicable federal or state
securities laws in connection with the delivery of the Exchange Notes,
or the registration of the Securities pursuant to any shelf
registration statement, in each case as contemplated by the
Registration Rights Agreement, no consent, approval, authorization or
order of, or filing or registration with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the Registration Rights Agreement and the Indenture
by the Company and the consummation of the transactions contemplated
hereby and thereby, and the issuance of the Securities.
(k) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial statements
included in the Final Memorandum, any material loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Final Memorandum; and, since such date,
there has not been any change in the capital stock or long-term debt
of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in
the Final Memorandum.
(l) The financial statements (including the related notes and
supporting schedules) included in the Offering Documents present
fairly the financial condition and results of operations of the
entities purported to be shown thereby, at the dates and for the
periods indicated, and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved (except that the unaudited financial
statements may be subject to normal year-end adjustments). The other
financial and statistical data related to the Company set forth in the
Offering Documents (and any amendment or supplement thereto) is, in
all material respects, accurately presented and prepared on a basis
consistent with such financial statements and the books and records of
the Company. The industry, customer and statistical
5
<PAGE>
data and estimates, and the information relating to VoiceStream
Wireless Corporation ("VoiceStream") and VoiceStream Wireless Holding
-----------
Corporation ("Holdings"), included in the Offering Documents are based
--------
on or derived from sources that the Company believes are reliable and
accurate in all material respects.
(m) PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company, whose report appears in the
Offering Documents and who have delivered the initial letter referred
to in Section 8(e) hereof, are independent public accountants as
required by the Securities Act and the rules and regulations
promulgated thereunder (the "Rules and Regulations").
---------------------
(n) The Company and each of its subsidiaries own or possess
adequate rights to use all material patents, patent applications,
trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights and licenses necessary for the
conduct of their respective businesses and have no reason to believe
that the conduct of their respective businesses will conflict with,
and have not received any notice of any claim of conflict with, any
such rights of others.
(o) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except for those
liens granted under debt agreements described in the Final Memorandum
or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of
such property by the Company and its subsidiaries or as permitted by
the Indenture; and all real property and buildings held under lease by
the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries.
(p) There are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which
any property or asset of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect; and to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(q) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company on the other hand,
except as
6
<PAGE>
disclosed in the Final Memorandum under the caption "Certain
Relationships and Related Transactions."
(r) Since the date as of which information is given in the Final
Memorandum through the date hereof, and except as may otherwise be
disclosed in the Final Memorandum, the Company has not (i) issued or
granted any securities, (ii) incurred any liability or obligation,
direct or contingent, other than liabilities and obligations which
were incurred in the ordinary course of business, (iii) entered into
any transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(s) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any
material respect, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained
in any material indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which it is a party or by which it is
bound or to which any of its properties or assets is subject,
including, without limitation, operating agreements or (iii) is in
violation in any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its properties or
assets may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or assets or to the
conduct of its business.
(t) Neither the Company nor any of its subsidiaries, nor any
director, officer, agent, employee or other person associated with or
acting on behalf of the Company or any of its subsidiaries, has used
any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expense relating to political activity; made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977; or made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment.
(u) Neither the Company nor any subsidiary of the Company is, or
will be after the offering of the Notes and the use of proceeds
therefrom, an "investment company" within the meaning of such term
under the Investment Company Act of 1940, as amended, and the rules
and regulations of the Securities and Exchange Commission (the
"Commission") thereunder (the "Investment Company Act").
----------- ----------------------
(v) Neither the Company nor any of the affiliates of the Company
(each, as defined in Rule 501(b) of Regulation D under the Securities
Act, an "Affiliate") has directly, or through any agent (other
---------
7
<PAGE>
than the Initial Purchasers in connection with this Agreement), (i)
sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any security (as defined in the Securities
Act) which is or will be integrated with the sale of the Notes in a
manner that would require the registration under the Securities Act of
the Notes, or (ii) engaged or will engage in any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offering
of the Notes, or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(w) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Securities Act
with respect to any debt securities of the Company or any of its
subsidiaries owned or to be owned by such person or to require the
Company to include any securities of the Company in any securities
being registered pursuant to any registration statement to be filed
under the Securities Act pursuant to the Registration Rights
Agreement.
(x) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be
expected to have a Material Adverse Effect.
(y) Neither the Company nor any of its subsidiaries has violated
any safety or similar law applicable to its business, 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, except for violations that, individually or in the aggregate,
would not have a Material Adverse Effect. The Company is in
compliance in all material respects with all presently applicable
provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has
-----
occurred with respect to any "pension plan" (as defined in ERISA) for
which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension
plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and to the best knowledge of the Company nothing has
occurred, whether by action or by failure to act, which would cause
the loss of such qualification.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic
8
<PAGE>
wastes, medical wastes, hazardous wastes or hazardous substances by
the Company or any of its subsidiaries (or, to the knowledge of the
Company, any of their predecessors in interest) at, upon or from any
of the property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require
remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or
remedial action which would not have, or could not be reasonably
likely to have, singularly or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical
wastes, solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of its subsidiaries or with respect to
which the Company or any of its subsidiaries have knowledge; and the
terms "hazardous wastes", "toxic wastes", "hazardous substances" and
"medical wastes" shall have the meanings specified in any applicable
local, state, federal and foreign laws or regulations with respect to
environmental protection.
(aa) The Company has filed (or has had filed on its behalf) all
federal, state and local income and franchise tax returns (or
extensions relating thereto) required to be filed through the date
hereof under applicable law, other than those filings being contested
in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate
provision as shall be required in conformity with generally accepted
accounting principles shall have been made therefor, and has paid all
taxes due thereon, and no tax deficiency has been determined adversely
to the Company or any of its subsidiaries which has had (nor does the
Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might have) a
Material Adverse Effect.
(bb) Except as would not have a Material Adverse Effect, (i) the
Company and its subsidiaries, have (A) such permits, licenses,
franchises and authorizations of governmental or regulatory
authorities (federal, foreign, state or local) ("Permits") as are
-------
necessary to own, lease and operate their properties and to conduct
their businesses as presently conducted, and (B) fulfilled and
performed all of their material obligations with respect to the
Permits, and (ii) no event has occurred that would allow, or after
notice or lapse of time would allow, revocation or termination of any
Permit or that would result in any other material impairment of the
rights granted to the Company or any of its subsidiaries under any
Permit, and the Company has no reason to believe that any governmental
body or agency is considering limiting, suspending or revoking any
Permit.
9
<PAGE>
(cc) The Company and each of its subsidiaries carry, or are
covered by, insurance in such amounts and covering 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.
(dd) The Company and its subsidiaries (i) make and keep accurate
books and records and (ii) maintain a system of internal accounting
controls sufficient to provide assurance that: (A) transactions are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's authorization and (D) the recorded and reported
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect
thereto.
(ee) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities of the Company
that are listed on a national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or that are quoted in a United States automated
-------------
inter-dealer quotation system.
(ff) As of the date hereof and as of the Closing Date, the
Company is not a party in interest or disqualified person (as those
terms are defined in Section 3(14) of ERISA and Section 4975 of the
Code respectively) with respect to any employee benefit plans other
than employee benefit plans sponsored by the Company or any of its
subsidiaries and covering employees of the Company or any of its
subsidiaries.
(gg) All licenses and authorizations issued by the Federal
Communications Commission ("FCC") and state authorities governing
telecommunications matters (the "Licenses") required for the operation
of the business of the Company and its subsidiaries are in full force
and effect there are no pending modifications, amendments or
revocation proceedings which would adversely affect the operation of
any of the telecommunications business currently owned by the Company
and its subsidiaries (the "Businesses") except (i) in connection with
the Reorganization Agreement (as defined herein) and the transactions
contemplated thereby and to be consummated in connection therewith and
(ii) the petitions by QUALCOMM Incorporated and National Telecom PCS,
Inc., to deny the transfer of, and/or to revoke, eleven of the
Company's licenses, including the Company's NY MTA license, all as
described in the Final Memorandum (the "Petitions"). Based on advice
10
<PAGE>
from outside legal counsel, the Company believes that the Petitions
are meritless and that the Company has valid legal defenses to such
Petitions. All fees due and payable to governmental authorities
pursuant to the rules governing Licenses have been paid. Except with
respect to the Petitions described above, no event has occurred with
respect to the Licenses held by the Company, or its respective
subsidiaries, which, with the giving of notice or the lapse of time or
both, would constitute grounds for revocation of any Licenses. Each
of the Company and its subsidiaries is in compliance in all material
respects with the terms of the Licenses, as applicable, and there is
no condition, event or occurrence existing, nor is there any
proceeding being conducted of which the Company has received notice,
nor, to the Company's knowledge, is there any proceeding threatened,
by any governmental authority, which would cause the termination,
suspension, cancellation or nonrenewal of any of the Licenses, or the
imposition of any penalty or fine (that is material to the Company and
its subsidiaries, taken as a whole) by any regulatory authority. No
registrations, filings, applications, notices, transfers, consents,
approvals, audits, qualifications, waivers or other action of any kind
is required by virtue of the execution, delivery and performance of
this Agreement, the Registration Rights Agreement and the Indenture by
the Company and the consummation of the transactions contemplated
hereby and thereby, and the issuance and delivery of the Securities,
to avoid the loss of any such License, permit, consent, concession or
other authorization or any asset, property or right pursuant to the
terms thereof, or the violation or breach of any applicable law
thereto.
(hh) The Company has developed and implemented a plan (the
"Company Y2K Plan") to ensure that all computer hardware and software
-----------------
used in and material to the business of the Company and its
subsidiaries is designed to be Year 2000 Compliant. The Company Y2K
Plan includes reasonable steps to determine whether the failure of any
suppliers or customers with which the Company or any subsidiary has a
material relationship to be Year 2000 Compliant would have or would
reasonably be expected to have a Material Adverse Effect. Based on
the foregoing, the Company believes that all computer applications
(including those of the Company's suppliers, vendors and customers)
that are material to its or any of its subsidiaries' business and
operations are reasonably expected on a timely basis to be Year 2000
Compliant. For purposes of this subsection (hh), "Date Data" means
any data of any kind that consists of date information or which is
otherwise derived from, dependent on or related to date information;
"Date-Sensitive System" means any software, microcode or hardware
system or component, including any electronic or electronically
controlled system or component that processes any Date Data and that
is installed, in development or on order, for internal or external
use, or the provision or operation of which provides a benefit to
customers, vendors, suppliers or any other party; and "Year 2000
Compliant" means (i) with respect to Date Data, that such data is in
proper
11
<PAGE>
format and (ii) with respect to Date-Sensitive Systems, that each such
system accurately processes all Date Data, including for the twentieth
and twenty-first centuries, without loss of any functionality or
performance, including, without limitation, calculating, comparing,
sequencing, storing and displaying such Date Data (including all leap
year considerations), when used as a stand-alone system or in
combination with other software or hardware. The matters set forth in
this subsection (hh) are subject to disclosures relating to Year 2000
matters in the Offering Documents.
(ii) The Company's public filings with the Commission since
January 1, 1997, when they became effective or were filed with the
Commission, as the case may be, did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and such filings when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Securities Act or the Exchange Act, as
applicable.
(jj) There are no contracts, agreements or understandings between
the Company and its subsidiaries and any other person that would give
rise to a valid claim against the Company or any of its subsidiaries
or the Initial Purchasers for a brokerage commission, finder's fee or
like payment in connection with the issuance, purchase and sale of the
Notes, except (A) pursuant to or contemplated by this Agreement and
(B) contracts, agreements or understandings for the payment of a
brokerage commission, finder's fee or like payment to the Initial
Purchasers.
(kk) (i) The Agreement and Plan of Reorganization, dated as of
June 23, 1999 (the "Reorganization Agreement"), among, VoiceStream,
------------------------
Holdings and the Company is in full force and effect and no party to
the Reorganization Agreement has sought to modify, amend or waive any
of the provisions thereof, other than as disclosed to the Initial
Purchasers, (ii) the representations and warranties of the Company
contained in the Reorganization Agreement that spoke as of the date of
the Reorganization Agreement were true and correct in all respects,
the representations and warranties of the Company contained in the
Reorganization Agreement that continue to speak as of the date hereof
and as of the Closing Date, are true and correct in all respects and,
to the best of the Company's knowledge, the representations and
warranties of the other parties to the Reorganization Agreement are
true and correct in all material respects, (iii) the Company is not,
and to the best of the Company's knowledge, no other party to the
Reorganization Agreement is in breach of any of the terms thereof and
(iv) except as disclosed in or contemplated by the Reorganization
Agreement, no consent, approval, authorization or order of, or filing
or registration with, any court or governmental agency or body was
required for the execution and delivery of, or is required for the
performance of, the Reorganization Agreement by any of the parties to
the
12
<PAGE>
Reorganization Agreement and the consummation of the transactions
contemplated thereby.
(ll) There are no contracts or other documents which would have
been required under the Securities Act to have been described in a
prospectus prepared as part of a Registration Statement on Form S-1
which have not been described in the Final Memorandum.
(mm) Each of the subsidiaries listed on Exhibit B hereto is a
Significant Subsidiary (as defined Section 16 hereto) of the Company
and such subsidiaries are the only Significant Subsidiaries of the
Company.
(nn) Neither the Company nor any of its Affiliates or any person
acting on its or their behalf (other than the Initial Purchasers, as
to whom the Company makes no representation) has engaged or will
engage in any directed selling efforts within the meaning of
Regulation S under the Securities Act ("Regulation S") with respect to
------------
the Notes.
(oo) The Notes offered and sold in reliance on Regulation S have
been and will be offered and sold only in offshore transactions.
(pp) The sale of the Notes pursuant to Regulation S is not part
of a plan or scheme to evade the registration provisions of the
Securities Act.
(qq) The Company and its respective Affiliates and all persons
acting on their behalf (other than the Initial Purchasers, as to whom
the Company makes no representation) have complied with and will
comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Notes outside the United States
and, in connection therewith, the Final Memorandum will contain the
disclosure required by Rule 902(g)(2).
(rr) The Company is a "reporting issuer," as defined in Rule 902
under the Securities Act.
The Company understands that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant hereto,
counsel to the Company and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations and the Company hereby
consents to such reliance.
2. Purchase of the Notes by the Initial Purchasers. (a) On the basis
of the representations and warranties herein contained, and subject to the terms
and conditions hereinafter set forth, the Company agrees to sell to the Initial
Purchasers and the Initial Purchasers, severally and not jointly, agree to
purchase from the Company, at a purchase price of 97.50% of the principal amount
of Notes, the respective principal amount of Notes set forth opposite the name
of each such Initial Purchaser in Schedule I hereto.
13
<PAGE>
(b) The Company shall not be obligated to deliver any of the Notes,
except upon payment for all of the Notes to be purchased as hereinafter
provided.
3. Sale and Resale of the Notes by the Initial Purchasers. (a) The
Initial Purchasers have advised the Company that they propose to offer the Notes
for resale upon the terms and conditions set forth in this Agreement and in the
Final Memorandum. The Initial Purchasers hereby represent and warrant to, and
agree with, the Company that they (i) are purchasing the Notes pursuant to a
private sale exempt from registration under the Securities Act, (ii) will not
solicit offers for, or offer or sell, the Notes by means of any form of general
solicitation or general advertising (as such terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act, (iii) with respect to Notes
sold pursuant to Rule 144A under the Securities Act, as such rule may be amended
from time to time ("Rule 144A"), they will solicit offers for the Notes only
---------
from, and will offer, sell or deliver the Notes, as part of their initial
resale, only to persons whom they reasonably believe to be qualified
institutional buyers ("Qualified Institutional Buyers") as defined in Rule 144A
------------------------------
or, if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such person has
represented to them that each such account is a Qualified Institutional Buyer,
to whom notice has been given that such sale or delivery is being made in
reliance on Rule 144A, and (iv) with respect to Notes sold pursuant to
Regulation S, (A) the Initial Purchasers and their Affiliates or any person
acting on its or their behalf have not engaged or will not engage in any
directed selling efforts within the meaning of Regulation S with respect to the
Notes, (B) the Notes offered and sold by the Initial Purchasers pursuant hereto
in reliance on Regulation S have been and will be offered and sold only in
offshore transactions, (C) the sale of the Notes offered and sold by the Initial
Purchasers pursuant hereto in reliance on Regulation S is not part of a plan or
scheme to evade the registration provisions of the Securities Act (D) the
Initial Purchasers agree that they have not offered or sold and will not offer
or sell such Notes in the United States or to, or for the benefit or account of,
a U.S. Person (their than a distributor), in each case, as defined in Rule 902
under the Act (x) as part of its distribution at any time and (y) otherwise
until 40 days after the later of the commencement of the offering of the Notes
pursuant hereto and the Closing Date, other than in accordance with Regulation S
of the Securities Act or another exemption from the registration requirements of
the Act and the Initial Purchasers agree that, during such 40-day distribution
compliance period, they will not cause any advertisement with respect to the
Notes (including any "tombstone" advertisement) to be published in any newspaper
or periodical or posted in any public place and will not issue any circular
relating to the Notes, except such advertisements as are permitted by and
include the statements required by Regulation S and (E) the Initial Purchasers
agree that, at or prior to confirmation of a sale of Notes by it to any
distributor, dealer or person receiving a selling concession, fee or other
remuneration during the 40-day distribution compliance period referred to in
Rule 903(c)(2) under the Securities Act, it will send to such distributor,
dealer or person receiving a selling concession, fee or other remuneration a
confirmation or notice to substantially the following effect:
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"The Notes covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and may not be
--------------
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of your distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
Offering and the Closing Date, except in either case in accordance with
Regulation S under the Securities Act (or Rule 144A or to Accredited
Institutions in transactions that are exempt from the registration
requirements of the Securities Act), and in connection with any subsequent
sale by you of the Notes covered hereby in reliance on Regulation S during
the period referred to above to any distributor, dealer or person receiving
a selling concession, fee or other remuneration, you must deliver a notice
to substantially the foregoing effect. Terms used above have the meanings
assigned to them in Regulation S."
(b) The Initial Purchasers understand that the Company, and for
purposes of the opinions to be delivered to the Initial Purchasers pursuant
hereto, counsel to the Company and counsel to the Initial Purchasers, will rely
upon the accuracy and truth of the foregoing representations and the Initial
Purchasers hereby consent to such reliance.
4. Delivery of and Payment for the Notes. (a) Payment of the
purchase price for, and delivery of, the Notes shall be made at the offices of
Weil, Gotshal & Manges LLP, New York, New York, or at such other place as shall
be agreed upon by the Company and you, at 9:30 a.m. (New York time), on
September 23, 1999, or at such other time or date as you and the Company shall
determine (such date and time of payment and delivery being herein called the
"Closing Date").
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(b) On the Closing Date, payment for the Notes shall be made in
immediately available funds by wire transfer to such account as the Company
shall specify prior to the Closing Date or by such means as the parties hereto
shall agree prior to the Closing Date against delivery to you of the
certificates evidencing the Notes. Upon delivery, the Notes shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not less than one full Business Day prior to the
Closing Date. The certificates evidencing the Notes shall be delivered to you
on the Closing Date for the account of the Initial Purchasers, with any transfer
taxes payable in connection with the transfer of the Notes to the Initial
Purchasers duly paid, against payment of the purchase price therefor. It is
understood that Barclays has authorized Lehman Brothers, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the
Notes which it has agreed to acquire. Lehman Brothers, individually and not as
a representative of Barclays, may (but shall not be obligated to) make payment
of the purchase price for the Notes to be acquired by Barclays, if Barclays'
wire transfer of immediately available funds has not been made by the Closing
Date, but such payment shall not relieve Barclays from its obligations
hereunder.
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5. Further Agreements of the Company. The Company further agrees:
(a) To furnish to you, without charge, during the period referred
to in paragraph (c) below, as many copies of the Final Memorandum and
any supplements and amendments thereto as you may reasonably request.
(b) Prior to making any amendment or supplement to the Final
Memorandum, the Company shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers and will not effect
any such amendment or supplement to which the Initial Purchasers shall
reasonably object by notice to the Company after a reasonable period
of review, which shall not in any case be longer than three Business
Days after receipt of such copy.
(c) If, at any time prior to completion of the distribution of
the Notes by you to purchasers, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel
for you or counsel for the Company, to amend or supplement the Final
Memorandum in order that the Final Memorandum will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in
light of the circumstances existing at the time it is delivered to a
purchaser, or if it is necessary to amend or supplement the Final
Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Final Memorandum, as so amended
or supplemented, will comply with applicable law and to furnish you
such number of copies as you may reasonably request.
(d) So long as any of the Notes remain outstanding and is a
"restricted security" within the meaning of Rule 144(a)(3) under the
Securities Act during any period in which the Company is not subject
to and in compliance with Section 13 or 15(d) of the Exchange Act, to
furnish to holders of the Notes and prospective purchasers of the
Notes designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
(e) For a period of five years following the date of the Final
Memorandum, the Company shall furnish to the Initial Purchasers copies
of all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange
upon which securities of the Company may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the
Commission thereunder.
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<PAGE>
(f) Promptly from time to time to take such action as the Initial
Purchasers may reasonably request to qualify the Notes for offering
and sale under the securities laws of such jurisdictions as the
Initial Purchasers may reasonably request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes; provided, however, that in no event will
the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising
out of the offering or sale of the Notes, in any jurisdiction where it
is not now so subject. In each jurisdiction in which the Notes have
been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for so long as any of the Notes are
outstanding. The Company will also supply the Initial Purchasers with
such information as is necessary for the determination of the legality
of the Notes for investment under the laws of such jurisdictions as
the Initial Purchasers may reasonably request.
(g) Not to offer, sell, contract to sell or otherwise dispose of
any additional securities of the Company substantially similar to the
Notes (but not including the Exchange Notes) or any securities
convertible into or exchangeable for or that represent the right to
receive any such similar securities, other than either the Notes to be
sold hereunder or the Exchange Notes, without the consent (which
consent shall not be unreasonably withheld) of the Initial Purchasers
during the period beginning from the date of this Agreement and
continuing for 180 days following the Closing Date.
(h) To use its best efforts to permit the Notes to be designated
Private Offerings, Resales and Trading through Automated Linkages
Market ("PORTAL") securities in accordance with the rules and
------
regulations adopted by the National Association of Securities Dealers,
Inc. relating to trading in the PORTAL Market and to permit the Notes
to be eligible for clearance and settlement through The Depository
Trust Company ("DTC").
---
(i) Except following the effectiveness of the Registration
Statement (as defined in the Registration Rights Agreement), not to,
and will cause its respective Affiliates not to, solicit any offer to
buy or offer to sell the Notes by means of any form of general
solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) or in any manner involving a
public offering within the meaning of Section 4(2) of the Securities
Act.
(j) Not to, and will cause its respective Affiliates not to,
sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of
17
<PAGE>
any security (as defined in the Securities Act) in a transaction that
could be integrated with the sale of the Notes in a manner that would
require the registration under the Securities Act of the Notes.
(k) To use reasonable best efforts to ensure that none of the
Company or any subsidiary of the Company shall become an "investment
company" within the meaning of such term under the Investment Company
Act.
(l) None of the Company, the Affiliates of the Company or any
person acting on its or their behalf (other than the Initial
Purchasers in connection with this Agreement) will engage in any
directed selling efforts within the meaning of Regulation S, and each
of the Company and the Affiliates of the Company and each person
acting on its or their behalf (other than the Initial Purchasers in
connection with this Agreement) will comply with the offering
restrictions of Regulation S.
6. Offering of Securities; Restrictions on Transfer. (a) Each
Initial Purchaser, severally and not jointly, represents and warrants that it is
a Qualified Institutional Buyer.
7. Expenses. The Company agrees to pay all expenses incident to the
performance of its obligations under this Agreement, including: (i) the costs
incident to the authorization, issuance, sale and delivery of the Notes and any
taxes payable in that connection; (ii) the costs incident to the preparation of
the Offering Documents and any amendments or supplements thereto (exclusive of
fees and expenses of counsel to the Initial Purchasers); (iii) the fees and
disbursements of the Company's counsel and accountants; (iv) the qualification
of the Notes under securities or Blue Sky laws, including filing fees and the
reasonable fees and disbursements of counsel for the Initial Purchasers in
connection therewith and in connection with the preparation of any Blue Sky or
legal investment memoranda; (v) the printing and delivery to the Initial
Purchasers in quantities as hereinabove stated of copies of the Offering
Documents and any amendments or supplements thereto; (vi) the fees and expenses,
if any, incurred in connection with the admission of the Notes for trading in
PORTAL or any other appropriate market system; (vii) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the Notes; and (viii) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder.
8. Conditions to the Initial Purchaser's Obligations. The
obligations of the Initial Purchasers hereunder are subject to the accuracy,
when made and on the Closing Date, of the representations and warranties of the
Company contained herein, to the performance by the Company of its respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the
Final
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<PAGE>
Memorandum or any amendment or supplement thereto contains any
untrue statement of a fact which, in the opinion of Weil, Gotshal &
Manges LLP, counsel for the Initial Purchasers, is material or omits
to state any fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the
Registration Rights Agreement, the Indenture, the Notes, the Offering
Documents and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all
respects to counsel for the Initial Purchasers, and the Company shall
have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(c) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by federal or New
York state authorities, (iii) there shall have been a significant
escalation in hostilities involving the United States or a declaration
of a national emergency or war by the United States or (iv) there
shall have occurred a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets in the United States shall be
such) as to make it, in the reasonable judgment of the Initial
Purchasers, impracticable or inadvisable to proceed with the offering
or delivery of the Notes on the terms and in the manner contemplated
in the Final Memorandum.
(d) Piper & Marbury L.L.P. shall have furnished to the Initial
Purchasers its written opinion, as counsel to the Company, addressed
to the Initial Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to the Initial Purchasers to the
effect set forth in Exhibit C attached hereto.
(e) You shall have received on the date hereof and on the Closing
Date letters, dated the date hereof and the Closing Date, as the case
may be, in form and substance reasonably satisfactory to you, from
PricewaterhouseCoopers LLP, independent public accountants, containing
statements and information with respect to the financial statements
and certain financial information, including the financial information
contained or referred to in the Final Memorandum, as identified by
you.
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<PAGE>
(f) The Company shall have furnished to the Initial Purchasers a
certificate, dated the Closing Date, of the President or a Vice
President of the Company and the Treasurer or its Acting Chief
Financial Officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 hereof are true and correct as of the Closing
Date and the Company has complied with all its agreements
contained herein;
(ii) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest audited financial
statements included in the Final Memorandum, any material loss or
interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree and
since such date, there has not been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries
or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general
affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries,
otherwise than as set forth or contemplated in the Final
Memorandum; and
(iii) They have carefully examined the Offering Documents and,
in their opinion (A) none of the Offering Documents, as of its
date and as of the Closing Date, included or includes any untrue
statement of a material fact or omitted or omits to state any
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, and (B) since the date of the Final Memorandum, no
event has occurred which would have been required under the
Securities Act to have been set forth in a supplement or amendment
to the Final Memorandum if it had been a prospectus prepared as
part of a Registration Statement on Form S-1.
(g) (i) None of the Company or any of the subsidiaries of the
Company shall have sustained, since the date of the latest audited
financial statements included in the Final Memorandum, any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree or (ii) since
such date there shall not have been any change in the capital stock or
long-term debt of the Company or any of the subsidiaries of the
Company or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and the subsidiaries of the Company taken as a
20
<PAGE>
whole, the effect of which, in any such case described in clause (i)
or (ii), is, in the reasonable judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to
proceed with the offering or the delivery of the Notes on the terms
and in the manner contemplated in the Final Memorandum.
(h) The Initial Purchasers shall have received on the Closing
Date the Registration Rights Agreement executed by the Company.
(i) Each of the Company and the Trustee shall have executed and
delivered the Indenture and Company shall have executed and delivered
and the Trustee shall have authenticated the Notes on or prior to the
Closing Date.
(j) The Initial Purchasers shall have received from Weil, Gotshal
& Manges LLP, counsel to the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchasers may reasonably require, and the Company shall have
furnished to such counsel such documents and information as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.
9. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless each Initial Purchaser, its officers, directors,
employees and agents and each person, if any, who controls any Initial Purchaser
within the meaning of Section 15 of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability or
action relating to purchases and sales of Notes), to which such Initial
Purchaser, officer, director, employee, agent or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in (A) the
Preliminary Memorandum, the Final Memorandum or in any amendment or supplement
thereto or (B) any blue sky application or other document prepared or executed
by the Company (or based upon any written information furnished by the Company)
specifically for the purpose of qualifying any or all of the Notes under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"), (ii)
--------------------
the omission or alleged omission to state in the Preliminary Memorandum, the
Final Memorandum or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to act, or any
alleged act or failure to act, by any Initial Purchaser in connection with, or
relating in any manner to, the Notes or the offering contemplated hereby, and
which is included as part of or
21
<PAGE>
referred to in any loss, claim, damage, liability or action arising out of or
based upon matters covered by clause (i) or (ii) above (provided that the
Company shall not be liable in the case of any matter covered by this clause
(iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted solely from any such act or failure to act undertaken or omitted to be
taken by such Initial Purchaser through its gross negligence or wilful
misconduct), and shall reimburse each Initial Purchaser and each such officer,
director, employee, agent or controlling person promptly upon demand for any
legal or other expenses reasonably incurred by that Initial Purchaser, officer,
director, employee, agent or controlling person in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum, the Final Memorandum or in any such amendment or
supplement, or in any Blue Sky Application in reliance upon and in conformity
with the written information concerning such Initial Purchaser furnished to the
Company by or on behalf of such Initial Purchaser specifically for inclusion
therein which information consists solely of the information specified in
Section 9(e); provided, further, that the Company shall not be liable to any
Initial Purchaser under the indemnity agreement in this paragraph (a) with
respect to the Preliminary Memorandum to the extent that any such loss, claim,
damage or liability of such Initial Purchaser results from the fact that such
Initial Purchaser sold Notes to a person as to whom it is established that there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Final Memorandum, or of the Final Memorandum as then amended or
supplemented, in any case where such delivery is required by the Securities Act
if the Company has previously furnished copies thereof in sufficient quantity to
that Initial Purchaser and the loss, claim, damage or liability of such Initial
Purchaser results from an untrue statement or omission of a material fact
contained in the Preliminary Offering Memorandum which was identified at such
time to such Initial Purchaser and corrected in the Final Memorandum or in the
Final Memorandum as then amended or supplemented. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have
to any Initial Purchaser or to any officer, director, employee, agent or
controlling person of that Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, its directors and officers, and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act, from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such director,
officer or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Preliminary Memorandum, the Final Memorandum
or in any amendment or supplement thereto or (B) any Blue Sky Application or
(ii) the omission or alleged omission to state in the Preliminary Memorandum,
the Final Memorandum or in any amendment or supplement thereto, or in any Blue
Sky Application any material fact required to be stated therein or
22
<PAGE>
necessary to make the statements therein not misleading, but in the case of
clauses (i) and (ii) only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with the written information concerning such Initial Purchaser
furnished to the Company by or on behalf of that Initial Purchaser specifically
for inclusion therein as set forth in Section 9(e), and shall reimburse the
Company and any such director, officer or controlling person promptly on demand
for any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Initial Purchaser may otherwise have to the
Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 9, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 9 except to the extent the
indemnifying party has been materially prejudiced by such failure and provided
further that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have to an indemnified party otherwise than
under Section 9(a) or (b) hereof. If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Initial
Purchasers shall have the right to employ separate counsel to represent jointly
the Initial Purchaser and their respective directors, officers, employees,
agents and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Initial Purchasers
against the Company under this Section 9 if, in the reasonable judgment of the
Initial Purchasers, it is advisable for the Initial Purchasers and those
directors, officers, employees, agents and controlling persons to be jointly
represented by separate counsel, and in that event the Company shall not have
the right to direct the defense of such action on behalf of the Initial
Purchasers with respect to such different defenses and the fees and expenses of
such separate counsel shall be paid by the Company. No indemnifying party shall
(i) without the prior written consent of the indemnified parties (which consent
shall not be unreasonably withheld), settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim, action,
suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
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arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment in favor of the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment in accordance with this Section 9.
(d) If the indemnification provided for in this Section 9 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 9(a) or 9(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Initial Purchasers, 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 Company, on the one hand, and the
Initial Purchasers, on the other hand, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the Initial
Purchasers, on the other hand, with respect to such offering shall be deemed to
be in the same proportion as the total net proceeds from the offering of the
Notes purchased under this Agreement (before deducting expenses) received by the
Company, on the one hand, and the total purchase discounts and commissions
received by the Initial Purchasers with respect to the Notes purchased under
this Agreement, on the other hand, bear to the total gross proceeds from the
offering of the Notes under this Agreement. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, on the one hand,
or the Initial Purchasers, on the other hand, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. Each of the Company and the Initial
Purchasers agrees that it would not be just and equitable if contributions
pursuant to this Section 9(d) were to be determined by pro rata allocation (even
if either the Initial Purchasers or the Company, as the case may be, were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 9(d) shall be deemed to include, subject to 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 9(d), no Initial
Purchaser shall be required to indemnify or contribute any amount in excess of
the amount by which the proceeds received by the Initial Purchaser from an
offering of the Notes exceeds the amount of any damages which the Initial
Purchaser has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
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<PAGE>
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 remedies provided for in
this Section 9 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
The Initial Purchasers' obligations to contribute as provided in this Section
9(d) are several in proportion to their respective purchase obligations and not
joint.
(e) The Initial Purchasers severally confirm and the Company
acknowledges that (i) the last paragraph on the cover page of, and (ii) the
third to the last sentence of the sixth paragraph and the tenth paragraph, under
the caption "Plan of Distribution" in, the Offering Documents are correct and
constitute the only information concerning the Initial Purchasers furnished in
writing to the Company by or on behalf of the Initial Purchasers specifically
for inclusion in the Offering Documents.
10. Defaulting Initial Purchasers.
If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining non-
defaulting Initial Purchaser, or those other initial purchasers satisfactory to
the remaining non-defaulting Initial Purchaser who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, the aggregate principal amount of all of the Notes to be
purchased on the Closing Date. If the remaining Initial Purchaser or other
initial purchasers satisfactory to the remaining non-defaulting Initial
Purchaser do not elect to purchase the aggregate principal amount of Notes which
the defaulting Initial Purchaser agreed but failed to purchase on such Closing
Date, this Agreement shall terminate without liability on the part of any non-
defaulting Initial Purchaser or the Company, except that the Company will
continue to be liable for the payment of expenses to the extent set forth in
Sections 7 and 12. As used in this Agreement, the term "Initial Purchaser"
includes, for all purposes of this Agreement unless the context requires
otherwise, any party not listed in Schedule 1 hereto who, pursuant to this
Section 10, purchases Notes which a defaulting Initial Purchaser agreed but
failed to purchase. Any action taken hereunder will not relieve a defaulting
Initial Purchaser from liability in respect of any default by it under this
Agreement.
11. Termination. The obligations of the Initial Purchasers hereunder
may be terminated by notice given to and received by the Company prior to
delivery of and payment for the Notes if, prior to that time, any of the events
described in Sections 8(c) or 8(g), shall have occurred or if the Initial
Purchasers shall decline to purchase the Notes for any reason permitted under
this Agreement.
12. Reimbursement of Initial Purchasers' Expenses. If the Company
shall fail to tender the Notes for delivery to the Initial Purchasers by reason
of any failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Initial Purchasers' obligations hereunder required to be fulfilled by the
Company is not fulfilled, the Company will reimburse the Initial Purchasers for
all reasonable out-of-pocket expenses (including fees and
25
<PAGE>
disbursements of counsel) incurred by the Initial Purchasers in connection with
this Agreement and the proposed purchase of the Notes, and upon demand the
Company shall pay the full amount thereof to the Initial Purchasers. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Initial Purchasers, the Company shall not be obligated to reimburse any
defaulting Initial Purchaser on account of those expenses.
13. Notices, Etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent by mail,
telex or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention: High Yield Capital Markets (Fax:
212-526-3738), with a copy to Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New
York, New York 10153, Attention: Jeremy W. Dickens, Esq. (Fax: 212-310-8007);
and
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Omnipoint Corporation, 3 Bethesda Metro Center,
Bethesda, MD 20814, Attention: Harry Plonskier (Fax: 301-951-2580), with a
copy to Piper & Marbury L.L.P., 1200 Nineteenth Street, NW, Washington, DC
20026, Attention: Edwin M. Martin, Jr., Esq. (Fax: 202-223-2085).
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Initial
Purchasers by Lehman Brothers Inc.
14. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (x) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers,
directors, employees and agents of the Initial Purchasers and the person or
persons, if any, who control the Initial Purchasers within the meaning of
Section 15 of the Securities Act and (y) the indemnity agreement of the Initial
Purchasers contained in Section 9(b) of this Agreement shall be deemed to be for
the benefit of the officers and directors of the Company and the person or
persons, if any, who control the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 14, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
15. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Initial Purchasers contained in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Notes and shall
remain in full force and effect, regardless
26
<PAGE>
of any investigation made by or on behalf of any of them or any person
controlling any of them.
16. Definition of the Terms "Business Day," "Subsidiary" and
"Significant Subsidiary." For purposes of this Agreement, (a) "business day"
means each Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on
which banking institutions in new York are generally authorized or obligated by
law or executive order to close, (b) "subsidiary" has the meaning set forth in
Rule 405 of the Rules and Regulations and (c) "Significant Subsidiary" has the
meaning set forth in Rule 405 of the Rules and Regulations.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
18. Counterparts. This Agreement may be executed in one or more
counterparts, including facsimile counterparts, and, if executed in more than
one counterpart, the executed counterparts shall each be deemed to be an
original but all such counterparts shall together constitute one and the same
instrument.
19. 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.
20. Communications Act. Any action proposed to be taken by Initial
Purchasers under this Agreement, the Registration Rights Agreement or the
Indenture which would affect the operational, voting or other control of the
Company shall be made pursuant to Section 310(d) of the Communications Act of
1934 (as amended), if applicable, applicable state law, and the applicable rules
and regulations thereunder, and, if and to the extent required thereby, subject
to the prior consent of the FCC or any applicable PUC.
27
<PAGE>
If the foregoing correctly sets forth the agreement between the
Company and the Initial Purchasers, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
OMNIPOINT CORPORATION
By: /s/ Douglas G. Smith
-----------------------
Name: Douglas G. Smith
Title: President
Accepted:
LEHMAN BROTHERS INC.
By: /s/ Raymond A. Cubero
--------------------------
Name: Raymond A. Cubero
Title: Sr. Vice President
BARCLAYS CAPITAL INC.
By: /s/ Michael Bloom
--------------------
Name: Michael Bloom
Title: Director
<PAGE>
EXHIBIT 10.2
OMNIPOINT CORPORATION
$205,000,000
11 1/2% SENIOR NOTES DUE 2009
REGISTRATION RIGHTS AGREEMENT
September 23, 1999
Lehman Brothers Inc.
Barclays Capital Inc.
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Ladies and Gentlemen:
Omnipoint Corporation, a Delaware corporation (the "Company"),
proposes to issue and sell (the "Initial Placement") to Lehman Brothers Inc.
("Lehman") and Barclays Capital Inc. ("Barclays" and, together with Lehman, the
"Initial Purchasers") upon the terms set forth in a Purchase Agreement, dated as
of September 17, 1999 (the "Purchase Agreement"), among the Company and the
Initial Purchasers, $205,000,000 aggregate principal amount of the Company's 11
1/2% Senior Notes due 2009 (the "Notes") to be issued pursuant to an Indenture,
dated as of the date hereof (the "Indenture"), between the Company and HSBC Bank
USA, as trustee (the "Trustee"). As an inducement to you to enter into the
Purchase Agreement and purchase the Notes and in satisfaction of a condition to
your obligations under the Purchase Agreement, the Company agrees with you for
the benefit of the holders from time to time of the Notes (including the Initial
Purchasers) (each of the foregoing a "Holder" and together the "Holders"), as
follows:
1. Definitions. Capitalized terms used herein without definition shall have
-----------
their respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
"Affiliate" of any specified person means any other person that,
---------
directly or indirectly, is in control of, is controlled by, or is under
common control with, such specified person. For purposes of this
definition, control of a person means the power, direct or indirect, to
direct or cause the direction of the management and policies of such person
whether by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means this Registrations Rights Agreement, among the
---------
Company and the Initial Purchasers.
"Indenture" has the meaning set forth in the preamble hereto.
---------
<PAGE>
"Closing Date" has the meaning set forth in the Purchase Agreement.
------------
"Commission" means the Securities and Exchange Commission.
----------
"Company" has the meaning set forth in the preamble hereto.
-------
"Company Registration Default" has the meaning set forth in Section 5
----------------------------
hereof.
"Company Registration Statement" means any Exchange Offer Registration
------------------------------
Statement or Shelf Registration Statement pursuant to the provisions of
this Agreement, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto, and all material incorporated by
reference therein.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations of the Commission promulgated thereunder.
"Exchange Notes" means securities issued by the Company, identical in
--------------
all material respects to the Notes (except that (i) interest thereon shall
accrue from the last date on which interest was paid on the Notes or, if no
such interest has been paid, from the date of issuance and (ii) the
liquidated damages provisions and the transfer restrictions pertaining to
the Notes will be modified or eliminated, as appropriate, in the Exchange
Notes), to be issued under the Indenture.
"Exchange Offer" means the proposed offer to the Holders to issue and
--------------
deliver to such Holders, in exchange for the Notes, a like aggregate
principal amount of Exchange Notes, in accordance with the terms of this
Agreement.
"Exchange Offer Registration Period" means the longer of (A) the
----------------------------------
period until the consummation of the Exchange Offer and (B) 180 days after
the consummation of the Exchange Offer, exclusive of any period during
which any stop order shall be in effect suspending the effectiveness of the
Exchange Offer Registration Statement; provided, however, that in the event
-------- -------
that all resales of Exchange Notes (including, subject to the time periods
set forth herein, any resales by Exchanging Dealers) covered by such
Exchange Offer Registration Statement have been made, the Exchange Offer
Registration Statement need not remain continuously effective for the
period set forth in clause (B) above.
"Exchange Offer Registration Statement" means a Registration Statement
-------------------------------------
of the Company on an appropriate form under the Securities Act with respect
to the Exchange Offer, all amendments and supplements to such Registration
Statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein, prepared in accordance with the terms of
this Agreement.
"Exchange Securities" means the Exchange Notes and the Holdings Notes.
-------------------
2
<PAGE>
"Exchanging Dealer" means any Holder (which may include the Initial
-----------------
Purchasers) that is a broker-dealer, electing to exchange Notes acquired
for its own account as a result of market-making activities or other
trading activities for Exchange Securities.
"Final Memorandum" has the meaning set forth in the Purchase
----------------
Agreement.
"Holder" has the meaning set forth in the preamble hereto.
------
"Holdings" means VoiceStream Wireless Holding Corporation.
--------
"Holdings Exchange Offer" means the proposed offer to the Holders to
-----------------------
issue and deliver to such Holders, in exchange for the Notes and/or
Exchange Notes, a like aggregate principal amount of Holdings Notes which
the Holders are able to resell from and after their receipt of Holdings
Notes without any limitations or restrictions under the Securities Act and
without material restrictions under the securities laws of a substantial
portion of the several states of the United States. The Holdings Exchange
Offer must be made in accordance with the terms of this Agreement,
including the compliance by Holdings with Sections 2 and 4 hereof as if
Holdings were a party to this Agreement and the Holdings Exchange Offer
were an Exchange Offer.
"Holdings Exchange Offer Registration Statement" means a Registration
----------------------------------------------
Statement of Holdings on an appropriate form under the Securities Act with
respect to the Holdings Exchange Offer, all amendments and supplements to
such Registration Statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein, prepared in accordance with
the terms of this Agreement. The Holdings Exchange Offer Registration
Statement must be prepared substantially in accordance with Sections 2 and
4 hereof as if Holdings were a party to this Agreement and the Holdings
Exchange Offer Registration Statement were an Exchange Offer Registration
Statement.
"Holdings Notes" means securities issued by Holdings, identical in all
--------------
material respects to the Notes (except that (i) such securities shall be
issued by Holdings, (ii) interest thereon shall accrue from the last date
on which interest was paid on the Notes or, if no such interest has been
paid, from September 23, 1999 and (iii) the liquidated damages provisions
and the transfer restrictions pertaining to the Notes will be modified or
eliminated, as appropriate, in the Holdings Notes).
"Holdings Registration Default" has the meaning set forth in Section 5
-----------------------------
hereto.
"Initial Placement" has the meaning set forth in the preamble hereto.
-----------------
"Initial Purchasers" has the meaning set forth in the preamble hereto.
------------------
3
<PAGE>
"Liquidated Damages" has the meaning set forth in Section 5 hereof.
------------------
"Losses" has the meaning set forth in Section 6(d) hereto.
------
"Majority Holders" means the Holders of a majority of the aggregate
----------------
principal amount of Notes registered under a Registration Statement.
"Managing Underwriters" means the investment banker or investment
---------------------
bankers and manager or managers that shall administer an underwritten
offering under a Shelf Registration Statement.
"Prospectus" means any preliminary prospectus or final prospectus
----------
included in any Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
430A 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 Notes, Exchange Notes or Holdings Notes covered by such
Registration Statement, and all amendments and supplements to the
Prospectus, including post-effective amendments.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
------------------
"Registration Statement" means any Exchange Offer Registration
----------------------
Statement, Shelf Registration Statement or Holdings Exchange Offer
Registration Statement pursuant to the provisions of this Agreement,
amendments and supplements to such registration statement, including post-
effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto, and all material incorporated by reference
therein.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations of the Commission promulgated thereunder.
"Shelf Registration" means a registration effected pursuant to Section
------------------
3 hereof.
"Shelf Registration Period" has the meaning set forth in Section 3(b)
-------------------------
hereof.
"Shelf Registration Statement" means a "shelf" registration statement
----------------------------
of the Company pursuant to the provisions of Section 3 hereof, which covers
some or all of the Notes or Exchange Notes, as applicable, on an
appropriate form under Rule 415 under the Securities Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to
such registration statement, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein, prepared in accordance with
the terms of this Agreement.
4
<PAGE>
"Transfer Restricted Security" means (A) each Note, until the earliest
----------------------------
to occur of (i) the date on which such Notes is exchanged in the Exchange
Offer for an Exchange Note which is entitled to be resold to the public by
the Holder thereof without complying with the prospectus delivery
requirements of the Securities Act, (ii) the date on which such Note has
been disposed of in accordance with a Shelf Registration Statement (and the
purchasers thereof have been issued Exchange Notes), or (iii) the date on
which such Note is distributed to the public pursuant to Rule 144 under the
Securities Act and (B) each Exchange Note held by an Exchanging Dealer
until the date on which such Exchange Note is disposed of by an Exchanging
Dealer pursuant to the plan of distribution contemplated by the Exchange
Offer Registration Statement (including the delivery of the Prospectus
contained therein).
"Underwriter" means any underwriter of Securities in connection with
-----------
an offering thereof under a Shelf Registration Statement.
"VoiceStream Transactions" means the transactions contemplated in
------------------------
connection with the proposed reorganization between the Company and
Holdings, including any consents and approvals required therefor, pursuant
to the Agreement and Plan of Reorganization, dated as of June 23, 1999,
among VoiceStream Wireless Corporation, Holdings and the Company.
2. Exchange Offer; Resales of Exchange Securities by Exchanging Dealers;
---------------------------------------------------------------------
Private Exchange.
- ----------------
(a) The Company shall prepare and file with the Commission the Exchange
Offer Registration Statement with respect to the Exchange Offer. The Company
shall use its best efforts to cause the Exchange Offer Registration
Statement to be declared effective under the Securities Act and remain
effective until the closing of the Exchange Offer and to consummate the
Exchange Offer on or prior to June 30, 2000.
(i) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Exchange Offer, it
being the objective of such Exchange Offer to enable each Holder
electing to exchange Notes for Exchange Notes (assuming that such
Holder (x) is not an "affiliate" of the Company within the meaning of
the Securities Act, (y) is not a broker-dealer that acquired the Notes
in a transaction other than as a part of its market-making or other
trading activities and (z) if such Holder is not a broker-dealer,
acquires the Exchange Notes in the ordinary course of such Holder's
business, is not participating in the distribution of the Exchange
Notes and has no arrangements or understandings with any person to
participate in the distribution of the Exchange Notes) to resell such
Exchange Notes from and after their receipt without any limitations or
restrictions under the Securities Act and without material restrictions
under the securities laws of a substantial portion of the several
states of the United States.
5
<PAGE>
(ii) If the VoiceStream Transactions are consummated and, on or
before June 30, 2000, Holdings shall have consummated the Holdings
Exchange Offer, then the Company shall have no further obligation to
the Holders of the Notes under this Agreement. If Holdings has not
consummated the Holdings Exchange Offer on or before June 30, 2000, the
Company's obligations under this Agreement, including its obligation to
pay Liquidated Damages in the event of a Holdings Registration Default
as provided in Section 5(c) below, shall continue for so long as any
Notes remain outstanding until such time, if ever, as Holdings shall
have consummated the Holdings Exchange Offer.
(b) In the event the VoiceStream Transactions shall be consummated,
whether or not the Company has complied with its obligations under this
Agreement, there shall be a Holdings Registration Default if Holdings shall
not have: (i) filed with the Commission the Holdings Exchange Offer
Registration Statement with respect to the Holdings Exchange Offer on or
before the 45th calendar day after the consummation of the VoiceStream
Transactions, (ii) caused the Holdings Exchange Offer Registration Statement
to be declared effective under the Securities Act on or before the 105th
calendar day after the consummation of the VoiceStream Transactions and to
remain effective until the closing of the Holdings Exchange Offer and (iii)
consummated the Holdings Exchange Offer on or before the 150th calendar day
after the consummation of the VoiceStream Transactions.
(c) In connection with the Exchange Offer, the Company shall mail or
cause to be mailed 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, stating, in addition to such
other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this
Agreement and that all Notes validly tendered will be accepted for
exchange;
(ii) the dates of acceptance for exchange;
(iii) that, in connection with the Exchange Offer, any Notes not
tendered will remain outstanding and continue to accrue interest, but
will not retain any rights under this Agreement to require the Company
to consummate an Exchange Offer in the future or, in the event Holdings
consummates the Holdings Exchange Offer, to require the Company to file
a Shelf Registration Statement;
(iv) that Holders electing to have Notes exchanged pursuant to the
Exchange Offer will be required to surrender such Notes, together with
the enclosed letters of transmittal, to the institution and at the
address (located in the Borough of Manhattan, The City of New York)
specified in
6
<PAGE>
the notice prior to the close of business on the last day of acceptance
for exchange; and
(v) that Holders will be entitled to withdraw their election, not
later than the close of business on the last day of acceptance for
exchange, 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 aggregate principal amount of Notes delivered
for exchange and a statement that such Holder is withdrawing his
election to have such Notes exchanged; and shall keep the Exchange
Offer open for acceptance for not less than 20 business days and not
more than 45 days (or longer if required by applicable law) after the
date notice thereof is mailed to the Holders; utilize the services of a
depositary for the Exchange Offer with an address in the Borough of
Manhattan, The City of New York; and comply in all respects with all
applicable laws relating to the Exchange Offer.
(d) As soon as practicable after the close of any Exchange Offer, the
Company shall:
(i) accept for exchange all Notes duly tendered and not validly
withdrawn pursuant to the Exchange Offer;
(ii) deliver to the exchange agent for cancellation all Notes so
accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver to
each Holder, Exchange Notes equal in aggregate principal amount to the
Notes of such Holder so accepted for exchange.
(e) The Initial Purchasers and the Company acknowledge that, pursuant
to interpretations by the staff of the Commission of Section 5 of the
Securities Act, and in the absence of an applicable exemption therefrom,
each Exchanging Dealer is required to deliver a Prospectus in connection
with a sale of any Exchange Notes received by such Exchanging Dealer
pursuant to an Exchange Offer in exchange for Notes acquired for its own
account as a result of market-making activities or other trading activities.
Accordingly, in connection with any Exchange Offer the Company shall:
(i) include the information set forth in Annex A hereto on the
cover of the Exchange Offer Registration Statement, in Annex B hereto
in the forepart of the Exchange Offer Registration Statement in a
section setting forth details of the Exchange Offer, in Annex C hereto
in the underwriting or plan of distribution section of the Prospectus
forming a part of the Exchange Offer Registration Statement, and in
Annex D hereto in the letter of transmittal delivered pursuant to the
Exchange Offer; and
7
<PAGE>
(ii) use its best efforts to keep the Exchange Offer Registration
Statement continuously effective under the Securities Act during the
Exchange Offer Registration Period for delivery of the prospectus
included therein by Exchanging Dealers in connection with sales of
Exchange Notes received pursuant to the Exchange Offer, as contemplated
by Section 4(h) below; provided, however, that the Exchange Offer
-------- -------
Registration Statement shall not be required to be maintained effective
for more than 30 days following the consummation of the Exchange Offer
unless the Company has been notified in writing on or prior to the 30th
day following the consummation of the Exchange Offer by one or more
Exchanging Dealers that such Holder has received Exchange Notes as to
which it will be required to deliver a prospectus upon resale.
(f) In the event that any of the Initial Purchasers determine that it
is not eligible to participate in the Exchange Offer with respect to the
exchange of Notes constituting any portion of an unsold allotment, upon the
effectiveness of the Shelf Registration Statement as contemplated by Section
3 hereof and at the request of such Initial Purchaser, the Company shall
issue and deliver to that Initial Purchaser, or to the party purchasing
Notes registered under the Shelf Registration Statement from that Initial
Purchaser, in exchange for such Notes, a like aggregate principal of
Exchange Notes. The Company shall use its best efforts to cause the CUSIP
Service Bureau to issue the same CUSIP number for such Exchange Notes as for
Exchange Notes issued pursuant to the Exchange Offer.
(g) The Company shall use its best efforts to complete the Exchange
Offer as provided above and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall
not be subject to any conditions, other than that (i) the Exchange Offer
does not violate applicable law or any applicable interpretation of the
staff of the Commission, (ii) no action or proceeding shall have been
instituted or threatened in any court or by any governmental agency which
has resulted or could reasonably be expected to result in a temporary or
permanent injunction prohibiting the Company from proceeding with the
Exchange Offer and (iii) all governmental approvals shall have been
obtained, which approvals the Company deems necessary (based on advice of
outside counsel) for the consummation of the Exchange Offer. The Company
shall inform the Initial Purchasers, upon their request, of the names and
addresses of the Holders to whom any Exchange Offer or Holdings Exchange
Offer is made, and the Initial Purchasers shall have the right, subject to
applicable law, to contact such Holders and otherwise facilitate the tender
of Notes in any Exchange Offer and/or Notes or Exchange Notes in any
Holdings Exchange Offer.
3. Shelf Registration. If (i) because of any change in law or applicable
------------------
interpretations thereof by the Commission's staff, the Company determines upon
advice of its outside counsel that it is not permitted to effect the Exchange
Offer as contemplated by Section 2 hereof, or (ii) for any reason other than
those specified in clause (i) above,
8
<PAGE>
the Exchange Offer or a Holdings Exchange Offer is not consummated on or prior
to June 30, 2000, or (iii) any of the Initial Purchasers so requests with
respect to Notes held by them within 90 days following consummation of the
Exchange Offer, or (iv) any Holder (other than the Initial Purchasers) is not
eligible to participate in the Exchange Offer or has participated in the
Exchange Offer and has received Exchange Notes that are not freely tradeable or
(v) in the case where any of the Initial Purchasers participates in the Exchange
Offer or acquires Exchange Notes pursuant to Section 2(f) hereof, an Initial
Purchaser does not receive freely tradeable Exchange Notes in exchange for Notes
constituting any portion of an unsold allotment (it being understood that, for
purposes of this Section 3, (x) the requirement that the Initial Purchasers
deliver a Prospectus containing the information required by Items 507 and/or 508
of Regulation S-K under the Securities Act in connection with sales of Exchange
Notes acquired in exchange for such Notes shall result in such Exchange Notes
being not "freely tradeable" and (y) the requirement that an Exchanging Dealer
deliver a Prospectus in connection with sales of Exchange Notes acquired in the
Exchange Offer in exchange for Notes acquired as a result of market-making
activities or other trading activities shall not result in such Exchange Notes
being not "freely tradeable"), the following provisions shall apply:
(a) The Company shall, as promptly as practicable, file with the
Commission a Shelf Registration Statement relating to the offer and sale of
the Notes or the Exchange Notes, as applicable, by the Holders from time to
time in accordance with the methods of distribution elected by such Holders
and set forth in such Shelf Registration Statement and Rule 415 under the
Securities Act, provided that, with respect to Exchange Notes received by
--------
the Initial Purchasers in exchange for Notes constituting any portion of an
unsold allotment, the Company may, if permitted by current interpretations
by the Commission's staff, file a post-effective amendment to the Exchange
Offer Registration Statement containing the information required by
Regulation S-K Items 507 and/or 508, as applicable, in satisfaction of its
obligations under this paragraph (a) with respect thereto, and any such
Exchange Offer Registration Statement, as so amended, shall be referred to
herein as, and governed by the provisions herein applicable to, a Shelf
Registration Statement.
(b) The Company shall use its best efforts to cause the Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as possible after filing such Shelf Registration Statement pursuant
to this Section 3 and to keep such Shelf Registration Statement continuously
effective in order to permit the Prospectus contained therein to be usable
by Holders for a period of two years from the date the Shelf Registration
Statement is declared effective by the Commission or such shorter period
that will terminate when all the Notes or Exchange Notes, as applicable,
cease to be Transfer Restricted Securities (in any such case, such period
being called the "Shelf Registration Period"). The Company shall be deemed
not to have used its best efforts to keep the Shelf Registration Statement
effective during the requisite period if it voluntarily takes any action
that would result in Holders of Notes covered thereby not being able to
offer and sell such Notes during that period, unless (i) such action is
required by applicable law, (ii) the Company complies with this Agreement or
(iii) such
9
<PAGE>
action is taken by the Company in good faith and for valid business reasons
(not including avoidance of the Company's obligations hereunder), including
the acquisition or divestiture of assets, so long as the Company promptly
thereafter complies with the requirements of Section 4(l) hereof, if
applicable.
4. Registration Procedures. In connection with any Shelf Registration
-----------------------
Statement and, to the extent applicable, any Exchange Offer Registration
Statement, the following provisions shall apply:
(a) The Company shall within a reasonable time prior to the filing of
any Company Registration Statement, any related Prospectus, any amendment to
a Company Registration Statement or amendment or supplement to a related
Prospectus or any document which is to be incorporated by reference into a
Company Registration Statement or a related Prospectus after initial filing
of a Company Registration Statement, provide copies of such document to the
Initial Purchasers and their counsel (and, in the case of a Shelf
Registration Statement, the Holders and their counsel, upon their request)
and make such representatives of the Company as shall be reasonably
requested by the Initial Purchasers or their counsel (and, in the case of a
Shelf Registration Statement, the Majority Holders or their counsel)
available for discussion of such document, and shall not at any time file or
make any amendment to the Company Registration Statement, any related
Prospectus or any amendment of or supplement to a Company Registration
Statement or a related Prospectus or any document which is to be
incorporated by reference into a Company Registration Statement or a related
Prospectus, of which the Initial Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders and their counsel) shall
not have previously been advised and furnished a copy or to which the
Initial Purchasers or their counsel (and, in the case of a Shelf
Registration Statement, the Holders or
10
<PAGE>
their counsel) shall object, except for any amendment or supplement or
document (a copy of which has been previously furnished to the Initial
Purchasers and their counsel (and, in the case of a Shelf Registration
Statement, the Holders and their counsel, upon their request)) which counsel
to the Company shall advise the Company in the form of a written opinion, is
required in order to comply with applicable law; the Initial Purchasers
agree that, if they receive timely notice and drafts under this clause (a),
they will not take actions or make objections pursuant to this clause (a)
such that the Company is unable to comply with its obligations under Section
2.
(b) The Company shall ensure that:
(i) any Company Registration Statement and any amendment thereto
and any related Prospectus contained therein and any amendment or supplement
thereto complies in all material respects with the Securities Act and the
rules and regulations thereunder;
(ii) any Company Registration Statement and any amendment thereto
does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and
(iii) any Prospectus forming part of any Company Registration
Statement, including any amendment or supplement to such Prospectus, does
not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and, in the
case of a Shelf Registration Statement, the Holders of Notes and/or Exchange
Notes covered thereby, and, if requested by the Initial Purchasers or any
such Holder, confirm such advice in writing:
(i) when a Company Registration Statement and any amendment thereto
has been filed with the Commission and when the Company Registration
Statement or any post-effective amendment thereto has become effective;
and
(ii) of any request by the Commission for amendments or supplements
to the Company Registration Statement or the Prospectus included
therein or for additional information.
(2) During the Shelf Registration Period or the Exchange Offer
Registration Period, as applicable, the Company shall advise the Initial
Purchasers and, in the case of a Shelf Registration Statement, the Holders
of Notes covered thereby, and, in the case of an Exchange Offer Registration
Statement, any
11
<PAGE>
Exchanging Dealer that has provided in writing to the Company a telephone or
facsimile number and address for notices, and, if requested by the Initial
Purchasers or any such Holder or Exchanging Dealer, confirm such advice in
writing:
(i) of the issuance by the Commission of any stop order
suspending the effectiveness of the Company Registration Statement or
the initiation of any proceedings for that purpose;
(ii) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes included
therein for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose; and
(iii) of the happening of any event that requires the making of
any changes in the Company Registration Statement or the related
Prospectus so that, as of such date, the Company Registration
Statement or the related Prospectus does not include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading or upon its discovery that the Company Registration
Statement or the related Prospectus includes an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which advice
shall be accompanied by an instruction to suspend the use of the
Prospectus until the requisite changes have been made).
(d) The Company shall use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of any Company Registration Statement
at the earliest possible time.
(e) The Company shall furnish to each Holder of Notes covered by any
Shelf Registration Statement that so requests, without charge, at least one
copy of such Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder so
requests in writing, all exhibits thereto.
(f) The Company shall, during the Shelf Registration Period, deliver to
each Holder of Notes covered by any Shelf Registration Statement, without
charge, as many copies of the Prospectus (including each preliminary
Prospectus) included in such Shelf Registration Statement and any amendment
or supplement thereto as such Holder may reasonably request; and the Company
consents to the use of the Prospectus or any amendment or supplement thereto
by each of the selling Holders of Notes in connection with the offering and
sale of the Notes covered by the Prospectus or any amendment or supplement
thereto.
12
<PAGE>
(g) The Company shall furnish to each Exchanging Dealer that so
requests, without charge, at least one copy of the Exchange Offer
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, any documents incorporated by reference
therein and, if the Exchanging Dealer so requests in writing, all exhibits
thereto.
(h) The Company shall, during the Exchange Offer Registration Period,
promptly deliver to each Exchanging Dealer, without charge, as many copies
of the Prospectus included in such Exchange Offer Registration Statement and
any amendment or supplement thereto as such Exchanging Dealer may reasonably
request for delivery by such Exchanging Dealer in connection with a sale of
Exchange Notes received by it pursuant to the Exchange Offer; and the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by any such Exchanging Dealer, as provided in Section 2(e) above.
(i) Each Holder of Notes and each Exchange Dealer agrees by its
acquisition of such Notes and/or Exchange Notes to be sold by such
Exchange Dealer, as the case may be, that, upon actual receipt of any
notice from the Company of the happening of any event of the kind
described in paragraph (c)(2)(i), (c)(2)(ii), or (c)(2)(iii) of this
Section 4, such Holder will forthwith discontinue disposition of such
Notes and/or Exchange Notes covered by such Company Registration
Statement or related Prospectus or Exchange Notes to be sold by such
Holder or Exchange Dealer, as the case may be, until such Holder's or
Exchange Dealer's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 4(l) hereof, or until it is advised
in writing by the Company that the use of the applicable Prospectus may
be resumed, and has received copies of any amendments or supplements
thereto. In the event that the Company shall give any such notice, the
Exchange Offer Registration Period shall be extended by the number of
days during such periods from and including the date of the giving of
such notice to and including the date when each seller of the Notes
and/or Exchange Notes covered by such Company Registration Statement or
Exchange Notes to be sold by such Exchange Dealer, as the case may be,
shall have received (x) the copies of the supplemented or amended
Prospectus contemplated by Section 4(l) hereof or (y) the advice in
writing.
(j) Prior to any Exchange Offer or any other offering of Notes or
Exchange Notes pursuant to any Company Registration Statement, the Company
shall register or qualify or cooperate with the Holders of Notes and/or
Exchange Notes included therein and their respective counsel in connection
with the registration or qualification of such Notes and/or Exchange Notes
for offer and sale under the securities or blue sky laws of such states as
any such Holders reasonably request in writing and do any and all other acts
or things necessary or advisable to enable the offer and sale in such states
of the Notes and/or Exchange Notes covered by such Company Registration
Statement; provided, however, that the Company will not be required to
-------- -------
qualify as a foreign corporation or as a dealer
13
<PAGE>
in securities in any jurisdiction in which it is not then so qualified, to
file any general consent to service of process or to take any action that
would subject it to general service of process in any such jurisdiction
where it is not then so subject or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise so
subject.
(k) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Notes and/or
Exchange Notes to be sold pursuant to any Company Registration Statement
free of any restrictive legends and in denominations of $1,000 or an
integral multiple thereof and registered in such names as Holders may
request prior to sales of Notes and/or Exchange Notes pursuant to such
Company Registration Statement.
(l) Upon the occurrence of any event contemplated by paragraph
(c)(2)(iii) of this Section 4, the Company shall promptly prepare and file a
post-effective amendment to any Company Registration Statement or an
amendment or supplement to the related Prospectus or any other required
document so that, as thereafter delivered to purchasers of the Notes and/or
Exchange Notes included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading and, in the case of a Shelf Registration
Statement, notify the Holders to suspend use of the Prospectus as promptly
as practicable after the occurrence of such an event. Notwithstanding the
foregoing, the Company shall not be required to amend or supplement a Shelf
Registration Statement, any related Prospectus or any document incorporated
therein by reference, for a period not to exceed an aggregate of 30 days in
any calendar year, if the Company determines in its good faith judgment that
the disclosure of such event at such time would have a material adverse
effect on the business, operations, or prospects of the Company or the
disclosure otherwise related to a pending material business transaction that
has not yet been publicly disclosed.
(m) Not later than the effective date of any such Company Registration
Statement hereunder, the Company shall provide a CUSIP number for the Notes
or Exchange Notes, as the case may be, registered under such Company
Registration Statement, and provide the Trustee with certificates for such
Notes or Exchange Notes, in a form eligible for deposit with The Depository
Trust Company.
(n) The Company shall comply with all applicable rules and regulations
of the Commission and shall make generally available to its security holders
as soon as practicable after the effective date of the applicable Company
Registration Statement an earnings statement meeting the requirements of
Rule 158 under the Securities Act.
14
<PAGE>
(o) The Company may require each Holder of Notes to be sold pursuant to
any Shelf Registration Statement to furnish to the Company such information
regarding the Holder and the distribution of such Notes as the Company may
from time to time reasonably require for inclusion in such Company
Registration Statement.
(p) The Company shall, if requested, promptly incorporate in a
Prospectus supplement or post-effective amendment to a Shelf Registration
Statement, such information as the Managing Underwriters, if any, and
Majority Holders reasonably agree should be included therein, and shall make
all required filings of such Prospectus supplement or post-effective
amendment promptly upon notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(q) In the case of any Shelf Registration Statement, the Company shall
enter into such agreements (including underwriting agreements) and take all
other appropriate actions in order to expedite or to facilitate the
registration or the disposition of any Notes included therein, and in
connection therewith, if an underwriting agreement is entered into, cause
the same to contain indemnification provisions and procedures no less
favorable than those set forth in Section 6 (or such other provisions and
procedures acceptable to the Majority Holders and the Managing Underwriters,
if any) with respect to all parties to be indemnified pursuant to Section 6.
(r) In the case of any Shelf Registration Statement, the Company shall:
(i) make reasonably available for inspection by the Holders of
Notes to be registered thereunder, any underwriter participating in any
disposition pursuant to such Shelf Registration Statement, and any
attorney, accountant or other agent retained by the Holders or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and any of its
subsidiaries;
(ii) cause the Company's officers, directors and employees to
supply all relevant information reasonably requested by the Holders or
any such underwriter, attorney, accountant or agent in connection with
any such Company Registration Statement as is customary for similar due
diligence examinations and make such representatives of the Company as
shall be reasonably requested by the Initial Purchasers or Managing
Underwriters, if any, available for discussion of any such Company
Registration Statement; provided, however, that any non-public
-------- -------
information that is designated in writing by the Company, in good
faith, as confidential at the time of delivery of such information
shall be kept confidential by the Holders or any such underwriter,
attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such
information becomes available to
15
<PAGE>
the public generally or through a third party without an accompanying
obligation of confidentiality other than as a result of a disclosure of
such information by any such Holder, underwriter, attorney, accountant
or agent;
(iii) make such representations and warranties to the Holders of
Notes registered thereunder and the underwriters, if any, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings as may be reasonably requested by
them;
(iv) obtain opinions of counsel to the Company and updates thereof
(which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters, if any) addressed
to each selling Holder and the underwriters, if any, covering such
matters as are customarily covered in opinions requested in similar
underwritten offerings and such other matters as may be reasonably
requested by such Holders and underwriters;
(v) obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are required
to be, included in the Company Registration Statement), addressed to
the underwriters, if any, and use reasonable efforts to have such
letter addressed to the selling Holders of Notes registered thereunder
(to the extent consistent with Statement on Auditing Standards No. 72
of the American Institute of Certified Public Accountants (AICPA) ("SAS
72")), in customary form and covering matters of the type customarily
covered in "cold comfort" letters in connection with similar
underwritten offerings, or if the provision of such "cold comfort"
letters is not permitted by SAS 72 or if requested by the Initial
Purchasers or their counsel in lieu of a "cold comfort" letter, an
agreed-upon procedures letter under Statement on Auditing Standards No.
75 of the AICPA, covering matters requested by the Initial Purchasers
or their counsel; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters, if
any, and customarily delivered in similar offerings, including those to
evidence compliance with Section 4(l) and with any conditions contained
in the underwriting agreement or other agreement entered into by the
Company.
The foregoing actions set forth in clauses (iii), (iv), (v) and
(vi) of this Section 4(r) shall be performed at (A) the effectiveness of
such Shelf Registration
16
<PAGE>
Statement and each post-effective amendment thereto and (B) each closing
under any underwriting or similar agreement as and to the extent required
thereunder.
(s) The Company shall, in the case of a Shelf Registration, use its
best efforts to cause all Notes to be listed on any securities exchange or
any automated quotation system on which similar securities issued by the
Company are then listed if requested by the Majority Holders, to the extent
such Notes satisfy applicable listing requirements.
5. Registration Expenses; Remedies.
-------------------------------
(a) The Company shall bear all expenses incurred in connection with the
performance of its obligations and the obligations of Holdings under
Sections 2, 3 and 4 hereof (unless Holdings shall pay such expenses),
including without limitation: (i) all Commission, stock exchange or National
Association of Securities Dealers, Inc. registration and filing fees, (ii)
all fees and expenses incurred in connection with compliance with state
securities or blue sky laws (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Notes), (iii) all
expenses of any persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, any amendments or supplements thereto, any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all fees relating to
the qualification of the Indenture or any indenture for the Holdings Notes
under the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission applicable to an indenture which is qualified
thereunder, (v) the fees and disbursements of any trustee or exchange agent
and their counsel, (vi) the fees and disbursements of counsel for the
Company and/or Holdings, and in the case of a Shelf Registration Statement,
the fees and disbursements of one counsel for the Holders (which counsel
shall be selected by the Majority Holders and which counsel may also be
counsel for the Initial Purchasers) and in the case of any Exchange Offer
Registration Statement or Holdings Exchange Offer Registration Statement,
the fees and expenses of counsel to the Initial Purchasers acting in
connection therewith and (vii) the fees and disbursements of the independent
public accountants of the Company and/or Holdings, including the expenses of
any special audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding fees and expenses of counsel to
the underwriters (other than fees and expenses set forth in clause (ii)
above) or the Holders and underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Notes and/or
Exchange Notes by a Holder.
(b) The Notes provide that if (i) the Exchange Offer is not consummated
on or prior to June 30, 2000, (ii) a Shelf Registration Statement is not
declared effective when required herein or (iii) a Shelf Registration
Statement is declared
17
<PAGE>
effective when required herein, but thereafter ceases to be effective or
usable in connection with resales of Notes or Exchange Notes during the
periods required herein (each event referred to in clauses (i) through (iii)
above, a "Company Registration Default"), then the Company will pay
----------------------------
liquidated damages ("Liquidated Damages") to each Holder of Notes, with
------------------
respect to the first 90-day period immediately following the occurrence of
such Company Registration Default in an amount equal to $.20 per week per
$1,000 principal amount of the Notes and/or Exchange Notes held by each such
Holder. Upon a Company Registration Default, Liquidated Damages will accrue
at the rate specified above until all such Company Registration Default are
cured and the amount of Liquidated Damages will increase by an additional
$.10 per week per $1,000 principal amount of Notes and/or Exchange Notes
with respect to each subsequent 90-day period until all Company Registration
Defaults have been cured, up to a maximum amount of Liquidated Damages of
$.50 per week per $1,000 principal amount of Notes and/or Exchange Notes
(regardless of whether one or more than one Company Registration Defaults or
Holdings Registration Defaults is outstanding). All accrued Liquidated
Damages will be paid by the Company on March 15 and September 15 of each
year to the Holders of the Notes and/or Exchange Notes.
(c) In the event the VoiceStream Transactions shall be consummated,
whether or not the Company has complied with its obligations under this
Agreement, there shall be a default under this Agreement if Holdings does
not: (i) file with the Commission the Holdings Exchange Offer Registration
Statement with respect to the Holdings Exchange Offer on or before the 45th
calendar day after the consummation of the VoiceStream Transactions, (ii)
cause the Holdings Exchange Offer Registration Statement to be declared
effective under the Securities Act on or before the 105th calendar day after
the consummation of the VoiceStream Transactions and remain effective until
the closing of the Holdings Exchange Offer and (iii) consummate the Holdings
Exchange Offer on or before the 150th calendar day after the consummation of
the VoiceStream Transactions (each such event referred to in clauses (i)
through (iii) above, a "Holdings Registration Default"). In the event that
-----------------------------
a Holdings Registration Default shall occur, then the Company will pay
Liquidated Damages to the Holder of each Note and/or Exchange Note, with
respect to the first 90-day period immediately following the occurrence of
such Holdings Registration Default in an amount equal to $.20 per week per
$1,000 principal amount of Notes and/or Exchange Notes held by each such
Holder. Upon such a Holdings Registration Default, Liquidated Damages will
accrue at the rate specified above until such Holdings Registration Default
is cured and the amount of Liquidated Damages will increase by an additional
$.10 per week per $1,000 principal amount of Notes and/or Exchange Notes
with respect to each subsequent 90-day period until all Holdings
Registration Defaults have been cured up to a maximum amount of Liquidated
Damages of $.50 per week per $1,000 principal amount of Notes and/or
Exchange Notes (regardless of whether one or more Holdings Registration
Defaults or
18
<PAGE>
Company Registration Defaults is outstanding). All accrued Liquidated
Damages will be paid by the Company on March 15 and September 15 of each
year to the Holders of the Notes and/or the Exchange Notes.
(d) Without limiting the remedies available to the Initial Purchasers
and the Holders, the Company acknowledges that any failure by the Company to
comply with the provisions under Sections 2, 3 and 4 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any
such failure, the Initial Purchasers or any Holder may obtain such relief as
may be required to specifically enforce the provisions under Sections 2, 3
and 4 hereof.
6. Indemnification and Contribution.
--------------------------------
(a) The Company shall indemnify and hold harmless each Holder of Notes
and Exchange Securities covered by a Registration Statement (including the
Initial Purchasers and, with respect to any Prospectus delivery as
contemplated by Sections 2(e) and 4(h) hereof, each Exchanging Dealer), the
officers, directors, employees and agents of such Holder and each person, if
any, who controls such Holder within the meaning of Section 15 of the
Securities, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales
of Notes and/or Exchange Securities), to which such Holder, officer,
director, employee, agent or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in (A)
any Prospectus, Registration Statement or in any amendment or supplement
thereto or (B) any blue sky application or other document prepared or
executed by the Company or Holdings (or based upon any written information
furnished by the Company or Holdings) specifically for the purpose of
qualifying any or all of the Notes or Exchange Securities under the
securities laws of any state or other jurisdiction (any such application,
document or information being hereinafter called a "Blue Sky Application"),
--------------------
(ii) the omission or alleged omission to state in any Prospectus,
Registration Statement or in any amendment or supplement thereto, or in any
Blue Sky Application any material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any act or
failure to act, or any alleged act or failure to act, by any such Holder in
connection with, or relating in any manner to, the Notes or the Exchange
Securities or any Exchange Offer or Holdings Exchange Offer contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon matters covered by
clause (i) or (ii) above (provided that the Company shall not be liable in
the case of any matter covered by this clause (iii) to the extent that it is
determined in a final judgment by a court of
19
<PAGE>
competent jurisdiction that such loss, claim, damage, liability or action
resulted solely from any such act or failure to act undertaken or omitted to
be taken by such Holder through its gross negligence or willful misconduct),
and shall reimburse each such Holder and each such officer, director,
employee, agent or controlling person promptly upon demand for any legal or
other expenses reasonably incurred by that Holder, officer, director,
employee, agent or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged
omission made in any Prospectus, Registration Statement or in any such
amendment or supplement, or in any Blue Sky Application in reliance upon and
in conformity with the written information concerning such Holder furnished
to the Company by or on behalf of such Holder specifically for inclusion
therein; provided, further, that the Company shall not be liable to any
Holder under the indemnity agreement in this paragraph 6(a) with respect to
any preliminary Prospectus to the extent that any such loss, claim, damage
or liability of such Holder results from the fact that such Holder sold
Notes or Exchange Securities to a person as to whom it is established that
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final Prospectus as then amended or supplemented, in any
case where such delivery is required by the Securities Act if the Company
has previously furnished copies thereof in sufficient quantity to such
Holder and has complied with the provisions of Section 4(c)(2) and 4(f) or
4(h) hereof and the loss, claim, damage or liability of such Holder results
from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was identified at such time to such Holder and
corrected in the final Prospectus or in the final Prospectus as then amended
or supplemented. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Holder or to any
officer, director, employee, agent or controlling person of that Holder.
The Company also agrees to indemnify or contribute to Losses of, as
provided in Section 6(d) hereof, any underwriters of Notes registered under
a Shelf Registration Statement, their officers, directors, employees and
agents and each person who controls such underwriters on the same basis as
that of the indemnification of the Initial Purchasers and the selling
Holders provided in this Section 6(a) and shall, if requested by any Holder,
enter into an underwriting agreement reflecting such agreement, as provided
in Section 4(q) hereof.
(b) Each Holder of Notes and Exchange Securities covered by a
Registration Statement (including the Initial Purchasers and, with respect
to any Prospectus delivery as contemplated by Sections 2(e) and 4(h) hereof,
each Exchanging Dealer), severally and not jointly, shall indemnify and hold
harmless the Company, each of the directors of the Company, (iii) each of
the officers of
20
<PAGE>
the Company who signs a Registration Statement and (iv) each Person who
controls the Company within the meaning of Section 15 of the Securities Act,
from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof, to which the Company or any such director,
officer or controlling person may become subject under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises
out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in (A) any Prospectus, Registration
Statement or in any amendment or supplement thereto or (B) any Blue Sky
Application or (ii) the omission or alleged omission to state in the
Prospectus, Registration Statement or in any amendment or supplement
thereto, or in any Blue Sky Application any material fact required to be
stated therein or necessary to make the statements therein not misleading,
but in the case of clauses (i) and (ii) only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with the written information
concerning such Holder furnished to the Company by or on behalf of that
Holder specifically for inclusion therein, and shall reimburse the Company
and any such director, officer or controlling person promptly on demand for
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which any Holder may otherwise
have to the Company or any such director, officer or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 6
of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 6, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 6 except to the extent
that the indemnifying party has been materially prejudiced by such failure
and provided further that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified party
otherwise than under Section 9(a) or (b) hereof. If any such claim or action
shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 6 for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that each
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<PAGE>
Holder of Notes and Exchange Securities covered by a Registration Statement
(including the Initial Purchasers and, with respect to any Prospectus
delivery as contemplated by Sections 2(e) and 4(h) hereof, each Exchanging
Dealer) shall have the right to employ separate counsel to represent jointly
such Holder and their respective directors, officers, employees, agents and
controlling persons who may be subject to liability arising out of any claim
in respect of which indemnity may be sought by such Holders against the
Company under this Section 6 if, in the reasonable judgment of such Holders,
it is advisable for the Holders and those directors, officers, employees,
agents and controlling persons to be jointly represented by separate
counsel, and in that event the Company shall not have the right to direct
the defense of such action on behalf of the Holders with respect to such
different defenses and the fees and expenses of such separate counsel shall
be paid by the Company. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding, or (ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with its written consent or if there be a final judgment in favor of the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability
by reason of such settlement or judgment in accordance with this Section 6.
(d) If the indemnification provided for in this Section 6 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 6(a) or 6(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the indemnifying party, on the one hand, and
the indemnifying party, on the other hand, from the Initial Placement and
the Registration Statement that resulted in such loss, claim, damage or
liability, or any action in respect thereof; provided, however, that in no
case shall the Initial Purchasers or any subsequent Holder of any Note or
Exchange Security be responsible, in the aggregate, for any amount in excess
of the purchase discount or commission applicable to such Security, or in
the case of an Exchange Security, applicable to the Note that was
exchangeable into such Exchange Security, as set forth on the cover page of
the Final Memorandum, nor shall any underwriter be responsible for any
amount in excess of the underwriting discount
22
<PAGE>
or commission applicable to the Notes purchased by such underwriter under
the Registration Statement that resulted in such loss, claim, damage or
liability, or any action in respect thereof, 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 party, on the one hand, and the indemnifying party, on the
other hand, with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as well
as any other relevant equitable considerations. The relative benefits
received by the Company shall be deemed to be equal to the total net
proceeds from the Initial Placement (before deducting expenses) as set forth
on the cover page of the Final Memorandum. The relative benefits received by
the Initial Purchasers shall be deemed to be equal to the total purchase
discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Notes or Exchange Securities, as applicable,
registered under the Securities Act. The relative benefits received by any
underwriter shall be deemed to be equal to the total underwriting discounts
and commissions, as set forth on the cover page of the Prospectus forming a
part of the Registration Statement that resulted in such loss, claim, damage
or liability, or any action in respect thereof. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party, on the one hand, or the indemnified party, on the other hand, the
intent of the parties and their relative 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 contributions
pursuant to this Section 6(d) were to be determined by pro rata allocation
(even if either the indemnifying party or the indemnified party, as the case
may be, were treated as one entity for such purpose) or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 6(d) shall be deemed to include,
subject to 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(d), no Initial Purchaser shall be required to
indemnify or contribute any amount in excess of the amount by which the
proceeds received by the Initial Purchaser from the offering of the Notes
exceeds the amount of any damages which the Initial Purchaser has otherwise
paid or become liable to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11 (f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in this Section
6 are not exclusive and shall not limit any rights or remedies which may
23
<PAGE>
otherwise be available to any indemnified party at law or in equity. The
Initial Purchasers' obligations to contribute as provided in this Section
6(d) are several in proportion to their respective purchase obligations and
not joint.
(e) The provisions of this Section 6 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder
or the Company or any of the officers, directors or controlling persons
referred to in Section 6 hereof, and will survive the sale by a Holder of
Notes or Exchange Securities covered by a Registration Statement.
7. Miscellaneous.
-------------
(a) No Inconsistent Agreement. The Company has not, as of the date
-------------------------
hereof, into, nor shall it, on or after the date hereof, enter into, any
agreement that conflicts with the rights granted to the Holders herein or
otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement, including
----------------------
the provisions of this sentence, may not be amended, qualified, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the Company has obtained the written consent
of the Holders of at least a majority of the then outstanding aggregate
principal amount of Notes (or, after the consummation of any Exchange Offer
in accordance with Section 2 hereof, of Exchange Notes); provided that, with
--------
respect to any matter that directly or indirectly affects the rights of the
Initial Purchasers hereunder, the Company shall obtain the written consent
of the Initial Purchasers. Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to departure from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders whose Notes are being sold pursuant to a Registration Statement and
that does not directly or indirectly affect the rights of other Holders may
be given by the Majority Holders, determined on the basis of Notes or
Exchange Notes being sold rather than registered under such Registration
Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
7(c), which address initially is, with respect to each Holder, the
address of such Holder maintained by the exchange agent, with a copy in
like manner to Lehman Brothers Inc.;
(ii) if to the Initial Purchasers, at Lehman Brothers Inc., Three
World Financial Center, New York, New York 10285, Attention: High
24
<PAGE>
Yield Capital Markets (Fax: 212-526-3738), with a copy to Weil, Gotshal
& Manges LLP, 767 Fifth Avenue, New York, New York 10153, Attention:
Jeremy W. Dickens (Fax: 212-310-8007); and
(iii) if to the Company, at Omnipoint Corporation, 3 Bethesda Metro
Center, Bethesda, MD 20814, Attention: Harry Plonskier (Fax: 301-951-
2580), with a copy to Piper & Marbury L.L.P., 1200 Nineteenth Street,
NW, Washington, DC 20026, Attention: Edwin M. Martin, Jr., Esq. (Fax:
202-223-2085).
All such notices and communications shall be deemed to have been duly
given when received. The Initial Purchasers, on the one hand, or the
Company, on the other hand, by notice to the other party or parties may
designate additional or different addresses for subsequent notices or
communications.
(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,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders of Notes and/or Exchange Securities. The
Company hereby agrees to extend the benefits of this Agreement to any Holder
of Notes and/or Exchange Securities and any such Holder may specifically
enforce the provisions of this Agreement as if an original party hereto.
(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.
(h) Severability. In the event that any one or more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent
permitted by law.
(i) Securities Held by the Company, Etc. Whenever the consent or
------------------------------------
approval of Holders of a specified percentage of the aggregate principal
amount of Notes or Exchange Securities is required hereunder, Notes or
Exchange
25
<PAGE>
Securities, as applicable, held by the Company or its Affiliates (other than
subsequent Holders of Notes or Exchange Securities if such subsequent
Holders are deemed to be Affiliates solely by reason of their holdings of
such Notes or Exchange Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
26
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
OMNIPOINT CORPORATION
By: /s/ Douglas G. Smith
----------------------
Name: Douglas G. Smith
Title: President
The foregoing Agreement is hereby
accepted as of the date first above written.
LEHMAN BROTHERS INC.
By: /s/ Raymond A. Cubero
-----------------------
Name: Raymond A. Cubero
Title: SR VP
BARCLAYS CAPITAL INC.
By: /s/ Nicholas Daifotis
-------------------------
Name: Nicholas Daifotis
Title: Managing Director
27
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from the balance sheet and
income statement of Omnipoint corporation as of and for the nine months ended
September 30, 1999 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 251,302
<SECURITIES> 117,889
<RECEIVABLES> 83,938
<ALLOWANCES> 19,849
<INVENTORY> 49,593
<CURRENT-ASSETS> 498,413
<PP&E> 1,351,326
<DEPRECIATION> (269,251)
<TOTAL-ASSETS> 2,312,387
<CURRENT-LIABILITIES> 418,695
<BONDS> 812,934
0
544,384
<COMMON> 537
<OTHER-SE> (1,367,477)
<TOTAL-LIABILITY-AND-EQUITY> 2,312,387
<SALES> 266,656
<TOTAL-REVENUES> 269,177
<CGS> 224,998
<TOTAL-COSTS> 228,848
<OTHER-EXPENSES> 383,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (192,639)
<INCOME-PRETAX> (510,254)
<INCOME-TAX> 0
<INCOME-CONTINUING> (510,254)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (510,254)
<EPS-BASIC> (9.57)
<EPS-DILUTED> (9.57)
</TABLE>
